FINANCIAL HIGHLIGHTS-THIRD QUARTER ENDED January 30, 2011 Third Quarter Third Quarter Second Quarter Ended Ended Ended Summary Results per GAAP January 30, January 31, October 31, 2011 2010 2010 ------------- ------------- ------------- (in thousands, except per share amounts) Continuing operations Revenues $ 263,016 $ 166,935 $ 240,943 Gross margin 32.0% 31.0% 34.2% Operating expenses $ 59,412 $ 42,569 $ 46,295 Operating income $ 24,653 $ 9,126 $ 36,105 Operating margin 9.4% 5.5% 15.0% Net Income $ 18,821 $ 5,616 $ 33,796 Earnings per share-basic $ 0.24 $ 0.09 $ 0.44 Earnings per share-diluted $ 0.22 $ 0.08 $ 0.39 Basic shares 80,080 65,113 76,766 Diluted shares 93,388 66,719 89,521 Third Quarter Third Quarter Second Quarter Ended Ended Ended Non-GAAP Results (a) January 30, January 31, October 31, 2011 2010 2010 ------------- ------------- ------------- (in thousands, except per share amounts) Continuing operations Revenues $ 263,016 $ 166,935 $ 240,943 Gross margin 34.7% 32.2% 35.5% Operating expenses $ 46,423 $ 39,664 $ 44,594 Operating income $ 44,735 $ 14,172 $ 40,897 Operating margin 17.0% 8.5% 17.0% Net Income $ 42,521 $ 11,468 $ 38,302 Earnings per share-basic $ 0.53 $ 0.18 $ 0.50 Earnings per share-diluted $ 0.47 $ 0.17 $ 0.44 Basic shares 80,080 65,113 76,766 Diluted shares 93,388 76,082 89,521(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. Highlights for the second quarter of fiscal 2011 under GAAP:
-- Revenues increased to $263.0 million, up $22.1 million, or 9.2%, from $240.9 million in the preceding quarter and up $96.1 million, or 57.6%, from $166.9 million in the third quarter of the prior year. -- Compared to the preceding quarter, the sale of 10 Gbps or faster products increased by $10.4 million, or 9.7%, the sale of less than 10 Gbps products increased by $2.6 million, or 2.8%, the sale of WSS/ROADM line card products increased by $8.8 million, or 22.7%, and the sale of products for analog and cable television (CATV) applications increased by $0.3 million, or 7.4%. -- Compared to the third quarter of the prior year, the sale of 10 Gbps or faster products increased by $50.3 million, or 74.7%, the sale of less than 10 Gbps products increased by $19.2 million, or 25.7%, the sale of WSS/ROADM line card products increased by $28.5 million, or 148.9%, and the sale of products for analog and CATV applications decreased by $1.9 million, or (33.2)%. -- Gross margin decreased to 32.0% of revenues from 34.2% in the preceding quarter and increased from 31.0% in the third quarter of the prior year. -- Operating income decreased to $24.7 million, or 9.4% of revenues, from $36.1 million, or 15.0% of revenues, in the preceding quarter. This decrease in GAAP operating income was primarily the result of a charge of $3.5 million in the third quarter representing the adverse judgment amount due related to the previously disclosed patent litigation with Emcore as compared to a gain of $2.5 million in the preceding quarter related to a patent settlement with Source Photonics, a non-cash charge of $5.9 million in the third quarter for induced conversion expense related to the exchange of convertible notes for common stock; and a $620,000 non-cash charge in the third quarter for acceleration of the amortization of previously paid fees associated with the original issuance of the exchanged portion of the notes. Operating income increased $15.5 million compared to operating income of $9.1 million, or 5.5% of revenues, in the third quarter of the prior year. -- Net income from continuing operations was $18.8 million, or $0.22 per diluted share, compared to $33.8 million, or $0.39 per diluted share, in the preceding quarter and $5.6 million, or $0.08 per share, in the third quarter of the prior year. -- Cash and cash equivalents totaled $310.2 million at the end of the third quarter compared to $184.9 million at the end of the preceding quarter. -- On December 27, 2010, Finisar completed a common stock offering for net proceeds of approximately $117.9 million. In addition, during the quarter, Finisar repaid approximately $17.3 million of bank debt associated with its Asian subsidiaries. -- Days sales outstanding, or DSOs, were 61 days compared to 66 days in the prior quarter. Inventory turns increased to 4.0 compared to 3.8 in the preceding quarter. -- Capital