FNSR
$34.22
Finisar
$.02
.06%
Earnings Details
2nd Quarter October 2016
Thursday, December 08, 2016 4:00:25 PM
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Summary

Finisar Beats

Finisar (FNSR) reported 2nd Quarter October 2016 earnings of $0.58 per share on revenue of $369.9 million. The consensus earnings estimate was $0.46 per share on revenue of $364.5 million. The Earnings Whisper number was $0.48 per share. Revenue grew 15.2% on a year-over-year basis.

The company said it expects third quarter non-GAAP earnings of $0.58 to $0.64 per share on revenue of $378.0 million to $398.0 million. The current consensus earnings estimate is $0.47 per share on revenue of $375.9 million for the quarter ending January 31, 2017.

Finisar Corp is a provider of optical subsystems and components that are used in data communication and telecommunication applications.

Results
Reported Earnings
$0.58
Earnings Whisper
$0.48
Consensus Estimate
$0.46
Reported Revenue
$369.9 Mil
Revenue Estimate
$364.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Finisar Announces Record Second Fiscal Quarter Revenues and Profits

SUNNYVALE, CA--(Marketwired - December 08, 2016) - Finisar Corporation (FNSR), a global technology leader for subsystems and components for fiber optic communications, today announced financial results for its second quarter of fiscal year 2017, ended October 30, 2016.

COMMENTARY

"I am pleased to announce that Finisar achieved all-time quarterly records for revenues and profits in our second quarter. Revenues were $369.9 million, an increase of $28.5 million, or 8.4% over the first quarter. This growth was primarily driven by strong demand for 100G transceivers. In addition, customer demand for wavelength selective switch and ROADM line card products was strong. Our gross margins improved significantly due to a favorable product mix and leverage achieved from our vertical integration with larger volumes. The combination of revenues being at the higher end of our guidance range with higher gross margins resulted in earnings per fully diluted share above our guidance range," said Jerry Rawls, Finisar’s Chief Executive Officer.

 
FINANCIAL HIGHLIGHTS - Second Quarter Ended October 30, 2016
 
 
 
 
 
Summary GAAP Results
 
Second
 
First
Quarter
 
Quarter
Ended
 
Ended
 
 
October 30, 2016  
July 31, 2016
 
 
(in thousands, except per share amounts)
 
 
 
 
 
Revenues
 
$369,863
 
$341,325
Gross margin
 
36.1%
 
31.7%
Operating expenses
 
$80,853
 
$79,854
Operating income
 
$52,828
 
$28,311
Operating margin
 
14.3%
 
8.3%
Net income
 
$48,765
 
$23,949
Income per share-basic
 
$0.44
 
$0.22
Income per share-diluted
 
$0.43
 
$0.22
 
 
 
 
 
Basic shares
 
110,407
 
108,820
Diluted shares
 
113,192
 
110,821
 
 
 
 
 
Summary Non-GAAP Results (a)  
Second
 
First
Quarter
 
Quarter
Ended
 
Ended
 
 
October 30, 2016  
July 31, 2016
 
 
(in thousands, except per share amounts)
 
 
 
 
 
Revenues
 
$369,863
 
$341,325
Non-GAAP Gross margin
 
37.2%
 
33.1%
Non-GAAP Operating expenses
 
$69,418
 
$69,344
Non-GAAP Operating income
 
$68,250
 
$43,520
Non-GAAP Operating margin
 
18.5%
 
12.8%
Non-GAAP Net income
 
$65,154
 
$41,825
Non-GAAP Income per share-basic
 
$0.59
 
$0.38
Non-GAAP Income per share-diluted
 
$0.58
 
$0.38
 
 
 
 
 
Basic shares
 
110,407
 
108,820
Diluted shares
 
113,192
 
110,821
 
 
 
 
 
(a)
  In evaluating the operating performance of Finisar’s business, Finisar management utilizes financial measures that exclude certain charges and credits required by U.S. generally accepted accounting principles, or GAAP, that are considered by management to be outside of Finisar’s core ongoing operating results. A reconciliation of Finisar’s non-GAAP financial measures to the most directly comparable GAAP measures, as well as additional related information, can be found under the heading "Finisar Non-GAAP Financial Measures" below.
     

