Finisar Corp. (FNSR, Financial) filed Quarterly Report for the period ended 2008-11-02.
FINISAR CORP. is a provider of fiber optic subsystems and network test and monitoring systems which enable high-speed data communications over local area networks or LANs storage area networks or SANs and metropolitan access networks or MANs. They are focused on the application of digital fiber optics to provide aline of high-performance reliable value-added optical subsystems for data networking and storage equipment manufacturers. Finisar Corp. has a market cap of $236.12 million; its shares were traded at around $0.42 with a P/E ratio of 12.5 and P/S ratio of 0.54.
Optical subsystems and components revenues which include $36.5 million from Optium, increased $76.2 million, or 40.7%, to $263.5 million in the six months ended November 2, 2008 compared to $187.3 million in the six months ended October 28, 2007. Excluding the Optium revenues, optical subsystem revenues increased $39.7 million, or 21.2%, to $227.0 million compared to $187.3 million in the six months ended October 28, 2007. Of this increase, sales of new products for 10/40 Gbps applications for both LAN/SAN and longer distance MAN applications increased $25.4 million and sales of products for shorter distance LAN/SAN applications less than 10 Gbps increased $13.5 million. Including the results of Optium, sales of products for 10/40 Gbps applications increased $49.7 million, sales of products for shorter distance LAN/SAN applications less than 10 Gbps increased $15.0 million, sales of ROADM products increased $8.8 million, and sales of CATV products increased $3.3 million.
Gross Profit. Gross profit increased $16.3 million, or 51.4 %, to $48.1 million in the quarter ended November 2, 2008 compared to $31.8 million in the quarter ended October 28, 2007. The increase in gross profit was primarily due to the Optium merger. Gross profit as a percentage of total revenue was 30.2% in the quarter ended November 2, 2008 compared to 31.6% in the quarter ended October 28, 2007. We recorded charges of $3.8 million for obsolete and excess inventory in the quarter ended November 2, 2008 compared to $3.6 million in the quarter ended October 28, 2007. We sold inventory that was written-off in previous periods resulting in a benefit of $1.3 million in the quarter ended November 2, 2008 and $1.7 million in the quarter ended October 28, 2007. As a result, we recognized a net charge of $2.5 million in the quarter ended November 2, 2008 compared to $1.9 million in the quarter ended October 28, 2007. Manufacturing overhead includes stock-based compensation charges of $863,000 in the quarter ended November 2, 2008 and $703,000 in the quarter ended October 28, 2007. Excluding amortization of acquired developed technology, the net impact of excess and obsolete inventory charges and stock-based compensation charges, gross profit would have been $53.0 million, or 33.2% of revenue, in the quarter ended November 2, 2008 compared to $36.1 million, or 35.9% of revenue in the quarter ended October 28, 2007. The decrease in adjusted gross profit margin was primarily due to the inclusion of two months of Optiums operating results during the quarter ended November 2, 2008.
Gross profit increased $33.5 million, or 52.2 %, to $97.6 million in the six months ended November 2, 2008 compared to $64.1 million in the six months ended October 28, 2007. The increase in gross profit was partially due to the Optium merger. Gross profit as a percentage of total revenue was 33.8% in the six months ended November 2, 2008 compared to 31.0% in the six months ended October 28, 2007. We recorded charges of $6.4 million for obsolete and excess inventory in the six months ended November 2, 2008 compared to $7.4 million in the six months ended October 28, 2007. We sold inventory that was written-off in previous periods resulting in a benefit of $3.1 million in the six months ended November 2, 2008 and $3.4 million in the six months ended October 28, 2007. As a result, we recognized a net charge of $3.3 million in the six months ended November 2, 2008 compared to $4.0 million in the six months ended October 28, 2007. Manufacturing overhead includes stock-based compensation charges of $1.7 million in the six months ended November 2, 2008 and $1.4 million in the six months ended October 28, 2007. Excluding amortization of acquired developed technology, the net impact of excess and obsolete inventory charges and stock-based compensation charges, gross profit would have been $105.3 million, or 36.5% of revenue, in the six months ended November 2, 2008 compared to $73.0 million, or 35.4% of revenue in the six months ended October 28, 2007. The increase in adjusted gross profit margin was primarily due to a more favorable product mix resulting from increased sales of higher margin network performance test systems and optical subsystems for 10/40 Gbps applications, as well as cost efficiencies associated with higher shipment volumes, partially offset by lower gross margins on sales of Optium products that were included for two months during the six month period ended November 2, 2008.
