UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the |
Date of Report: December 05, 2013
(Date of earliest event reported)
Finisar Corporation
(Exact name of registrant as specified in its charter)
DE
(State or other jurisdiction
of incorporation)
000-27999
(Commission File Number)
94-3038428
(IRS Employer
Identification Number)
1389 Moffett Park Drive, Sunnyvale, CA
(Address of principal executive offices)
94089-1133
(Zip Code)
4085425051
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
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Item 2.02. Results of Operations and Financial Condition On December 5, 2013, Finisar Corporation issued a press release announcing its financial results for the second quarter of fiscal year 2014 ended October 27, 2013. A copy of the press release is attached hereto as Exhibit 99.1. In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: December 05, 2013 |
FINISAR CORPORATION
By: /s/ Kurt Adzema |
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| Exhibit No. | Description |
| 99.1 | Press Release of Finisar Corporation dated December 05, 2013 |
SUNNYVALE, CA -- (Marketwired - December 05, 2013) - Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its second fiscal quarter ended October 27, 2013.
COMMENTARY
"I am pleased to report second quarter revenues were $290.7 million, a new all-time record for Finisar. Revenues increased by $24.7 million, or 9.3%, over the first quarter and $58.7 million, or 25.3%, over the second quarter of the prior year. Revenues grew for the fifth consecutive quarter. This quarter's revenue growth came from both datacom and telecom products," said Jerry Rawls, Finisar's executive Chairman of the Board.
"During the quarter, we continued to make significant strides in new product development that we believe will drive future revenue growth. For example, we demonstrated our new 100Gbps CFP4 Ethernet transceiver for short reach datacom applications. This transceiver provides 75% greater face plate density and 80% less power consumption than our original CFP," said Eitan Gertel, Finisar's Chief Executive Officer.
FINANCIAL HIGHLIGHTS - SECOND QUARTER ENDED October 27, 2013
Summary GAAP Results Second First
Quarter Quarter
Ended Ended
October 27, 2013 July 28, 2013
----------------- -----------------
(in thousands, except per share amounts)
Revenues $ 290,722 $ 266,068
Gross margin 35.6% 34.3%
Operating expenses $ 73,264 $ 64,270
Operating income $ 30,109 $ 27,103
Operating margin 10.4% 10.2%
Net income $ 29,965 $ 26,011
Income per share-basic $ 0.31 $ 0.27
Income per share-diluted $ 0.29 $ 0.26
Basic shares 95,941 94,609
Diluted shares 103,696 101,125
Summary Non-GAAP Results (a) Second First
Quarter Quarter
Ended Ended
October 27, 2013 July 28, 2013
----------------- -----------------
(in thousands, except per share amounts)
Revenues $ 290,722 $ 266,068
Gross margin 37.1% 35.1%
Operating expenses $ 63,159 $ 60,903
Operating income $ 44,767 $ 32,397
Operating margin 15.4% 12.2%
Net income $ 43,767 $ 31,269
Income per share-basic $ 0.46 $ 0.33
Income per share-diluted $ 0.43 $ 0.31
Basic shares 95,941 94,609
Diluted shares 103,696 101,125
(a) In evaluating the operating performance of Finisar's business, Finisar
management utilizes financial measures that exclude certain charges and
credits required by U.S. generally accepted accounting principles, or
GAAP, that are considered by management to be outside Finisar's core
operating results. A reconciliation of Finisar's non-GAAP financial
measures to the most directly comparable GAAP measures, as well as
additional related information, can be found under the heading "Finisar
Non-GAAP Financial Measures" below.
Financial Statement Highlights for the second quarter of fiscal 2014:
OUTLOOK
The Company indicated that it currently expects revenues for the third quarter of fiscal 2014 to be in the range of $290 to $305 million; GAAP operating margin to be approximately 11.5%; non-GAAP operating margin to be approximately 15.5% and non-GAAP earnings per diluted share to be in the range of approximately $0.43 to $0.47.
CONFERENCE CALL
Finisar will discuss its financial results for the second quarter and current business outlook during its regular quarterly conference call scheduled for Thursday, December 5, 2013, at 2:00 pm PT (5:00 pm ET). To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com/ or dial 1-877-719-9795 (domestic) or +1-719-325-4786 (international) and enter conference ID 5981213.