Financial Statement Highlights for the Second Quarter of Fiscal 2017:

Revenues were $369.9 million, an increase of $28.5 million, or 8.4%, from $341.3 million in the first quarter.

Sales of telecom products increased by $9.7 million, or 9.9%, compared to the first quarter. This increase was due primarily to higher sales of 100G transceivers, as well as wavelength selective switch and ROADM line card products.

Sales of datacom products increased by $18.8 million, or 7.7%, compared to the first quarter. This increase was due primarily to growth in demand for 100G transceivers. Sales of 100G transceivers for datacom applications increased approximately 30% compared to the first quarter, and more than 80% compared to the second quarter of the prior fiscal year. Sales of 40G datacom transceivers were approximately flat compared to the first quarter.

GAAP gross margin improved to 36.1%, compared to 31.7% in the first quarter, primarily due to favorable product mix and the operational leverage from our vertical integration.

Non-GAAP gross margin improved to 37.2% compared to 33.1% in the first quarter.

GAAP operating expenses were $80.9 million compared to $79.9 million in the first quarter. GAAP operating expenses as a percentage of revenue decreased to approximately 21.9% of revenue compared to 23.4% in the first quarter.

Non-GAAP operating expenses were $69.4 million compared to $69.3 million in the first quarter. Non-GAAP operating expenses as a percentage of revenue decreased to approximately 18.8% compared to 20.3% in the first quarter.

GAAP operating margin improved to 14.3% from 8.3% in the first quarter.

Non-GAAP operating margin improved to 18.5% from 12.8% in the first quarter.

GAAP earnings per fully diluted share was $0.43 compared to $0.22 in the first quarter, primarily due to higher revenue levels and improved gross margins.

Non-GAAP earnings per fully diluted share was $0.58 compared to $0.38 in the preceding quarter.

Cash, cash equivalents and short-term investments increased $32.5 million to $626.3 million at the end of the second quarter, compared to $593.8 million at the end of the preceding quarter.

OUTLOOK

Finisar indicated that for the third quarter of fiscal 2017 it currently expects revenues in the range of $378 to $398 million, non-GAAP gross margin of approximately 37% to 38%, non-GAAP operating margin of approximately 18.5% to 19.5%, and non-GAAP earnings per fully diluted share in the range of approximately $0.58 to $0.64.

Finisar has not provided a reconciliation of its third quarter outlook for non-GAAP gross margin, non-GAAP operating margin and non-GAAP earnings per fully diluted share because estimates of all of the reconciling items cannot be provided without unreasonable efforts. It is difficult to reasonably provide a forward-looking estimate of certain reconciling items between such non-GAAP forward-looking measures and the comparable forward-looking GAAP measures. Certain factors that are materially significant to Finisar’s ability to estimate these items are out of its control and/or cannot be reasonably predicted, including with respect to restructuring charges, litigation settlements and resolutions and related costs, and the timing of tax related adjustments. Accordingly, a reconciliation of such non-GAAP forward-looking measures to the comparable forward-looking GAAP measures are not available within a reasonable range of predictability.

CONFERENCE CALL

Finisar will discuss its financial results for the second quarter and current business outlook during its regular quarterly conference call scheduled for Thursday, December 8, 2016, at 2:00 pm PT (5:00 pm ET). To listen to the call you may connect through the Finisar investor relations page at http://investor.finisar.com/ or dial 1-877-741-4239 (domestic) or 1-719-325-4771 (international) and enter conference ID 7509499.

An audio replay will be available for two weeks following the call by dialing 1-888-203-1112 (domestic) or 1-719-457-0820 (international) and then following the prompts: enter conference ID 7509499 and provide your name, affiliation, and contact number. A replay of the webcast will be available shortly after the conclusion of the call on Finisar’s website until the next regularly scheduled earnings conference call.

SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This press release contains forward-looking statement concerning Finisar’s expected financial performance. These statements are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations, estimates, assumptions and projections about our business and industry, and the markets and customers we serve, and they are subject to numerous risks and uncertainties that may cause these forward-looking statements to be inaccurate. Finisar assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from those projected. Examples of such risks include those associated with: the uncertainty of customer demand for Finisar’s products; the rapidly evolving markets for Finisar’s products and uncertainty regarding the development of these markets; Finisar’s historical dependence on sales to a limited number of customers and fluctuations in the mix of products and customers in any period; ongoing new product development and introduction of new and enhanced products; the challenges of rapid growth followed by periods of contraction; and intensive competition. Further information regarding these and other risks relating to Finisar’s business is set forth in Finisar’s annual report on Form 10-K (filed June 17, 2016) and quarterly SEC filings.

ABOUT FINISAR

Finisar Corporation (FNSR) is a global technology leader for fiber optic subsystems and components that enable high-speed voice, video and data communications for telecommunications, networking, storage, wireless, and cable TV applications. For over 25 years, Finisar has provided critical optics technologies to system manufacturers to meet the increasing demands for network bandwidth and storage. Finisar is headquartered in Sunnyvale, California, USA with R&D, manufacturing sites, and sales offices worldwide. For additional information, visit www.finisar.com.

FINISAR FINANCIAL STATEMENTS The following financial tables are presented in accordance with GAAP.

 
 
Finisar Corporation
 
Consolidated Statements of Operations
 
(Unaudited, in thousands, except per share data)
 
 
   
     
     
     
     
 
 
  Three Months Ended
    Six Months Ended
    Three Months Ended
 
 
  Oct 30, 2016
    Nov 01, 2015
    Oct 30, 2016
    Nov 01, 2015
    Jul 31, 2016
 
Revenues
  $
369,863
    $
321,136
    $
711,188
    $
635,166
    $
341,325
 
Cost of revenues
    235,192
      230,610
      466,829
      454,757
     
231,637
 
Impairment of long-lived assets
    -
      -
      -
      1,071
     
-
 
Amortization of acquired developed technology
    990
      1,435
      2,513
      2,870
     
1,523
 
Gross profit
    133,681
      89,091
      241,846
      176,468
     
108,165
 
Gross margin
    36.1
%
    27.7
%
    34.0
%
    27.8
%
   
31.7
%
Operating expenses:
                                   
 
 
 
Research and development
    53,242
      50,972
      104,250
      103,380
     
51,008
 
 
Sales and marketing
    13,367
      11,897
      25,230
      23,099
     
11,863
 
 
General and administrative
    13,576
      16,186
      29,891
      31,394
     
16,315
 
 
Impairment of long-lived assets
    -
      -
      -
      830
     
-
 
 
Amortization of purchased intangibles
    668
      668
      1,336
      1,336
     
668
 
 
 
Total operating expenses
    80,853
      79,723
      160,707
      160,039
     
79,854
 
Income from operations
    52,828
      9,368
      81,139
      16,429
     
28,311
 
Interest income
    1,021
      469
      1,747
      834
     
726
 
Interest expense
    (3,025
)
    (2,917
)
    (6,011
)
    (5,800
)
   
(2,986
)
Other income (expenses), net
    795
      445
      736
      1,326
     
(59
)
Income before income taxes
    51,619
      7,365
      77,611
      12,789
     
25,992
 
Provision for income taxes
    2,854
      721
      4,897
      2,752
     
2,043
 
Net income
  $
48,765
    $
6,644
    $
72,714
    $
10,037
    $
23,949
 
 
                                   
 
 
Net income per share attributable to Finisar Corporation common stockholders:                                    
 
 
 
                                   
 
 
 
Basic
  $
0.44
    $
0.06
    $
0.66
    $
0.09
    $
0.22
 
 
Diluted
  $
0.43
    $
0.06
    $
0.65
    $
0.09
    $
0.22
 
 
                                   
 
 
Shares used in computing net income per share - basic
    110,407
      106,635
      109,614
      105,961
     
108,820
 
Shares used in computing net income per share - diluted
    113,192
      107,493
      112,450
      108,238
     
110,821
 
 
                                   
 
 
 
                                   
