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OPLINK REPORTS REVENUE GROWTH AND IMPROVING OPERATING MODEL IN THE SECOND QUARTER OF FISCAL 2004

For the second quarter of fiscal 2004, Oplink reported revenues of $8.1 million, which represents an increase of 12% over revenues of $7.2 million reported in the first quarter of fiscal 2004 and an increase of 60% over revenues of $5.0 million reported in the second quarter of fiscal 2003. Loss from continuing operations was $2.1 million, or $0.01 per share, for the second quarter of fiscal 2004, as compared to a loss from continuing operations of $2.4 million, or $0.02 per share, reported in the first quarter of fiscal 2004, and $12.0 million, or $0.07 per share, in the second quarter of fiscal 2003.

Net loss for the second quarter of fiscal 2004 improved to $2.1 million, or $0.01 per share, as compared to a net loss of $2.3 million, or $0.02 per share, reported in the first quarter of fiscal 2004, and a net loss of $14.4 million, or $0.09 per share, reported in the second quarter of fiscal 2003. Net loss for the second quarter of fiscal 2004 includes certain net charges totaling $1.2 million, which consists of in-process research and development costs related to the acquisition on November 3, 2003 of RedClover Networks, Inc. and non-cash compensation charges offset by income from discontinued operation. Net loss for the first quarter of fiscal 2004 includes certain net charges totaling $1.6 million, which consists of non-cash compensation charges, amortization of intangible assets and $890,000 of expenses associated with the exploration of strategic business opportunities included in general and administrative expenses offset by income from discontinued operation. Net loss for the second quarter of fiscal 2003 includes net charges totaling $9.6 million, which consists of restructuring and other charges, loss from discontinued operation, merger fees and amortization of intangible assets offset by net amortization of deferred stock recovery. The foregoing net loss results also include revenue associated with the unexpected utilization of fully reserved inventory of $240,000, $515,000 and $530,000 in the second quarter of fiscal 2004, the first quarter of fiscal 2004 and the second quarter of fiscal 2003, respectively.

At December 31, 2003, Oplink had $188.7 million in cash, cash equivalents and, short and long-term investments.

"We are very satisfied with our financial performance in the second quarter, and encouraged by recent increases in telecommunication spending activity," commented Joe Liu, president and CEO of Oplink. "In addition to posting solid revenue increases in the quarter, we continued to make good progress at improving profitability and managing cash. Our Optical Manufacturing Solutions (OMS) business grew in the quarter, representing approximately 50% of revenue, and we were pleased to report higher sales activity with newer customers that we believe may represent potential future opportunities.

"Looking ahead, we continue to be optimistic about our long-term market opportunity as the industry begins to shows signs of recovery. We plan to continue to seek strategic technologies which will broaden our portfolio of offerings and expand our OMS capabilities, while providing Oplink's low-cost, highly technical manufacturing capabilities," concluded Mr. Liu.

For the six-month period ended December 31, 2003, Oplink reported revenues of $15.3 million and a net loss of $4.4 million, or $0.03 per share. This compares to revenues of $11.0 million and a net loss of $23.1 million, or $0.14 per share, reported for the six-month period ended December 31, 2002. For the six months ended December 31, 2003 net loss includes net charges of $2.8 million, which consists of non-cash compensation charges, in-process research and development costs, amortization of intangible assets and $890,000 of expenses associated with the exploration of strategic business opportunities included in general and administrative expenses offset by income from discontinued operation. For the six months ended December 31, 2002 net loss includes net charges of $11.7 million, which consists of restructuring costs and other charges, loss from discontinued operation, merger fees, net non-cash compensation expenses and amortization of intangible assets.

The Company presents each of the fiscal quarters and six-month periods as if it ended on the last day of each calendar quarter or six-month period, respectively. The Company operates and reports using interim fiscal quarters and six-month periods, which end on the Sunday closest to the end of each calendar quarter and six-month period. December 28, 2003 and December 29, 2002 represent the Sunday closest to the period ending December 31, 2003 and December 31, 2002, respectively.

Conference Call Information

The Company will host a corresponding conference call and live Webcast at 2:00 p.m. Pacific Time on January 22, 2004. To access the conference call in the US or Canada, dial 800-366-3908. For all international calls, dial 303-262-2141. The Webcast will be available live on the Investor Relations section of the Company's corporate website at http://investor.oplink.com/index.cfm.

A replay of the Webcast will be available live on the Investor Relations section of the Company's corporate website at http://investor.oplink.com/index.cfm 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 4:00 p.m. Pacific Time on January 22, 2004 until 11:59 p.m. Pacific Time on January 24, 2004, by dialing 800-405-2236 (303-590-3000 for callers outside the U.S. and Canada) and entering pass code 566960.

About Oplink

Incorporated in 1995, Oplink is a leading provider of design, integration and optical manufacturing solutions (OMS) for optical networking components and subsystems. The Company offers advanced and cost-effective optical-electrical components and subsystem manufacturing through its facilities in Zhuhai, China. In addition, Oplink maintains a full complement of optical-centric front-end design, application, and customer service functions at its headquarters in San Jose, California. The Company's customers include telecommunications, data communications and cable TV equipment manufacturers around the globe. Oplink is committed to providing fully customized, Photonic Foundry services which incorporate its subsystems manufacturing capabilities. To learn more about Oplink, visit its web site at: http://www.oplink.com/.

This news release contains forward-looking statements, including statements regarding Oplink's expected financial results in the quarter, market opportunities and ability to improve profitability, effectively manage cash, acquire and effectively integrate additional technologies and achieve market acceptance with respect to its new products and designs, that involve risks and uncertainties which may cause Oplink's actual results to differ substantially from expectations. These risks include, but are not limited to, the potential widespread downturn in the overall economy in the United States and other parts of the world and the telecommunications industry, including reductions in telecommunication spending activity, possible reductions in customer orders, challenges to successfully integrate and realize anticipated benefits of acquisitions of businesses or technologies, our reliance upon third parties to supply our raw materials and equipment, intense competition in our target markets and potential pricing pressure that may arise from changing supply-demand conditions in the industry, the need to retain and motivate key personnel, risks associated with the protection of our, and possible infringement of others', intellectual property, and other risks detailed from time to time in our periodic reports filed with the Securities and Exchange Commission, including our quarterly report filed on Form 10-Q for the quarter ended September 30, 2003.

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.

Financial Tables

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