[July 23, 2014] |
|
Infinera Corporation Reports Second Quarter 2014 Financial Results
SUNNYVALE, Calif. --(Business Wire)--
Infinera Corporation (NASDAQ: INFN), provider of Intelligent
Transport Networks, today released financial results for the second
quarter of 2014 ended June 28, 2014.
GAAP revenue for the quarter was $165.4 million compared to $142.8
million in the first quarter of 2014 and $138.4 million in the second
quarter of 2013.
GAAP gross margin for the quarter was 42.5% compared to 40.9% in the
first quarter of 2014 and 37.3% in the second quarter of 2013.
GAAP net income for the quarter was $4.8 million, or $0.04 per diluted
share, compared to net loss of $(4.4) million, or $(0.04) per share, in
the first quarter of 2014, and a net loss of $(10.0) million, or $(0.09)
per share, in the second quarter of 2013.
Non-GAAP gross margin for the quarter was 43.3% compared to 41.8% in the
first quarter of 2014 and 38.9% in the second quarter of 2013.
Non-GAAP net income for the quarter was $13.5 million, or $0.11 per
diluted share, compared to net income of $4.2 million, or $0.03 per
diluted share in the first quarter of 2014, and net loss of $(1.2)
million, or $(0.01) per share, in the second quarter of 2013.
These non-GAAP measures exclude non-cash stock-based compensation
expenses and the amortization of debt discount on Infinera's convertible
senior notes. A further explanation of the use of non-GAAP financial
information and a reconciliation of the non-GAAP financial measures to
the GAAP equivalents can be found at the end of this release.
Management Commentary:
"We continued the strong momentum from our solid first quarter results
delivering record quarterly revenue, an expanded gross margin and
significant earnings growth in the second quarter. We had record 100G
port shipments as we experienced excellent DTN-X deployments across a
broad base of customer verticals. We were pleased to add four new
invoiced DTN-X customers this quarter, including a new customer to
Infinera, allowing us to further capitalize on the 100G technology cycle
with this new footprint" said Tom Fallon, Infinera's Chief Executive
Officer. "We see video and cloud driving bandwidth growth across our
markets as well as Internet Content Providers building significant
amounts of new capacity. Our technological innovation and proven
operating excellence supports continued growth in the long haul market
as we enter the second half of the year and positions us well as we
begin the process of expanding into new adjacent high capacity transport
markets."
Conference Call Information:
Infinera will host a conference call for analysts and investors to
discuss its second quarter of 2014 results and its outlook for the third
quarter of 2014 today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific
Time). A live webcast of the conference call will also be accessible
from the Investor Relations' section of Infinera's website at www.infinera.com.
Following the webcast, an archived version will be available on the
website for 90 days. To hear the replay, parties in the United States
and Canada should call 1-866-423-4837. International parties can access
the replay at 1-203-369-0849.
About Infinera
Infinera provides Intelligent Transport Networks to help carriers
exploit the increasing demand for cloud-based services and data center
connectivity as they advance into the Terabit Era. Infinera is unique in
its use of breakthrough semiconductor technology to deliver large scale
Photonic Integrated Circuit (PICs) and the application of PICs to
vertically integrated optical networking solutions that deliver the
industry's only commercially available 500 Gb/s FlexCoherent
super-channels. Infinera Intelligent Transport Network solutions include
the DTN-X, DTN and ATN platforms. Find more at www.infinera.com.
Forward-Looking Statements
This press release contains certain forward-looking statements based on
current expectations, forecasts and assumptions that involve risks and
uncertainties. These statements are based on information available to
Infinera as of the date hereof and actual results could differ
materially from those stated or implied due to risks and uncertainties.
