Infinera Corporation Reports Third Quarter 2016 Financial Results
SUNNYVALE, CA -- (Marketwired) -- 10/26/16 -- Infinera Corporation (NASDAQ: INFN), provider of Intelligent Transport Networks, today released financial results for the third quarter of 2016 ended September 24, 2016.
GAAP revenue for the quarter was $185.5 million compared to $258.8 million in the second quarter of 2016 and $232.5 million in the third quarter of 2015.
GAAP gross margin for the quarter was 45.6% compared to 47.8% in the second quarter of 2016 and 44.2% in the third quarter of 2015. GAAP operating margin for the quarter was (5.9)% compared to 6.2% in the second quarter of 2016 and 6.1% in the third quarter of 2015.
GAAP net loss for the quarter was $(11.2) million, or $(0.08) per share, compared to net income of $11.5 million, or $0.08 per diluted share, in the second quarter of 2016, and net income of $8.5 million, or $0.06 per diluted share, in the third quarter of 2015.
Non-GAAP revenue for the quarter was $185.5 million compared to $259.0 million in the second quarter of 2016 and $233.2 million in the third quarter of 2015.
Non-GAAP gross margin for the quarter was 49.2% compared to 50.4% in the second quarter of 2016 and 47.5% in the third quarter of 2015. Non-GAAP operating margin for the quarter was 3.6% compared to 13.2% in the second quarter of 2016 and 14.4% in the third quarter of 2015.
Non-GAAP net income for the quarter was $7.4 million, or $0.05 per diluted share, compared to $30.9 million, or $0.21 per diluted share, in the second quarter of 2016, and $32.2 million, or $0.22 per diluted share, in the third quarter of 2015.
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.
"As expected, weak demand across much of our business in the third quarter led to financial results that were below our standards," said Tom Fallon, Infinera's Chief Executive Officer. "While the revenue environment is likely to remain challenging in the near term, we are making continued progress towards delivering our next generation of products and increasing the cadence in which we will introduce step function technology improvements. I firmly believe that we have the team and the core technologies that will enable us to recover from our current challenges and ultimately return to delivering differentiated financial results."
Conference Call Information
Infinera will host a conference call for analysts and investors to discuss its third quarter 2016 results and its outlook for the fourth quarter of 2016 today at 5:30 p.m. Eastern Time (2:30 p.m. Pacific Time). Interested parties may join the conference call by dialing 1-866-373-6878 (toll free) or 1-412-317-5101 (international). A live webcast of the conference call will also be accessible from the Events & Webcasts section of Infinera's website at investors.infinera.com. Replay of the audio webcast will be available at investors.infinera.com approximately two hours after the end of the live call.
About Infinera
Infinera provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and simplify optical network operations. Infinera's end-to-end packet-optical portfolio is designed for long-haul, subsea, data center interconnect and metro applications. Infinera's unique large scale photonic integrated circuits enable innovative optical networking solutions for the most demanding networks. To learn more about Infinera visit www.infinera.com, follow us on Twitter @Infinera and read our latest blog posts at blog.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. Such forward-looking statements include, without limitation, Infinera's expectations regarding its next generation of products and step function technology improvements; and Infinera's ability to recover from its current challenges and ultimately return to delivering differentiated financial results. Forward-looking statements can also be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. 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. The risks and uncertainties that could cause Infinera's results to differ materially from those expressed or implied by such forward-looking statements include delays in the development and introduction of new products or updates to existing products and market acceptance of these products; the effect that changes in product pricing or mix, and/or increases in component costs could have on Infinera's gross margin; Infinera's ability to respond to rapid technological changes; aggressive business tactics by Infinera's competitors; Infinera's reliance on single-source suppliers; Infinera's ability to protect Infinera's intellectual property; Infinera's ability to successfully integrate the Infinera and Transmode businesses; claims by others that Infinera infringes their intellectual property; the effect of global macroeconomic conditions on Infinera's business; war, terrorism, public health issues, natural disasters and other circumstances that could disrupt the supply, delivery or demand of Infinera's products; and other risks and uncertainties 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 on June 25, 2016 as filed with the SEC on August 2, 2016, 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, acquisition-related costs, certain purchase accounting adjustments related to Infinera's acquisition of Transmode AB, which closed during the third quarter of 2015, 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, basic and diluted net income per share, gross margin or operating 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 third quarter 2016 results, including an estimate of certain non-GAAP financial measures for the fourth quarter of 2016 that excludes non-cash stock-based compensation expenses, acquisition-related costs, certain purchase accounting adjustments related to Infinera's acquisition of Transmode AB 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.
