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: September 04, 2014
(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)
Item 2.02. Results of Operations and Financial Condition On September 4, 2014, Finisar Corporation issued a press release announcing its financial results for the first quarter of fiscal 2015 ended July 27, 2014. 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: September 04, 2014 |
FINISAR CORPORATION
By: /s/ Kurt Adzema |
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Exhibit No. | Description |
99.1 | Press Release of Finisar Corporation dated September 04, 2014 |
SUNNYVALE, CA -- (Marketwired - September 04, 2014) - Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its first quarter of fiscal 2015, ended July 27, 2014.
COMMENTARY
"I am pleased to report that first quarter revenues were $327.6 million, a new all-time record for Finisar. Quarterly revenues increased by $21.6 million, or 7.1%, over the fourth fiscal quarter of fiscal 2014. Quarterly revenues grew for the eighth consecutive quarter," said Jerry Rawls, Finisar's executive Chairman of the Board.
"While demand for our transceivers that address wireless applications was very strong in the first quarter, demand for these products is now expected to decrease in the second quarter. We expect the demand to return and revenues to increase sequentially for these products in the third quarter. As a result of this decrease in demand for wireless transceivers, as well as a decrease in demand for telecom products due to soft carrier spending and a decrease in demand from several datacom customers with lumpy order patterns, we expect our overall revenues to decline in the second fiscal quarter," said Eitan Gertel, Finisar's Chief Executive Officer.
FINANCIAL HIGHLIGHTS - FIRST QUARTER ENDED JULY 27, 2014 Summary GAAP Results First Fourth Quarter Quarter Ended Ended July 27, 2014 April 27, 2014 ------------------- ------------------- (in thousands, except per share amounts) Revenues $ 327,638 $ 306,025 Gross margin 30.2% 31.6% Operating expenses $ 78,451 $ 75,457 Operating income $ 20,368 $ 21,107 Operating margin 6.2% 6.9% Net income $ 14,243 $ 28,750 Income per share-basic $ 0.14 $ 0.30 Income per share-diluted $ 0.14 $ 0.28 Basic shares 98,241 96,965 Diluted shares 106,036 105,418 Summary Non-GAAP Results (a) First Fourth Quarter Quarter Ended Ended July 27, 2014 April 27, 2014 ------------------- ------------------- (in thousands, except per share amounts) Revenues $ 327,638 $ 306,025 Gross margin 32.0% 34.2% Operating expenses $ 69,439 $ 65,931 Operating income $ 35,404 $ 38,882 Operating margin 10.8% 12.7% Net income $ 33,332 $ 36,992 Income per share-basic $ 0.34 $ 0.38 Income per share-diluted $ 0.32 $ 0.36 Basic shares 98,241 96,965 Diluted shares 106,036 105,418
_____________
(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 first quarter of fiscal 2015:
OUTLOOK
The Company indicated that for the second quarter of fiscal 2015 it currently expects revenues in the range of $305 to $320 million, non-GAAP gross margin of approximately 31% to 32%, non-GAAP operating margin of approximately 8.5% to 9.5%, and non-GAAP earnings per diluted share in the range of approximately $0.23 to $0.27.
CONFERENCE CALL
Finisar will discuss its financial results for the first quarter and current business outlook during its regular quarterly conference call scheduled for Thursday, September 4, 2014, 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 1-888-299-7205 (domestic) or +1-719-325-3210 (international) and enter conference ID 7685228.