Forward-looking statements include statements regarding Infinera's
expectations, beliefs, intentions or strategies including statements
regarding Infinera's expectations for continued bandwidth growth across
Infinera's markets as well as Internet Content Providers building
significant amounts of new capacity; Infinera's ability to support
continued growth; and Infinera's ability to expand into new adjacent
high capacity transport markets. Such forward-looking statements can be
identified by forward-looking words such as "anticipated," "believed,"
"could," "estimate," "expect," "intend," "may," "should," "will," and
"would" or similar words. The risks and uncertainties that could cause
Infinera's results to differ materially from those expressed or implied
by such forward-looking statements include aggressive business tactics
by Infinera's competitors; delays in the development and introduction of
Infinera's products and market acceptance of these products; the effect
of changes in product pricing or mix, and/or increases in component
costs could have on Infinera's gross margin; Infinera's reliance on
single-source suppliers; Infinera's ability to protect Infinera's
intellectual property; claims by others that Infinera infringes their
intellectual property; war, terrorism, public health issues, natural
disasters, and other circumstances that could disrupt supply, delivery,
or demand of products; Infinera's ability to respond to rapid
technological changes; and other risks detailed in Infinera's SEC
filings from time to time. More information on potential factors that
may impact Infinera's business are set forth in its Quarterly Report on
Form 10-Q for the quarter ended March 29, 2014 and filed with the SEC on
April 30, 2014, as well as subsequent reports filed with or furnished to
the SEC from time to time. These reports are available on Infinera's
website at www.infinera.com
and the SEC's website at www.sec.gov.
Infinera assumes no obligation to, and does not currently intend to,
update any such forward-looking statements.
Use of Non-GAAP Financial Information
In addition to disclosing financial measures prepared in accordance with
U.S. Generally Accepted Accounting Principles (GAAP), this press release
and the accompanying tables contain certain non-GAAP measures that
exclude non-cash stock-based compensation expenses and amortization of
debt discount on Infinera's convertible senior notes. Infinera believes
these adjustments are appropriate to enhance an overall understanding of
its underlying financial performance and also its prospects for the
future and are considered by management for the purpose of making
operational decisions. In addition, these results are the primary
indicators management uses as a basis for its planning and forecasting
of future periods. The presentation of this additional information is
not meant to be considered in isolation or as a substitute for net
income (loss), basic and diluted net income (loss) per share, or gross
margin prepared in accordance with GAAP. Non-GAAP financial measures are
not based on a comprehensive set of accounting rules or principles and
are subject to limitations. For a description of these non-GAAP
financial measures and a reconciliation to the most directly comparable
GAAP financial measures, please see the section titled, "GAAP to
Non-GAAP Reconciliations." Infinera anticipates disclosing
forward-looking non-GAAP information in its conference call to discuss
its second quarter results, including an estimate of non-GAAP earnings
for the third quarter of 2014 that excludes non-cash stock-based
compensation expenses and amortization of debt discount on Infinera's
convertible senior notes.
A copy of this press release can be found on the Investor Relations'
page of Infinera's website at www.infinera.com.
Infinera and the Infinera logo are trademarks or registered trademarks
of Infinera Corporation. All other trademarks used or mentioned herein
belong to their respective owners.
