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| 8-K - FORM 8-K - OPLINK COMMUNICATIONS INC | form8-k.htm |
Exhibit 99.1
Oplink Reports Strong Second Quarter Fiscal 2011 Financial Results
Fremont, Calif., -- January 27, 2011 -- Oplink Communications, Inc. (Nasdaq: OPLK), a leading provider of design, integration and optical manufacturing solutions (OMS) for optical networking components, modules and subsystems, today reported its financial results for its second quarter of fiscal 2011, ended December 31, 2010.
Revenues for the quarter were $52.0 million, an increase of 5% over the first quarter of fiscal 2011 and an increase of 59% over the same period of the prior year. GAAP net income for the second quarter of fiscal 2011 was $8.5 million, or $0.41 per diluted share, an increase of 52% over $5.6 million, or $0.28 per diluted share, reported for the first quarter of fiscal 2011 and an increase of 171% over $3.1 million, or $0.14 per diluted share, reported in the same period of the prior year.
Non-GAAP net income for the second quarter of fiscal 2011 was $10.7 million, or $0.52 per diluted share, an increase of 30% over $8.3 million, or $0.41 per diluted share, reported for the first quarter of fiscal 2011 and an increase of 89% over $5.7 million, or $0.26 per diluted share, reported in the same period of the prior year. Non-GAAP results reflect the adjustments described in the Reconciliation of GAAP Financial Measures to non-GAAP Financial Measures attached to this press release.
Oplink generated $7.4 million in cash from operations during the second quarter, and closed the quarter with cash, cash equivalents and short-term investments of $168 million.
"We reported a strong second quarter across the business with good performances in revenue, gross margin and net income,” commented Joe Liu, Chairman and CEO of Oplink. “Bandwidth demand continues to drive top line growth. A favorable product and customer mix contributed to better than expected gross margin performance, and our manufacturing capabilities remained strong. We continue to invest in R&D to develop new products and technologies that are expected to drive further growth over time. The sales environment is encouraging, and we are optimistic about our business into the third quarter."
Business Outlook for the Quarter Ending March 31, 2011
For the quarter ending March 31, 2011, the Company expects to report revenues between $52 million and $56 million and GAAP net income per diluted share of approximately $0.39 to $0.45. On a non-GAAP basis, excluding stock compensation, amortization of intangible assets and other non-cash or non-recurring charges, if any, the Company expects earnings per diluted share for the quarter ending March 31, 2011 of approximately $0.49 to $0.55.
Conference Call Information
The Company will host a conference call and live webcast at 2:30 p.m. Pacific Time today, January 27, 2011. To access the conference call, dial 877-941-8416 or 480-629-9808 (outside the U.S. and Canada). The webcast will be available live on the Investor Relations section of the Company’s corporate website at http://investor.oplink.com and via replay beginning approximately two hours after the completion of the call until the Company’s announcement of its financial results for the next quarter. An audio replay of the call will also be available to investors beginning at approximately 4:30 p.m. Pacific Time on January 27, 2011 until 11:59 p.m. Pacific Time on February 3, 2011, by dialing 800-406-7325 or 303-590-3030 (outside the U.S. and Canada) and entering pass code 4402247#.
Non-GAAP Financial Measures
In this earnings release and during the earnings conference call and webcast as described above, Oplink will discuss certain non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A reconciliation between non-GAAP and GAAP measures can be found in the accompanying tables.
Oplink believes that providing these non-GAAP measures to its investors provides investors the benefit of viewing Oplink’s performance using the same financial metrics that the management team uses in making many key decisions and evaluating how Oplink’s “core operating performance” and its results of operations may look in the future. Oplink defines “core operating performance” as its on-going performance in the ordinary course of its operations. Items that are non-recurring or do not involve cash expenditures, such as impairment charges, restructuring charges, amortization of intangible assets and non-cash compensation related to stock and options, are not included in Oplink’s view of “core operating performance.”
About Oplink
Incorporated in 1995, Oplink is a leading provider of design, integration and optical manufacturing solutions (OMS) for optical networking components, modules and subsystems. Oplink offers advanced and cost-effective optical-electrical components and subsystem manufacturing through its facilities in Zhuhai and Shanghai, China. In addition, Oplink maintains optical-centric front-end design, application, and customer service functions at its offices in Fremont and Woodland Hills, California and has research facilities in Zhuhai and Wuhan, China and Hsinchu Science-Based Industrial Park in Taiwan. Oplink's customers include telecommunications, data communications and cable TV equipment manufacturers around the globe. Oplink is committed to providing fully customized, photonic foundry services incorporating its subsystems manufacturing capabilities. To learn more about Oplink, visit its web site at: http://www.oplink.com/.