General and administrative expenses increased $1.5 million, or 7.2%, to $22.2 million in the six months ended November 2, 2008 compared to $20.7 million in the six months ended October 28, 2007. The increase was primarily due to $1.8 million in additional expenses as a result of the Optium merger, an increase in employee related expenses of $1.2 million, and a non-cash charge of $919,000 related to the sale of a product line. These increases were partially offset by a $4.0 million decrease in legal and consulting fees as a result of the completion of our stock option investigation. Included in general and administrative expenses were stock-based compensation charges of $1.3 million in the six months ended November 2, 2008 and $981,000 in the six months ended October 28, 2007. General and administrative expenses as a percent of revenues decreased to 7.7% in the six months ended November 2, 2008 compared to 10.0% in the six months ended October 28, 2007.
Provision for Income Taxes. We recorded an income tax benefit of $7.7 million and an income tax provision of $655,000, respectively, for the quarters ended November 2, 2008 and October 28, 2007 and an income tax benefit of $7.0 million and an income tax provision of $1.3 million, respectively, for the six months ended November 2, 2008 and October 28, 2007. The income tax benefit for the quarter ended November 2, 2008 includes a non-cash benefit of $8.4 million from the reversal of previously recorded deferred tax liabilities as a result of the impairment of goodwill in the current quarter and current tax expense of $655,000 for minimum federal and state taxes and foreign income taxes arising in certain foreign jurisdictions in which we conduct business. The income tax provision for the quarter ended October 28, 2007 includes a non-cash charge $544,000 for deferred tax liabilities that were recorded for tax amortization of goodwill for which no financial statement amortization has occurred under generally accepted accounting principles as promulgated by SFAS 142 and current tax expense of $111,000 for minimum federal and state taxes and foreign income taxes arising in certain foreign jurisdictions in which we conduct business. The income tax benefit for the six month period ended November 2, 2008 includes a non-cash benefit of $7.8 million from the reversal of previously recorded deferred tax liabilities as a result of the impairment of goodwill in the current quarter and current tax expense of $849,000 for minimum federal and state taxes and foreign income taxes arising in certain foreign jurisdictions in which we conduct business. The income tax provision for the six months ended October 28, 2007 includes a non-cash charge $1.1 million for deferred tax liabilities that were recorded for tax amortization of goodwill for which no financial statement amortization has occurred under generally accepted accounting principles as promulgated by SFAS 142 and current tax expense of $188,000 for minimum federal and state taxes and foreign income taxes arising in certain foreign jurisdictions in which we conduct business. Due to the uncertainty regarding the timing and extent of our future profitability, we have recorded a valuation allowance to offset our deferred tax assets which represent future income tax benefits associated with our operating losses. There can be no assurance that our deferred tax assets subject to the valuation allowance will ever be realized.
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More on FNSR:
Gurus buys and sells of FNSR
10-year financial history of FNSR.
Insider buys/sells of FNSR.
FINISAR CORP. is a provider of fiber optic subsystems and network test and monitoring systems which enable high-speed data communications over local area networks or LANs storage area networks or SANs and metropolitan access networks or MANs. They are focused on the application of digital fiber optics to provide aline of high-performance reliable value-added optical subsystems for data networking and storage equipment manufacturers. Finisar Corp. has a market cap of $236.12 million; its shares were traded at around $0.42 with a P/E ratio of 12.5 and P/S ratio of 0.54.
