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Oclaro Inc Reports Operating Results (10-Q)

February 08, 2013 | About:
10qk

10qk

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Oclaro Inc (OCLR) filed Quarterly Report for the period ended 2012-12-29.

Oclaro, Inc. has a market cap of $133.55 million; its shares were traded at around $1.46 with and P/S ratio of 0.1993.

Highlight of Business Operations:

Research and development expenses increased to $51.5 million for the six months ended December 29, 2012 from $34.7 million for the six months ended December 31, 2011. The increase was primarily related to the inclusion of research and development expenses in fiscal year 2013 to fund research and development associated with products acquired through the acquisition of Opnext on July 23, 2012, partially offset by a reduction in research and development expenses of $0.5 million related to synergies from aligning and reducing combined research and development resources of Oclaro and Opnext in association with the merger, and other cost reduction efforts in response to softening market conditions and lower post-flood revenues. Personnel-related costs increased to $29.5 million for the six months ended December 29, 2012, compared with $20.3 million for the six months ended December 31, 2011, primarily as a result of an increase in personnel numbers following our acquisition of Opnext. In addition, in the second quarter of fiscal year 2012, as part of our Thailand flood recovery efforts, certain of our research and development employees were redirected to efforts to restore our production capacity. As a result, our research and development expenses were $0.6 million lower than they would have been otherwise, as these amounts were recorded in flood-related expense for the six months ended December 31, 2011. Other costs, including the costs of design tools and facilities-related costs increased to $22.0 million for the six months ended December 29, 2012, compared with $14.4 million for the six months ended December 31, 2011.

Selling, general and administrative expenses increased to $23.1 million for the three months ended December 29, 2012, from $14.4 million for the three months ended December 31, 2011. The increase was primarily related to the inclusion of selling, general and administrative expenses in fiscal year 2013 attributable to the operations of Opnext, partially offset by a reduction in selling, general and administrative expenses related to synergies from aligning and reducing combined selling, general and administrative resources of Oclaro and Opnext in association with the merger, and other cost reduction efforts in response to softening market conditions and lower post-flood revenues. Personnel-related costs increased to $13.6 million for the three months ended December 29, 2012, compared with $9.3 million for the three months ended December 31, 2011, primarily as a result of an increase in personnel numbers following our acquisition of Opnext. Other costs, including legal and professional fees, facilities expenses and other miscellaneous expenses, increased to $9.5 million for the three months ended December 29, 2012, compared with $5.1 million for the three months ended December 31, 2011. Of the $9.5 million in other costs incurred in the second quarter of fiscal year 2013, $3.2 million related to audit, professional fees and insurance costs, $2.7 million related to sales and marketing costs, $1.9 million related to information technology costs, $1.1 million related to legal and executive costs, and $0.6 million related to human resources costs.

Selling, general and administrative expenses increased to $47.7 million for the six months ended December 29, 2012, from $32.0 million for the six months ended December 31, 2011. The increase was primarily related to the inclusion of selling, general and administrative expenses in fiscal year 2013 attributable to the operations of Opnext, partially offset by a reduction in selling, general and administrative expenses related to synergies from aligning and reducing combined selling, general and administrative resources of Oclaro and Opnext in association with the merger, and other cost reduction efforts in response to softening market conditions and lower post-flood revenues. Personnel-related costs increased to $27.2 million for the six months ended December 29, 2012, compared with $19.4 million for the six months ended December 31, 2011, primarily as a result of an increase in personnel numbers following our acquisition of Opnext. Other costs, including legal and professional fees, facilities expenses and other miscellaneous expenses, increased to $20.4 million for the six months ended December 29, 2012, compared with $12.6 million for the six months ended December 31, 2011. Of the $20.4 million in other costs incurred during the six months ended December 29, 2012, $7.2 million related to audit, professional fees and insurance costs, $5.6 million related to sales and marketing costs, $4.0 million related to information technology costs, $2.5 million related to legal and executive costs, and $1.3 million related to human resources costs.

Net cash used by operating activities for the six months ended December 29, 2012 was $66.4 million, primarily resulting from a net loss of $21.6 million, non-cash adjustments of $37.9 million and a $6.9 million decrease in cash due to changes in operating assets and liabilities. The $6.9 million decrease in cash due to changes in operating assets and liabilities was comprised of a $10.6 million increase in inventories, a $7.9 million decrease in accrued expenses and other liabilities, a $5.8 million increase in prepaid expenses and other current assets, a $2.8 million decrease in accounts payable and a $0.5 million increase in other non-current assets, partially offset by a $20.7 million decrease in accounts receivable. The $37.9 million decrease in cash resulting from non-cash adjustments primarily consisted of a decrease of $39.5 million for the bargain purchase gain related to the acquisition of Opnext, a decrease of $25.0 million related to the gain on the sale of the thin film filter business and interleaver product line and $1.0 million from the amortization of deferred gain from sales-leaseback transactions, partially offset by $23.1 million in depreciation and amortization, $3.7 million of expense related to stock-based compensation and $0.9 million related to the impairment of certain intangibles.

Net cash used by operating activities for the six months ended December 31, 2011 was $20.7 million, primarily resulting from a net loss of $45.4 million, partially offset by $16.2 million of non-cash adjustments and a $8.6 million increase in cash due to changes in operating assets and liabilities. The $16.2 million of non-cash adjustments was primarily comprised of $11.2 million of expense related to depreciation and amortization, $7.2 million related to our non-cash flood-related impairments and $3.3 million of expense related to stock-based compensation, partially offset by $2.9 million due to the revaluation of the Mintera earnout liability, $2.2 million gain on the sale of investments and $0.5 million from the amortization of deferred gain from a sales-leaseback transaction. The $8.6 million increase in cash due to changes in operating assets and liabilities was primarily comprised of a $20.1 million decrease in accounts receivable, an $11.7 million decrease in inventory, a $2.4 million increase in accrued expenses and other liabilities and a $0.3 million decrease in prepaid expenses and other current assets, partially offset by a $25.9 million decrease in accounts payable.

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