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infinera Corporation
|
GAAP Condensed Consolidated Statements of Operations
|
(In thousands, except share data)
|
(Unaudited)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 28,
|
|
June 29,
|
|
June 28,
|
|
June 29,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenue:
|
|
|
|
|
|
|
|
|
Product
|
|
$
|
142,364
|
|
|
$
|
120,647
|
|
|
$
|
266,606
|
|
|
$
|
228,990
|
|
Services
|
|
|
23,035
|
|
|
|
17,738
|
|
|
|
41,608
|
|
|
|
34,020
|
|
Total revenue
|
|
|
165,399
|
|
|
|
138,385
|
|
|
|
308,214
|
|
|
|
263,010
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Cost of product
|
|
|
85,906
|
|
|
|
80,198
|
|
|
|
164,344
|
|
|
|
155,645
|
|
Cost of services
|
|
|
9,240
|
|
|
|
6,533
|
|
|
|
15,211
|
|
|
|
13,009
|
|
Total cost of revenue
|
|
|
95,146
|
|
|
|
86,731
|
|
|
|
179,555
|
|
|
|
168,654
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
70,253
|
|
|
|
51,654
|
|
|
|
128,659
|
|
|
|
94,356
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Research and development
|
|
|
31,738
|
|
|
|
31,681
|
|
|
|
61,084
|
|
|
|
61,407
|
|
Sales and marketing
|
|
|
18,082
|
|
|
|
17,155
|
|
|
|
35,944
|
|
|
|
35,201
|
|
General and administrative
|
|
|
12,381
|
|
|
|
11,426
|
|
|
|
24,635
|
|
|
|
21,298
|
|
Total operating expenses
|
|
|
62,201
|
|
|
|
60,262
|
|
|
|
121,663
|
|
|
|
117,906
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
|
|
8,052
|
|
|
|
(8,608
|
)
|
|
|
6,996
|
|
|
|
(23,550
|
)
|
|
|
|
|
|
|
|
|
|
Other income (expense), net:
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
337
|
|
|
|
207
|
|
|
|
673
|
|
|
|
404
|
|
Interest expense
|
|
|
(2,728
|
)
|
|
|
(849
|
)
|
|
|
(5,405
|
)
|
|
|
(849
|
)
|
Other gain (loss), net
|
|
|
(264
|
)
|
|
|
(158
|
)
|
|
|
(993
|
)
|
|
|
(361
|
)
|
Total other income (expense), net
|
|
|
(2,655
|
)
|
|
|
(800
|
)
|
|
|
(5,725
|
)
|
|
|
(806
|
)
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
5,397
|
|
|
|
(9,408
|
)
|
|
|
1,271
|
|
|
|
(24,356
|
)
|
Provision for income taxes
|
|
|
617
|
|
|
|
601
|
|
|
|
865
|
|
|
|
932
|
|
Net income (loss)
|
|
$
|
4,780
|
|
|
$
|
(10,009
|
)
|
|
$
|
406
|
|
|
$
|
(25,288
|
)
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.22
|
)
|
Diluted
|
|
$
|
0.04
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.22
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss) per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
123,128
|
|
|
|
116,911
|
|
|
|
122,240
|
|
|
|
115,609
|
|
Diluted
|
|
|
126,758
|
|
|
|
116,911
|
|
|
|
126,112
|
|
|
|
115,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infinera Corporation
|
|
|
|
|
|
|
|
|
|
|
GAAP to Non-GAAP Reconciliations
|
(In thousands, except percentages and per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
June 28,
|
|
March 29,
|
|
June 29,
|
|
June 28,
|
|
June 29,
|
|
|
|
|
|
2014
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
Reconciliation of Gross Profit:
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP as reported
|
|
$
|
70,253
|
|
|
$
|
58,406
|
|
|
$
|
51,654
|
|
|
$
|
128,659
|
|
|
$
|
94,356
|
|
Stock-based compensation(1)
|
|
|
1,360
|
|
|
|
1,284
|
|
|
