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FREMONT, Calif., Aug 14, 2008 (BUSINESS WIRE) -- Oplink Communications, Inc. (Nasdaq: OPLK), a leading provider of photonic components, intelligent modules, and subsystem solutions, today reported its financial results for its fourth quarter and fiscal year ended June 30, 2008.
For the fourth quarter of fiscal 2008, Oplink reported consolidated revenues of $37.3 million, as compared to $37.2 million reported for the fourth quarter of 2007. Consolidated net loss for the fourth quarter of fiscal 2008, calculated in accordance with accounting principles generally accepted in the United States ("GAAP"), was $791,000, or ($0.04) per share. This compares to GAAP net income of $3.0 million, or $0.13 per diluted share, reported for the fourth quarter of fiscal 2007.
Consolidated non-GAAP net income for the fourth quarter of fiscal 2008 was $2.8 million, or $0.13 per diluted share, which excludes approximately $891,000 of inventory adjustments, $451,000 in transitional costs for contract manufacturing, a benefit of $69,000 for impairment charge and other costs, $1.4 million in stock-based compensation expense, and $961,000 in amortization of intangible assets. This compares to non-GAAP net income of $5.6 million, or $0.24 per diluted share, reported for the fourth quarter of fiscal 2007, which excludes $216,000 in transitional costs for contract manufacturing, $1.5 million in merger fees, $1.5 million in stock-based compensation expense, and $242,000 in amortization of intangible assets, and the benefit of $850,000 in minority interest.
Oplink generated $4.1 million in cash from operations and closed the fourth quarter with cash, cash equivalents and investments of $142.1 million, up from $138.3 million held at the close of the third quarter of fiscal 2008.
"We are pleased to report revenue slightly above the outlook we provided last quarter, improved gross margins and increased operating efficiencies in the fourth quarter," commented Joe Liu, president and CEO of Oplink. "We had good sales activity for our passive components through our traditionally large customers and are building our pipeline for future periods. Demand for our active components was strong and, with our offshore manufacturing transition nearly completed, we are now shifting our focus to customer interactions and design win activities. We remain confident in the long-term opportunity for the consolidated business as we move into fiscal year 2009."
The Company also announced that its Board of Directors has approved a new repurchase program, authorizing the Company to repurchase up to $20 million of its common stock. Repurchases under the program will be made in open market or privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18, subject to market conditions, applicable legal requirements and other factors. The repurchase program does not require the Company to acquire a specific number of shares, and may be suspended from time to time or discontinued. The share repurchases will be funded from available working capital. There is no fixed termination date for the repurchase program.
"We believe this share repurchase program communicates our long-term confidence in our business and is a good use of our capital at this time," Liu concluded.
Consolidated revenues for fiscal year 2008 were $176.3 million, an increase from $107.5 million reported for fiscal year 2007 (which only included one month of financial results from Optical Communication Products, Inc. ("OCP"), of which Oplink acquired a majority stake in June 2007 and which became a 100% owned subsidiary in October 2007). Consolidated GAAP net loss for fiscal 2008 was $6.8 million, or $(0.31) per basic and diluted share.
Consolidated non-GAAP net income for fiscal 2008 was $13.9 million, or $0.63 per diluted share, which excludes approximately $7.3 million of inventory adjustments, $2.3 million in transitional costs for contract manufacturing, $626,000 in impairment charge and other costs, $5.9 million in expenses incurred by OCP relating to Oplink's acquisition of OCP, $7.9 million in stock-based compensation expense, $3.3 million in amortization of intangible assets, the benefit of $2.4 million gains on sale of assets, and the benefit of $4.2 million in minority interest. This compares to non-GAAP net income of $19.5 million, or $0.85 per diluted share, which excludes approximately $268,000 in compensation related to stock option modifications, $216,000 in transitional costs for contract manufacturing, $1.5 million in expenses incurred by OCP relating to Oplink's acquisition of OCP, $4.7 million in stock-based compensation expense, $519,000 in amortization of intangible assets and a net benefit of $850,000 in minority interest, reported for fiscal year 2007.