Infinera Corporation
GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------------- ---------------------------
September 24, September 26, September 24, September 26,
2016 2015 2016 2015
------------- ------------- ------------- -------------
Revenue:
Product $ 156,188 $ 202,365 $ 599,802 $ 542,190
Services 29,264 30,107 89,290 84,490
------------- ------------- ------------- -------------
Total revenue 185,452 232,472 689,092 626,680
Cost of revenue:
Cost of product 91,064 117,154 331,564 306,151
Cost of services 9,786 12,513 32,842 32,816
------------- ------------- ------------- -------------
Total cost of
revenue 100,850 129,667 364,406 338,967
Gross profit 84,602 102,805 324,686 287,713
Operating expenses:
Research and
development 50,855 45,466 164,541 128,144
Sales and
marketing 27,960 24,721 88,434 67,298
General and
administrative 16,646 18,358 51,617 46,324
------------- ------------- ------------- -------------
Total operating
expenses 95,461 88,545 304,592 241,766
Income (loss) from
operations (10,859) 14,260 20,094 45,947
Other income
(expense), net:
Interest income 647 406 1,764 1,371
Interest expense (3,313) (3,014) (9,644) (8,851)
Other gain (loss),
net: (188) (3,293) (1,116) 1,788
------------- ------------- ------------- -------------
Total other
income
(expense), net (2,854) (5,901) (8,996) (5,692)
Income (loss) before
income taxes (13,713) 8,359 11,098 40,255
Provision for
(benefit from)
income taxes (2,416) (151) (725) 1,473
------------- ------------- ------------- -------------
Net income (loss) (11,297) 8,510 11,823 38,782
Less: Net loss
attributable to
noncontrolling
interest (125) - (503) -
------------- ------------- ------------- -------------
Net income (loss)
attributable to
Infinera
Corporation $ (11,172) $ 8,510 $ 12,326 $ 38,782
============= ============= ============= =============
Net income (loss)
per common share
attributable to
Infinera
Corporation:
Basic $ (0.08) $ 0.06 $ 0.09 $ 0.30
============= ============= ============= =============
Diluted $ (0.08) $ 0.06 $ 0.08 $ 0.27
============= ============= ============= =============
Weighted average
shares used in
computing net
income (loss) per
common share:
Basic 143,850 134,834 142,350 131,007
============= ============= ============= =============
Diluted 143,850 145,300 145,921 141,082
============= ============= ============= =============
Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands, except percentages and per share data)
(Unaudited)
Three Months Ended
----------------------------------------------------------
September June 25, September
24, 2016 2016 26, 2015
------------- ------------- --------------
Reconciliation of
Revenue:
U.S. GAAP as
reported $ 185,452 $ 258,822 $ 232,472
Acquisition-
related deferred
revenue
adjustment(1) - 174 721
------------- ------------ -------------
Non-GAAP as
adjusted $ 185,452 $ 258,996 $ 233,193
============= ============ =============
Reconciliation of
Gross Profit:
U.S. GAAP as
reported $ 84,602 45.6% $ 123,746 47.8% $ 102,805 44.2
Stock-based
compensation(2) 1,424 1,658 1,621
Acquisition-
related deferred
revenue
adjustment(1) - 174 721
Amortization of
acquired
intangible
assets(3) 5,102 4,998 1,922
Acquisition-
related
inventory step-
up expense(4) - - 3,620
Acquisition-
related costs(4) 38 40 -
------------- ------ ------------ ----- ------------ ----
Non-GAAP as
adjusted $ 91,166 49.2% $ 130,616 50.4% $ 110,689 47.5
============= ====== ============ ===== ============ ====
Reconciliation of
Operating
Expenses:
U.S. GAAP as
reported $ 95,461 $ 107,664 $ 88,545
Stock-based
compensation(2) 8,787 9,335 6,830
Amortization of
acquired
intangible
assets(3) 1,537 1,584 686
Acquisition-
related costs(4) 563 402 3,950
------------- ------------ -------------
Non-GAAP as
adjusted $ 84,574 $ 96,343 $ 77,079
============= ============ =============
Reconciliation of
Income (Loss)
from Operations:
U.S. GAAP as
reported $ (10,859) (5.9)% $ 16,082 6.2% $ 14,260 6.1
Stock-based
compensation(2) 10,211 10,993 8,451
Acquisition-
related deferred
revenue
adjustment(1) - 174 721
Amortization of
acquired
intangible
assets(3) 6,639 6,582 2,608
Acquisition-
related
inventory step-
up expense(4) - - 3,620
Acquisition-
related costs(4) 601 442 3,950
------------- ------ ------------ ----- ------------- ----
Non-GAAP as
adjusted $ 6,592 3.6% $ 34,273 13.2% $ 33,610 14.4
