SAN JOSE, Calif., Nov. 1, 2017 /PRNewswire/ -- Oclaro, Inc.
(Nasdaq: OCLR), a leading provider and innovator of optical
communications solutions, today announced its financial results for
the first quarter of fiscal year 2018, which ended September 30, 2017.
"The Oclaro team once again produced strong quarterly results,
fueled by our CFP2-ACO and QSFP product lines. We generated
sequential revenue growth and strong profitability," said
Greg Dougherty, Chief Executive
Officer, Oclaro. "Our near-term visibility includes continued
softness in China, compounded by a
recent slowdown in data center sales. Despite our reduced
outlook, we expect to remain solidly profitable for the December
quarter, which would serve as a further testament to our strong
financial model."
Results for the First Quarter of Fiscal 2018
- Revenues were $155.6 million for
the first quarter of fiscal 2018. This compares with revenues of
$149.4 million in the fourth quarter
of fiscal 2017, and revenues of $135.5
million in the first quarter of fiscal 2017.
- GAAP gross margin was 40.3% for the first quarter of fiscal
2018. This compares with GAAP gross margin of 41.1% in the fourth
quarter of fiscal 2017, and GAAP gross margin of 34.2% in the first
quarter of fiscal 2017.
- Non-GAAP gross margin was 40.6% for the first quarter of fiscal
2018. This compares with non-GAAP gross margin of 41.4% in the
fourth quarter of fiscal 2017, and non-GAAP gross margin of 34.4%
in the first quarter of fiscal 2017.
- GAAP operating income was $31.2
million for the first quarter of fiscal 2018. This compares
with GAAP operating income of $29.9
million in the fourth quarter of fiscal 2017, and GAAP
operating income of $17.9 million in
the first quarter of fiscal 2017.
- Non-GAAP operating income was $34.6
million for the first quarter of fiscal 2018. This compares
with non-GAAP operating income of $33.3
million in the fourth quarter of fiscal 2017, and non-GAAP
operating income of $20.9 million in
the first quarter of fiscal 2017.
- GAAP net income for the first quarter of fiscal 2018 was
$26.5 million. This compares with
GAAP net income of $56.0 million in
the fourth quarter of fiscal 2017, and GAAP net income of
$3.4 million in the first quarter of
fiscal 2017.
- Non-GAAP net income for the first quarter of fiscal 2018 was
$34.5 million. This compares with
non-GAAP net income of $33.9 million
in the fourth quarter of fiscal 2017, and non-GAAP net income of
$20.0 million in the first quarter of
fiscal 2017.
- GAAP earnings per diluted share for the first quarter of fiscal
2018 were $0.16. This compares with
GAAP earnings per diluted share of $0.33 in the fourth quarter of fiscal 2017, and
GAAP earnings per diluted share of $0.02 in the first quarter of fiscal 2017.
- Non-GAAP earnings per diluted share for the first quarter of
fiscal 2018 were $0.20. This compares
with non-GAAP earnings per diluted share of $0.20 in the fourth quarter of fiscal 2017, and
non-GAAP earnings per diluted share of $0.14 in the first quarter of fiscal 2017.
- Cash, cash equivalents, restricted cash, and short-term
investments were $279.8 million at
September 30, 2017.
Second Quarter Fiscal Year 2018 Outlook
The guidance for the quarter ending December 30, 2017 is:
- Revenues in the range of $135 million to
$143 million.
- Non-GAAP gross margin in the range of 36% to 39%.
- Non-GAAP operating income in the range of $19 million to $23 million.
The foregoing guidance is based on current expectations. These
statements are forward looking, and actual results may differ
materially. Please see the Safe Harbor Statement in this earnings
release for a description of certain important risk factors that
could cause actual results to differ, and refer to Oclaro's most
recent annual and quarterly reports on file with the Securities and
Exchange Commission (SEC) for a more complete description of these
risks. Furthermore, we have not provided reconciliations from
non-GAAP to GAAP for our outlook. Certain elements of such
reconciliations, such as restructuring and related costs,
acquisition or disposal related costs, expenses or income from
certain legal actions, settlements and related costs outside our
normal course of business, impairments of other long-lived assets
and other costs and contingencies unrelated to our current and
future operations, are highly variable and we are not able to
forecast these items within a meaningful range. We are better able
to forecast stock-based compensation and amortization of other
intangible assets, the two largest elements of such reconciliation,
and we expect those elements to be approximately $3.9 million and $0.2
million, respectively, for the second quarter. We do not
intend to update this guidance as a result of developments
occurring after the date of this release.
