Finisar Announces Fourth Fiscal Quarter and Full Year 2016 Financial Results

SUNNYVALE, CA--(Marketwired - June 16, 2016) - Finisar Corporation ( FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its fourth quarter and full fiscal year 2016, ended May 1, 2016.

COMMENTARY

"Revenues for our fourth fiscal quarter were $318.8 million, an increase of $9.6 million, or 3.1% compared to the prior quarter, primarily driven by growth in demand for 40G and 100G transceivers for datacom applications including CFP, CFP2, CFP4, QSFP and QSFP28 form factors. Better than expected gross margins, due to favorable product mix, and lower expenses resulted in earnings per fully diluted share exceeding the upper end of our prior guidance range," said Jerry Rawls, Finisar's Chief Executive Officer.

FINANCIAL HIGHLIGHTS - Fourth Quarter Ended May 1, 2016

Summary GAAP Results		Fourth		Third
		Quarter		Quarter
		Ended		Ended
		May 1, 2016		January 31, 2016
		(in thousands, except per share amounts)
Revenues		$318,794		$309,206
Gross margin		28.4%		28.4%
Operating expenses		$76,306		$77,282
Operating income		$14,135		$10,458
Operating margin		4.4%		3.4%
Net income		$13,072		$12,084
Income per share-basic		$0.12		$0.11
Income per share-diluted		$0.12		$0.11
Basic shares		107,612		107,180
Diluted shares		109,386		108,128
Summary Non-GAAP Results (a)		Fourth		Third
		Quarter		Quarter
		Ended		Ended
		May 1, 2016		January 31, 2016
		(in thousands, except per share amounts)
Revenues		$318,794		$309,206
Non-GAAP Gross margin		30.6%		30.3%
Non-GAAP Operating expenses		$66,186		$67,292
Non-GAAP Operating income		$31,239		$26,309
Non-GAAP Operating margin		9.8%		8.5%
Non-GAAP Net income		$31,824		$26,604
Non-GAAP Income per share-basic		$0.30		$0.25
Non-GAAP Income per share-diluted		$0.29		$0.25
Basic shares		107,612		107,180
Diluted shares		109,386		108,128

(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 of Finisar's core ongoing 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 Fourth Quarter of Fiscal 2016:

Revenues were $318.8 million, an increase of $9.6 million, or 3.1%, from $309.2 million in the preceding quarter.Sales of products for datacom applications increased by $23.6 million, or 10.8%, compared to the preceding quarter, primarily driven by growth in demand for 40G and 100G transceivers including CFP, CFP2, CFP4, QSFP, and QSFP28 form factorsSales of products for telecom applications decreased by $14.1 million, or (15.6)%, compared to the preceding quarter, primarily as the result of the full three months of the telecom price negotiations and an unexpected decline in demand for legacy products including 10G fixed wavelength and tunable transceivers and amplifiers. In addition, factors expected to partially offset the negative impacts on telecom revenue above during the quarter were lower in magnitude than expected due to delays in adding manufacturing capacity for wavelength selective switches and delays in the qualification of new ROADM linecard designs.GAAP gross margin was 28.4% compared to 28.4% in the preceding quarter.Non-GAAP gross margin was 30.6% compared to 30.3% in the prior quarter, as favorable product mix was partially offset by the impact of the full three months of annual telecom price negotiations, which typically take effect on January 1.GAAP operating expenses were $76.3 million compared to $77.3 million in the prior quarter.Non-GAAP operating expenses decreased to $66.2 million compared to $67.3 million in the prior quarter primarily due to lower G&A costs including lower legal expenses.GAAP earnings per fully diluted share was $0.12 compared to $0.11 in the preceding quarter.Non-GAAP earnings per fully diluted share was $0.29 compared to $0.25 in the preceding quarter.Cash, cash equivalents and short term investments increased $31.4 million to $562.5 million at the end of the fourth quarter, compared to $531.1 million at the end of the preceding quarter.