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Revenues for the quarter increased to $33.6 million, compared to $32.4 million reported for the fourth quarter of fiscal 2009. GAAP net income for the first quarter of fiscal 2010 increased to $1.8 million, or $0.09 per diluted share, compared to GAAP net income of $249,000, or $0.01 per diluted share, reported for the fourth quarter of fiscal 2009.
Non-GAAP net income for the first quarter of fiscal 2010 increased to $4.4 million, or $0.21 per diluted share, compared to non-GAAP net income of $3.1 million, or $0.15 per diluted share, reported for the fourth quarter of fiscal 2009. First quarter of fiscal 2010 non-GAAP results exclude $1.6 million in stock compensation and $946,000 in amortization of intangible assets. Fourth quarter of fiscal 2009 non-GAAP results exclude $1.2 million in stock compensation, $952,000 in amortization of intangibles, and a $725,000 loss on the sale of assets.
Oplink generated $9.1 million in cash from operations during the first quarter, and closed the quarter with cash, cash equivalents and short-term investments of $178.7 million.
"We are pleased to report results that are ahead of the outlook we provided," commented Joe Liu, President and CEO of Oplink. "We are winning more advanced OMS business in part based on our component expertise and industry leadership. Oplink has become one of the leading providers of advanced photonic sub-systems product engineering and manufacturing solutions for global long-haul, metro-core and edge equipment companies. Our reputation for executing customer needs positions us to benefit as telecom spending resumes."
Business Outlook
For the quarter ending December 31, 2009, the Company expects to report revenues between $31 million and $35 million and GAAP net income per diluted share of approximately $0.06 to $0.12. 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 December 31, 2009 of approximately $0.18 to $0.24.
Conference Call Information
The Company will host a conference call and live webcast at 2:00 p.m. Pacific Time today, October 29, 2009. To access the conference call, dial 877-941-8418 or 480-629-9809 (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 5:00 p.m. Pacific Time on October 29, 2009 until 11:59 p.m. Pacific Time on November 5, 2009, by dialing 800-406-7325 or 303-590-3030 (outside the U.S. and Canada) and entering pass code 4173946#.
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, while these non-GAAP measures are not a substitute for GAAP results, they provide a basis for evaluating the Company's cash requirements for ongoing operating activities. These non-GAAP measures have been reconciled to the nearest GAAP measure as required under Securities and Exchange Commission rules.
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 Calabasas, 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 guidance given for anticipated results for the second quarter of fiscal year 2010, that involve risks and uncertainties that may cause results to differ substantially from expectations. These risks include, but are not limited to, the potential for a sustained continuation and/or worsening of the current downturn in the telecommunications industry or the overall economy in the United States and other parts of the world, possible reductions in customer orders, Oplink's reliance upon third parties to supply 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, 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.
OPLINK COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, June 30,
2009 2009
(Unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $ 53,266 $ 49,702
Short-term investments 125,390 115,774
Accounts receivable, net 27,222 29,023
Inventories 7,907 10,031
Prepaid expenses and other current assets 3,092 2,648
Total current assets 216,877 207,178
Long-term investments - 3,180
Property, plant and equipment, net 29,145 30,318
Intangible assets, net 7,902 8,848
Other assets 424 423
Total assets $ 254,348 $ 249,947
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,908 $ 7,580
Accrued liabilities and other current liabilities 10,979 10,688
Accrued transitional costs for contract manufacturing 160 160
Total current liabilities 18,047 18,428
