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OPLINK REPORTS STRONG FIRST QUARTER FISCAL 2011 FINANCIAL RESULTS

FREMONT, Calif., Oct 28, 2010 (GlobeNewswire via COMTEX News Network) -- Oplink Communications, Inc. (Nasdaq:OPLK), a leading provider of design, integration and optical manufacturing solutions (OMS) for optical networking components, modules and subsystems, today reported its financial results for its first quarter of fiscal 2011, ended September 30, 2010.

Revenues for the quarter were $49.6 million, an increase of 28% over the fourth quarter of fiscal 2010 and an increase of 48% over the same period of the prior year. GAAP net income for the first quarter of fiscal 2011 increased to $5.6 million, or $0.28 per diluted share, compared to GAAP net income of $3.6 million, or $0.17 per diluted share, reported for the fourth quarter of fiscal 2010 and $1.8 million, or $0.09 per diluted share, reported in the same period of the prior year.

Non-GAAP net income for the first quarter of fiscal 2011 was $8.3 million, or $0.41 per diluted share, an increase of 37% over $6.0 million, or $0.28 per diluted share, reported for the fourth quarter of fiscal 2010 and an increase of 88% over $4.4 million, or $0.21 per diluted share, reported in the first quarter of 2010. Non-GAAP results reflect the adjustments described in the Reconciliation of GAAP Financial Measures to non-GAAP Financial Measures attached to this press release.

Oplink generated $5.5 million in cash from operations during the first quarter, and closed the quarter with cash, cash equivalents and short-term investments of $160 million. During the quarter ended September 30, 2010, Oplink spent $6.5 million on repurchases of its common stock.

"We are very pleased with our first quarter fiscal 2011 financial results," commented Joe Liu, Chairman and CEO of Oplink. "We have improved our factory capacity and normalized our production lead-times. With our new OMS design-wins, the continued growing demand on video transport and consolidated competitor landscape, we are optimistic about our long-term business opportunity, but near-term visibility remains limited."

Business Outlook for the Quarter Ending December 31, 2010

For the quarter ending December 31, 2010, the Company expects to report revenues between $50 million and $53 million and GAAP net income per diluted share of approximately $0.28 to $0.34. 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, 2010 of approximately $0.41 to $0.47.

Conference Call Information

The Company will host a conference call and live webcast at 2:00 p.m. Pacific Time today, October 28, 2010. To access the conference call, dial 877-941-4778 or 480-629-9763 (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 28, 2010 until 11:59 p.m. Pacific Time on November 4, 2010, by dialing 800-406-7325 or 303-590-3030 (outside the U.S. and Canada) and entering pass code 4378037#.

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 Woodland Hills, 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 press release contains forward-looking statements, including without limitation the statements under the heading "Business Outlook for the Quarter Ending December 31, 2010." These forward-looking statements involve risks and uncertainties, as well as assumptions that if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include the potential for a worsening of the 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,
                                   2010         2010

                                (Unaudited)     (1)
                                -----------  ---------
  ASSETS
  Current assets:
   Cash and cash equivalents       $ 55,090   $ 40,711
   Short-term investments           104,537    109,632
   Accounts receivable, net          34,190     29,728
   Inventories                       24,265     20,902
   Prepaid expenses and other
    current assets                    7,987      7,659
                                -----------  ---------
     Total current assets           226,069    208,632
  Long-term investments                  --     10,000
  Property, plant and
   equipment, net                    34,595     33,363
  Goodwill and intangible
   assets, net                        5,926      6,952

  Other assets                          649        651
                                -----------  ---------

     Total assets                 $ 267,239  $ 259,598
                                -----------  ---------

  LIABILITIES AND
   STOCKHOLDERS' EQUITY
  Current liabilities:
   Accounts payable                $ 14,629   $ 14,369
   Accrued liabilities and
    other current liabilities        13,669     11,657
                                -----------  ---------
     Total current liabilities       28,298     26,026

  Non-current liabilities             5,087      4,923
                                -----------  ---------

     Total liabilities               33,385     30,949
                                -----------  ---------

  Stockholders' equity              233,854    228,649
                                -----------  ---------
     Total liabilities and
      stockholders' equity        $ 267,239  $ 259,598
                                -----------  ---------

  (1) The June 30, 2010 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                 September
                                        30,       June 30,        30,

                                       2010         2010         2009
                                    -----------  -----------  -----------
                                    (Unaudited)  (Unaudited)  (Unaudited)


  Revenues                             $ 49,640     $ 38,878     $ 33,565
                                    -----------  -----------  -----------
  Cost of revenues:
   Cost of revenues                      33,402       26,426       23,634

   Stock compensation expense               117          105           99
                                    -----------  -----------  -----------

     Total cost of revenues              33,519       26,531       23,733
                                    -----------  -----------  -----------

  Gross profit                           16,121       12,347        9,832
                                    -----------  -----------  -----------
  Operating expenses:
   Research and development               3,399        3,030        2,225
   Sales and marketing                    2,458        2,152        2,086
   General and administrative             1,868        2,168        1,721
   Stock compensation expense             1,541        1,359        1,547
   Amortization of intangible and
    other assets                            451          434          404
                                    -----------  -----------  -----------