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 7685228 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
This press release contains forward-looking statement concerning Finisar's expected financial performance. These statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations, estimates, assumptions and projections about our business and industry, and the markets and customers we serve, and they are subject to numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. 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; intensive competition; and the uncertainty of achieving anticipated cost savings and synergies in connection with the recently completed u2t acquisition. 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 26, 2014) 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 Balance Sheets (in thousands) July 27, April 27, 2014 2014 ------------ ------------ (Unaudited) ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 287,455 $ 303,101 Short-term held-to-maturity investments 209,927 209,922 Accounts receivable, net 231,312 225,020 Accounts receivable, other 41,595 33,749 Inventories 270,122 259,759 Prepaid expenses and other assets 38,582 33,022 ------------ ------------ Total current assets 1,078,993 1,064,573 Property, equipment and improvements, net 301,020 273,328 Purchased intangible assets, net 33,680 34,141 Goodwill 106,735 106,115 Minority investments 2,317 2,117 Other assets 20,907 17,272 ------------ ------------ Total assets $ 1,543,652 $ 1,497,546 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 143,224 $ 119,439 Accrued compensation 28,215 38,541 Other accrued liabilities 27,568 31,533 Deferred revenue 16,872 16,659 Short term debt 247 243 Current portion of convertible notes 40,015 40,015 ------------ ------------ Total current liabilities 256,141 246,430 Long-term liabilities: Convertible notes, net of current portion 214,496 212,253 Other non-current liabilities 24,042 22,804 ------------ ------------ Total liabilities 494,679 481,487 Stockholders' equity: Common stock 100 97 Additional paid-in capital 2,469,687 2,456,110 Accumulated other comprehensive income 25,116 20,025 Accumulated deficit (1,445,930) (1,460,173) ------------ ------------ Total stockholders' equity 1,048,973 1,016,059 ------------ ------------ Total liabilities and stockholders' equity $ 1,543,652 $ 1,497,546 ============ ============
Note - Balance sheet amounts as of April 27, 2014 are derived from the audited consolidated financial statements as of the date.
Finisar Corporation Consolidated Statements of Operations (Unaudited, in thousands, except per share data) Three Months Ended ---------------------------------------- July 27, July 28, April 27, 2014 2013 2014 ------------ ------------ ------------ Revenues $ 327,638 $ 266,068 $ 306,025 Cost of revenues 227,385 173,102 208,135 Amortization of acquired developed technology 1,434 1,593 1,326 ------------ ------------ ------------ Gross profit 98,819 91,373 96,564 Gross margin 30.2% 34.3% 31.6% Operating expenses: Research and development 51,006 43,530 48,132 Sales and marketing 11,965 11,805 11,509 General and administrative 14,719 8,340 15,133 Amortization of purchased intangibles 761 595 683 ------------ ------------ ------------ Total operating expenses 78,451 64,270 75,457 ------------ ------------ ------------ Income from operations 20,368 27,103 21,107 Interest income 612 217 485 Interest expense (3,134) (552) (2,965) Other income (expenses), net (2,026) 488 8,124 ------------ ------------ ------------ Income before income taxes and non-controlling interest 15,820 27,256 26,751 Provision (benefits) for income taxes 1,577 1,421 (1,932) ------------ ------------ ------------ Income before non-controlling interest 14,243 25,835 28,683 Adjust for net loss attributable to non-controlling interest - 176 67 ------------ ------------ ------------ Net income attributable to Finisar Corporation $ 14,243 $ 26,011 $ 28,750 ============ ============ ============ Net income per share attributable to Finisar Corporation common stockholders: Basic $ 0.14 $ 0.27 $ 0.30 Diluted $ 0.14 $ 0.26 $ 0.28 Shares used in computing net income per share - basic 98,241 94,609 96,965 Shares used in computing net income per share - diluted 106,036 101,125 105,418
FINISAR NON-GAAP FINANCIAL MEASURES
