Oplink Communications, Inc. Logo

Print Print page   Email Email page   PDF Download PDF    Add to Briefcase
« Previous Release | Next Release »



OPLINK REPORTS FINANCIAL RESULTS FOR SECOND QUARTER OF FISCAL 2008

FREMONT, Calif., Jan 31, 2008 (BUSINESS WIRE) -- Oplink Communications, Inc. (Nasdaq:OPLK), a leading provider of photonic components, intelligent modules, and subsystem solutions, today reported financial results for its second quarter of fiscal 2008, ended December 31, 2007.

On October 31, 2007, Oplink announced that it had acquired the remaining 42% of Optical Communication Products, Inc. (OCP) common stock by means of a merger. As a result, OCP became a wholly-owned subsidiary of Oplink. Results for the second quarter of 2008 include an approximately 58% interest for the month of October and 100% interest for November and December of 2007.

For the second quarter of fiscal 2008, Oplink reported consolidated revenues of $48.9 million, an increase of 113% over $23.0 million reported for the second quarter of 2007 (which did not include results from OCP). Consolidated net loss for the second quarter of fiscal 2008, calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), was $3.4 million, or $(0.16) per basic share. This compares to a GAAP net income of $3.1 million, or $0.14 per diluted share, reported for the second quarter of fiscal 2007.

Consolidated non-GAAP net income for the second quarter of fiscal 2008, which excludes approximately $3.5 million in stock-based compensation expense, $4.7 million in expenses incurred by OCP relating to Oplink's acquisition of OCP, $532,000 in transitional costs for contract manufacturing, $865,000 in amortization of intangible assets and $626,000 for impairment and other charges, net of a $2.9 million adjustment to reflect the 42% minority interest related to OCP's portion of these items, was $4.0 million, or $0.18 per diluted share. This compares to non-GAAP net income of $4.6 million, or $0.20 per diluted share, reported for the second quarter of fiscal 2007, which excluded $1.1 million in stock-based compensation expense, $268,000 for compensation related to the modification of a stock option exercise price and $92,000 in amortization of intangible assets.

The Company closed the second quarter with cash, cash equivalents and investments of $117.3 million, which is down from $236.8 million held at the close of the first quarter of fiscal 2008. During the second quarter of 2008, the Company used approximately $80.6 million to complete the acquisition of OCP and repurchased common stock at an aggregate cost of approximately $39.6 million. Since December 31, 2007, Oplink has sold a facility in Woodland Hills, CA and received approximately $26.1 million in net proceeds.

"We have initiated integration of the OCP business and operations, and have begun to achieve business efficiencies," commented Joe Liu, president and CEO of Oplink. "We expect to complete the integration by June 2008. We continue to believe that the combined company will drive good performance in the future and are optimistic about the value this will create over time for customers, partners and shareholders."

Business Outlook

For the quarter ending March 31, 2008, the Company expects to report consolidated revenues of between $41 and $45 million and consolidated net income per diluted share of approximately $0.06 to $0.10 on a GAAP basis. On a non-GAAP basis, excluding stock-based compensation expense, charges related to Oplink's acquisition and integration of OCP, amortization of intangible assets, gain from the sale of OCP's facility in Woodland Hills and other non-recurring charges, if any, the Company expects consolidated earnings per diluted share for the quarter ending March 31, 2008 of approximately $0.12 to $0.16.

Conference Call Information

The Company will host a conference call and live webcast at 2:00 p.m. Pacific Time on January 31, 2008. To access the conference call, dial 800-240-2430 or 303-262-2131 (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 4:00 p.m. Pacific Time on January 31, 2008 through February 7, 2008, by dialing 800-405-2236 or 303-590-3000 (outside the U.S. and Canada) and entering pass code 11107060#.

