Oplink Reports First Quarter Fiscal Year 2014 Financial Results

The following excerpt is from the company's SEC filing.

Fremont, Calif., -- October 31, 2013 -- Oplink Communications, Inc. (Nasdaq: OPLK),  a leading provider of optical communication components, intelligent modules and subsystems, today reported its financial results for its first quarter of fiscal year 2014, ended September 29, 2013.

Revenue for the quarter was $54.8 million, an increase of 11% over prior quarter revenue of $49.3 million and a 22% increase over first quarter fiscal 2013 revenue of $44.9 million.  GAAP net income was $2.2 million, or $0.11 per diluted share, down from $4.5 million, or $0.23 per diluted share, in the prior quarter and $3.4 million, or $0.17 per diluted share, reported for the first quarter of fiscal 2013.

Non-GAAP net income for the first quarter was $4.0 million, or $0.21 per diluted share, compared to $4.7 million, or $0.24 per diluted share, reported in the prior quarter, and $5.0 million, or $0.26 per diluted share, reported for the first quarter of fiscal 2013.  A reconciliation of the non-GAAP financial measures to their GAAP equivalents is included in the financial tables accompanying this press release.

“The September quarter was a solid start to the 2014 fiscal year,” said Joe Liu, Chairman and CEO of Oplink. “Looking ahead, we see long-term growth in both the telecom and datacom markets, driven by ever-increasing demand for bandwidth.  We believe that we are well positioned to benefit from this growth with our broad portfolio of advanced technologies and long-established manufacturing capabilities.  We are also making good progress in our new cloud-based home security service business, which we believe will prove to be an additional growth driver in the future.”

For the quarter ending December 29, 2013, the Company expects to report revenue of $47 to $51 million and GAAP net income of $0.00 to $0.06 per diluted share.  On a non-GAAP basis, excluding stock-based compensation, amortization of intangible assets and any other non-cash or non-recurring charges, the Company expects earnings per diluted share of $0.06 to $0.12. GAAP and non-GAAP net income per diluted share for the quarter ending December 29, 2013 assume an effective tax rate of 20%.

Oplink will host a corresponding conference call and live webcast at 2:00 p.m. Pacific Time on October 31, 2013.  The conference call can be accessed by dialing 1-877-941-8631, or 1-480-629-9867 (outside the U.S. and Canada). A live webcast will be available on the Investors section of Oplink’s corporate website at www.oplink.com and via replay beginning approximately two hours after the completion of the call until Oplink’s announcement of its financial results for the next quarter. An audio replay of the call will also be available to investors beginning at approximately 5:00 p.m. Pacific Time on October 31, 2013 until 11:59 p.m. Pacific Time on November 7, 2013, by dialing 1-800-406-7325 or 1-303-590-3030 (outside the U.S. and Canada) and entering pass code 4647028#.

In this earnings release and during the earnings conference call and webcast as described above, Oplink will discuss certain non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A reconciliation between non-GAAP and GAAP measures can be found in the accompanying tables. Oplink believes that providing these non-GAAP measures to its investors provides investors the benefit of viewing Oplink’s performance using the same financial metrics that the management team uses in making many key decisions and evaluating how Oplink’s “core operating performance” and its results of operations may look in the future. Oplink defines “core operating performance” as its on-going performance in the ordinary course of its operations. Items that are non-recurring or do not involve cash expenditures, such as one-time tax benefits or charges, impairment charges, restructuring charges, amortization of intangible assets and non-cash compensation related to stock and options, are not included in Oplink’s view of “core operating performance.”

This press release contains forward-looking statements, including without limitation the statements under the heading “Business Outlook for the Quarter Ending December 29, 2013.” These forward-looking statements involve risks and uncertainties that could cause Oplink’s results to differ materially from those expressed or implied by such forward-looking statements, including the following risks and uncertainties: (1) possible reductions in customer orders or delays in shipments of products to customers; (2) potential delays in introduction of new Oplink products; (3) Oplink’s reliance on a small number of customers for a substantial portion of its revenues; (4) Oplink’s reliance on third parties to supply critical components and materials for its products; (5) intense competition in Oplink’s target markets and potential pricing pressure that may arise from changing supply or demand conditions in the industry; (6) risks relating to the new Mobile Interactive business, including the risk that the products and services, being new and unproven, may not achieve market acceptance, the risk that Oplink may not be successful in developing adequate sales channels for these products and services, and the risk of write-downs for slow-moving or obsolete inventory ; (7) increasing reliance on sales to datacom customers, which can fluctuate more than sales to our traditional telecom customers; (8) changes in our effective tax rate, which could reduce our net income; and (9) other risks detailed from time to time in Oplink’s periodic reports filed with the Securities and Exchange Commission, including the Company’s latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The foregoing information represents Oplink’s outlook only as of the date of this press release, and Oplink undertakes no obligation to update or revise any forward-looking statements, whether as a result of new developments or otherwise.