Highlight of Business Operations:
Optical subsystems and components revenues which include $36.5 million from Optium, increased $56.8 million, or 62.5%, to $147.7 million in the quarter ended November 2, 2008 compared to $90.9 million in the quarter ended October 28, 2007. Excluding the Optium revenues, optical subsystem revenues increased $20.3 million, or 22.3%, to $111.2 million compared to $90.9 million in the quarter ended October 28, 2007. Of this increase, sales of new products for 10/40 Gbps applications for both LAN/SAN and longer distance MAN applications increased $11.4 million while sales of products for shorter distance LAN/SAN applications less than 10 Gbps increased $9.0 million due primarily to increased sales of 4 and 8 Gbps products for storage applications. Of the $56.8 million increase in revenues including the results of Optium, sales of products for 10/40 Gbps applications increased $35.8 million, sales of products for shorter distance LAN/SAN applications less than 10 Gbps increased $9.0 million, sales of ROADM products increased $8.8 million, and sales of CATV products increased $3.2 million.Optical subsystems and components revenues which include $36.5 million from Optium, increased $76.2 million, or 40.7%, to $263.5 million in the six months ended November 2, 2008 compared to $187.3 million in the six months ended October 28, 2007. Excluding the Optium revenues, optical subsystem revenues increased $39.7 million, or 21.2%, to $227.0 million compared to $187.3 million in the six months ended October 28, 2007. Of this increase, sales of new products for 10/40 Gbps applications for both LAN/SAN and longer distance MAN applications increased $25.4 million and sales of products for shorter distance LAN/SAN applications less than 10 Gbps increased $13.5 million. Including the results of Optium, sales of products for 10/40 Gbps applications increased $49.7 million, sales of products for shorter distance LAN/SAN applications less than 10 Gbps increased $15.0 million, sales of ROADM products increased $8.8 million, and sales of CATV products increased $3.3 million.
Gross Profit. Gross profit increased $16.3 million, or 51.4 %, to $48.1 million in the quarter ended November 2, 2008 compared to $31.8 million in the quarter ended October 28, 2007. The increase in gross profit was primarily due to the Optium merger. Gross profit as a percentage of total revenue was 30.2% in the quarter ended November 2, 2008 compared to 31.6% in the quarter ended October 28, 2007. We recorded charges of $3.8 million for obsolete and excess inventory in the quarter ended November 2, 2008 compared to $3.6 million in the quarter ended October 28, 2007. We sold inventory that was written-off in previous periods resulting in a benefit of $1.3 million in the quarter ended November 2, 2008 and $1.7 million in the quarter ended October 28, 2007. As a result, we recognized a net charge of $2.5 million in the quarter ended November 2, 2008 compared to $1.9 million in the quarter ended October 28, 2007. Manufacturing overhead includes stock-based compensation charges of $863,000 in the quarter ended November 2, 2008 and $703,000 in the quarter ended October 28, 2007. Excluding amortization of acquired developed technology, the net impact of excess and obsolete inventory charges and stock-based compensation charges, gross profit would have been $53.0 million, or 33.2% of revenue, in the quarter ended November 2, 2008 compared to $36.1 million, or 35.9% of revenue in the quarter ended October 28, 2007. The decrease in adjusted gross profit margin was primarily due to the inclusion of two months of Optiums operating results during the quarter ended November 2, 2008.