Conference Call
Oclaro will hold a conference call to discuss financial results
for the first quarter of fiscal year 2018 today at 2:00 p.m. PT/5:00 p.m.
ET. To listen to the live conference call, please dial (719)
325-4789. A replay of the conference call will be available through
November 15, 2017. To access the
replay, dial (412) 317-6671. The passcode for the replay is
2460877. A webcast of this call and a supplemental presentation
will be available in the investor section of Oclaro's website at
www.oclaro.com.
About Oclaro
Oclaro, Inc. (NASDAQ: OCLR), is a leader in optical components
and modules for the long-haul, metro and data center markets.
Leveraging more than three decades of laser technology innovation
and photonics integration, Oclaro provides differentiated solutions
for optical networks and high-speed interconnects driving the next
wave of streaming video, cloud computing, application
virtualization and other bandwidth-intensive and high-speed
applications. For more information, visit www.oclaro.com or follow
on Twitter at @OclaroInc.
Copyright 2017. All rights reserved. Oclaro, the Oclaro logo,
and certain other Oclaro trademarks and logos are trademarks and/or
registered trademarks of Oclaro, Inc. or its subsidiaries in the US
and other countries. All other trademarks are the property of their
respective owners. Information in this release is subject to change
without notice.
Safe Harbor Statement
This press release, in association with Oclaro's first quarter
of fiscal year 2018 financial results conference call, contains
statements about management's future expectations regarding the
plans or prospects of Oclaro and its business, and together with
the assumptions underlying these statements, constitute
forward-looking statements for the purposes of the safe harbor
provisions of The Private Securities Litigation Reform Act of 1995.
Investors should not unduly rely on such forward-looking
statements. These forward-looking statements include statements
concerning (i) financial guidance for the fiscal quarter ending
December 30, 2017 regarding revenues,
non-GAAP gross margin, and non-GAAP operating income, (ii) customer
demand for Oclaro's products, (iii) Oclaro's future financial
performance and operating prospects and (iv) the statements in our
CEO's quote. Such statements can be identified by the fact that
they do not relate strictly to historical or current facts and may
contain words such as "anticipate," "estimate," "expect,"
"forecast," "project," "intend," "plan," "believe," "will,"
"should," "outlook," "could," "target," "model," "objective," and
other words and terms of similar meaning in connection with any
discussion of future operations or financial performance. There are
a number of important factors that could cause actual results or
events to differ materially from those indicated by such
forward-looking statements, including (i) the absence of long-term
purchase commitments from many of our long-term customers, (ii) our
dependence on a limited number of customers for a significant
percentage of our revenues, (iii) competition and pricing pressure,
(iv) our ability to respond to evolving technologies, customer
requirements and demands, and product design challenges, (v) our
ability to meet or exceed our gross margin expectations, (vi) our
ability to timely develop, commercialize and ramp the production of
new products to customer required volumes, (vii) potential
operating or reporting disruptions that could result from the
implementation of our new enterprise resource planning system,
(viii) our ability to effectively manage our inventory, (ix) our
ability to conclude agreements with our customers on favorable
terms, (x) fluctuations in our revenues, growth rates and operating
results, (xi) our manufacturing yields, (xii) the risks associated
with delays, disruptions or quality control problems in
manufacturing, (xiii) our ability to continue increasing the
percentage of sales associated with our new products, (xiv) the
effects of fluctuations in foreign currency exchange rates, (xv)
our ability to obtain governmental licenses and approvals for
international trading activities or technology transfers, including
export licenses, (xvi) our dependence on a limited number of
suppliers and key contract manufacturers, (xvii) the impact of
financial market and general economic conditions in the industries
in which we operate and any resulting reduction in demand for our
products, (xviii) our ability to protect our intellectual property
rights, (xix) the outcome of pending litigation against us, and
(xx) other factors described under the caption "Risk Factors" and
elsewhere in our most recent annual report on Form 10-K and other
documents we periodically file with the SEC.
Non-GAAP Financial Measures
Oclaro provides certain supplemental non-GAAP financial measures
to its investors as a complement to the most comparable GAAP
measures. The GAAP measure most directly comparable to non-GAAP
gross margin rate is gross margin rate. The GAAP measure most
directly comparable to non-GAAP operating income/loss is operating
income/loss. The GAAP measure most directly comparable to Adjusted
EBITDA is net income/loss. The GAAP measure most directly
comparable to non-GAAP net income/loss is net income/loss. An
explanation and reconciliation of each of these non-GAAP financial
measures to GAAP information is set forth below.