Cautionary Statement
This news release contains forward-looking statements, including without limitation the statements under the heading “Business Outlook for the Quarter Ending March 31, 2011.” These forward-looking statements involve risks and uncertainties that could cause Oplink’s results to differ materially from those expressed or implied by such forward-looking statements, including the following risks and uncertainties: possible reductions in customer orders or delays in shipments of products to customers; Oplink’s reliance on a small number of customers for a substantial portion of its revenues; Oplink’s reliance on third parties to supply critical components and materials for its products; intense competition in Oplink’s target markets and potential pricing pressure that may arise from changing supply or demand conditions in the industry; the potential for a downturn in the telecommunications industry or the overall economy in the United States or other parts of the world; and other risks detailed from time to time in Oplink’s periodic reports filed with the Securities and Exchange Commission, including the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.,
The foregoing information represents Oplink’s outlook only as of the date of this press release, and Oplink undertakes no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.
Investor Relations:
Erica Abrams
415-217-5864
erica@blueshirtgroup.com
Matthew Hunt
415-489-2194
matt@blueshirtgroup.com
###
(TABLES TO FOLLOW)
OPLINK COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
December 31,
|
June 30,
|
|||||||
|
2010
|
2010
|
|||||||
|
(Unaudited)
|
(1) | |||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 68,713 | $ | 40,711 | ||||
|
Short-term investments
|
99,295 | 109,632 | ||||||
|
Accounts receivable, net
|
39,833 | 29,728 | ||||||
|
Inventories
|
26,007 | 20,902 | ||||||
|
Prepaid expenses and other current assets
|
5,983 | 7,659 | ||||||
|
Total current assets
|
239,831 | 208,632 | ||||||
|
Long-term investments
|
- | 10,000 | ||||||
|
Property, plant and equipment, net
|
35,342 | 33,363 | ||||||
|
Goodwill and intangible assets, net
|
4,900 | 6,952 | ||||||
|
Other assets
|
675 | 651 | ||||||
|
Total assets
|
$ | 280,748 | $ | 259,598 | ||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 13,774 | $ | 14,369 | ||||
|
Accrued liabilities and other current liabilities
|
14,007 | 11,657 | ||||||
|
Total current liabilities
|
27,781 | 26,026 | ||||||
|
Non-current liabilities
|
5,624 | 4,923 | ||||||
|
Total Liabilities
|
33,405 | 30,949 | ||||||
|
Stockholders’ equity
|
247,343 | 228,649 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 280,748 | $ | 259,598 | ||||
|
(1)
|
The June 30, 2010 condensed consolidated balance sheet has been derived from audited consolidated financial statements at that date.
|
OPLINK COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||||
|
2010
|
2010
|
2009
|
2010
|
2009
|
||||||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||||
|
Revenues
|
$ | 52,025 | $ | 49,640 | $ | 32,743 | $ | 101,665 | $ | 66,308 | ||||||||||
|
Cost of revenues:
|
||||||||||||||||||||
|
Cost of revenues
|
32,814 | 33,402 | 21,643 | 66,216 | 45,277 | |||||||||||||||
|
Stock compensation expense
|
102 | 117 | 88 | 219 | 187 | |||||||||||||||
|
Total cost of revenues
|
32,916 | 33,519 | 21,731 | 66,435 | 45,464 | |||||||||||||||
|
Gross profit
|
19,109 | 16,121 | 11,012 | 35,230 | 20,844 | |||||||||||||||
|
Operating expenses:
|
||||||||||||||||||||
|
Research and development
|
3,992 | 3,399 | 2,268 | 7,391 | 4,493 | |||||||||||||||
|
Sales and marketing
|
2,482 | 2,458 | 1,923 | 4,940 | 4,009 | |||||||||||||||
|
General and administrative
|
1,895 | 1,868 | 1,810 | 3,763 | 3,531 | |||||||||||||||
|
Stock compensation expense
|
1,127 | 1,541 | 1,520 | 2,668 | 3,067 | |||||||||||||||
|
Amortization of intangible assets
|
451 | 451 | 403 | 902 | 807 | |||||||||||||||
|
Total operating expenses
|
9,947 | 9,717 | 7,924 | 19,664 | 15,907 | |||||||||||||||
|
Income from operations
|
9,162 | 6,404 | 3,088 | 15,566 | 4,937 | |||||||||||||||
|
Interest and other income, net
|
54 | 57 | 193 | 111 | 467 | |||||||||||||||
|
Gain on sale/disposal of assets
|
83 | - | 214 | 83 | 338 | |||||||||||||||
|
Income before provision for income taxes
|
9,299 | 6,461 | 3,495 | 15,760 | 5,742 | |||||||||||||||
|
Provision for income taxes
|