|
2,164
|
|
|
|
2,644
|
|
|
|
4,252
|
|
Non-GAAP as adjusted
|
|
$
|
71,613
|
|
|
$
|
59,690
|
|
|
$
|
53,818
|
|
|
$
|
131,303
|
|
|
$
|
98,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Gross Margin:
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP as reported
|
|
|
42.5
|
%
|
|
|
40.9
|
%
|
|
|
37.3
|
%
|
|
|
41.7
|
%
|
|
|
35.9
|
%
|
Stock-based compensation(1)
|
|
|
0.8
|
%
|
|
|
0.9
|
%
|
|
|
1.6
|
%
|
|
|
0.9
|
%
|
|
|
1.6
|
%
|
Non-GAAP as adjusted
|
|
|
43.3
|
%
|
|
|
41.8
|
%
|
|
|
38.9
|
%
|
|
|
42.6
|
%
|
|
|
37.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Income (Loss) from Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP as reported
|
|
$
|
8,052
|
|
|
$
|
(1,056
|
)
|
|
$
|
(8,608
|
)
|
|
$
|
6,996
|
|
|
$
|
(23,550
|
)
|
Stock-based compensation(1)
|
|
|
6,804
|
|
|
|
6,672
|
|
|
|
8,184
|
|
|
|
13,476
|
|
|
|
16,159
|
|
Non-GAAP as adjusted
|
|
$
|
14,856
|
|
|
$
|
5,616
|
|
|
$
|
(424
|
)
|
|
$
|
20,472
|
|
|
$
|
(7,391
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP as reported
|
|
$
|
4,780
|
|
|
$
|
(4,374
|
)
|
|
$
|
(10,009
|
)
|
|
$
|
406
|
|
|
$
|
(25,288
|
)
|
Stock-based compensation(1)
|
|
|
6,804
|
|
|
|
6,672
|
|
|
|
8,184
|
|
|
|
13,476
|
|
|
|
16,159
|
|
Amortization of debt discount(2)
|
|
|
1,908
|
|
|
|
1,860
|
|
|
|
580
|
|
|
|
3,768
|
|
|
|
580
|
|
Non-GAAP as adjusted
|
|
$
|
13,492
|
|
|
$
|
4,158
|
|
|
$
|
(1,245
|
)
|
|
$
|
17,650
|
|
|
$
|
(8,549
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) per Common Share - Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP as reported
|
|
$
|
0.04
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.22
|
)
|
Non-GAAP as adjusted
|
|
$
|
0.11
|
|
|
$
|
0.03
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.14
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) per Common Share - Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. GAAP as reported
|
|
$
|
0.04
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.22
|
)
|
Non-GAAP as adjusted(3)
|
|
$
|
0.11
|
|
|
$
|
0.03
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.14
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss)
per common share - U.S. GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
123,128
|
|
|
|
121,352
|
|
|
|
116,911
|
|
|
|
122,240
|
|
|
|
115,609
|
|
Diluted
|
|
|
126,758
|
|
|
|
121,352
|
|
|
|
116,911
|
|
|
|
126,112
|
|
|
|
115,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computing net income (loss)
per common share - Non-GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
123,128
|
|
|
|
121,352
|
|
|
|
116,911
|
|
|
|
122,240
|
|
|
|
115,609
|
|
Diluted(3)
|
|
|
126,758
|
|
|
|
125,435
|
|
|
|
121,254
|
|
|
|
126,112
|
|
|
|
119,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Stock-based compensation expense is calculated in accordance with
the fair value recognition provisions of Financial Accounting
Standards Board Accounting Standards Codification (ASC) Topic 718, Compensation-Stock
Compensation effective January 1, 2006. The following table
summarizes the effects of stock-based compensation related to
employees and non-employees (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