    September 29,     June 30,       2013     2013       (Unaudited)       (1)   ASSETS               Current assets:               Cash and cash equivalents   $ 55,177     $ 65,014   Short-term investments     106,260       105,829   Accounts receivable, net     40,818       40,735   Inventories     35,996       30,028   Prepaid expenses and other current assets     7,486       7,029   Deferred tax assets     809       809   Total current assets     246,546       249,444   Property, plant and equipment, net     51,184       47,687   Long-term investments     12,579       3,307   Goodwill and intangible assets, net     1,071       1,146   Deferred tax assets     7,158       7,083   Other assets     16,259       16,504   Total assets   $ 334,797     $ 325,171                     LIABILITIES AND STOCKHOLDERS' EQUITY                 Current liabilities:                 Accounts payable   $ 19,989     $ 18,166   Accrued liabilities and other current liabilities     15,750       13,579   Total current liabilities     35,739       31,745   Non-current liabilities     10,484       10,225   Total liabilities     46,223       41,970   Stockholders' equity     288,574       283,201   Total liabilities and stockholders' equity   $ 334,797     $ 325,171  

      (1) The June 30, 2013 condensed consolidated balance sheet has been derived from audited consolidated financial statements at that date.  

    Three Months Ended       September 29,     June 30,     September 30,       2013     2013     2012       (Unaudited)                       Revenues   $ 54,782     $ 49,293     $ 44,884   Cost of revenues     37,085       31,774       28,254   Gross profit     17,697       17,519       16,630   Operating expenses:                         Research and development     6,790       6,794       5,432   Sales and marketing     3,773       3,750       3,212   General and administrative     2,066       2,273       2,154   Stock-based compensation expense     1,969       1,323       1,863   Amortization of intangible assets     40       86       91   Net (gain) loss on sale/disposal of assets     77       (1,377 )     (7 ) Total operating expenses     14,715       12,849       12,745   Income from operations     2,982       4,670       3,885   Interest and other income, net     32       1,809       266   Income before provision for income taxes     3,014       6,479       4,151   Provision for income taxes     792       1,978       788   Net income   $ 2,222     $ 4,501     $ 3,363                             Net income per share:                         Basic   $ 0.12       0.24     $ 0.18   Diluted   $ 0.11       0.23     $ 0.17                             Shares used in per share calculation:                         Basic     19,239       19,105       19,080   Diluted     19,543       19,390       19,425  

    Three Months Ended       September 29,     June 30,     September 30,       2013     2013     2012       (Unaudited)   Reconciliation of GAAP net income to non-GAAP net income:       Net income, GAAP   $ 2,222       4,501     $ 3,363   Adjustments to measure non-GAAP:                         Related to cost of revenues:                         Stock-based compensation expense     108       91       123   Amortization of intangible assets     35       35       36   Total related to cost of revenues     143       126       159                             Related to operating expenses:                         Stock-based compensation expense     1,969       1,323       1,863   Amortization of intangible assets     40       86       91   Total related to operating expenses     2,009       1,409       1,954                             Gain on sale of equity investments     -       (1,761 )     -   Tax effects on non-GAAP adjustments     (352 )     430       (517 )                           Non-GAAP net income   $ 4,022     $ 4,705     $ 4,959                             Net income per share, non-GAAP:                         Basic   $ 0.21       0.25     $ 0.26   Diluted   $ 0.21       0.24     $ 0.26                             Shares used in per share calculation:                         Basic     19,239       19,105       19,080   Diluted     19,543       19,390       19,425                             Reconciliation of GAAP gross profit to non-GAAP gross profit:                         GAAP gross profit   $ 17,697     $ 17,519     $ 16,630   Stock compensation expense included in cost of revenues     108       91       123   Amortization of intangible assets included in cost of revenues     35       35       36   Non-GAAP gross profit   $ 17,840     $ 17,645     $ 16,789                             GAAP gross margin rate     32.3 %     35.5 %     37.1 % Non-GAAP gross margin rate     32.6 %     35.8 %     37.4 %

    Three Months Ended       September 29,     September 30,       2013     2012       (Unaudited)     (Unaudited)                 Cash flows from operating activities:             Net income   $ 2,222     $ 3,363   Adjustments to reconcile net income to net cash provided by operating activities:                 Depreciation and amortization     2,001       1,781   Amortization of intangible assets     75       127   Stock-based compensation expense     2,077       1,986   Deferred income taxes     (74 )     4   Net loss (gain) on sale/disposal of assets and equity investments     77       (7 ) Other     189       51   Change in assets and liabilities     (2,128 )     458   Net cash provided by operating activities     4,439       7,763                     Cash flows from investing activities:                 Net purchases of investments     (8,336 )     (13,821 ) Net purchases of property, plant and equipment     (5,451 )     (1,403 ) Net sales of cost or equity investments     -       214   Net cash used in investing activities     (13,787 )     (15,010 )                   Cash flows from financing activities:                 Proceeds from issuance of common stock     620       1,180   Repurchase of common stock     -       (2,675 ) Other     (1,147 )     (877 ) Net cash used in financing activities     (527 )     (2,372 )                   Effect of exchange rate changes on cash and cash equivalents     38       (55 ) Net decrease in cash and cash equivalents     (9,837 )     (9,674 ) Cash and cash equivalents, beginning of period     65,014       81,233   Cash and cash equivalents, end of period   $ 55,177     $ 71,559  

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here. Oplink Communications next reports earnings on October 31, 2013.

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Other recent filings from the company include the following:

Oplink Announces Initiatives To Enhance Shareholder Value - July 29, 2014

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