 
 
 
Finisar Corporation
Consolidated Balance Sheets
(in thousands)
 
 
 
 
 
 
 
 
 
Oct 30, 2016
 
Jul 31, 2016
 
May 1, 2016
 
 
(Unaudited)
 
(Unaudited)
 
 
ASSETS
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
 
$ 282,963
 
$ 280,414
 
$ 299,221
 
Short-term held-to-maturity investments
 
343,319
 
313,389
 
263,255
 
Accounts receivable, net
 
277,667
 
255,036
 
249,257
 
Accounts receivable, other
 
49,997
 
43,678
 
44,576
 
Inventories
 
292,439
 
272,592
 
273,291
 
Prepaid expenses and other assets
 
17,140
 
18,646
 
18,483
 
 
Total current assets
 
1,263,525
 
1,183,755
 
1,148,083
Property, equipment and improvements, net
 
341,563
 
338,918
 
348,613
Purchased intangible assets, net
 
16,339
 
16,197
 
18,388
Goodwill
 
106,735
 
106,735
 
106,735
Minority investments
 
3,893
 
3,974
 
4,051
Other assets
 
18,008
 
18,928
 
19,501
 
 
Total assets
 
$ 1,750,063
 
$ 1,668,507
 
$ 1,645,371
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Accounts payable
 
$ 153,023
 
$ 136,317
 
$ 141,591
 
Accrued compensation
 
45,213
 
36,332
 
36,084
 
Other accrued liabilities
 
36,736
 
39,201
 
42,206
 
Deferred revenue
 
17,818
 
16,468
 
13,529
 
 
Total current liabilities
 
252,790
 
228,318
 
233,410
Long-term liabilities:
 
 
 
 
 
 
 
Convertible notes, net of current portion
 
234,679
 
232,016
 
229,393
 
Other non-current liabilities
 
13,279
 
14,056
 
14,882
 
 
Total liabilities
 
500,748
 
474,390
 
477,685
Stockholders’ equity:
 
 
 
 
 
 
 
Common stock
 
111
 
110
 
108
 
Additional paid-in capital
 
2,639,355
 
2,621,260
 
2,605,859
 
Accumulated other comprehensive income (loss)
 
(49,772)
 
(38,109)
 
(25,188)
 
Accumulated deficit
 
(1,340,379)
 
(1,389,144)
 
(1,413,093)
 
 
Total stockholders’ equity  
1,249,315
 
1,194,117
 
1,167,686
Total liabilities and stockholders’ equity
 
$ 1,750,063
 
$ 1,668,507
 
$ 1,645,371
 
 
 
 
 
 
 
Note - Balance sheet amounts as of May 1, 2016 are derived from the audited consolidated financial statements as of the date. 
 

FINISAR NON-GAAP FINANCIAL MEASURES

In addition to reporting financial results in accordance with U.S. generally accepted accounting principles, or GAAP, Finisar provides the following financial measures defined as non-GAAP financial measures by the Securities and Exchange Commission: non-GAAP gross profit, non-GAAP operating income, non-GAAP income and non-GAAP net income per share. These non-GAAP financial measures are supplemental information regarding Finisar’s operating performance on a non-GAAP basis that excludes certain gains, losses and charges of a non-cash nature or that occur relatively infrequently and/or that management considers to be outside of our ongoing core operating results. Management believes that tracking non-GAAP gross profit, non-GAAP operating income, non-GAAP net income and non-GAAP net income per share provides management and the investment community with valuable insight into our ongoing core current operations, our ability to generate cash and the underlying business trends that are affecting our performance. These non-GAAP measures are used by both management and our Board of Directors, along with the comparable GAAP information, in evaluating our current performance and planning our future business activities. In particular, management finds it useful to exclude non-cash charges in order to better correlate our operating activities with our ability to generate cash from operations and to exclude certain cash charges as a means of more accurately predicting our liquidity requirements. We believe that these non-GAAP measures, when used in conjunction with our GAAP financial information, also allow investors to better evaluate our financial performance in comparison to other periods and to other companies in our industry.

