SAN JOSE, Calif., May 8, 2018 /PRNewswire/ -- Oclaro, Inc.
(Nasdaq: OCLR), a leading provider and innovator of optical
communications solutions, today announced its financial results for
the third quarter of fiscal year 2018, which ended March 31, 2018. Oclaro will not hold an earnings
call, nor provide forward guidance for the fourth quarter of fiscal
year 2018, due to the previously announced proposed acquisition of
Oclaro by Lumentum Holdings Inc.
"I am very pleased with the results that the Oclaro team
delivered for our third fiscal quarter. Our revenue of $127 million, which was at the high end of our
guidance, was driven by a record revenue quarter for our CFP2-ACO
product family and laser chip business. The strong sales mix
resulted in non-GAAP gross margin of 37 percent, and non-GAAP
operating income of $18 million,
which exceeded our guidance, and marked the eighth consecutive
quarter of double digit operating income percentage," said
Greg Dougherty, CEO of Oclaro.
"As a result of the U.S. Department of Commerce recently
re-imposing export sanctions on ZTE, we have temporarily suspended
all shipments to, and activities with, ZTE. Despite the loss of ZTE
as a greater than 10 percent customer for an indefinite period, we
continue to believe our solid financial model and tight expense
controls, when coupled with our highly differentiated products,
will allow us to continue to demonstrate strong financial
performance," said Mr. Dougherty.
Results for the Third Quarter of Fiscal 2018
- Revenues were $127.3 million for
the third quarter of fiscal 2018. This compares with revenues of
$139.3 million in the second quarter
of fiscal 2018, and revenues of $162.2
million in the third quarter of fiscal 2017.
- GAAP gross margin was 34.2% for the third quarter of fiscal
2018. This compares with GAAP gross margin of 37.2% in the second
quarter of fiscal 2018, and GAAP gross margin of 41.2% in the third
quarter of fiscal 2017.
- Non-GAAP gross margin was 37.2% for the third quarter of fiscal
2018. This compares with non-GAAP gross margin of 38.4% in the
second quarter of fiscal 2018, and non-GAAP gross margin of 41.6%
in the third quarter of fiscal 2017.
- GAAP operating income was $7.9
million for the third quarter of fiscal 2018. This compares
with GAAP operating income of $19.3
million in the second quarter of fiscal 2018, and GAAP
operating income of $37.7 million in
the third quarter of fiscal 2017.
- Non-GAAP operating income was $18.1
million for the third quarter of fiscal 2018. This compares
with non-GAAP operating income of $24.5
million in the second quarter of fiscal 2018, and non-GAAP
operating income of $40.5 million in
the third quarter of fiscal 2017.
- GAAP net income for the third quarter of fiscal 2018 was
$10.8 million. This compares with
GAAP net income of $18.7 million in
the second quarter of fiscal 2018, and GAAP net income of
$38.2 million in the third quarter of
fiscal 2017.
- Non-GAAP net income for the third quarter of fiscal 2018 was
$19.0 million. This compares with
non-GAAP net income of $23.1 million
in the second quarter of fiscal 2018, and non-GAAP net income of
$39.9 million in the third quarter of
fiscal 2017.
- GAAP earnings per diluted share for the third quarter of fiscal
2018 were $0.06. This compares with
GAAP earnings per diluted share of $0.11 in the second quarter of fiscal 2018, and
GAAP earnings per diluted share of $0.22 in the third quarter of fiscal 2017.
- Non-GAAP earnings per diluted share for the third quarter of
fiscal 2018 were $0.11. This compares
with non-GAAP earnings per diluted share of $0.14 in the second quarter of fiscal 2018, and
non-GAAP earnings per diluted share of $0.23 in the third quarter of fiscal 2017.
- Cash, cash equivalents, and short-term investments were
$304.4 million at March 31, 2018.
About Oclaro
Oclaro, Inc. (NASDAQ: OCLR), is a leader
in optical components and modules for the long-haul, metro and data
center markets. Leveraging more than three decades of laser
technology innovation and photonics integration, Oclaro provides
differentiated solutions for optical networks and high-speed
interconnects driving the next wave of streaming video, cloud
computing, application virtualization and other bandwidth-intensive
and high-speed applications. For more information, visit
www.oclaro.com or follow on Twitter at @OclaroInc.