Business Outlook
For the quarter ending September 30, 2008, the Company expects to report consolidated revenues of between $38 million and $42 million and consolidated net income per diluted share of approximately $0.02 to $0.06 on a GAAP basis. On a non-GAAP basis, excluding stock-based compensation expense, amortization of intangible assets, and other non-recurring charges, if any, the Company expects consolidated earnings per diluted share for the quarter ending September 30, 2008 of approximately $0.13 to $0.17.
Conference Call Information
The Company will host a conference call and live webcast at 2:00 p.m. Pacific Daylight Time today, August 14, 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 5:00 p.m. Pacific Daylight Time on August 14, 2008 until 11:59 p.m. Pacific Daylight Time on August 22, 2008, by dialing 800-405-2236 or 303-590-3000 (outside the U.S. and Canada) and entering pass code 11118037#.
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. The company 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. 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 first quarter and of fiscal year 2009, 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)
======================================================================
Years Ended
June 30,
-----------------------
2008 2007
(Unaudited) (1)
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 72,001 $ 111,600
Short-term investments 50,077 73,300
Accounts receivable, net 34,200 34,795
Inventories 28,290 35,427
Net assets held for sale - 22,200
Prepaid expenses and other current assets 4,949 6,412
----------- -----------
Total current assets 189,517 283,734
Long-term investments 20,003 42,978
Property, plant and equipment, net 34,206 28,907
Goodwill and intangible assets, net 23,487 7,421
Other assets 1,867 5,349
----------- -----------
Total assets $ 269,080 $ 368,389
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,354 $ 14,604
Accrued liabilities and other current
liabilities 13,522 13,820
Accrued transitional costs for contract
manufacturing 341 1,234
Restructuring accrual 370 -
----------- -----------
Total current liabilities 30,587 29,658
Non-current liabilities 223 207
----------- -----------
Total liabilities 30,810 29,865
----------- -----------
Minority interest - 68,749
Stockholders' equity 238,270 269,775
----------- -----------
Total liabilities and stockholders'
equity $ 269,080 $ 368,389
----------- -----------
(1) The June 30, 2007 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 Years Ended
---------------------------------------------
June 30, June 30,
2008 2007 2008 2007
----------- ----------- ---------------------
(Unaudited) (Unaudited) (Unaudited) (1)
Revenues $37,323 $37,212 $176,253 $107,499
----------- ----------- ----------- ---------
Cost of revenues:
Cost of revenues 28,040 28,085 140,539 78,588
Stock compensation
expense 110 106 456 315
----------- ----------- ----------- ---------
Total cost of revenues 28,150 28,191 140,995 78,903
----------- ----------- ----------- ---------
Gross profit 9,173 9,021 35,258 28,596
----------- ----------- ----------- ---------
Operating expenses:
Research and development 3,026 2,432 14,393 6,796
Sales and marketing 2,397 1,941 10,501 6,064
General and
administrative 3,109 2,367 14,268 7,102
Impairment charge and
other costs (69) - 626 -
Transitional costs for
contract manufacturing 451 216 2,285 216
Merger fees - 1,451 5,618 1,451
Stock compensation
expense 1,259 1,430 7,475 4,396
Amortization of
intangible and other
assets 419 117 1,519 222
----------- ----------- ----------- ---------
Total operating expenses 10,592 9,954 56,685 26,247
----------- ----------- ----------- ---------
(Loss) income from
operations (1,419) (933) (21,427) 2,349
Interest and other
income, net 853 2,678 7,518 9,666
(Loss) gain on
sale/disposal of assets (88) (10) 2,305 (18)
----------- ----------- ----------- ---------
(Loss) income before
minority interest and
provision for income
taxes (654) 1,735 (11,604) 11,997
Minority interest in loss
of consolidated
subsidiaries - 1,390 5,891 1,418
Provision for income
taxes (137) (116) (1,045) (241)
----------- ----------- ----------- ---------