expenditures were $19.0 million compared to $13.4 million in the preceding quarter. -- Under Finisar's $70.0 million secured credit facility with Wells Fargo Foothill, LLC, no borrowings were outstanding and $66.6 million was available to borrow at the end of the third quarter. -- In several privately-negotiated transactions completed during the quarter, Finisar exchanged an aggregate of approximately $42.2 million of its outstanding 5% Convertible Senior Notes due 2029 for approximately 3.9 million shares of the Company common stock, based on the conversion price of the notes of approximately $10.68 per share, plus a total of approximately 188,000 additional shares, including approximately 16,000 shares issued in payment of accrued and unpaid interest. At the end of the quarter, there was approximately $57.9 million in principal amount of the notes remaining outstanding. -- Subsequent to the end of the quarter, Finisar exchanged an aggregate of an additional $17.8 million of the notes for approximately 1.7 million shares of the Company common stock, based on the conversion price of the notes of approximately $10.68, plus a total of approximately 75,000 additional shares including approximately 8,000 shares issued in payment of accrued and unpaid interest. After such additional exchanges, there was approximately $40.0 million in principal amount of the notes remaining outstanding.In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides supplemental information regarding its operating performance on a non-GAAP basis. Finisar believes this supplemental information provides investors and management with additional insight into its underlying core operating performance by excluding a number of non-cash and cash charges, as well as infrequently occurring gains or losses principally related to acquisitions, the sale of minority investments, restructuring or other transition activities, legal settlements, impairments and financing transactions. For the third quarter of fiscal 2011, items related to continuing operations representing a net charge of approximately $23.7 million were excluded. Excluded benefits and charges included a charge of $3.5 million representing the adverse judgment amount due related to previously disclosed patent litigation with Emcore; $4.7 million in non-cash stock-based compensation expenses; $1.6 million in non-cash amortization charges related to acquired developed technology and purchased intangibles arising from previous acquisitions; a benefit of $416,000 representing the difference between cash payments for income taxes and the related GAAP tax provision, less non-recurring items; $2.4 million non-cash charge related to foreign exchange losses; $4.6 million in non-cash charges related to slow-moving and excess inventory; a non-cash charge of $5.9 million for induced conversion expense related to the exchange of convertible notes for common stock; and a $620,000 non-cash charge for acceleration of the amortization of previously paid fees associated with the original issuance of the exchanged portion of the notes. Other excluded items are described in Finisar Non-GAAP Financial Measures below. Highlights for the third quarter of fiscal 2011 on a non-GAAP basis:
-- Non-GAAP gross margin decreased to 34.7% of revenues from 35.5% in the preceding quarter but increased from 32.2% in the third quarter of the prior year. The decrease in gross margin compared to the preceding quarter was due primarily to unexpected under-utilization in our Allen, Texas VCSEL laser fabrication facility due to a shortage of wafer availability. The improvement in gross margin compared to the prior year reflects both a favorable shift in product mix and a reduction in manufacturing unit costs due to higher shipment volumes. -- Non-GAAP operating expenses increased to $46.4 million from $44.6 million in the preceding quarter and $39.7 million in the third quarter of the prior year. Operating expenses as a percent of revenues declined to 17.7% of revenues in the third quarter from 18.5% in the preceding quarter and 23.8% in the third quarter of the prior year due primarily to revenues growing faster than expenses. -- Non-GAAP operating income was $44.7 million, or 17.0% of revenues, up $3.8 million from $40.9 million, or 17.0% of revenues, in the