|
June 28,
|
|
March 29,
|
|
June 29,
|
|
June 28,
|
|
June 29,
|
|
|
|
|
|
2014
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Cost of revenue
|
|
|
|
$
|
477
|
|
$
|
452
|
|
$
|
474
|
|
$
|
929
|
|
$
|
960
|
|
Research and development
|
|
|
2,080
|
|
|
2,138
|
|
|
2,622
|
|
|
4,218
|
|
|
5,741
|
|
Sales and marketing
|
|
|
|
1,815
|
|
|
1,720
|
|
|
1,807
|
|
|
3,535
|
|
|
3,806
|
|
General and administration
|
|
|
1,549
|
|
|
1,530
|
|
|
1,591
|
|
|
3,079
|
|
|
2,360
|
|
|
|
|
|
|
5,921
|
|
|
5,840
|
|
|
6,494
|
|
|
11,761
|
|
|
12,867
|
|
Cost of revenue - amortization from balance sheet*
|
|
883
|
|
|
832
|
|
|
1,690
|
|
|
1,715
|
|
|
3,292
|
|
Total stock-based compensation expense
|
$
|
6,804
|
|
$
|
6,672
|
|
$
|
8,184
|
|
$
|
13,476
|
|
$
|
16,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Stock-based compensation expense deferred to inventory and
deferred inventory costs in prior periods and recognized in the
current period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Under GAAP, certain convertible debt instruments that may be settled
in cash on conversion are required to be separately accounted for as
liability (debt) and equity (conversion option) components of the
instrument in a manner that reflects the issuer's non-convertible
debt borrowing rate. Accordingly, for GAAP purposes, Infinera is
required to amortize as a debt discount an amount equal to the fair
value of the conversion option that was recorded in equity as
interest expense on its $150 million 1.75% convertible debt issuance
in May 2013 over the term of the notes. These amounts have been
adjusted in arriving at Infinera's non-GAAP results because
management believes that this non-cash expense is not indicative of
ongoing operating performance and provides a better indication of
Infinera's underlying business performance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
Diluted shares used to calculate net loss per share on a non-GAAP
basis provided for informational purposes only.
|
|
|
|
|
|
|
|
|
|
|
Infinera Corporation
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
|
|
(In thousands, except par values)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 28,
|
|
December 28,
|
|
|
|
|
2014
|
|
|
2013
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
83,307
|
|
|
$
|
124,330
|
|
Short-term investments
|
|
|
230,694
|
|
|
|
172,660
|
|
Accounts receivable, net of allowance for doubtful accounts of $41
in 2014 and $43 in 2013
|
|
|
|
|
|
|
120,686
|
|
|
|
100,643
|
|
Inventory
|
|
|
130,853
|
|
|
|
123,685
|
|
Prepaid expenses and other current assets
|
|
|
20,167
|
|
|
|
17,752
|
|
Total current assets
|
|
|
585,707
|
|
|
|
539,070
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
76,886
|
|
|
|
79,668
|
|
Long-term investments
|
|
|
|
37,086
|
|
|
|
64,419
|
|
Cost-method investment
|
|
|
|
9,000
|
|
|
|
9,000
|
|
Long-term restricted cash
|
|
|
|
4,404
|
|
|
|
3,904
|
|
Other non-current assets
|
|
|
|
5,571
|
|
|
|
4,865
|
|
Total assets
|
|
$
|
718,654
|
|
|
$
|
700,926
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
33,162
|
|
|
$
|
39,843
|
|
Accrued expenses
|
|
|
|
22,546