Gross profit increased $33.5 million, or 52.2 %, to $97.6 million in the six months ended November 2, 2008 compared to $64.1 million in the six months ended October 28, 2007. The increase in gross profit was partially due to the Optium merger. Gross profit as a percentage of total revenue was 33.8% in the six months ended November 2, 2008 compared to 31.0% in the six months ended October 28, 2007. We recorded charges of $6.4 million for obsolete and excess inventory in the six months ended November 2, 2008 compared to $7.4 million in the six months ended October 28, 2007. We sold inventory that was written-off in previous periods resulting in a benefit of $3.1 million in the six months ended November 2, 2008 and $3.4 million in the six months ended October 28, 2007. As a result, we recognized a net charge of $3.3 million in the six months ended November 2, 2008 compared to $4.0 million in the six months ended October 28, 2007. Manufacturing overhead includes stock-based compensation charges of $1.7 million in the six months ended November 2, 2008 and $1.4 million in the six months ended October 28, 2007. Excluding amortization of acquired developed technology, the net impact of excess and obsolete inventory charges and stock-based compensation charges, gross profit would have been $105.3 million, or 36.5% of revenue, in the six months ended November 2, 2008 compared to $73.0 million, or 35.4% of revenue in the six months ended October 28, 2007. The increase in adjusted gross profit margin was primarily due to a more favorable product mix resulting from increased sales of higher margin network performance test systems and optical subsystems for 10/40 Gbps applications, as well as cost efficiencies associated with higher shipment volumes, partially offset by lower gross margins on sales of Optium products that were included for two months during the six month period ended November 2, 2008.
General and administrative expenses increased $1.5 million, or 7.2%, to $22.2 million in the six months ended November 2, 2008 compared to $20.7 million in the six months ended October 28, 2007. The increase was primarily due to $1.8 million in additional expenses as a result of the Optium merger, an increase in employee related expenses of $1.2 million, and a non-cash charge of $919,000 related to the sale of a product line. These increases were partially offset by a $4.0 million decrease in legal and consulting fees as a result of the completion of our stock option investigation. Included in general and administrative expenses were stock-based compensation charges of $1.3 million in the six months ended November 2, 2008 and $981,000 in the six months ended October 28, 2007. General and administrative expenses as a percent of revenues decreased to 7.7% in the six months ended November 2, 2008 compared to 10.0% in the six months ended October 28, 2007.
Provision for Income Taxes. We recorded an income tax benefit of $7.7 million and an income tax provision of $655,000, respectively, for the quarters ended November 2, 2008 and October 28, 2007 and an income tax benefit of $7.0 million and an income tax provision of $1.3 million, respectively, for the six months ended November 2, 2008 and October 28, 2007. The income tax benefit for the quarter ended November 2, 2008 includes a non-cash benefit of $8.4 million from the reversal of previously recorded deferred tax liabilities as a result of the impairment of goodwill in the current quarter and current tax expense of $655,000 for minimum federal and state taxes and foreign income taxes arising in certain foreign jurisdictions in which we conduct business. The income tax provision for the quarter ended October 28, 2007 includes a non-cash charge $544,000 for deferred tax liabilities that were recorded for tax amortization of goodwill for which no financial statement amortization has occurred under generally accepted accounting principles as promulgated by SFAS 142 and current tax expense of $111,000 for minimum federal and state taxes and foreign income taxes arising in certain foreign jurisdictions in which we conduct business. The income tax benefit for the six month period ended November 2, 2008 includes a non-cash benefit of $7.8 million from the reversal of previously recorded deferred tax liabilities as a result of the impairment of goodwill in the current quarter and current tax expense of $849,000 for minimum federal and state taxes and foreign income taxes arising in certain foreign jurisdictions in which we conduct business. The income tax provision for the six months ended October 28, 2007 includes a non-cash charge $1.1 million for deferred tax liabilities that were recorded for tax amortization of goodwill for which no financial statement amortization has occurred under generally accepted accounting principles as promulgated by SFAS 142 and current tax expense of $188,000 for minimum federal and state taxes and foreign income taxes arising in certain foreign jurisdictions in which we conduct business. Due to the uncertainty regarding the timing and extent of our future profitability, we have recorded a valuation allowance to offset our deferred tax assets which represent future income tax benefits associated with our operating losses. There can be no assurance that our deferred tax assets subject to the valuation allowance will ever be realized.
Read the The complete Report
More on FNSR:
Gurus buys and sells of FNSR
10-year financial history of FNSR.
Insider buys/sells of FNSR.
