December 7, 2017
Finisar Announces Second Quarter Fiscal 2018 Financial Results
SUNNYVALE, Calif.
, Dec. 07, 2017
(GLOBE NEWSWIRE)
-- Finisar Corporation (NASDAQ:FNSR), a global technology
leader for subsystems and components for fiber optic communications, today announced financial results for its second
fiscal quarter, ended October 29, 2017.
COMMENTARY
"We experienced strong demand in our second fiscal quarter for our 100G QSFP28 transceivers for datacenters," said Jerry
Rawls
, Finisar's Chief Executive Officer. "However, our overall revenues for the second fiscal quarter were $332.2 million, a
decrease of $9.6 million, or 2.8%, compared to the first quarter of fiscal 2018. This decline was primarily due to lower
revenues from our Chinese OEM customers. Also, during the second quarter, we began shipping production quantities of
our VCSEL arrays for 3D sensing. In addition, after the end of the quarter, we acquired an approximately 700,000 square
foot facility in Sherman, Texas. In the second half of calendar year 2018, we expect this facility will allow us to produce
VCSEL arrays using 6" wafers for both consumer and automotive applications."
_____________
FINANCIAL HIGHLIGHTS
- Second Quarter Ended October 29, 2017
Summary GAAP Results
Second
First
Quarter
Quarter
Ended
Ended
October 29, 2017
July 30, 2017
(in thousands, except per share amounts)
Revenues
$332,205
$341,806
Gross margin
29.0%
33.7%
Operating expenses
$86,738
$85,387
Operating income
$9,467
$29,912
Operating margin
2.8%
8.8%
Net income
$5,857
$19,859
Income per share-basic
$0.05
$0.18
Income per share-diluted
$0.05
$0.17
Basic shares
113,960
112,544
Diluted shares
115,443
115,698
Summary Non-
GAAP Results (a)
Second
First
Quarter
Quarter
Ended
Ended
October 29, 2017
July 30, 2017
(in thousands, except per share amounts)
Revenues
$332,205
$341,806
Non-GAAP Gross margin
30.3%
34.9%
Non-GAAP Operating expenses
$74,643
$73,150
Non-GAAP Operating income
$25,914
$46,005
Non-GAAP Operating margin
7.8%
13.5%
Non-GAAP Net income
26,089
45,750
Non-GAAP Income per share-basic
$0.23
$0.41
Non-GAAP Income per share-diluted
$0.23
$0.40
Basic shares
113,960
112,544
Diluted shares
115,443
115,698
(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 Second Quarter of Fiscal 2018:
l Sales of datacom products decreased by $1.7 million, or (0.7)%, compared to the first quarter of fiscal 2018, primarily
from lower demand for 10G and below transceivers, 40G QSFP transceivers, and 100G CFP ethernet transceivers.
This was partially offset by an increase in sales of 100G QSFP28 transceivers as well as new revenues from VCSEL
arrays for 3D sensing.
l Sales of telecom products decreased by $7.9 million, or (9.5)%, compared to the first quarter of fiscal 2018, primarily
driven by lower revenues from our Chinese OEM customers.
l GAAP gross margin was 29.0% compared to 33.7% in the first quarter of fiscal 2018, primarily due to lower revenue
levels, unfavorable product mix, and under-absorption of manufacturing costs at our Allen, Texas VCSEL fab. This
under-absorption was primarily due to our shipping production quantities of VCSEL arrays late in the quarter.
l
Non
-GAAP gross margin was 30.3% compared to 34.9% in the first quarter of fiscal 2018.
l GAAP operating margin was 2.8% compared to 8.8% in the first quarter of fiscal 2018, primarily due to lower revenue
levels and gross margins.
l
Non
-GAAP operating margin was 7.8% compared to 13.5% in the first quarter of fiscal 2018.
l GAAP income per fully diluted share was $0.05 compared to $0.17 in the first quarter of fiscal 2018, primarily due to
lower revenue levels and gross margin.
l
Non
-GAAP income per fully diluted share was $0.23 compared to $0.40 in the first quarter of fiscal 2018.
OUTLOOK
Finisar indicated that for the third quarter of fiscal 2018 it currently expects revenues in the range of $325 to $345 million,
non-GAAP gross margin of approximately 30%-31%, non-GAAP operating margin of approximately 7.5% -8.5%, and non-
GAAP earnings per fully diluted share in the range of approximately $0.21 to $0.27.
Finisar has not provided a reconciliation of its third quarter outlook for non-GAAP gross margin, non-GAAP operating
margin and non-GAAP earnings per fully diluted share because estimates of all of the reconciling items cannot be provided
without unreasonable efforts. It is difficult to reasonably provide a forward-looking estimate of certain reconciling items
between such non-GAAP forward-looking measures and the comparable forward-looking GAAP measures. Certain factors
that are materially significant to Finisar's ability to estimate these items are out of its control and/or cannot be reasonably
predicted, including with respect to restructuring charges, litigation settlements and resolutions and related costs, and the
timing of tax related adjustments. Accordingly, a reconciliation of such non-GAAP forward-looking measures to the
comparable forward-looking GAAP measures are not available within a reasonable range of predictability.
CONFERENCE CALL
Finisar will discuss its financial results for the second quarter and current business outlook during its regular quarterly
conference call scheduled for Thursday, December 7, 2017, 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-(855) 473-9088 (domestic) or 1-
(720) 405-0995 (international) and enter conference ID 61569772.
An audio replay will be available for two weeks following the call by dialing 1- (855) 859-2056 (domestic) or 1-404-537-3406
(international) and then following the prompts: enter conference ID 61569772and provide your name, affiliation, and contact
number. A replay of the webcast will be available shortly after the conclusion of the call on Finisar'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