In calculating non-GAAP gross profit in this release, we have excluded the following items from cost of revenues in applicable periods in this release:

Changes in excess and obsolete inventory reserve (predominantly non-cash charges);

Amortization of acquired technology (non-cash charges related to technology obtained in acquisitions);

Duplicate facility costs during facility move (non-core cash charges);

Stock-based compensation expense (non-cash charges);

Impairment of long-lived assets (non-cash charges);

Reduction in force costs (non-core cash charges); and

Acquisition related retention payments (non-core cash charges).

In calculating non-GAAP operating income in this release, we have excluded the same items to the extent they are classified as operating expenses, and have also excluded the following items in applicable periods in this release:

Acquisition related costs (non-core cash charges);

Gain or loss on litigation settlements and resolutions and related costs (non-core cash charges or benefits); and

Amortization of purchased intangibles (non-cash charges).

In calculating non-GAAP income and non-GAAP income per share in this release, we have also excluded the following items in applicable periods in this release:

Imputed interest expenses on convertible debt (non-cash charges);

Imputed interest related to restructuring (non-cash charges);

Gains and losses on sales of assets (non-cash losses and cash gains related to the periodic disposal of assets no longer required for current activities);

Other miscellaneous expenses (income) (non-core charges or benefits);

Dollar denominated foreign exchange transaction losses (gains) (non-cash charges or benefits); and

Amortization of debt issuance costs (non-cash charges).

In addition, in this release we have adjusted non-GAAP income and non-GAAP income per share for the difference between GAAP income taxes and non-GAAP income taxes.

A reconciliation of this non-GAAP financial information to the corresponding GAAP information is set forth below:

 
 
Finisar Corporation
 
Reconciliation of Results of Operations under GAAP and non-GAAP
 
(Unaudited, in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
Six Months Ended
 
 
Three Months Ended
 
 
 
Oct 30, 2016
 
 
Nov 01, 2015
 
 
Oct 30, 2016
 
 
Nov 01, 2015
 
 
Jul 31, 2016
 
GAAP to non-GAAP reconciliation of gross profit:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross profit - GAAP
 
$
133,681
 
 
$
89,091
 
 
$
241,846
 
 
$
176,468
 
 
$
108,165
 
Gross margin - GAAP
 
 
36.1
%
 
 
27.7
%
 
 
34.0
%
 
 
27.8
%
 
 
31.7
%
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in excess and obsolete inventory valuation adjustments (1)
 
 
-
 
 
 
2,402
 
 
 
-
 
 
 
3,832
 
 
 
-
 
 
Amortization of acquired technology
 
 
990
 
 
 
1,435
 
 
 
2,513
 
 
 
2,870
 
 
 
1,523
 
 
Duplicate facility costs during facility move
 
 
8
 
 
 
4
 
 
 
16
 
 
 
86
 
 
 
8
 
 
Stock compensation
 
 
2,949
 
 
 
2,922
 
 
 
5,996
 
 
 
5,614
 
 
 
3,047
 
 
Impairment of long-lived assets
 
 
-
 
 
 
-
 
 
 
-
 
 
 
1,282
 
 
 
-
 
 
Reduction in force costs
 
 
14
 
 
 
417
 
 
 
116
 
 
 
971
 
 
 
102
 
 
Acquisition related retention payment
 
 
26
 
 
 
28
 
 
 
45
 
 
 
93
 
 
 
19
 
 
 
Total cost of revenue adjustments
 
 
3,987
 
 
 
7,208
 
 
 
8,686
 
 
 
14,748
 
 
 
4,699
 
Gross profit - non-GAAP
 
 
137,668
 
 
 
96,299
 
 
 
250,532
 
 
 
191,216
 
 
 
112,864
 
Gross margin - non-GAAP
 
 
37.2
%
 
 
30.0
%
 
 
35.2
%
 
 
30.1
%
 
 
33.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP to non-GAAP reconciliation of operating income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income - GAAP
 
 
52,828
 
 
 
9,368
 
 
 
81,139
 
 
 
16,429
 
 
 