============= ====== ============ ===== ============= ====
Reconciliation of
Net Income
(Loss)
Attributable to
Infinera
Corporation:
U.S. GAAP as
reported $ (11,172) $ 11,483 $ 8,510
Stock-based
compensation(2) 10,211 10,993 8,451
Acquisition-
related deferred
revenue
adjustment(1) - 174 721
Amortization of
acquired
intangible
assets(3) 6,639 6,582 2,608
Acquisition-
related
inventory step-
up expense(4) - - 3,620
Acquisition-
related costs(4) 874 862 3,950
Acquisition-
related forward
contract (gain)
loss(5) - - 3,728
Amortization of
debt discount(6) 2,391 2,331 2,162
Income tax
effects(7) (1,519) (1,510) (1,529)
------------- ------------ -------------
Non-GAAP as
adjusted $ 7,424 $ 30,915 $ 32,221
============= ============ =============
Net Income (Loss)
per Common Share
Attributable to
Infinera
Corporation -
Basic:
U.S. GAAP as
reported $ (0.08) $ 0.08 $ 0.06
============= ============ =============
Non-GAAP as
adjusted $ 0.05 $ 0.22 $ 0.24
============= ============ =============
Net Income (Loss)
per Common Share
Attributable to
Infinera
Corporation -
Diluted:
U.S. GAAP as
reported $ (0.08) $ 0.08 $ 0.06
============= ============ =============
Non-GAAP as
adjusted $ 0.05 $ 0.21 $ 0.22
============= ============ =============
Weighted Average
Shares Used in
Computing Net
Income (Loss)
per Common
Share:
Basic 143,850 142,396 134,834
============= ============ =============
Diluted 144,993 145,851 145,300
============= ============ =============
Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands, except percentages and per share data)
(Unaudited)
Nine Months Ended
----------------------------------------
September 24, September 26,
2016 2015
-------------- --------------
Reconciliation of
Revenue:
U.S. GAAP as
reported $ 689,092 $ 626,680
Acquisition-
related deferred
revenue
adjustment(1) 400 721
-------------- --------------
Non-GAAP as
adjusted $ 689,492 $ 627,401
============== ==============
Reconciliation of
Gross Profit:
U.S. GAAP as
reported % $ 324,686 47.1% $ 287,713 45.9%
Stock-based
compensation(2) 4,614 4,357
Acquisition-
related deferred
revenue
adjustment(1) 400 721
Amortization of
acquired
intangible
assets(3) 14,970 1,922
Acquisition-
related
inventory step-
up expense(4) - 3,620
Acquisition-
related costs(4) 117 -
- -------------- ----- -------------- -----
Non-GAAP as
adjusted % $ 344,787 50.0% $ 298,333 47.6%
= ============== ===== ============== =====
Reconciliation of
Operating
Expenses:
U.S. GAAP as
reported $ 304,592 $ 241,766
Stock-based
compensation(2) 24,577 19,511
Amortization of
acquired
intangible
assets(3) 4,753 686
Acquisition-
related costs(4) 1,453 6,676
-------------- --------------
Non-GAAP as
adjusted $ 273,809 $ 214,893
============== ==============
Reconciliation of
Income (Loss)
from Operations:
U.S. GAAP as
reported % $ 20,094 2.9% $ 45,947 7.3%
Stock-based
compensation(2) 29,191 23,868
Acquisition-
related deferred
revenue
adjustment(1) 400 721
Amortization of
acquired
intangible
assets(3) 19,723 2,608
Acquisition-
related
inventory step-
up expense(4) - 3,620
Acquisition-
related costs(4) 1,570 6,676
- -------------- ----- ------------- -----
Non-GAAP as
adjusted % $ 70,978 10.3% $ 83,440 13.3%
= ============== ===== ============= =====
Reconciliation of
Net Income
(Loss)
Attributable to
Infinera
Corporation:
U.S. GAAP as
reported $ 12,326 $ 38,782
Stock-based
compensation(2) 29,191 23,868
Acquisition-
related deferred
revenue
adjustment(1) 400 721
Amortization of
acquired
intangible
assets(3) 19,723 2,608
Acquisition-
related
inventory step-
up expense(4) - 3,620
Acquisition-
related costs(4) 2,263 6,676
Acquisition-
related forward
contract (gain)
loss(5) - (1,054)
Amortization of
debt discount(6) 6,996 6,328
Income tax
effects(7) (4,531) (1,529)
-------------- --------------
Non-GAAP as
adjusted $ 66,368 $ 80,020
============== ==============
Net Income (Loss)
per Common Share
Attributable to
Infinera
Corporation -
Basic:
U.S. GAAP as
reported $ 0.09 $ 0.30
============== ==============
Non-GAAP as
adjusted $ 0.47 $ 0.61
============== ==============
Net Income (Loss)
per Common Share
Attributable to
Infinera
Corporation -
Diluted:
U.S. GAAP as
reported $ 0.08 $ 0.27
============== ==============
Non-GAAP as
adjusted $ 0.45 $ 0.57
============== ==============
Weighted Average
Shares Used in
Computing Net
Income (Loss)
per Common
Share:
Basic 142,350 131,007
============== ==============