Copyright 2018. All rights reserved. Oclaro, the Oclaro logo,
and certain other Oclaro trademarks and logos are trademarks and/or
registered trademarks of Oclaro, Inc. or its subsidiaries in the US
and other countries. All other trademarks are the property of their
respective owners. Information in this release is subject to change
without notice.
Safe Harbor Statement
This press release contains
statements about management's future expectations regarding the
plans or prospects of Oclaro and its business, and together with
the assumptions underlying these statements, constitute
forward-looking statements for the purposes of the safe harbor
provisions of The Private Securities Litigation Reform Act of 1995.
Investors should not unduly rely on such forward-looking
statements. These forward-looking statements include statements
concerning (i) our decision to suspend shipment of products to ZTE,
(ii) Oclaro's future financial performance and operating prospects
and (iii) the statements in our CEO's quote. Such statements can be
identified by the fact that they do not relate strictly to
historical or current facts and may contain words such as
"anticipate," "estimate," "expect," "forecast," "project,"
"intend," "plan," "believe," "will," "should," "outlook," "could,"
"target," "model," "objective," and other words and terms of
similar meaning in connection with any discussion of future
operations or financial performance. There are a number of
important factors that could cause our actual results or events to
differ materially from those indicated by such forward-looking
statements, including (i) our dependence on a limited number of
customers for a significant percentage of our revenues, (ii) the
impact on our business, financial condition and results of
operations of the U.S. Department of Commerce changing and
reactivating its previous denial order relating to ZTE, (iii) the
risk that our pending merger with Lumentum Holdings Inc. does not
close, due to the failure of one or more conditions to closing,
(iv) uncertainty as to the market value of the Lumentum merger
consideration to be paid in the merger, (v) the risk that required
governmental or Oclaro stockholder approvals of the merger
(including China antitrust
approval) will not be obtained or that such approvals will be
delayed beyond current expectations, (vi) the risk of litigation in
respect of either Oclaro or Lumentum or the merger, (vii)
disruption from the merger making it more difficult to maintain our
customer, supplier, key personnel and other strategic
relationships, (viii) competition and pricing pressure, (ix) the
absence of long-term purchase commitments from many of our
long-term customers, (x) our ability to effectively manage our
inventory, (xi) our ability to meet or exceed our gross margin
expectations, (xii) our ability to timely develop, commercialize
and ramp the production of new products to customer required
volumes, (xiii) the effects of fluctuations in foreign currency
exchange rates, (xiv) our ability to respond to evolving
technologies, customer requirements and demands, and product design
challenges, (xv) potential operating or reporting disruptions that
could result from the implementation of our new enterprise resource
planning system, (xvi) our manufacturing yields, (xvii) our ability
to conclude agreements with our customers on favorable terms,
(xviii) the risks associated with delays, disruptions or quality
control problems in manufacturing, (xix) fluctuations in our
revenues, growth rates and operating results, (xx) changes in our
effective tax rates or outcomes of tax audits or similar
proceedings, (xxi) our ability to obtain governmental licenses and
approvals for international trading activities or technology
transfers, including export licenses, (xxii) our dependence on a
limited number of suppliers and key contract manufacturers, (xxiii)
the impact of financial market and general economic conditions in
the industries in which we operate and any resulting reduction in
demand for our products, (xxiv) our ability to protect our
intellectual property rights, (xxv) the risks associated with our
international operations, and (xxvi) other factors described under
the caption "Risk Factors" and elsewhere in the documents we
periodically file with the SEC.
Non-GAAP Financial Measures
Oclaro provides certain
supplemental non-GAAP financial measures to its investors as a
complement to the most comparable GAAP measures. The GAAP measure
most directly comparable to non-GAAP gross margin rate is gross
margin rate. The GAAP measure most directly comparable to non-GAAP
operating income/loss is operating income/loss. The GAAP measure
most directly comparable to Adjusted EBITDA is net income/loss. The
GAAP measure most directly comparable to non-GAAP net income/loss
is net income/loss. An explanation and reconciliation of each of
these non-GAAP financial measures to GAAP information is set forth
below.