Oclaro believes that providing these non-GAAP measures to its
investors, in addition to corresponding income statement measures,
provides investors the benefit of viewing Oclaro's performance
using the same financial metrics that the management team uses in
making many key decisions and evaluating how Oclaro's core
operating performance and its results of operations may look in the
future. Oclaro defines "core operating performance" as its ongoing
performance in the ordinary course of its operations. Management
excludes certain items from its view of Oclaro's core operating
performance, such as impairment charges, deferred income taxes,
restructuring and severance programs, costs relating to specific
major projects (such as acquisitions), non-cash compensation
related to stock and options, impairment of fixed assets and
inventory and related expenses, certain other income and expense
items, and the tax effects thereof. Management does not believe
these items are reflective of Oclaro's ongoing core operating
performance and accordingly excludes those items from non-GAAP
gross margin rate, non-GAAP operating income/loss, non-GAAP net
income/loss and Adjusted EBITDA. Additionally, each non-GAAP
measure has historically been presented by Oclaro as a complement
to its most comparable GAAP measure, and Oclaro believes that the
continuation of this practice increases the consistency and
comparability of Oclaro's earnings releases.
Non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles in
the United States of America.
Non-GAAP measures should not be considered in isolation from or as
a substitute for financial information presented in accordance with
generally accepted accounting principles, and may be different from
non-GAAP measures used by other companies.
Adjusted EBITDA
Adjusted EBITDA is calculated as net income/loss excluding the
impact of income taxes, net interest income/expense, depreciation
and amortization, net gains/losses on foreign currency
transactions, as well as restructuring, acquisition and related
costs, non-cash compensation related to stock and options, and
other unusual one-time charges, specifically identified in the
non-GAAP reconciliation schedules set forth below. Oclaro uses
Adjusted EBITDA in evaluating Oclaro's historical and prospective
cash usage, as well as its cash usage relative to its competitors.
Specifically, management uses this non-GAAP measure to further
understand and analyze the cash used in/generated from Oclaro's
core operations. Oclaro believes that by excluding these non-cash
and non-recurring charges, more accurate expectations of its future
cash needs can be assessed in addition to providing a better
understanding of the actual cash used in or generated from core
operations for the periods presented. Oclaro further believes that
providing this information allows Oclaro's investors greater
transparency and a better understanding of Oclaro's core cash
position.
Oclaro, Inc.
Contact
|
|
Investor
Contact
|
Pete
Mangan
|
|
Jim
Fanucchi
|
Chief Financial
Officer
|
|
Darrow Associates,
Inc.
|
(408)
383-1400
|
|
(408)
404-5400
|
ir@oclaro.com
|
|
ir@oclaro.com
|
OCLARO,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
July 1,
2017
|
|
(Thousands)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
192,420
|
|
|
$
|
219,270
|
|
Restricted
cash
|
268
|
|
|
716
|
|
Short-term
investments
|
87,091
|
|
|
37,559
|
|
Accounts receivable,
net
|
122,640
|
|
|
122,287
|
|
Inventories
|
104,201
|
|