preceding quarter, and up $30.6 million from $14.2 million, or 8.5% of revenues, in the third quarter of the prior year. -- Non-GAAP net income from continuing operations was $42.5 million, or $0.47 per diluted share, compared to $38.3 million, or $0.44 per diluted share, in the preceding quarter and $11.5 million, or $0.17 per diluted share, in the third quarter of the prior year. -- Non-GAAP EBITDA rose to $53.6 million from $49.5 million in the preceding quarter and $21.6 million in the third quarter of the prior year.OUTLOOK During the fourth quarter ending April 30, 2011, the Company will be impacted by the full three months of the annual price negotiations with telecom customers that typically take effect on January 1, the 10-day long shutdown at certain customers for Chinese New Year in February, the adjustment of inventory levels at some telecom customers, particularly for products which had previously been on allocation and long lead times, including WSS and ROADM line cards, and a slowdown in business in China overall. Primarily as a result of these factors, the Company indicated that it currently expects revenues for the fourth quarter to be in the range of $235 to $250 million. On a GAAP basis, operating margin is expected to be in the range of approximately 10 to 12%. Additional non-cash and infrequently occurring charges and benefits excluded when calculating non-GAAP operating income are expected to total a net charge of approximately $7 to $9 million. As a result, on a non-GAAP basis, operating margin is expected to be in the range of 13 to 15%. Weighted average fully-diluted shares are expected to increase from 93.4 million in the third quarter to approximately 98.0 million in the fourth quarter due to the shares issued in the common stock offering that closed on December 27, 2010 and options exercised during the third quarter being outstanding for the full fourth quarter. Non-GAAP earnings per diluted share is expected to be in the range of approximately $0.31 to $0.35. CONFERENCE CALL Finisar will discuss its financial results for the second quarter and current business outlook during its regular quarterly conference call scheduled for Tuesday, March 8, 2011, at 2:00pm PST (5:00pm EST). To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com/ or dial 1-888-609-5698 (domestic) or (913) 312-1477 (international) and enter conference ID 9631182. An audio replay will be available for two weeks following the call by dialing 1-888-203-1112 (domestic) or (719) 457-0820 and then following the prompts: enter conference ID 9631182 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 July 1, 2010) and quarterly SEC filings. ABOUT FINISAR Finisar Corporation (
Finisar Corporation Consolidated Statements of Operations Three Months Three Months Ended Nine Months Ended Ended -------------------- -------------------- --------- January January January January October 30, 2011 31, 2010 30, 2011 31, 2010 31, 2010 --------- --------- --------- --------- --------- (Unaudited) (in thousands, except per share data) Revenues $ 263,016 $ 166,935 $ 711,841 $ 441,390 $ 240,943 Cost of revenues 177,730 114,048 470,865 316,923 157,343 Amortization of acquired developed technology 1,221 1,192 3,613 3,577 1,200 --------- --------- --------- --------- --------- Gross profit 84,065 51,695 237,363 120,890 82,400 Gross margin 32.0% 31.0% 33.3% 27.4% 34.2% Operating expenses: Research and development 29,607 24,892 84,372 67,514 28,148 Sales and marketing 8,818 7,922 27,140 22,054 9,247 General and administrative 20,604 9,329 40,197 27,127 8,517 Amortization of purchased intangibles 383 426 1,149 1,645 383 Restructuring costs - - - 4,173 - --------- --------- --------- --------- --------- Total operating expenses 59,412 42,569 152,858 122,513 46,295 --------- --------- --------- --------- --------- Income (loss) from operations 24,653 9,126 84,505 (1,623) 36,105 Interest income 204 85 439 104 143 Interest expense (1,465) (2,241) (5,697) (6,842) (2,077) Gain (loss) on repayment/purchase of convertible notes - 28 - (25,039) - Other income (expense), net (3,404) (961) (3,404) (2,899) 192 --------- --------- --------- --------- --------- Income (loss) from continuing operations before income taxes 19,988 6,037 75,843 (36,299) 34,363 Provision for income taxes 1,167 421 3,816 