Oclaro believes that providing these non-GAAP measures to its
investors, in addition to corresponding income statement measures,
provides investors the benefit of viewing Oclaro's performance
using the same financial metrics that the management team uses in
making many key decisions and evaluating how Oclaro's core
operating performance and its results of operations may look in the
future. Oclaro defines "core operating performance" as its ongoing
performance in the ordinary course of its operations. Management
excludes certain items from its view of Oclaro's core operating
performance, such as impairment charges, deferred income taxes,
restructuring and severance programs, costs relating to specific
major projects (such as acquisitions), non-cash compensation
related to stock and options, impairment of fixed assets and
inventory and related expenses, certain other income and expense
items, and the tax effects thereof. Management does not believe
these items are reflective of Oclaro's ongoing core operating
performance and accordingly excludes those items from non-GAAP
gross margin rate, non-GAAP operating income/loss, non-GAAP net
income/loss and Adjusted EBITDA. Additionally, each non-GAAP
measure has historically been presented by Oclaro as a complement
to its most comparable GAAP measure, and Oclaro believes that the
continuation of this practice increases the consistency and
comparability of Oclaro's earnings releases.
Non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles in
the United States of America.
Non-GAAP measures should not be considered in isolation from or as
a substitute for financial information presented in accordance with
generally accepted accounting principles, and may be different from
non-GAAP measures used by other companies.
Adjusted EBITDA
Adjusted EBITDA is calculated
as net income/loss excluding the impact of income taxes, net
interest income/expense, depreciation and amortization, net
gains/losses on foreign currency transactions, as well as
restructuring, acquisition and related costs, non-cash compensation
related to stock and options, and other unusual one-time charges,
specifically identified in the non-GAAP reconciliation schedules
set forth below. Oclaro uses Adjusted EBITDA in evaluating Oclaro's
historical and prospective cash usage, as well as its cash usage
relative to its competitors. Specifically, management uses this
non-GAAP measure to further understand and analyze the cash used
in/generated from Oclaro's core operations. Oclaro believes that by
excluding these non-cash and non-recurring charges, more accurate
expectations of its future cash needs can be assessed in addition
to providing a better understanding of the actual cash used in or
generated from core operations for the periods presented. Oclaro
further believes that providing this information allows Oclaro's
investors greater transparency and a better understanding of
Oclaro's core cash position.
Oclaro, Inc.
Contact
|
|
Investor
Contact
|
Pete
Mangan
|
|
Jim
Fanucchi
|
Chief Financial
Officer
|
|
Darrow Associates,
Inc.
|
(408)
383-1400
|
|
(408)
404-5400
|
ir@oclaro.com
|
|
ir@oclaro.com
|
OCLARO,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
March 31,
2018
|
|
July 1,
2017
|
|
(Thousands)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
179,969
|
|
|
$
|
219,270
|
|
Restricted
cash
|
—
|
|
|
716
|
|
Short-term