|
101,068
|
|
Prepaid expenses and
other current assets
|
47,477
|
|
|
40,870
|
|
Total current
assets
|
554,097
|
|
|
521,770
|
|
Property and
equipment, net
|
126,936
|
|
|
114,333
|
|
Other intangible
assets, net
|
553
|
|
|
699
|
|
Deferred tax assets,
non-current
|
19,889
|
|
|
25,774
|
|
Other non-current
assets
|
2,785
|
|
|
2,573
|
|
Total
assets
|
$
|
704,260
|
|
|
$
|
665,149
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
96,780
|
|
|
$
|
88,316
|
|
Accrued expenses and
other liabilities
|
43,036
|
|
|
42,499
|
|
Capital lease
obligations, current
|
2,339
|
|
|
2,368
|
|
Total current
liabilities
|
142,155
|
|
|
133,183
|
|
Deferred gain on
sale-leasebacks
|
5,882
|
|
|
5,895
|
|
Capital lease
obligations, non-current
|
1,239
|
|
|
1,379
|
|
Other non-current
liabilities
|
11,155
|
|
|
11,019
|
|
Total
liabilities
|
160,431
|
|
|
151,476
|
|
Stockholders'
equity:
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
Common
stock
|
1,688
|
|
|
1,676
|
|
Additional paid-in
capital
|
1,691,198
|
|
|
1,688,777
|
|
Accumulated other
comprehensive income
|
42,475
|
|
|
40,973
|
|
Accumulated
deficit
|
(1,191,532)
|
|
|
(1,217,753)
|
|
Total stockholders'
equity
|
543,829
|
|
|
513,673
|
|
Total liabilities and
stockholders' equity
|
$
|
704,260
|
|
|
$
|
665,149
|
|
|
|
|
|
OCLARO,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
July 1,
2017
|
|
October 1,
2016
|
|
|
(Thousands, except
per share amounts)
|
Revenues
|
$
|
155,598
|
|
|
$
|
149,380
|
|
|
$
|
135,492
|
|
|
Cost of
revenues
|
92,894
|
|
|
88,049
|
|
|
89,136
|
|
|
Gross
profit
|
62,704
|
|
|
61,331
|
|
|
46,356
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Research and
development
|
16,435
|
|
|
15,750
|
|
|
13,107
|
|
|
Selling, general and
administrative
|
14,866
|
|
|
15,578
|
|
|
14,792
|
|
|
Amortization of other
intangible assets
|
152
|
|
|
151
|
|
|
244
|
|
|
Restructuring,
acquisition and related (income) expense, net
|
—
|
|
|
(32)
|
|
|
311
|
|
|
(Gain) loss on sale
of property and equipment
|
22
|
|
|
(3)
|
|
|
(37)
|
|
|
Total operating
expenses
|
31,475
|
|
|
31,444
|
|
|
28,417
|
|
|
Operating
income
|
31,229
|
|
|
29,887
|
|
|
17,939
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
Interest income
(expense), net (1)
|
434
|
|
|
300
|
|
|
(13,858)
|
|
|
Gain (loss) on
foreign currency transactions, net
|
489
|
|
|
(497)
|
|
|
(518)
|
|
|
Other income
(expense), net
|
574
|
|
|
227
|
|
|
194
|
|
|
Total other income
(expense)
|
1,497
|
|
|
30
|
|
|
(14,182)
|
|
|
Income before income
taxes
|
32,726
|
|
|
29,917
|
|
|
3,757
|
|
|
Income tax provision
(benefit) (2)
|
6,237
|
|
|
(26,110)
|
|
|
406
|
|
|
Net income
|
$
|
26,489
|
|
|
$
|
56,027
|
|
|
$
|
3,351
|
|
|
Net income per
share:
|
|
|
|
|
|
Basic
|
$
|
0.16
|
|
|
$
|
0.33
|
|
|
$
|
0.03
|
|
|
Diluted
|
$
|
0.16
|
|
|
$
|
0.33
|
|
|
$
|
0.02
|
|
|
Shares used in
computing net income per share:
|
|
|
Basic
|
168,137
|
|
|
167,349
|
|
|
132,480
|
|
|
Diluted
|
170,849
|
|
|
170,204
|
|
|
135,529
|
|
|
|
|
(1)
|
Interest income
(expense), net for the first quarter of fiscal year 2017 includes
$13.3 million in make whole and inducement expenses related to the
exchanges for all the Company's outstanding 6.00% Convertible
Senior Notes.
|
|
|
(2)
|
Income tax provision
(benefit) includes a $25.7 million benefit relating to the release
of a valuation reserve on net operating losses and other net
deferred tax assets in our Japan subsidiary in the fourth quarter
of fiscal year 2017.