|
|
|
|
22,431
|
|
Accrued compensation and related benefits
|
|
|
28,742
|
|
|
|
33,899
|
|
Accrued warranty
|
|
|
|
13,860
|
|
|
|
12,374
|
|
Deferred revenue
|
|
|
|
29,657
|
|
|
|
32,402
|
|
Total current liabilities
|
|
|
127,967
|
|
|
|
140,949
|
|
|
|
|
|
|
|
|
Long-term debt, net
|
|
|
|
112,932
|
|
|
|
109,164
|
|
Accrued warranty, non-current
|
|
|
14,088
|
|
|
|
10,534
|
|
Deferred revenue, non-current
|
|
|
6,187
|
|
|
|
4,888
|
|
Other long-term liabilities
|
|
|
18,173
|
|
|
|
17,581
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
Preferred stock, $0.001 par value
|
|
|
|
|
Authorized shares - 25,000 and no shares issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.001 par value
|
|
|
|
|
Authorized shares - 500,000 as of June 28, 2014 and December 28,
2013 Issued and outstanding shares - 123,615 as of June 28,
2014 and 119,887 as of December 28, 2013
|
|
|
|
|
|
|
|
|
|
|
124
|
|
|
|
120
|
|
Additional paid-in capital
|
|
|
1,046,375
|
|
|
|
1,025,661
|
|
Accumulated other comprehensive loss
|
|
|
(3,113
|
)
|
|
|
(3,486
|
)
|
Accumulated deficit
|
|
|
|
(604,079
|
)
|
|
|
(604,485
|
)
|
Total stockholders' equity
|
|
|
439,307
|
|
|
|
417,810
|
|
Total liabilities and stockholders' equity
|
|
$
|
718,654
|
|
|
$
|
700,926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infinera Corporation
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
|
(In thousands)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
June 28,
|
|
June 29,
|
|
|
2014
|
|
|
2013
|
|
Cash Flows from Operating Activities:
|
|
|
|
Net income (loss)
|
$
|
406
|
|
|
$
|
(25,288
|
)
|
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
|
|
|
|
Depreciation and amortization
|
|
12,813
|
|
|
|
12,621
|
|
(Recovery of) provision for other receivables
|
|
-
|
|
|
|
(88
|
)
|
Provision for doubtful accounts
|
|
-
|
|
|
|
40
|
|
Amotization of debt discount and issuance costs
|
|
4,092
|
|
|
|
630
|
|
Amortization of premium on investments
|
|
1,747
|
|
|
|
450
|
|
Stock-based compensation expense
|
|
13,476
|
|
|
|
16,159
|
|
Other gain
|
|
(22
|
)
|
|
|
(243
|
)
|
Changes in assets and liabilities:
|
|
|
|
Accounts receivable
|
|
(20,043
|
)
|
|
|
10,332
|
|
Inventory
|
|
(8,107
|
)
|
|
|
791
|
|
Prepaid expenses and other assets
|
|
(3,389
|
)
|
|
|
(2,238
|
)
|
Accounts payable
|
|
(6,428
|
)
|
|
|
(23,980
|
)
|
Accrued liabilities and other expenses
|
|
(3,318
|
)
|
|
|
(220
|
)
|
Deferred revenue
|
|
(1,448
|
)
|
|
|
4,440
|
|
Accrued warranty
|
|
5,040
|
|
|
|
3,219
|
|
Net cash used in operating activities
|
|
(5,181
|
)
|
|
|
(3,375
|
)
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
Purchase of available-for-sale investments
|
|
(158,496
|
)
|
|
|
(130,828
|
)
|
Proceeds from sale of available-for-sale investments
|
|
9,824
|
|
|
|
2,850
|
|
Proceeds from maturities and calls of investments
|
|
116,290
|
|
|
|
62,647
|
|
Purchase of property and equipment
|
|
(9,985
|
)
|
|
|
(9,431
|
)
|
Change in restricted cash
|
|
(491
|
)
|
|
|
(6
|
)
|
Net cash used in investing activities
|
|
(42,858
|
)
|
|
|
(74,768
|
)
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
Proceeds from issuance of debt, net