investments
|
124,433
|
|
|
37,559
|
|
Accounts receivable,
net
|
111,564
|
|
|
122,287
|
|
Inventories
|
103,927
|
|
|
101,068
|
|
Prepaid expenses and
other current assets
|
38,983
|
|
|
40,870
|
|
Total current
assets
|
558,876
|
|
|
521,770
|
|
Property and
equipment, net
|
137,999
|
|
|
114,333
|
|
Other intangible
assets, net
|
241
|
|
|
699
|
|
Deferred tax assets,
non-current
|
19,325
|
|
|
25,774
|
|
Other non-current
assets
|
1,622
|
|
|
2,573
|
|
Total
assets
|
$
|
718,063
|
|
|
$
|
665,149
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
73,124
|
|
|
$
|
88,316
|
|
Accrued expenses and
other liabilities
|
42,159
|
|
|
42,499
|
|
Capital lease
obligations, current
|
2,514
|
|
|
2,368
|
|
Total current
liabilities
|
117,797
|
|
|
133,183
|
|
Deferred gain on
sale-leasebacks
|
5,747
|
|
|
5,895
|
|
Capital lease
obligations, non-current
|
1,033
|
|
|
1,379
|
|
Other non-current
liabilities
|
11,212
|
|
|
11,019
|
|
Total
liabilities
|
135,789
|
|
|
151,476
|
|
Stockholders'
equity:
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
Common
stock
|
1,701
|
|
|
1,676
|
|
Additional paid-in
capital
|
1,700,120
|
|
|
1,688,777
|
|
Accumulated other
comprehensive income
|
42,441
|
|
|
40,973
|
|
Accumulated
deficit
|
(1,161,988)
|
|
|
(1,217,753)
|
|
Total stockholders'
equity
|
582,274
|
|
|
513,673
|
|
Total liabilities and
stockholders' equity
|
$
|
718,063
|
|
|
$
|
665,149
|
|
OCLARO,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
2018
|
|
December 30,
2017
|
|
April
1, 2017
|
|
(Thousands, except
per share amounts)
|
Revenues
|
$
|
127,293
|
|
|
$
|
139,335
|
|
|
$
|
162,182
|
|
Cost of
revenues
|
83,729
|
|
|
87,507
|
|
|
95,394
|
|
Gross
profit
|
43,564
|
|
|
51,828
|
|
|
66,788
|
|
Operating
expenses:
|
|
|
|
|
|
Research and
development
|
16,412
|
|
|
15,358
|
|
|
14,479
|
|
Selling, general and
administrative
|
16,002
|
|
|
16,892
|
|
|
14,736
|
|
Amortization of other
intangible assets
|
154
|
|
|
154
|
|
|
150
|
|
Restructuring,
acquisition and related (income) expense, net
|
3,084
|
|
|
—
|
|
|
(301)
|
|
Loss (gain) on sale
of property and equipment
|
(19)
|
|
|
169
|
|
|
(16)
|
|
Total operating
expenses
|
35,633
|
|
|
32,573
|
|
|
29,048
|
|
Operating
income
|
7,931
|
|
|
19,255
|
|
|
37,740
|
|
Other income
(expense):
|
|
|
|
|
|
Interest income
(expense), net
|
253
|
|
|
123
|
|
|
175
|
|
Gain (loss) on
foreign currency transactions, net
|
2,107
|
|
|
1,599
|
|
|
687
|
|
Other income
(expense), net
|
906
|
|
|
936
|
|
|
233
|
|
Total other income
(expense)
|
3,266
|
|
|
2,658
|
|
|
1,095
|
|
Income before income
taxes
|
11,197
|
|
|
21,913
|
|
|
38,835
|
|
Income tax provision
(1)
|
390
|
|
|
3,176
|
|
|
621
|
|
Net income
|
$
|
10,807
|
|
|
$
|
18,737
|
|
|
$
|
38,214
|
|
Net income per
share:
|
|
|
|
|
Basic
|
$
|
0.06
|
|
|
$
|
0.11
|
|
|
$
|
0.23
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.11
|
|
|
$
|
0.22
|
|
Shares used in
computing net income per share:
|
|
Basic
|
169,602
|
|
|
168,990
|
|
|
166,808
|
|
Diluted
|
171,261
|
|
|
170,692
|
|
|
169,841
|
|
|
(1) The Company has
not completed its estimate of the impact of Public Law 115-97
(formerly known as the Tax Cuts and Jobs Act) on the realizability
of its U.S. deferred tax assets and has, therefore, elected to
utilize the reporting provisions of Staff Accounting Bulletin No.
118 issued by the U.S. Securities and Exchange
Commission.