|
OCLARO,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
July 1,
2017
|
|
October 1,
2016
|
|
|
(Thousands)
|
Reconciliation of
GAAP gross margin rate to non-GAAP gross margin
rate:
|
|
GAAP gross
profit
|
$
|
62,704
|
|
|
$
|
61,331
|
|
|
$
|
46,356
|
|
|
Stock-based
compensation in cost of revenues
|
438
|
|
|
504
|
|
|
289
|
|
|
Non-GAAP gross
profit
|
$
|
63,142
|
|
|
$
|
61,835
|
|
|
$
|
46,645
|
|
|
GAAP gross margin
rate
|
40.3
|
%
|
|
41.1
|
%
|
|
34.2
|
%
|
|
Non-GAAP gross margin
rate
|
40.6
|
%
|
|
41.4
|
%
|
|
34.4
|
%
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income:
|
GAAP operating
income
|
$
|
31,229
|
|
|
$
|
29,887
|
|
|
$
|
17,939
|
|
|
Stock-based
compensation
|
3,199
|
|
|
3,273
|
|
|
2,443
|
|
|
Amortization of other
intangible assets
|
152
|
|
|
151
|
|
|
244
|
|
|
Restructuring,
acquisition and related (income) expense, net
|
—
|
|
|
(32)
|
|
|
311
|
|
|
(Gain) loss on sale
of property and equipment
|
22
|
|
|
(3)
|
|
|
(37)
|
|
|
Non-GAAP operating
income
|
$
|
34,602
|
|
|
$
|
33,276
|
|
|
$
|
20,900
|
|
|
Reconciliation of
GAAP net income to non-GAAP net income and adjusted
EBITDA:
|
GAAP net
income
|
$
|
26,489
|
|
|
$
|
56,027
|
|
|
$
|
3,351
|
|
|
Stock-based
compensation
|
3,199
|
|
|
3,273
|
|
|
2,443
|
|
|
Amortization of other
intangible assets
|
152
|
|
|
151
|
|
|
244
|
|
|
Restructuring,
acquisition and related (income) expense, net
|
—
|
|
|
(32)
|
|
|
311
|
|
|
Payments related to
the interest make-whole charge and induced conversion expense on
the convertible notes (1)
|
—
|
|
|
—
|
|
|
13,250
|
|
|
Other (income)
expense items, net
|
(574)
|
|
|
(227)
|
|
|
(194)
|
|
|
(Gain) loss on sale
of property and equipment
|
22
|
|
|
(3)
|
|
|
(37)
|
|
|
(Gain) loss on
foreign currency translation
|
(489)
|
|
|
497
|
|
|
518
|
|
|
Income tax effect
(2)
|
5,664
|
|
|
(25,756)
|
|
|
105
|
|
|
Non-GAAP net
income
|
$
|
34,463
|
|
|
$
|
33,930
|
|
|
$
|
19,991
|
|
|
Income tax provision
(benefit)
|
573
|
|
|
(354)
|
|
|
301
|
|
|
Interest (income)
expense, net
|
(434)
|
|
|
(300)
|
|
|
608
|
|
|
Depreciation
expense
|
6,195
|
|
|
6,032
|
|
|
4,748
|
|
|
Adjusted
EBITDA
|
$
|
40,797
|
|
|
$
|
39,308
|
|
|
$
|
25,648
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income per share:
|
|
|
|
Basic
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.15
|
|
|
Diluted
(3)
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.14
|
|
|
Shares used in
computing Non-GAAP net income per share:
|
|
|
|
Basic
|
168,137
|
|
|
167,349
|
|
|
132,480
|
|
|
Diluted
|
170,849
|
|
|
170,204
|
|
|
150,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2017
|
|
July 1,
2017
|
|
October 1,
2016
|
|
|
(Thousands, except
per share amounts)
|
Stock-based
compensation for the above included the following:
|
|
|
|
Cost of
revenues
|
$
|
438
|
|
|
$
|
504
|
|
|
$
|
289
|
|
|
Research and
development
|
867
|
|
|
717
|
|
|
457
|
|
|
Selling, general and
administrative
|
1,894
|
|
|
2,052
|
|
|
1,697
|
|
|
Total
|
$
|
3,199
|
|
|
$
|
3,273
|
|
|
$
|
2,443
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Interest income
(expense), net for the first quarter of fiscal year 2017 includes
$13.3 million in make whole and inducement expenses related to the
exchanges for all the Company's outstanding 6.00% Convertible
Senior Notes.
|
|
|
(2)
|
Income tax provision
(benefit) includes a $25.7 million benefit relating to the release
of a valuation reserve on net operating losses and other net
deferred tax assets in our Japan subsidiary in the fourth quarter
of fiscal year 2017.
|
|
|
(3)
|
The numerator for the
October 1, 2016 fiscal quarter Non-GAAP diluted earnings per share
calculation includes an add back of approximately $0.6 million of
interest costs related to our Convertible Notes. Non-GAAP diluted
shares outstanding for the October 1, 2016 fiscal quarter includes
the full impact of the number of shares related to the Company's
Convertible Notes, adding approximately 15 million additional
shares.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/oclaro-announces-first-quarter-fiscal-year-2018-financial-results-300547679.html
SOURCE Oclaro, Inc.