SUNNYVALE, CA--(Marketwired - Mar 6, 2014) - Finisar Corporation (NASDAQ: FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its third fiscal quarter ended January 26, 2014.
COMMENTARY
"I am pleased to report third quarter revenues were $294.0 million, a new all-time record for Finisar. Revenues increased by $3.3 million, or 1.1%, over the second quarter and $55.7 million, or 23.4%, over the third quarter of the prior year. Revenues grew for the sixth consecutive quarter," said Jerry Rawls, Finisar's executive Chairman of the Board.
"During the quarter, we continued to make significant strides in new product development. We are scheduled to make several important product announcements and demonstrations at the Optical Fiber Conference trade show in San Francisco next week," said Eitan Gertel, Finisar's Chief Executive Officer.
| | | FINANCIAL HIGHLIGHTS - THIRD QUARTER ENDED January 26, 2014 | | | | Summary GAAP Results | | Third | | | Second | | | | Quarter | | | Quarter | | | | Ended | | | Ended | | | | | January 26, 2014 | | | October 27, 2013 | | | | | (in thousands, except per share amounts) | | | | | | | | | | | Revenues | | $ | 294,018 | | | $ | 290,722 | | | Gross margin | | | 35.9 | % | | | 35.6 | % | | Operating expenses | | $ | 72,593 | | | $ | 73,264 | | | Operating income | | $ | 33,096 | | | $ | 30,109 | | | Operating margin | | | 11.3 | % | | | 10.4 | % | | Net income | | $ | 27,061 | | | $ | 29,965 | | | Income per share-basic | | $ | 0.28 | | | $ | 0.31 | | | Income per share-diluted | | $ | 0.26 | | | $ | 0.29 | | | | | | | | | | | | | Basic shares | | | 96,394 | | | | 95,941 | | | Diluted shares | | | 104,361 | | | | 103,696 | | | | | | | | | | | | | Summary Non-GAAP Results (a) | | Third | | | Second | | | | Quarter | | | Quarter | | | | Ended | | | Ended | | | | | January 26, 2014 | | | October 27, 2013 | | | | | (in thousands, except per share amounts) | | | | | | | | | | | | | Revenues | | $ | 294,018 | | | $ | 290,722 | | | Gross margin | | | 37.2 | % | | | 37.1 | % | | Operating expenses | | $ | 63,209 | | | $ | 63,159 | | | Operating income | | $ | 46,295 | | | $ | 44,767 | | | Operating margin | | | 15.7 | % | | | 15.4 | % | | Net income | | $ | 44,993 | | | $ | 43,767 | | | Income per share-basic | | $ | 0.47 | | | $ | 0.46 | | | Income per share-diluted | | $ | 0.44 | | | $ | 0.43 | | | | | | | | | | | | | Basic shares | | | 96,394 | | | | 95,941 | | | Diluted shares | | | 104,361 | | | | 103,696 | | | | | | | | | | | |
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| (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 third quarter of fiscal 2014:
Revenues increased to $294.0 million, up $3.3 million, or 1.1%, from $290.7 million in the preceding quarter.The sale of products for datacom applications increased by $ 6.1 million, or 3.0%, compared to the preceding quarter.The sale of products for telecom applications decreased by $2.8 million, or (3.2)%, compared to the preceding quarter, primarily driven by the impact of one month of the annual price reductions for telecom products that typically take effect on January 1st.GAAP gross margin increased to 35.9% from 35.6% in the preceding quarter.Non-GAAP gross margin increased to 37.2% from 37.1% in the preceding quarter.GAAP operating income increased $3.0 million to $33.1 million, or 11.3% of revenues, compared to $30.1 million, or 10.4% of revenues in the preceding quarter.Non-GAAP operating income increased $1.5 million to $46.3 million, or 15.7% of revenues, compared to $44.8 million, or 15.4% of revenues, in the preceding quarter. Cash, cash equivalents and short term investments increased $238.2 million to $554.7 million at the end of the third quarter, compared to $316.5 million at the end of the preceding quarter, principally reflecting the net proceeds of approximately $255.0 million from a convertible debt offering completed during the quarter.During the quarter, the Company announced that it entered into an agreement under which Finisar would acquire 100% of the equity interests in u2t Photonics AG for approximately $20 million in cash, subject to certain adjustments and that Finisar would also assume net debt of approximately $7 million. This transaction closed on January 31st, one week into the fourth fiscal quarter.OUTLOOK
Without taking into account the acquisition of u2t, the Company indicated that it currently expects revenues for the fourth quarter of fiscal 2014 to be in the range of $290 to $305 million; non-GAAP gross margin of approximately 36%, non-GAAP operating margin of approximately 13.8% to 14.8%, and non-GAAP earnings per diluted share to be in the range of approximately $0.38 to $0.42.
After taking into account the acquisition of u2t, including the elimination of any intercompany revenue or expense transactions with Finisar, the Company indicated that it currently expects revenues for the fourth quarter of fiscal 2014 to be in the range of $296 to $311 million, non-GAAP gross margin of approximately 35.5%, non-GAAP operating margin of approximately 12.8% to 13.8%, and non-GAAP earnings per diluted share to be in the range of approximately $0.36 to $0.40. |