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 and subsystems. The company offers advanced and cost-effective optical-electrical components and subsystem manufacturing through its facilities in Zhuhai, Shanghai, and Wuhan, China, as well as in Woodland Hills, California. In addition, Oplink maintains a full complement of optical-centric front-end design, application, and customer service functions at its headquarters in Fremont, 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 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 third quarter of fiscal 2008, that involve risks and uncertainties that may cause results to differ substantially from expectations. These risks include, but are not limited to, the risk that Oplink will not realize the synergies or cost reductions it hopes to achieve after the OCP acquisition, the potential for a 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)
======================================================================

                                                December 31, June 30,
                                                ------------ ---------
                                                    2007       2007
                                                (Unaudited)     (1)
                                                ------------ ---------
ASSETS
Current assets:
   Cash and cash equivalents                    $     62,513 $ 111,600
   Short-term investments                             51,743    73,300
   Accounts receivable, net                           34,531    34,795
   Inventories                                        32,524    35,427
   Net assets held for sale                           25,203    22,200
   Prepaid expenses and other current assets           3,144     6,412
                                                ------------ ---------

     Total current assets                            209,658   283,734

Long-term investments                                  3,061    42,978
Property, plant and equipment, net                    34,896    28,907
Goodwill and intangible assets, net                   24,576     7,421
Other assets                                             755     5,349
                                                ------------ ---------

     Total assets                               $    272,946 $ 368,389
                                                ------------ ---------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                             $     16,481 $  14,604
   Accrued liabilities and other current
    liabilities                                       17,073    13,820
   Accrued transitional costs for contract
    manufacturing                                        642     1,234
   Restructuring accrual                               2,500         -
                                                ------------ ---------

     Total current liabilities                        36,696    29,658

Non-current liabilities                                  209       207
                                                ------------ ---------

     Total liabilities                                36,905    29,865
                                                ------------ ---------

Minority interest                                          -    68,749

Stockholders' equity                                 236,041   269,775
                                                ------------ ---------

     Total liabilities and stockholders' equity $    272,946 $ 368,389
                                                ------------ ---------


(1)  The June 30, 2007 condensed consolidated balance sheet has been
      derived from audited 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,            December 31,
                          2007          2006      2007        2006
                       ----------------------- -----------------------
                       (Unaudited) (Unaudited) (Unaudited) (Unaudited)

Revenues               $   48,943     $22,953  $   98,094  $   42,667
                       ----------- ----------- ----------- -----------

Cost of revenues:

  Cost of revenues         37,727      16,497      74,796      29,988

  Merger fees                 114           -         239           -

  Stock compensation
   expense                    114          75         243         140
                       ----------- ----------- ----------- -----------

    Total cost of
     revenues              37,955      16,572      75,278      30,128
                       ----------- ----------- ----------- -----------

Gross profit               10,988       6,381      22,816      12,539
                       ----------- ----------- ----------- -----------

Operating expenses:

  Research and
   development              3,610       1,429       8,042       3,000

  Sales and marketing       2,763       1,280       5,643       2,662

  General and
   administrative           3,614       1,772       8,018       3,271

  Impairment charge
   and other costs            626           -         626           -

  Transitional costs
   for contract
   manufacturing              532           -       1,287           -

  Merger fees               4,568           -       5,989           -

  Stock compensation
   expense                  3,414       1,031       5,031       2,040

  Amortization of
   intangible and
   other assets               401          35         667          70
                       ----------- ----------- ----------- -----------

    Total operating
     expenses              19,528       5,547      35,303      11,043
                       ----------- ----------- ----------- -----------

(Loss) income from
 operations                (8,540)        834     (12,487)      1,496

Interest and other
 income, net                2,090       2,321       5,112       4,484
                       ----------- ----------- ----------- -----------

(Loss) income before
 minority interest and
 provision for income
 taxes                     (6,450)      3,155      (7,375)      5,980

Minority interest in
 loss of consolidated
 subsidiaries               3,407           9       5,891          21

Provision for income
 taxes                       (309)        (33)       (543)       (115)
                       ----------- ----------- ----------- -----------

Net (loss) income      $   (3,352)    $ 3,131  $   (2,027) $    5,886
                       ----------- ----------- ----------- -----------

Net (loss) income per
 share:

  Basic                $    (0.16)    $  0.14  $    (0.09) $     0.27
                       ----------- ----------- ----------- -----------