An audio replay will be available for two weeks following the call by dialing 1-888-203-1112 (domestic) or +1-719-457-0820 and then following the prompts: enter conference ID 5981213 and provide your name, affiliation, and contact number. A replay of the webcast will be available shortly after the conclusion of the call on the Company's website until the next regularly scheduled earnings conference call.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements included in this press release are based upon information available to Finisar as of the date hereof, and Finisar assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from those projected. Examples of such risks include those associated with: the uncertainty of customer demand for Finisar's products; the rapidly evolving markets for Finisar's products and uncertainty regarding the development of these markets; Finisar's historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period; ongoing new product development and introduction of new and enhanced products; the challenges of rapid growth followed by periods of contraction; and intensive competition. Further information regarding these and other risks relating to Finisar's business is set forth in Finisar's annual report on Form 10-K (filed June 24, 2013) and quarterly SEC filings.
ABOUT FINISAR
Finisar Corporation (NASDAQ: FNSR) is a global technology leader for fiber optic subsystems and components that enable high-speed voice, video and data communications for telecommunications, networking, storage, wireless, and cable TV applications. For 25 years, Finisar has provided critical optics technologies to system manufacturers to meet the increasing demands for network bandwidth. Finisar is headquartered in Sunnyvale, California, USA with R&D, manufacturing sites, and sales offices worldwide. For additional information, visit www.finisar.com.
FINISAR FINANCIAL STATEMENTS
The following financial tables are presented in accordance with GAAP.
Finisar Corporation
Consolidated Statements of Operations
(in thousands, except per share data)
Three
Months
Three Months Ended Six Months Ended Ended
-------------------- -------------------- ---------
October October October October July 28,
27, 2013 28, 2012 27, 2013 28, 2012 2013
--------- --------- --------- --------- ---------
(Unaudited) (Unaudited)
-------------------- -------------------- ---------
Revenues $ 290,722 $ 232,041 $ 556,790 $ 452,567 $ 266,068
Cost of revenues 186,168 166,167 359,270 327,624 173,102
Amortization of
acquired developed
technology 1,181 2,000 2,774 3,272 1,593
--------- --------- --------- --------- ---------
Gross profit 103,373 63,874 194,746 121,671 91,373
Gross margin 35.6% 27.5% 35.0% 26.9% 34.3%
Operating expenses:
Research and
development 44,959 39,620 88,489 77,789 43,530
Sales and marketing 12,322 10,219 24,127 20,893 11,805
General and
administrative 15,388 12,919 23,728 26,261 8,340
Amortization of
purchased
intangibles 595 1,062 1,190 1,871 595
--------- --------- --------- --------- ---------
Total operating
expenses 73,264 63,820 137,534 126,814 64,270
--------- --------- --------- --------- ---------
Income (loss) from
operations 30,109 54 57,212 (5,143) 27,103
Interest income 282 162 499 358 217
Interest expense (367) (750) (919) (1,397) (552)
Other income
(expenses), net 495 (101) 983 (20) 488
--------- --------- --------- --------- ---------
Income (loss) before
income taxes and
non-controlling
interest 30,519 (635) 57,775 (6,202) 27,256
Provision (benefits)
for income taxes 568 (1,062) 1,989 (420) 1,421
--------- --------- --------- --------- ---------
Income (loss) before
non-controlling
interest 29,951 427 55,786 (5,782) 25,835
Adjust for net
(income) loss
attributable to non-
controlling interest 14 (156) 190 (144) 176
--------- --------- --------- --------- ---------
Net income (loss)
attributable to
Finisar Corporation $ 29,965 $ 271 $ 55,976 $ (5,926) $ 26,011
========= ========= ========= ========= =========
Net income (loss) per
share attributable
to Finisar
Corporation common
stockholders:
Basic $ 0.31 $ 0.00 $ 0.59 $ (0.06) $ 0.27
Diluted $ 0.29 $ 0.00 $ 0.56 $ (0.06) $ 0.26
Shares used in
computing net income
(loss) per share -
basic 95,941 92,780 95,275 92,386 94,609
Shares used in
computing net income
(loss) per share -
diluted 103,696 94,735 102,771 92,386 101,125
Finisar Corporation
Consolidated Balance Sheets
(in thousands)
October 27, July 28, April 28,
2013 2013 2013
----------- ----------- -----------
(Unaudited) (Unaudited)
----------- ----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 316,488 $ 288,433 $ 289,076