618 567 --------- --------- --------- --------- --------- Income (loss) from continuing operations 18,821 5,616 72,027 (36,917) 33,796 Income (loss) from discontinued operations, net of taxes - (131) (284) 36,881 - --------- --------- --------- --------- --------- Net income (loss) $ 18,821 $ 5,485 $ 71,743 $ (36) $ 33,796 ========= ========= ========= ========= ========= Income (loss) per share from continuing operations - basic $ 0.24 $ 0.09 $ 0.93 $ (0.58) $ 0.44 Income (loss) per share from continuing operations - diluted $ 0.22 $ 0.08 $ 0.84 $ (0.58) $ 0.39 Income (loss) per share from discontinued operations - basic $ - $ (0.00) $ (0.00) $ 0.58 $ - Income (loss) per share from discontinued operations - diluted $ - $ (0.00) $ (0.00) $ 0.58 $ - Shares used in computing net loss per share from continuing operations - basic 80,080 65,113 77,638 63,131 76,766 Shares used in computing net loss per share from continuing operations - diluted 93,388 66,719 90,694 63,131 89,521 Shares used in computing net income (loss) per share from discontinued operations - basic 80,080 65,113 77,638 63,131 76,766 Shares used in computing net income (loss) per share from discontinued operations - diluted 93,388 66,719 90,694 63,131 89,521 Finisar Corporation Consolidated Balance Sheets (In thousands) January 30, October 31, August 1, April 30, 2011 2010 2010 2010 ----------- ----------- ----------- ----------- (unaudited) (unaudited) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 310,232 $ 184,928 $ 192,152 $ 207,024 Accounts receivable, net 175,173 173,243 152,477 127,617 Accounts receivable, other 13,910 11,826 9,885 12,855 Inventories 176,811 167,021 154,586 139,525 Deferred tax assets 2,437 1,559 852 2,238 Prepaid expenses 11,253 9,571 7,306 6,956 ----------- ----------- ----------- ----------- Total current assets 689,816 548,148 517,258 496,215 Property, equipment and improvements, net 112,324 100,960 93,386 89,214 Purchased technology, net 8,403 9,576 10,497 11,689 Other intangible assets, net 10,509 10,910 11,312 11,713 Minority investments 18,610 18,169 12,289 12,289 Other assets 4,178 4,995 5,131 5,610 ----------- ----------- ----------- ----------- Total assets $ 843,840 $ 692,758 $ 649,873 $ 626,730 =========== =========== =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 83,263 $ 86,598 $ 79,121 $ 76,838 Accrued compensation 21,872 21,861 14,479 18,289 Other accrued liabilities 25,101 20,739 20,206 21,798 Deferred revenue 7,186 8,475 6,290 6,571 Current portion of convertible notes - - 29,214 28,839 Current portion of long-term debt - 4,000 4,000 4,000 ----------- ----------- ----------- ----------- Total current liabilities 137,422 141,673 153,310 156,335 Long-term liabilities: Convertible notes, net of current portion 57,850 100,000 100,000 100,000 Long-term debt, net of current portion - 13,250 14,250 15,250 Other non-current liabilities 12,706 12,762 6,102 6,260 Deferred tax liabilities 387 328 255 239 ----------- ----------- ----------- ----------- Total liabilities 208,365 268,013 273,917 278,084 Stockholders' equity: Common stock 87 77 76 76 Additional paid-in capital 2,239,726 2,048,708 2,038,636 2,030,373 Accumulated other comprehensive income 21,513 20,632 15,712 15,791 Accumulated deficit (1,625,851) (1,644,672) (1,678,468) (1,697,594) ----------- ----------- ----------- ----------- Total stockholders' equity 635,475 424,745 375,956 348,646 ----------- ----------- ----------- ----------- Total liabilities and stockholders' equity $ 843,840 $ 692,758 $ 649,873 $ 626,730 =========== =========== =========== ===========
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 non-recurring and infrequently incurred 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:
-- Changes in excess and obsolete inventory reserve (predominantly non-cash charges or non-cash benefits); -- Amortization of acquired technology (non-cash charges related to technology obtained in acquisitions); -- Stock-based compensation expense (non-cash charges); -- The cost of covering employee and employer tax liabilities (non-recurring cash charges) arising from the special investigation into our historical stock option granting practices; -- Purchase accounting adjustment for sale of acquired inventory (non-cash charges); and -- Reduction in force costs (non-recurring charges).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:
-- Gain or loss on settlement of lawsuits (non-recurring charges); -- Debt conversion inducement expense (non-cash charges associated with the issuance of additional shares in connection with the exchange of convertible notes); and -- Restructuring costs (non-recurring charges).In calculating non-GAAP income from continuing operations and non-GAAP income from continuing operations per share in this release, we have also excluded the following items in applicable periods:
-- Amortization of discount on convertible debt and imputed interest expense (non-cash charges); -- Losses on repayment/purchase/exchange of convertible notes (non-recurring and non-cash charges); -- Imputed interest related to restructuring (amortization of imputed interest expense associated with previously incurred restructuring costs); -- Gains and losses on sales of assets (non-recurring or non-cash losses and cash gains related to the periodic disposal of assets no longer required for current activities); -- Gains and losses on minority investments (infrequently occurring and principally non-cash gains and losses related to the disposal of investments in other companies and non-cash income or loss from these investments accounted for under the equity method); -- Other miscellaneous income; -- Dollar denominated foreign exchange transaction losses (gains) (non-recurring and non-cash charges); -- Debt conversion inducement expense (acceleration of the amortization of previously paid fees associated with the original issuance of the exchanged portion of convertible notes); and -- Differences between cash payable for tax and GAAP provision, less non-recurring items.In calculating non-GAAP income from discontinued operations and non-GAAP income from discontinued operations per share in this release, we have also excluded gains on disposal of a product line and disposal of discontinued operations. 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 Three Months Three Months Ended Nine Months Ended Ended -------------------- -------------------- --------- January January January January October 30, 2011 31, 2010 30, 2011 31, 2010 31, 2010 --------- --------- --------- --------- --------- (Unaudited) (in thousands, except per share data) Reconciliation of GAAP income (loss) to non-GAAP income (loss) from continuing operations Reconciliation of GAAP Gross Profit to non-GAAP Gross Profit: Gross profit per GAAP $ 84,065 $ 51,695 $ 237,363 $ 120,890 $ 82,400 Gross margin, GAAP 32.0% 31.0% 33.3% 27.4% 34.2% Adjustments: Cost of revenues Change in excess and obsolete inventory reserve 4,589 (24) 5,569 6,035 575 Amortization of acquired technology 1,222 1,192 3,614 3,576 1,200 Stock compensation 1,353 909 3,409 3,228 1,310 Payroll taxes related to options investigation (83) - (83) - - Purchase accounting adjustment for sale of acquired inventory 11 - 11 - - Reduction in force costs 1 64 43 240 6 --------- --------- --------- --------- --------- Total cost of revenue adjustments 7,093 2,141 12,563 13,079 3,091 Gross profit, non-GAAP 91,158 53,836 249,926 133,969 85,491 Gross margin, non-GAAP 34.7% 32.2% 35.1% 30.4% 35.5% Reconciliation of GAAP operating income (loss) to non-GAAP operating income (loss): Operating income (loss) per GAAP 24,653 9,126 84,505 (1,623) 36,105 Operating margin (deficit), GAAP 9.4% 5.5% 11.9% -0.4% 15.0% Adjustments: Total cost of revenue adjustments 7,093 2,141 12,563 13,079 3,091 Research and development Reduction in force costs 25 20 30 49 - Stock compensation 1,608 1,363 4,347 4,378 1,702 Payroll taxes related to options investigation (118) - (118) - - Sales and marketing Reduction in force costs 69 - 224 - 81 Stock compensation 536 463 1,515 1,472 528 Payroll taxes related to options investigation (42) - (42) - - General and administrative Reduction in force costs 29 54 121 303 50 Stock compensation 1,189 779 3,636 2,541 1,422 Payroll taxes related to options investigation (73) - (73) 200 - Litigation settlement 3,437 (200) 872 127 (2,465) Debt conversion expense 5,946 - 5,946 - - Amortization of purchased intangibles 383 426 1,149 1,645 383 Restructuring costs - - - 4,173 - --------- --------- --------- --------- --------- Total cost of revenue and operating expense adjustments 20,082 5,046 30,170 