|
|
-
|
|
|
|
144,469
|
|
Proceeds from issuance of common stock
|
|
8,401
|
|
|
|
12,496
|
|
Minimum tax withholding paid on behalf of employees for net share
settlement
|
|
(1,619
|
)
|
|
|
(1,499
|
)
|
Net cash provided by financing activities
|
|
6,782
|
|
|
|
155,466
|
|
|
|
|
|
|
Effect of exchange rate changes on cash
|
|
234
|
|
|
|
(778
|
)
|
|
|
|
|
|
Net change in cash and cash equivalents
|
|
(41,023
|
)
|
|
|
76,545
|
|
Cash and cash equivalents at beginning of period
|
|
124,330
|
|
|
|
104,666
|
|
Cash and cash equivalents at end of period
|
$
|
83,307
|
|
|
$
|
181,211
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
Cash paid for income taxes, net of refunds
|
$
|
482
|
|
|
$
|
1,148
|
|
Cash paid for interest
|
$
|
1,313
|
|
|
$
|
-
|
|
Supplemental schedule of non-cash financing activities:
|
|
|
|
Transfer of inventory to fixed assets
|
$
|
978
|
|
|
$
|
4,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Infinera Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q3'12
|
|
Q4'12
|
|
Q1'13
|
|
Q2'13
|
|
Q3'13
|
|
Q4'13
|
|
Q1'14
|
|
Q2'14
|
Revenue ($ Mil)
|
|
$112.2
|
|
$128.1
|
|
$124.6
|
|
$138.4
|
|
$142.0
|
|
$139.1
|
|
$142.8
|
|
$165.4
|
Gross Margin % (1)
|
|
39.1%
|
|
35.9%
|
|
35.9%
|
|
38.9%
|
|
49.2%
|
|
41.4%
|
|
41.8%
|
|
43.3%
|
Revenue Composition:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic %
|
|
70%
|
|
63%
|
|
63%
|
|
64%
|
|
73%
|
|
54%
|
|
78%
|
|
82%
|
International %
|
|
30%
|
|
37%
|
|
37%
|
|
36%
|
|
27%
|
|
46%
|
|
22%
|
|
18%
|
Customers >10% of Revenue
|
|
1
|
|
1
|
|
1
|
|
-
|
|
3
|
|
1
|
|
2
|
|
2
|
Cash Related Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from (Used in) Operations ($ Mil)
|
|
$(29.3)
|
|
$8.3
|
|
$(21.3)
|
|
$17.9
|
|
$12.8
|
|
$25.8
|
|
$(15.4)
|
|
$10.3
|
Capital Expenditures ($ Mil)
|
|
$2.5
|
|
$3.2
|
|
$4.9
|
|
$4.5
|
|
$4.2
|
|
$7.5
|
|
$5.6
|
|
$4.4
|
Depreciation & Amortization ($ Mil)
|
|
$6.1
|
|
$6.4
|
|
$6.3
|
|
$6.3
|
|
$5.9
|
|
$6.0
|
|
$6.3
|
|
$6.5
|
DSO's
|
|
74
|
|
76
|
|
82
|
|
64
|
|
56
|
|
66
|
|
68
|
|
66
|
Inventory Metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raw Materials ($ Mil)
|
|
$12.4
|
|
$13.0
|
|
$12.2
|
|
$9.8
|
|
$12.1
|
|
$14.3
|
|
$13.2
|
|
$11.2
|
Work in Process ($ Mil)
|
|
$59.8
|
|
$57.3
|
|
$53.1
|
|
$41.0
|
|
$45.7
|
|
$49.2
|
|
$47.8
|
|
$40.6
|
Finished Goods ($ Mil)
|
|
$46.3
|
|
$57.5
|
|
$65.7
|
|
$70.5
|
|
$65.7
|
|
$60.2
|
|
$65.5
|
|
$79.1
|
Total Inventory ($ Mil)
|
|
$118.5
|
|
$127.8
|
|
$131.0
|
|
$121.3
|
|
$123.5
|
|
$123.7
|
|
$126.5
|
|
$130.9
|
Inventory Turns (2)
|
|
2.3
|
|
2.6
|
|
2.4
|
|
2.8
|
|
2.3
|
|
2.6
|
|
2.6
|
|
2.9
|
Worldwide Headcount
|
|
1,235
|
|
1,242
|
|
1,219
|
|
1,238
|
|
1,296
|
|
1,318
|
|
1,346
|
|
1,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Amounts reflect non-GAAP results. Non-GAAP adjustments include
non-cash stock-based compensation expense.
|
|
|
|
|
|
(2)
|
|
Infinera calculates non-GAAP inventory turns as annualized non-GAAP
cost of revenue before adjustments for non-cash stock-based
compensation expense divided by the average inventory for the
quarter.
|
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|