In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commissions: non-GAAP gross profit, non-GAAP operating income and non-GAAP income per share. These non-GAAP financial measures are 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:
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 Ended ---------------------------------------- July 27, July 28, April 27, 2014 2013 2014 ------------ ------------ ------------ GAAP to non-GAAP reconciliation of gross profit: Gross profit - GAAP $ 98,819 $ 91,373 $ 96,564 Gross margin - GAAP 30.2% 34.3% 31.6% Adjustments: Cost of revenues Change in excess and obsolete inventory reserve 1,721 (1,528) 3,384 Amortization of acquired technology 1,434 1,593 1,326 Stock compensation 2,276 1,777 2,531 Acquisition method accounting adjustment for sale of acquired inventory - - 822 Reduction in force costs 475 23 124 Acquisition related retention payment 118 62 62 ------------ ------------ ------------ Total cost of revenue adjustments 6,024 1,927 8,249 ------------ ------------ ------------ Gross profit - non-GAAP 104,843 93,300 104,813 ------------ ------------ ------------ Gross margin - non-GAAP 32.0% 35.1% 34.2% GAAP to non-GAAP reconciliation of operating income: Operating income - GAAP 20,368 27,103 21,107 Operating margin - GAAP 6.2% 10.2% 6.9% Adjustments: Total cost of revenue adjustments 6,024 1,927 8,249 Research and development Reduction in force costs 332 12 - Acquisition related retention payment 193 191 190 Stock compensation 4,436 3,525 4,056 Sales and marketing Acquisition related retention payment 20 17 17 Stock compensation 1,529 1,184 1,406 General and administrative Reduction in force costs (5) 67 69 Acquisition related retention payment 16 217 8 Stock compensation 2,812 2,423 2,525 Acquisition related costs 230 225 567 Litigation settlements and resolutions and related costs (1,312) 5 5 Gain on fair value remeasurement of contingent consideration liability - (5,094) - Amortization of purchased intangibles 761 595 683 ------------ ------------ ------------ Total cost of revenue and operating expense adjustments 15,036 5,294 17,775 ------------ ------------ ------------ Operating income - non-GAAP 35,404 32,397 38,882 ------------ ------------ ------------ Operating margin - non-GAAP 10.8% 12.2% 12.7% GAAP to non-GAAP reconciliation of income attributable to Finisar Corporation: Net income attributable to Finisar Corporation - GAAP 14,243 26,011 28,750 Adjustments: Total cost of revenue and operating expense adjustments 15,036 5,294 17,775 Non-cash imputed interest expenses on convertible debt 2,243 - 2,225 Imputed interest related to restructuring 51 57 53 Other (income) expense, net Loss (gain) on sale of assets 238 (110) (8,156) Gain related to minority investments - (743) - Other miscellaneous income (1) - - Foreign exchange transaction (gain) or loss 1,991 567 (69) Amortization of debt issuance cost 154 - 155 Provision for income taxes Income tax provision adjustments (623) 126 (3,737) Non-controlling interest non-GAAP adjustment - 67 (4) ------------ ------------ ------------ Total adjustments 19,089 5,258 8,242 ------------ ------------ ------------ Net income attributable to Finisar Corporation - non-GAAP $ 33,332 $ 31,269 $ 36,992 ============ ============ ============ Non-GAAP income attributable to Finisar Corporation $ 33,332 $ 31,269 $ 36,992 Add: interest expense for dilutive convertible notes 539 539 539 ------------ ------------ ------------ Adjusted non-GAAP income attributable to Finisar Corporation $ 33,871 $ 31,808 $ 37,531 ============ ============ ============ Non-GAAP income per share attributable to Finisar Corporation common stockholders Basic $ 0.34 $ 0.33 $ 0.38 Diluted $ 0.32 $ 0.31 $ 0.36 Shares used in computing non-GAAP income per share attributable to Finisar Corporation common stockholders Basic 98,241 94,609 96,965 Diluted 106,036 101,125 105,418 Non-GAAP EBITDA Non-GAAP income attributable to Finisar Corporation $ 33,332 $ 31,269 $ 36,992 Depreciation expense 19,648 13,927 17,518 Amortization 39 94 94 Interest expense 228 278 202 Income tax expense 2,200 1,295 1,805 ------------ ------------ ------------ Non-GAAP EBITDA $ 55,447 $ 46,863 $ 56,611 ============ ============ ============
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