28,311
 
Operating margin - GAAP
 
 
14.3
%
 
 
2.9
%
 
 
11.4
%
 
 
2.6
%
 
 
8.3
%
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total cost of revenue adjustments
 
 
3,987
 
 
 
7,208
 
 
 
8,686
 
 
 
14,748
 
 
 
4,699
 
Total operating expense adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses - GAAP
 
 
80,853
 
 
 
79,723
 
 
 
160,707
 
 
 
160,039
 
 
 
79,854
 
 
Research and development
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction in force costs
 
 
88
 
 
 
-
 
 
 
262
 
 
 
288
 
 
 
174
 
 
 
Duplicate facility costs during facility move
 
 
7
 
 
 
49
 
 
 
14
 
 
 
270
 
 
 
7
 
 
 
Acquisition related retention payment
 
 
32
 
 
 
67
 
 
 
64
 
 
 
158
 
 
 
32
 
 
 
Stock compensation
 
 
5,552
 
 
 
4,970
 
 
 
10,663
 
 
 
9,808
 
 
 
5,111
 
 
 
Impairment of long-lived assets
 
 
-
 
 
 
-
 
 
 
-
 
 
 
287
 
 
 
-
 
 
Sales and marketing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction in force costs
 
 
-
 
 
 
117
 
 
 
29
 
 
 
180
 
 
 
29
 
 
 
Acquisition related retention payment
 
 
-
 
 
 
3
 
 
 
-
 
 
 
13
 
 
 
-
 
 
 
Stock compensation
 
 
1,877
 
 
 
1,718
 
 
 
3,628
 
 
 
3,425
 
 
 
1,751
 
 
General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reduction in force costs
 
 
20
 
 
 
963
 
 
 
33
 
 
 
1,315
 
 
 
13
 
 
 
Duplicate facility costs
 
 
154
 
 
 
8
 
 
 
297
 
 
 
17
 
 
 
143
 
 
 
Acquisition related retention payment
 
 
-
 
 
 
-
 
 
 
(2
)
 
 
(5
)
 
 
(2
)
 
 
Stock compensation
 
 
2,989
 
 
 
2,757
 
 
 
5,542
 
 
 
5,517
 
 
 
2,553
 
 
 
Acquisition related costs
 
 
2
 
 
 
378
 
 
 
33
 
 
 
396
 
 
 
31
 
 
 
Litigation settlements and resolutions and related costs
 
 
46
 
 
 
-
 
 
 
46
 
 
 
16
 
 
 
-
 
 
Amortization of purchased intangibles
 
 
668
 
 
 
668
 
 
 
1,336
 
 
 
1,336
 
 
 
668
 
 
Impairment of long-lived assets
 
 
-
 
 
 
-
 
 
 
-
 
 
 
587
 
 
 
-
 
 
 
 
Total operating expense adjustments  
 
11,435
 
 
 
11,698
 
 
 
21,945
 
 
 
23,608
 
 
 
10,510
 
 
Operating expenses - non-GAAP
 
 
69,418
 
 
 
68,025
 
 
 
138,762
 
 
 
136,431
 
 
 
69,344
 
Operating income - non-GAAP
 
 
68,250
 
 
 
28,274
 
 
 
111,770
 
 
 
54,785
 
 
 
43,520
 
Operating margin - non-GAAP
 
 
18.5
%
 
 
8.8
%
 
 
15.7
%
 
 
8.6
%
 
 
12.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP to non-GAAP reconciliation of income before income taxes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income taxes - GAAP
 
 
51,619
 
 
 
7,365
 
 
 
77,611
 
 
 
12,789
 
 
 
25,992
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total cost of revenue adjustments
 
 
3,987
 
 
 
7,208
 
 
 
8,686
 
 
 
14,748
 
 
 
4,699
 
Total operating expense adjustments
 
 
11,435
 
 
 
11,698
 
 
 
21,945
 
 
 
23,608
 
 
 
10,510
 
Total Interest and other adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-cash imputed interest expenses on convertible debt
 
 
2,509
 
 
 
2,391
 
 
 
4,978
 
 
 
4,745
 
 
 