Accounts receivable, net 186,486 171,823 149,612
Accounts receivable, other 25,890 34,386 16,538
Inventories 231,235 207,029 200,670
Prepaid expenses 20,902 19,533 18,402
----------- ----------- -----------
Total current assets 781,001 721,204 674,298
Property, equipment and improvements,
net 231,022 213,044 201,442
Purchased intangible assets, net 23,587 25,416 30,457
Goodwill 90,986 90,986 90,986
Minority investments 1,841 1,711 884
Other assets 16,946 12,954 9,780
----------- ----------- -----------
Total assets $ 1,145,383 $ 1,065,315 $ 1,007,847
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 98,220 $ 90,488 $ 77,630
Accrued compensation 48,182 32,001 31,492
Other accrued liabilities 32,943 31,542 23,533
Deferred revenue 14,235 12,582 9,182
Short term debt 4,700 - -
Current portion of convertible
notes 40,015 - -
----------- ----------- -----------
Total current liabilities 238,295 166,613 141,837
Long-term liabilities:
Convertible notes, net of current
portion - 40,015 40,015
Other non-current liabilities 12,756 12,908 13,480
----------- ----------- -----------
Total liabilities 251,051 219,536 195,332
Stockholders' equity:
Common stock 96 96 94
Additional paid-in capital 2,377,198 2,363,514 2,350,146
Accumulated other comprehensive
income 27,315 22,397 28,525
Accumulated deficit (1,515,984) (1,545,949) (1,571,960)
----------- ----------- -----------
Finisar Corporation stockholders'
equity 888,625 840,058 806,805
Non-controlling interest 5,707 5,721 5,710
----------- ----------- -----------
Total stockholders' equity 894,332 845,779 812,515
----------- ----------- -----------
Total liabilities and stockholders'
equity $ 1,145,383 $ 1,065,315 $ 1,007,847
=========== =========== ===========
Note - Balance sheet amounts as of April 28, 2013 are derived from the
audited consolidated financial statements as of the date.
FINISAR NON-GAAP FINANCIAL MEASURES
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides supplemental information regarding the Company's operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or which occur relatively infrequently and which management considers to be outside our core operating results. Some of these non-GAAP measures also exclude the ongoing impact of historical business decisions made in different business and economic environments. Management believes that tracking non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income and non-GAAP net income per share provides management and the investment community with valuable insight into our current operations, our ability to generate cash and the underlying business trends which are affecting our performance. These non-GAAP measures are used by both management and our Board of Directors, along with the comparable GAAP information, in evaluating our current performance and planning our future business activities. In particular, management finds it useful to exclude non-cash charges in order to better correlate our operating activities with our ability to generate cash from operations and to exclude certain cash charges as a means of more accurately predicting our liquidity requirements. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry.
In calculating non-GAAP gross profit in this release, we have excluded the following items from cost of revenues in applicable periods:
In calculating non-GAAP operating income in this release, we have excluded the same items to the extent they are classified as operating expenses, and have also excluded the following items in applicable periods:
In calculating non-GAAP income and non-GAAP income per share in this release, we have also excluded the following items in applicable periods:
In calculating non-GAAP income per share in this release, we have included the shares issuable upon conversion of our outstanding convertible notes and excluded the interest expenses associated with such notes in such periods where such treatment is dilutive to non-GAAP income (loss) per share.
A reconciliation of this non-GAAP financial information to the corresponding GAAP information is set forth below:
Finisar Corporation
Reconciliation of Results of Operations under GAAP and non-GAAP
(Unaudited, in thousands, except per share data)
Three
Months
Three Months Ended Six Months Ended Ended
-------------------- -------------------- ---------
October October October October July 28,
27, 2013 28, 2012 27, 2013 28, 2012 2013
--------- --------- --------- --------- ---------
GAAP to non-GAAP
reconciliation of
gross profit:
Gross profit - GAAP $ 103,373 $ 63,874 $ 194,746 $ 121,671 $ 91,373