27,967 4,792 Operating income, non-GAAP 44,735 14,172 114,675 26,344 40,897 Operating margin, non-GAAP 17.0% 8.5% 16.1% 6.0% 17.0% Reconciliation of GAAP income (loss) to non-GAAP income (loss) from continuing operations: Income (loss) per GAAP from continuing operations 18,821 5,616 72,027 (36,917) 33,796 Total cost of revenue and operating expense adjustments 20,082 5,046 30,170 27,967 4,792 Non-cash imputed interest expenses on convertible debt - 383 742 2,674 367 Loss on repayment/purchase of convertible notes - (28) - 25,039 - Imputed interest related to restructuring 74 - 74 - - Other income (expense), net Loss (gain) on sale of assets 154 10 161 285 (9) Loss on minority investments - - - 1,625 - Other misc income (3) - (61) (2) (58) Foreign exchange transaction loss/(gain) 2,357 441 1,819 106 (471) Debt conversion expense 620 - 620 - - Provision for income tax Difference between cash payable for taxes and GAAP provision, less non-recurring items 416 - 1,083 - (115) --------- --------- --------- --------- --------- Total adjustments 23,700 5,852 34,608 57,694 4,506 --------- --------- --------- --------- --------- Income, non-GAAP, from continuing operations 42,521 11,468 106,635 20,777 38,302 --------- --------- --------- --------- --------- Reconciliation of GAAP income (loss) to non-GAAP income (loss) from discontinued operations: Income (loss) per GAAP from discontinued operations - (131) (284) 36,881 - Adjustments: Reduction in force costs - - - 6 - Stock compensation - - - 704 - Amortization of acquired technology - - - 170 - Amortization of purchased intangibles - - - 77 - Gain on disposal of a product line - - - (1,250) - Gain on disposal of discontinued operations - 165 - (35,888) - --------- --------- --------- --------- --------- Total adjustments - 165 - (36,181) - --------- --------- --------- --------- --------- Income (loss) from discontinued operations, non-GAAP - 34 (284) 700 - --------- --------- --------- --------- --------- Reconciliation of GAAP net income (loss) to non-GAAP net income (loss): Net income (loss) per GAAP 18,821 5,485 71,743 (36) 33,796 Total adjustments from continuing operations 23,700 5,852 34,608 57,694 4,506 Total adjustments from discontinuing operations - 165 - (36,181) - --------- --------- --------- --------- --------- Total adjustments 23,700 6,017 34,608 21,513 4,506 --------- --------- --------- --------- --------- Net income, non-GAAP $ 42,521 $ 11,502 $ 106,351 $ 21,477 $ 38,302 ========= ========= ========= ========= ========= Income from continuing operations $ 42,521 $ 11,468 $ 106,635 $ 20,777 $ 38,302 Add: interest expense for dilutive convertible notes 1,283 1,349 4,035 1,349 1,374 --------- --------- --------- --------- --------- Adjusted income from continuing operations $ 43,804 $ 12,817 $ 110,670 $ 22,126 $ 39,676 ========= ========= ========= ========= ========= Income per share from continuing operations - basic $ 0.53 $ 0.18 $ 1.37 $ 0.33 $ 0.50 Income per share from continuing operations - diluted $ 0.47 $ 0.17 $ 1.22 $ 0.34 $ 0.44 Shares used in computing net income per share from continuing operations - basic 80,080 65,113 77,638 63,131 76,766 Shares used in computing net income per share from continuing operations - diluted 93,388 76,082 90,694 64,615 89,521 Continuing operations Net income, non-GAAP $ 42,521 $ 11,468 $ 106,635 $ 20,777 $ 38,302 Depreciation expense 8,922 7,638 25,772 21,992 8,684 Amortization 264 291 842 599 289 Interest expense 1,187 1,773 4,442 4,064 1,567 Income tax expense 751 421 2,734 618 682 --------- --------- --------- --------- --------- Non-GAAP EBITDA $ 53,645 $ 21,591 $ 140,425 $ 48,050 $ 49,524 --------- --------- --------- --------- --------- Discontinued operations Net income (loss), non-GAAP - 34 (284) 700 - Depreciation expense - - - 119 - --------- --------- --------- --------- --------- Non-GAAP EBITDA $ - $ 34 $ (284) $ 819 $ - --------- --------- --------- --------- --------- --------- --------- --------- --------- --------- Total Non-GAAP EBITDA $ 53,645 $ 21,625 $ 140,141 $ 48,869 $ 49,524 ========= ========= ========= ========= =========
Contact Information: Investor Contact: Kurt Adzema Chief Financial Officer 408-542-5050 or Investor.relations@finisar.com Press contact: Victoria McDonald Sr. Manager, Corporate Communications 408-542-4261