News Release from: Finisar Corp
Edited by the Electronicstalk Editorial Team on 7 March 2006
Finisar notches tenth straight growth quarter
Finisar Corporation has reported financial results for its third fiscal quarter ended 31st January 2006.
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Finisar Corporation has reported financial results for its third fiscal quarter ended 31st January 2006. Total revenues in the third quarter of fiscal 2006 were $93.5 million, up 8% on a sequential basis from $86.6 million in the second quarter and 28% from $73.1 million in the third quarter of the prior year. The company's revenues have grown sequentially for ten consecutive quarters, the last six of which set new records.
Total revenues from the sale of optical subsystems were $84.2 million in the third quarter, up 9% on a sequential basis from $77.4 million in the second quarter and 33% from $63.4 million in the third quarter of the prior year.
Sales of network test and monitoring systems were $9.3 million in the third quarter compared with $9.2 million in the second quarter and down 3% from $9.7 million in the third quarter of the prior year.
The company reported net income of $8.3 million, or $0.03 per diluted share, for the third quarter of fiscal 2006, compared with a net loss of $15.8 million, or $0.05 per share, in the second quarter and a net loss of $33.0 million, or $0.15 per share, in the third quarter of fiscal 2005.
The company's gross profit for the third quarter was $28.2 million, or 30.2% of total revenues, compared with 23.8% in the second quarter and 22.8% in the third quarter of 2005.
The company's operating results include a number of noncash and cash charges and gains principally related to acquisitions, the sale of minority investments, restructuring activities and financing transactions.
For the third quarter of fiscal 2006, these items resulted in a net charge of $554,000 and included, among other items, a gain of $11.0 million associated with the sale of a minority investment and $1.3 million related to the reversal of a charge for expected warranty work offset by $4.5 million in amortisation charges related to acquired developed technology and purchased intangibles arising from previous acquisitions, $4.5 million related to charges for slow-moving and obsolete inventory reserves, and $1.1 million related to the amortisation of discount on convertible notes issued in 2001.
The charge for slow-moving and obsolete inventory was largely based on an estimate of the amount of inventory that will be unused after 12 months although a portion of that inventory may in fact be used beyond this period.
Also included in the current quarter is a noncash tax provision of $.6 million resulting from timing differences associated with the amortisation of goodwill for tax reporting purposes which is not amortised for financial reporting purposes.
The company excludes these and certain other items for the purpose of tracking its performance on a non-GAAP basis.
Non-GAAP gross profit and non-GAAP net income (loss), as reported by the company, give an indication of the company's baseline performance before gains, losses or other charges that are considered by management to be outside of our core operating results.
The company's non-GAAP net income for the third quarter of fiscal 2006 was $7.7 million, or $0.03 per share, compared with net income of $850,000, or $0.00 per share, in the second quarter and a net loss of $7.9 million, or $.04 per share, in the third quarter of the prior year.
On a non-GAAP basis, gross margins were 38.8% in the third quarter compared with 32.7% in the second quarter and 29.8% in the third quarter of the prior year.
'We are proud of the progress we made in the third quarter', said Jerry Rawls, Finisar's President, CEO and Chairman.
'We have been pointing to this quarter for more than a year as the one in which we would become profitable, at least on a non-GAAP basis'.
'While we were able to generate a small non-GAAP profit earlier than expected in the second quarter, we are especially pleased that we were able to achieve our third quarter profitability goal'.
'While our march to profitability has been a long and arduous path, we have remained steadfast in our commitment to delivering value to customers through focused R and D, in-house manufacturing and vertical integration'.
'Our gross margins improved again this quarter from increased revenues and our relentless push for improved manufacturing efficiency and lower costs'.
'In addition, we have laid the foundation for strengthening our balance sheet by generating almost $17 million of EBITDA last quarter and increased our cash balance by $21 million to $116 million'.
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