Gross margin - GAAP 35.6% 27.5% 35.0% 26.9% 34.3%
Adjustments:
Cost of revenues
Change in excess
and obsolete
inventory reserve 1,199 2,003 (329) 6,869 (1,528)
Amortization of
acquired
technology 1,181 2,000 2,774 3,272 1,593
Stock compensation 2,056 1,876 3,833 3,362 1,777
Acquisition method
accounting
adjustment for
sale of acquired
inventory - 722 - 1,363 -
Reduction in force
costs 47 136 70 784 23
Acquisition related
retention payment 70 73 132 73 62
--------- --------- --------- --------- ---------
Total cost of
revenue
adjustments 4,553 6,810 6,480 15,723 1,927
--------- --------- --------- --------- ---------
Gross profit - non-
GAAP 107,926 70,684 201,226 137,394 93,300
--------- --------- --------- --------- ---------
Gross margin - non-
GAAP 37.1% 30.5% 36.1% 30.4% 35.1%
GAAP to non-GAAP
reconciliation of
operating income:
Operating income
(loss) - GAAP 30,109 54 57,212 (5,143) 27,103
Operating margin -
GAAP 10.4% 0.0% 10.3% -1.1% 10.2%
Adjustments:
Total cost of revenue
adjustments 4,553 6,810 6,480 15,723 1,927
Research and
development
Reduction in force
costs 16 - 28 177 12
Acquisition related
retention payment 190 222 381 222 191
Stock compensation 4,069 3,353 7,594 6,339 3,525
Sales and marketing
Acquisition related
retention payment 17 20 34 20 17
Stock compensation 1,382 1,002 2,566 2,079 1,184
General and
administrative
Reduction in force
costs 173 54 240 69 67
Acquisition related
retention payment 830 253 1,047 253 217
Stock compensation 2,663 2,956 5,086 5,785 2,423
Acquisition related
costs 124 96 349 421 225
Litigation
settlements and
resolutions and
related costs - (10) 5 13 5
Shareholder class
action and
derivative
litigation costs 46 (34) (5,048) 9 (5,094)
Amortization of
purchased
intangibles 595 1,062 1,190 1,871 595
--------- --------- --------- --------- ---------
Total cost of
revenue and
operating
expense
adjustments 14,658 15,784 19,952 32,981 5,294
--------- --------- --------- --------- ---------
Operating income -
non-GAAP 44,767 15,838 77,164 27,838 32,397
--------- --------- --------- --------- ---------
Operating margin -
non-GAAP 15.4% 6.8% 13.9% 6.2% 12.2%
GAAP to non-GAAP
reconciliation of
income attributable
to Finisar
Corporation:
Net income (loss)
attributable to
Finisar Corporation
- GAAP 29,965 271 55,976 (5,926) 26,011
Adjustments:
Total cost of revenue
and operating
expense adjustments 14,658 15,784 19,952 32,981 5,294
Imputed interest
related to
restructuring 56 164 113 226 57
Other (income)
expense, net
Gain on sale of
assets 5 (170) (105) (189) (110)
Gain related to
minority
investments - - (743) - (743)
Other miscellaneous
income (2) - (2) (160) -
Foreign exchange
transaction (gain)
or loss (208) (607) 359 (611) 567
Debt extinguishment
loss - 573 - 573 -
Provision for income
taxes
Income tax
provision
adjustments (832) (1,810) (706) (1,818) 126
Non-controlling
interest non-GAAP
adjustment 125 - 192 - 67
--------- --------- --------- --------- ---------
Total adjustments 13,802 13,934 19,060 31,002 5,258
--------- --------- --------- --------- ---------
Net income
attributable to
Finisar Corporation
- non-GAAP $ 43,767 $ 14,205 $ 75,036 $ 25,076 $ 31,269
========= ========= ========= ========= =========
Non-GAAP income
attributable to
Finisar Corporation $ 43,767 $ 14,205 $ 75,036 $ 25,076 $ 31,269
Add: interest expense
for dilutive
convertible notes 539 539 1,078 - 539
--------- --------- --------- --------- ---------
Adjusted non-GAAP
income attributable
to Finisar
Corporation $ 44,306 $ 14,744 $ 76,114 $ 25,076 $ 31,808
========= ========= ========= ========= =========
Non-GAAP income per
share attributable
to Finisar
Corporation common
stockholders
Basic $ 0.46 $ 0.15 $ 0.79 $ 0.27 $ 0.33
Diluted $ 0.43 $ 0.15 $ 0.74 $ 0.26 $ 0.31
Shares used in
computing non-GAAP
income per share
attributable to
Finisar Corporation
common stockholders
Basic 95,941 92,780 95,275 92,386 94,609
Diluted 103,696 98,483 102,771 94,780 101,125
Non-GAAP EBITDA
Non-GAAP income
attributable to
Finisar Corporation $ 43,767 $ 14,205 $ 75,036 $ 25,076 $ 31,269
Depreciation expense 14,621 13,106 28,548 25,817 13,927
Amortization 94 237 188 473 94
Interest expense 29 424 307 813 278
Income tax expense 1,400 748 2,695 1,398 1,295
--------- --------- --------- --------- ---------
Non-GAAP EBITDA $ 59,911 $ 28,720 $ 106,774 $ 53,577 $ 46,863
========= ========= ========= ========= =========
Finisar-F
Investor Contact: Kurt Adzema Chief Financial Officer 408-542-5050 Investor.relations@finisar.com Press contact: Victoria McDonald Director, Corporate Communications 408-542-4261