     Total operating expenses             9,717        9,143        7,983
                                    -----------  -----------  -----------
  Income from operations                  6,404        3,204        1,849
  Interest and other income, net             57          108          274

  Gain on sale/disposal of assets            --          600          124
                                    -----------  -----------  -----------
  Income before provision for
   income taxes                           6,461        3,912        2,247

  Provision for income taxes              (881)        (333)        (438)
                                    -----------  -----------  -----------

  Net income                            $ 5,580      $ 3,579      $ 1,809
                                    -----------  -----------  -----------

  Net income per share:

   Basic                                 $ 0.29       $ 0.17       $ 0.09
                                    -----------  -----------  -----------

   Diluted                               $ 0.28       $ 0.17       $ 0.09
                                    -----------  -----------  -----------

  Shares used in per share
   calculation:

   Basic                                 19,335       20,543       20,566
                                    -----------  -----------  -----------

   Diluted                               20,252       21,387       21,173
                                    -----------  -----------  -----------


  RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL
   MEASURES
  (unaudited, in thousands, except
   per share amounts)
                                    =====================================

                                             Three Months Ended
                                    -------------------------------------
                                     September                 September
                                        30,       June 30,        30,
  Reconciliation of GAAP net
   income to                           2010         2010         2009
                                    -----------  -----------  -----------
   non-GAAP net income:

  Net income, GAAP                      $ 5,580      $ 3,579      $ 1,809
                                    -----------  -----------  -----------
  Adjustments to measure non-GAAP:
   Related to cost of revenues:
     Stock compensation expense             117          105           99
     Amortization of intangible
      and other assets                      575          565          542
                                    -----------  -----------  -----------
   Total related to cost of
    revenues                                692          670          641
                                    -----------  -----------  -----------

  Related to operating expenses:
   Stock compensation expense             1,541        1,359        1,547
   Amortization of intangible and
    other assets                            451          434          404
                                    -----------  -----------  -----------
  Total related to operating
   expenses                               1,992        1,793        1,951
                                    -----------  -----------  -----------


  Non-GAAP net income                   $ 8,264      $ 6,042      $ 4,401
                                    -----------  -----------  -----------

  Net income per share, non-GAAP:

   Basic                                 $ 0.43       $ 0.29       $ 0.21
                                    -----------  -----------  -----------

   Diluted                               $ 0.41       $ 0.28       $ 0.21
                                    -----------  -----------  -----------

  Shares used in per share
   calculation:

   Basic                                 19,335       20,543       20,566
                                    -----------  -----------  -----------

   Diluted                               20,252       21,387       21,173
                                    -----------  -----------  -----------

  Reconciliation of GAAP gross
   profit
   to non-GAAP gross profit:
   GAAP gross profit                   $ 16,121     $ 12,347      $ 9,832
     Stock compensation expense
      included in cost of revenues          117          105           99
     Amortization of intangible
      and other assets

      included in cost of revenues          575          565          542
                                    -----------  -----------  -----------

   Non-GAAP gross profit               $ 16,813     $ 13,017     $ 10,473
                                    -----------  -----------  -----------

   GAAP gross margin rate                 32.5%        31.8%        29.3%
   Non-GAAP gross margin rate             33.9%        33.5%        31.2%




  ===============================================================
  OPLINK COMMUNICATIONS, INC.
  CONDENSED CONSOLIDATED STATEMENTS OF CASH
   FLOWS

  (In thousands)
  ===============================================================

                                               Three Months Ended
                                              -------------------
                                                 September 30,

                                                 2010      2009
                                              ---------  --------

  Cash flows from operating activities:
   Net income                                   $ 5,580   $ 1,809
   Adjustments to reconcile net income to
    net cash provided by operating
     activities:
     Depreciation and amortization                1,352     1,666
     Amortization of intangible assets            1,026       946
     Stock compensation expense                   1,658     1,646
     Gain on sale/disposal of assets                 --     (124)
     Other                                          290         3

     Change in assets and liabilities           (4,366)     3,187
                                              ---------  --------
      Net cash provided by operating
       activities                                 5,540     9,133
                                              ---------  --------

  Cash flows from investing activities:
   Net sales (purchases) of investments          14,978   (6,289)

   Net purchases of property and equipment      (2,425)     (394)
                                              ---------  --------
      Net cash provided by (used in)
       investing activities                      12,553   (6,683)
                                              ---------  --------

  Cash flows from financing activities:
   Proceeds from issuance of common stock         2,788     1,109

   Repurchase of common stock                   (6,534)        --
                                              ---------  --------
      Net cash (used in) provided by
       financing activities                     (3,746)     1,109
                                              ---------  --------

  Effect of exchange rate changes on cash
   and cash equivalents                              32         5
  Net increase in cash and cash equivalents      14,379     3,564
  Cash and cash equivalents, beginning of
   period                                        40,711    49,702
                                              ---------  --------

  Cash and cash equivalents, end of period     $ 55,090  $ 53,266
                                              ---------  --------


This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Oplink Communications, Inc.

CONTACT:  Oplink Communications, Inc.
Investor Relations:
Erica Abrams
415-217-5864
erica@blueshirtgroup.com
Matthew Hunt
415-489-2194
matt@blueshirtgroup.com

(C) Copyright 2010 GlobeNewswire, Inc. All rights reserved.

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