2,469
 
Imputed interest related to restructuring
 
 
37
 
 
 
44
 
 
 
75
 
 
 
89
 
 
 
38
 
Other (income) expense, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss (gain) on sale of assets
 
 
(17
)
 
 
85
 
 
 
(25
)
 
 
(100
)
 
 
(8
)
 
Other miscellaneous income
 
 
-
 
 
 
(120
)
 
 
-
 
 
 
(137
)
 
 
-
 
 
Foreign exchange transaction (gain) or loss
 
 
(970
)
 
 
51
 
 
 
(999
)
 
 
(642
)
 
 
(29
)
 
Amortization of debt issuance cost
 
 
154
 
 
 
154
 
 
 
308
 
 
 
308
 
 
 
154
 
 
 
Total Interest and other adjustments
 
 
1,713
 
 
 
2,605
 
 
 
4,337
 
 
 
4,263
 
 
 
2,624
 
Income before income taxes - non-GAAP
 
 
68,754
 
 
 
28,876
 
 
 
112,579
 
 
 
55,408
 
 
 
43,825
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP to non-GAAP reconciliation of net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income - GAAP
 
 
48,765
 
 
 
6,644
 
 
 
72,714
 
 
 
10,037
 
 
 
23,949
 
Total cost of revenue adjustments
 
 
3,987
 
 
 
7,208
 
 
 
8,686
 
 
 
14,748
 
 
 
4,699
 
Total operating expense adjustments
 
 
11,435
 
 
 
11,698
 
 
 
21,945
 
 
 
23,608
 
 
 
10,510
 
Total Interest and other adjustments
 
 
1,713
 
 
 
2,605
 
 
 
4,337
 
 
 
4,263
 
 
 
2,624
 
Income tax provision adjustments
 
 
(746
)
 
 
(1,298
)
 
 
(703
)
 
 
(1,267
)
 
 
43
 
 
Total adjustments
 
 
16,389
 
 
 
20,213
 
 
 
34,265
 
 
 
41,352
 
 
 
17,876
 
Net income - non-GAAP
 
$
65,154
 
 
$
26,857
 
 
$
106,979
 
 
$
51,389
 
 
$
41,825
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP net income for diluted earnings per share calcuation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP net income
 
$
65,154
 
 
$
26,857
 
 
$
106,979
 
 
$
51,389
 
 
$
41,825
 
Add: interest expense for dilutive convertible notes
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Adjusted non-GAAP income
 
$
65,154
 
 
$
26,857
 
 
$
106,979
 
 
$
51,389
 
 
$
41,825
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic non-GAAP income per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP earnings per share
 
$
0.44
 
 
$
0.06
 
 
$
0.66
 
 
$
0.09
 
 
$
0.22
 
Impact of all non-GAAP adjustments
 
$
0.15
 
 
$
0.19
 
 
$
0.31
 
 
$
0.39
 
 
$
0.16
 
Non-GAAP earnings per share
 
$
0.59
 
 
$
0.25
 
 
$
0.98
 
 
$
0.48
 
 
$
0.38
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted non-GAAP income per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP earnings per share
 
$
0.43
 
 
$
0.06
 
 
$
0.65
 
 
$
0.09
 
 
$
0.22
 
Impact of all non-GAAP adjustments
 
$
0.15
 
 
$
0.19
 
 
$
0.30
 
 
$
0.38
 
 
$
0.16
 
Non-GAAP earnings per share
 
$
0.58
 
 
$
0.25
 
 
$
0.95
 
 
$
0.47
 
 
$
0.38
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares used in computing non-GAAP income per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
110,407
 
 
 
106,635
 
 
 
109,614
 
 
 
105,961
 
 
 
108,820
 
Diluted
 
 
113,192
 
 
 
107,493
 
 
 
112,450
 
 
 
108,238
 
 
 
110,821
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Non-GAAP adjustment no longer made effective fiscal 2017.                    
                     

Finisar-F

Investor Contact: Kurt Adzema Chief Financial Officer 408-542-5050 Investor.relations@finisar.com Press contact: Victoria McDonald Director, Corporate Communications 408-542-4261