|
OCLARO,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
2018
|
|
December 30,
2017
|
|
April
1, 2017
|
|
(Thousands)
|
Reconciliation of
GAAP gross margin rate to non-GAAP gross margin
rate:
|
GAAP gross
profit
|
$
|
43,564
|
|
|
$
|
51,828
|
|
|
$
|
66,788
|
|
Stock-based
compensation in cost of revenues
|
763
|
|
|
755
|
|
|
630
|
|
Restructuring and
acquisition related costs in cost of revenues
|
—
|
|
|
969
|
|
|
—
|
|
Excess and obsolete
charges in cost of revenues (2)
|
3,065
|
|
|
—
|
|
|
—
|
|
Non-GAAP gross
profit
|
$
|
47,392
|
|
|
$
|
53,552
|
|
|
$
|
67,418
|
|
|
|
|
|
|
|
GAAP gross margin
rate
|
34.2
|
%
|
|
37.2
|
%
|
|
41.2
|
%
|
Non-GAAP gross margin
rate
|
37.2
|
%
|
|
38.4
|
%
|
|
41.6
|
%
|
Reconciliation of
GAAP operating income to non-GAAP operating income:
|
GAAP operating
income
|
$
|
7,931
|
|
|
$
|
19,255
|
|
|
$
|
37,740
|
|
Stock-based
compensation
|
3,917
|
|
|
3,939
|
|
|
2,890
|
|
Amortization of other
intangible assets
|
154
|
|
|
154
|
|
|
150
|
|
Restructuring,
acquisition and related (income) expense, net
|
3,084
|
|
|
969
|
|
|
(301)
|
|
Excess and obsolete
charges (2)
|
3,065
|
|
|
—
|
|
|
—
|
|
Loss (gain) on sale
of property and equipment
|
(19)
|
|
|
169
|
|
|
(16)
|
|
Non-GAAP operating
income
|
$
|
18,132
|
|
|
$
|
24,486
|
|
|
$
|
40,463
|
|
|
|
|
|
|
|
GAAP operating income
rate
|
6.2
|
%
|
|
13.8
|
%
|
|
23.3
|
%
|
Non-GAAP operating
income rate
|
14.2
|
%
|
|
17.6
|
%
|
|
24.9
|
%
|
|
|
|
|
|
|
Reconciliation of
GAAP net income to non-GAAP net income and adjusted
EBITDA:
|
GAAP net
income
|
$
|
10,807
|
|
|
$
|
18,737
|
|
|
$
|
38,214
|
|
Stock-based
compensation
|
3,917
|
|
|
3,939
|
|
|
2,890
|
|
Amortization of other
intangible assets
|
154
|
|
|
154
|
|
|
150
|
|
Restructuring,
acquisition and related (income) expense, net
|
3,084
|
|
|
969
|
|
|
(301)
|
|
Other (income)
expense items, net
|
(906)
|
|
|
(936)
|
|
|
(233)
|
|
Loss (gain) on sale
of property and equipment
|
(19)
|
|
|
169
|
|
|
(16)
|
|
Excess and obsolete
charges (2)
|
3,065
|
|
|
—
|
|
|
—
|
|
Gain (loss) on
foreign currency translation
|
(2,107)
|
|
|
(1,599)
|
|
|
(687)
|
|
Income tax
effect
|
1,016
|
|
|
1,687
|
|
|
(125)
|
|
Non-GAAP net
income
|
$
|
19,011
|
|
|
$
|
23,120
|
|
|
$
|
39,892
|
|
Income tax (benefit)
provision
|
(626)
|
|
|
1,489
|
|
|
746
|
|
Interest (income)
expense, net
|
(253)
|
|
|
(123)
|
|
|
(175)
|
|
Depreciation
expense
|
7,747
|
|
|
7,344
|
|
|
5,042
|
|
Adjusted
EBITDA
|
$
|
25,879
|
|
|
$
|
31,830
|
|
|
$
|
45,505
|
|
|
|
|
|
|
|
Non-GAAP net
income per share:
|
|
|
Basic
|
$
|
0.11
|
|
|
$
|
0.14
|
|
|
$
|
0.24
|
|
Diluted
|
$
|
0.11
|
|
|
$
|
0.14
|
|
|
$
|
0.23
|
|
Shares used in
computing Non-GAAP net income per share:
|
|
|
Basic
|
169,602
|
|
|
168,990
|
|
|
166,808
|
|
Diluted
|
171,261
|
|
|
170,692
|
|
|
169,841
|
|
|
Three Months
Ended
|
|
March 31,
2018
|
|
December 30,
2017
|
|
April
1, 2017
|
|
(Thousands, except
per share amounts)
|
Stock-based
compensation for the above included the following:
|
|
|
Cost of
revenues
|
$
|
763
|
|
|
$
|
755
|
|
|
$
|
630
|
|
Research and
development
|
857
|
|
|
858
|
|
|
590
|
|
Selling, general and
administrative
|
2,297
|
|
|
2,326
|
|
|
1,670
|
|
Total
|
$
|
3,917
|
|
|
$
|
3,939
|
|
|
$
|
2,890
|
|
|
(2) Excess and
obsolete charges related to inventory exposure as a result of the
recently re-imposed export sanctions on ZTE.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/oclaro-announces-third-quarter-fiscal-year-2018-financial-results-300644205.html
SOURCE Oclaro, Inc.