  Diluted              $    (0.16)    $  0.14  $    (0.09) $     0.26
                       ----------- ----------- ----------- -----------

Shares used in per
 share calculation:

  Basic                    21,617      22,000      22,399      21,778
                       ----------- ----------- ----------- -----------

  Diluted                  21,617      23,022      22,399      22,810
                       ----------- ----------- ----------- -----------


RECONCILIATION OF GAAP NET (LOSS) INCOME TO NON-GAAP NET INCOME

                       ======================= =======================
                         Three Months Ended       Six Months Ended
                       -----------------------------------------------
                            December 31,            December 31,
                          2007          2006      2007        2006
                       ----------------------- -----------------------

Net (loss) income,
 GAAP                  $   (3,352)    $ 3,131  $   (2,027) $    5,886

Adjustments to measure
 non-GAAP:

  Compensation related
   to stock option
   modification                 -         268           -         268

  Transitional costs
   for contract
   manufacturing              532           -       1,287           -

  Impairment charge
   and other costs            626           -         626           -

  Merger fees               4,682           -       6,228           -

  Stock compensation
   expense                  3,528       1,106       5,274       2,180

  Amortization of
   intangible and
   other assets               865          92       1,405         185

  Minority interest in
   loss of
   consolidated
   subsidiaries            (2,930)          -      (4,217)          -

                       ----------- ----------- ----------- -----------

Non-GAAP net income    $    3,951     $ 4,597  $    8,576  $    8,519
                       ----------- ----------- ----------- -----------

Net income per share,
 non-GAAP:

  Basic                $     0.18     $  0.21  $     0.38  $     0.39
                       ----------- ----------- ----------- -----------

  Diluted              $     0.18     $  0.20  $     0.37  $     0.37
                       ----------- ----------- ----------- -----------

Shares used in per
 share calculation:

  Basic                    21,617      22,000      22,399      21,778
                       ----------- ----------- ----------- -----------

  Diluted                  22,258      23,022      23,012      22,810
                       ----------- ----------- ----------- -----------


======================================================================
OPLINK COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
======================================================================
                                                    Six Months Ended
                                                  --------------------
                                                      December 31,
                                                    2007       2006
                                                  --------------------
                                                      (Unaudited)
Cash flows from operating activities:
  Net (loss) income                               $ (2,027) $   5,886
  Adjustments to reconcile net (loss) income to
   net cash provided by operating activities:
    Depreciation and amortization                    3,676      2,365
    Amortization of intangible assets                1,405        185
    Stock compensation expense                       5,274      2,180
    Impairment charge and other costs                  626          -
    Transitional costs for contract manufacturing    1,287          -
    Minority interest in loss of consolidated
     subsidiaries                                   (5,891)       (21)
    Other                                              (22)       113
    Change in assets and liabilities                 5,242     (7,665)
                                                  --------- ----------
      Net cash provided by operating activities      9,570      3,043
                                                  --------- ----------

Cash flows from investing activities:
  Net sales of investments                          61,689        583
  Net purchases of property and equipment           (6,325)    (1,225)
  Net sales of equity investments                    4,600          -
  Acquisition of businesses, net of cash acquired  (81,280)         -
                                                  --------- ----------
      Net cash used in investing activities        (21,316)      (642)
                                                  --------- ----------

Cash flows from financing activities:
  Proceeds from issuance of common stock             2,311      7,257
  Repurchase of common stock                       (39,577)         -
                                                  --------- ----------
      Net cash (used in) provided by financing
       activities                                  (37,266)     7,257
                                                  --------- ----------

Effect of exchange rate changes on cash and cash
 equivalents                                           (75)        15

Net (decrease) increase in cash and cash
 equivalents                                       (49,087)     9,673

Cash and cash equivalents, beginning of period     111,600      7,856
                                                  --------- ----------

Cash and cash equivalents, end of period          $ 62,513  $  17,529
                                                  --------- ----------

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

Copyright Business Wire 2008

News Provided by COMTEX

Close window | Back to top