(811 | ) | (881 | ) | (358 | ) | (1,692 | ) | (796 | ) | ||||||||||
|
Net income
|
$ | 8,488 | $ | 5,580 | $ | 3,137 | $ | 14,068 | $ | 4,946 | ||||||||||
|
Net income per share:
|
||||||||||||||||||||
|
Basic
|
$ | 0.43 | $ | 0.29 | $ | 0.15 | $ | 0.72 | $ | 0.24 | ||||||||||
|
Diluted
|
$ | 0.41 | $ | 0.28 | $ | 0.14 | $ | 0.69 | $ | 0.23 | ||||||||||
|
Shares used in per share calculation:
|
||||||||||||||||||||
|
Basic
|
19,556 | 19,335 | 20,797 | 19,441 | 20,686 | |||||||||||||||
|
Diluted
|
20,602 | 20,252 | 21,694 | 20,463 | 21,452 | |||||||||||||||
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(Unaudited, in thousands, except per share amounts)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||
|
December 31,
|
September 30,
|
December 31,
|
December 31,
|
December 31,
|
||||||||||||||||
|
2010
|
2010
|
2009
|
2010
|
2009
|
||||||||||||||||
|
Reconciliation of GAAP net income to non-GAAP net income:
|
||||||||||||||||||||
|
Net income, GAAP
|
$ | 8,488 | $ | 5,580 | $ | 3,137 | $ | 14,068 | $ | 4,946 | ||||||||||
|
Adjustments to measure non-GAAP:
|
||||||||||||||||||||
|
Related to cost of revenues:
|
||||||||||||||||||||
|
Stock compensation expense
|
102 | 117 | 88 | 219 | 187 | |||||||||||||||
|
Amortization of intangible assets
|
575 | 575 | 542 | 1,150 | 1,084 | |||||||||||||||
|
Total related to cost of revenues
|
677 | 692 | 630 | 1,369 | 1,271 | |||||||||||||||
|
Related to operating expenses:
|
||||||||||||||||||||
|
Stock compensation expense
|
1,127 | 1,541 | 1,520 | 2,668 | 3,067 | |||||||||||||||
|
Amortization of intangible assets
|
451 | 451 | 403 | 902 | 807 | |||||||||||||||
|
Total related to operating expenses
|
1,578 | 1,992 | 1,923 | 3,570 | 3,874 | |||||||||||||||
|
Non-GAAP net income
|
$ | 10,743 | $ | 8,264 | $ | 5,690 | $ | 19,007 | $ | 10,091 | ||||||||||
|
Net income per share, non-GAAP:
|
||||||||||||||||||||
|
Basic
|
$ | 0.55 | $ | 0.43 | $ | 0.27 | $ | 0.98 | $ | 0.49 | ||||||||||
|
Diluted
|
$ | 0.52 | $ | 0.41 | $ | 0.26 | $ | 0.93 | $ | 0.47 | ||||||||||
|
Shares used in per share calculation:
|
||||||||||||||||||||
|
Basic
|
19,556 | 19,335 | 20,797 | 19,441 | 20,686 | |||||||||||||||
|
Diluted
|
20,602 | 20,252 | 21,694 | 20,463 | 21,452 | |||||||||||||||
|
Reconciliation of GAAP gross profit to non-GAAP gross profit:
|
||||||||||||||||||||
|
GAAP gross profit
|
$ | 19,109 | $ | 16,121 | $ | 11,012 | $ | 35,230 | $ | 20,844 | ||||||||||
|
Stock compensation expense included in cost of revenues
|
102 | 117 | 88 | 219 | 187 | |||||||||||||||
|
Amortization of intangible assets included in cost of revenues
|
575 | 575 | 542 | 1,150 | 1,084 | |||||||||||||||
|
Non-GAAP gross profit
|
$ | 19,786 | $ | 16,813 | $ | 11,642 | $ | 36,599 | $ | 22,115 | ||||||||||
|
GAAP gross margin rate
|
36.7 | % | 32.5 | % | 33.6 | % | 34.7 | % | 31.4 | % | ||||||||||
|
Non-GAAP gross margin rate
|
38.0 | % | 33.9 | % | 35.6 | % | 36.0 | % | 33.4 | % | ||||||||||
OPLINK COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
Six Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
(Unaudited)
|
||||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income
|
$ | 14,068 | $ | 4,946 | ||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
2,709 | 3,341 | ||||||
|
Amortization of intangible assets
|
2,052 | 1,891 | ||||||
|
Stock compensation expense
|
2,887 | 3,254 | ||||||
|
Gain on sale/disposal of assets
|
(83 | ) | (338 | ) | ||||
|
Other
|
475 | 113 | ||||||
|
Change in assets and liabilities
|
(9,139 | ) | 4,403 | |||||
|
Net cash provided by operating activities
|
12,969 | 17,610 | ||||||
|
Cash flows from investing activities:
|
||||||||
|
Net sales (purchases) of investments
|
20,308 | (12,072 | ) | |||||
|
Net purchases of property and equipment
|
(3,802 | ) | (851 | ) | ||||
|
Net cash provided by (used in) investing activities
|
16,506 | (12,923 | ) | |||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from issuance of common stock
|
4,855 | 3,406 | ||||||
|
Repurchase of common stock
|
(6,534 | ) | - | |||||
|
Net cash (used in) provided by financing activities
|
(1,679 | ) | 3,406 | |||||
|
Effect of exchange rate changes on cash and cash equivalents
|
206 | 20 | ||||||
|
Net increase in cash and cash equivalents
|
28,002 | 8,113 | ||||||
|
Cash and cash equivalents, beginning of period
|
40,711 | 49,702 | ||||||
|
Cash and cash equivalents, end of period
|
$ | 68,713 | $ | 57,815 | ||||