Net (loss) income $ (791) $ 3,009 $ (6,758) $ 13,174
----------- ----------- ----------- ---------
Net (loss) income per
share:
Basic $ (0.04) $ 0.13 $ (0.31) $ 0.60
----------- ----------- ----------- ---------
Diluted $ (0.04) $ 0.13 $ (0.31) $ 0.57
----------- ----------- ----------- ---------
Shares used in per share
calculation:
Basic 20,700 22,524 21,533 22,071
----------- ----------- ----------- ---------
Diluted 20,700 23,252 21,533 22,942
----------- ----------- ----------- ---------
RECONCILIATION OF GAAP NET (LOSS) INCOME TO NON-
GAAP NET INCOME
======================= =====================
Three Months Ended Years Ended
----------------------- ---------------------
June 30, June 30,
2008 2007 2008 2007
----------- ----------- ----------- ---------
Net (loss) income, GAAP $ (791) $ 3,009 $ (6,758) $ 13,174
Adjustments to measure
non-GAAP:
Inventory adjustments
included in cost of
revenues 891 - 7,274 -
Compensation related to
stock option
modification - - - 268
Transitional costs for
contract manufacturing 451 216 2,285 216
Impairment charge and
other costs (69) - 626 -
Merger fees - 1,451 5,857 1,451
Stock compensation
expense 1,369 1,536 7,931 4,711
Amortization of
intangible and other
assets 961 242 3,342 519
Gain on sale/disposal of
assets - - (2,433) -
Minority interest in loss
of consolidated
subsidiaries - (850) (4,217) (850)
----------- ----------- ----------- ---------
Non-GAAP net income $ 2,812 $ 5,604 $ 13,907 $ 19,489
----------- ----------- ----------- ---------
Net income per share,
non-GAAP:
Basic $ 0.14 $ 0.25 $ 0.65 $ 0.88
----------- ----------- ----------- ---------
Diluted $ 0.13 $ 0.24 $ 0.63 $ 0.85
----------- ----------- ----------- ---------
Shares used in per share
calculation:
Basic 20,700 22,524 21,533 22,071
----------- ----------- ----------- ---------
Diluted 21,147 23,252 22,085 22,942
----------- ----------- ----------- ---------
(1)The condensed consolidated statement of operations for the year
ended June 30, 2007 has been derived from audited consolidated
financial statements at that date.
OPLINK COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
======================================================================
Years Ended
June 30,
---------------------
2008 2007
(Unaudited) (1)
----------- ---------
Cash flows from operating activities:
Net (loss) income $ (6,758) $ 13,174
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization 7,107 4,918
Inventory adjustments 7,274 -
Amortization of intangible assets 3,342 519
Stock compensation expense 7,931 4,711
(Gain) loss on sale/disposal of assets (2,305) 18
Impairment charge and other costs 626 -
Minority interest in loss of consolidated
subsidiaries (5,891) (1,418)
Other (119) 611
Change in assets and liabilities (3,578) (9,868)
----------- ---------
Net cash provided by operating activities 7,629 12,665
----------- ---------
Cash flows from investing activities:
Net sales of investments 47,070 89,023
Net sales (purchases) of property and
equipment 19,324 (2,623)
Net sales of equity investments 4,600 -
Acquisition of businesses, net of cash
acquired (81,445) (3,917)
----------- ---------
Net cash (used in) provided by investing
activities (10,451) 82,483
----------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock 3,217 8,550
Repurchase of common stock (40,000) -
----------- ---------
Net cash (used in) provided by financing
activities (36,783) 8,550
----------- ---------
Effect of exchange rate changes on cash and cash
equivalents 6 46
Net (decrease) increase in cash and cash
equivalents (39,599) 103,744
Cash and cash equivalents, beginning of year 111,600 7,856
----------- ---------
Cash and cash equivalents, end of year $ 72,001 $111,600
----------- ---------
Supplemental non-cash investing and financing
activities:
Common stock issued upon business combination $ - $ 14,217
----------- ---------
(1)The condensed consolidated statement of cash flows for the year
ended June 30, 2007 has been derived from audited consolidated
financial statements at that date.
SOURCE: Oplink Communications, Inc.
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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