Non-current liabilities 3,601 3,492
Total liabilities 21,648 21,920
Stockholders' equity 232,700 228,027
Total liabilities and stockholders' equity $ 254,348 $ 249,947
(1) The June 30, 2009 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
September 30, June 30, September 30,
2009 2009 2008
(Unaudited) (Unaudited) (Unaudited)
Revenues $ 33,565 $ 32,364 $ 42,952
Cost of revenues:
Cost of revenues 23,634 23,009 36,645
Stock compensation expense 99 107 118
Total cost of revenues 23,733 23,116 36,763
Gross profit 9,832 9,248 6,189
Operating expenses:
Research and development 2,225 2,275 3,282
Sales and marketing 2,086 2,057 2,257
General and administrative 1,721 1,940 2,666
Stock compensation expense 1,547 1,100 1,449
Amortization of intangible and other assets 404 412 412
Total operating expenses 7,983 7,784 10,066
Income (loss) from operations 1,849 1,464 (3,877 )
Interest and other income, net 274 429 1,040
Gain (loss) on sale/disposal of assets 124 (740 ) (119 )
Income (loss) before provision for income taxes 2,247 1,153 (2,956 )
Provision for income taxes (438 ) (904 ) (456 )
Net income (loss) $ 1,809 $ 249 $ (3,412 )
Net income (loss) per share:
Basic $ 0.09 $ 0.01 $ (0.16 )
Diluted $ 0.09 $ 0.01 $ (0.16 )
Shares used in per share calculation:
Basic 20,566 20,447 20,757
Diluted 21,173 20,892 20,757
RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
MEASURES
(unaudited, in thousands, except per share amounts)
Three Months Ended
Reconciliation of GAAP net income (loss) to non-GAAP net income: September 30, June 30, September 30,
2009 2009 2008
Net income (loss), GAAP $ 1,809 $ 249 $ (3,412 )
Adjustments to measure non-GAAP:
Related to cost of revenues:
Provision for excess and obsolete inventory - - 4,065
Stock compensation expense 99 107 118
Amortization of intangible and other assets 542 540 542
Total related to cost of revenues 641 647 4,725
Related to operating expenses:
Stock compensation expense 1,547 1,100 1,449
Amortization of intangible and other assets 404 412 412
Total related to operating expenses 1,951 1,512 1,861
Loss on sale/disposal of assets - 725 -
Total related to net income (loss) 2,592 2,884 6,586
Non-GAAP net income $ 4,401 $ 3,133 $ 3,174
Net income per share, non-GAAP:
Basic $ 0.21 $ 0.15 $ 0.15
Diluted $ 0.21 $ 0.15 $ 0.15
Shares used in per share calculation:
Basic 20,566 20,447 20,757
Diluted 21,173 20,892 21,268
Reconciliation of GAAP gross profit to non-GAAP gross profit:
GAAP gross profit $ 9,832 $ 9,248 $ 6,189
Provision for excess and obsolete inventory included in cost of - - 4,065
revenues
Stock compensation expense included in cost of revenues 99 107 118
Amortization of intangible and other assets included in cost of 542 540 542
revenues
Non-GAAP gross profit $ 10,473 $ 9,895 $ 10,914
GAAP gross margin rate 29.3 % 28.6 % 14.4 %
Non-GAAP gross margin rate 31.2 % 30.6 % 25.4 %
OPLINK COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Three Months Ended
September 30,
2009 2008
(Unaudited)
Cash flows from operating activities:
Net income (loss) $ 1,809 $ (3,412 )
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 1,666 1,835
Inventory adjustments - 4,065
Amortization of intangible assets 946 954
Stock compensation expense 1,646 1,567
Gain on sale/disposal of assets (124 ) -
Other 3 (481 )
Change in assets and liabilities 3,187 (200 )
Net cash provided by operating activities 9,133 4,328
Cash flows from investing activities:
Net (purchases) sales of investments (6,289 ) 22,986
Net (purchases) sales of property and equipment (394 ) 6
Net cash (used in) provided by investing activities (6,683 ) 22,992
Cash flows from financing activities:
Proceeds from issuance of common stock 1,109 353
Net cash provided by financing activities 1,109 353
Effect of exchange rate changes on cash and cash equivalents 5 (224 )
Net increase in cash and cash equivalents 3,564 27,449
Cash and cash equivalents, beginning of period 49,702 72,001
Cash and cash equivalents, end of period $ 53,266 $ 99,450
SOURCE: Oplink Communications, Inc.
For Oplink Communications, Inc. Investor Relations: Erica Abrams, 415-217-5864 erica@blueshirtgroup.com Matthew Hunt, 415-489-2194 matt@blueshirtgroup.com
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