-- The impact of a transition by two customers to "lean inventory"
arrangements during the quarter whereby demand for the Company's products
is reduced in conjunction with implementing lower levels of inventory at
these customer locations; and
-- The continued utilization by certain customers of excess inventories
of products designed for LAN/SAN applications which adversely affected
demand during the quarter.
These factors combined to reduce revenues from the sale of optical
subsystems in the fourth quarter by approximately $6 million as compared to
the Company's earlier guidance. The Company further noted that revenues
from the sale of optical subsystems for 10-40 Gb/s applications would total
$14 to $15 million for the fourth quarter, in line with its original
forecast of $14 to $17 million. The Company is not providing preliminary
bottom-line financial guidance for the quarter at this time in light of the
voluntary review of its historical stock option granting practices and
associated accounting impact, which is ongoing.
The Company's updated expectations for fourth quarter revenues would mean
total revenues for the fiscal year ended April 30, 2007 would total
approximately $419 million, up 15% from $364.3 million in the prior fiscal
year.
In light of the Company's preliminary results for the fourth quarter, it
also updated its guidance for revenues for the first quarter ending July
29, 2007 to $105 to $112 million, down slightly from its original
expectations of $108 to $115 million discussed during the Company's last
quarterly conference call with investors on March 5, 2007. Revenue is
expected to rebound in the first quarter as a result of the following:
-- Little or no continuing impact during the quarter from its customers'
lean manufacturing arrangements;
-- Anticipated increases in sales of products for 10 Gb/s applications;
and
-- A full quarter of results associated with the recent acquisitions of
AZNA, LLC and Kodeos Communications, Inc.
CONFERENCE CALL
Finisar plans to review its preliminary fourth quarter results and discuss
its current business outlook during its regular quarterly conference call
for investors. The date and time of the conference call will be announced
separately.
SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACTS 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, including statements
regarding Finisar's expectations, beliefs, intentions, or strategies
regarding the future. 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. These risks include those associated with 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 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. These risks and uncertainties also
include the extent to which additional stock-based compensation expense
will be recognized as a result of the ongoing review of the Company's stock
option granting practices; the timing of the Company's filings relating to
any restated financial information; the impact of any regulatory review of
the disclosures in those documents; and the potential impact of related
civil litigation. Further information regarding these and other risks
relating to Finisar's business is set forth in Finisar's Annual Report on
Form 10-K and other reports as filed with the Securities and Exchange
Commission.
ABOUT FINISAR
Finisar Corporation (Contact Information: Contact: Steve Workman Chief Financial Officer 408-548-1000 Investor Relations 408-542-5050 investor.relations@Finisar.com