Diluted 145,921 141,082
============== ==============
(1) Business combination accounting principles require Infinera to write
down to fair value its maintenance support contracts assumed in the
Transmode acquisition. The revenue for these support contracts is
deferred and typically recognized over a one year period, so Infinera's
GAAP revenue for the one year period after the acquisition will not
reflect the full amount of revenue that would have been reported if the
acquired deferred revenue was not written down to fair value. The non-
GAAP adjustment eliminates the effect of the deferred revenue write-
down. Management believes these adjustments to the revenue from these
support contracts are useful to investors as an additional means to
reflect revenue trends of Infinera's business.
(2) Stock-based compensation expense is calculated in accordance with the
fair value recognition provisions of Financial Accounting Standards
Board Accounting Standards Codification 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
-------------------------------------
September 24, June 25, September 26,
2016 2016 2015
------------- --------- -------------
Cost of revenue $ 756 $ 746 $ 645
Research and development 3,496 3,904 2,788
Sales and marketing 2,826 2,945 2,131
General and administration 2,465 2,486 1,911
------------- --------- -------------
9,543 10,081 7,475
Cost of revenue - amortization from
balance sheet* 668 912 976
------------- --------- -------------
Total stock-based compensation
expense $ 10,211 $ 10,993 $ 8,451
============= ========= =============
Nine Months Ended
---------------------------
September 24, September 26,
2016 2015
------------- -------------
Cost of revenue $ 2,175 $ 1,740
Research and development 9,721 8,183
Sales and marketing 8,006 5,922
General and administration 6,850 5,406
------------- -------------
26,752 21,251
Cost of revenue - amortization from
balance sheet* 2,439 2,617
------------- -------------
Total stock-based compensation
expense $ 29,191 $ 23,868
============= =============
* Stock-based compensation expense deferred to inventory and deferred
inventory costs in prior periods and recognized in the current period.
(3) Amortization of acquisition-related intangible assets consists of
amortization of developed technology, trade names, and customer
relationships acquired in connection with the Transmode acquisition.
U.S. GAAP accounting requires that acquired intangible assets are
recorded at fair value and amortized over their useful lives. As this
amortization is non-cash, Infinera has excluded it from its non-GAAP
operating expenses, gross margin and net income measures. Management
believes the amortization of acquired intangible assets is not
indicative of ongoing operating performance and its exclusion provides a
better indication of Infinera's underlying business performance.
(4) Acquisition-related costs associated with the Transmode acquisition
include legal, financial, employee retention costs and other
professional fees incurred in connection with the transaction, including
squeeze-out proceedings. These amounts have been adjusted in arriving at
Infinera's non-GAAP results because management believes that these
expenses are non-recurring, not indicative of ongoing operating
performance and their exclusion provides a better indication of
Infinera's underlying business performance.
(5) In April 2015, Infinera entered into a foreign currency forward contract
and in July 2015, Infinera entered into a series of foreign currency
exchange option contracts to hedge currency exposures associated with
the cash portion of the offer to acquire Transmode. The forward contract
and option contracts were subsequently closed during the third quarter
of 2015. The net change in the fair value of the forward contract and
option contracts impacted Infinera's financial statements for the
current interim reporting period. Management has excluded the impact of
these gains and losses in arriving at Infinera's non-GAAP results
because they are non-recurring and management believes that these gains
are not indicative of ongoing operating performance.
(6) 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 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. Interest expense has been excluded from 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.
(7) The difference between the GAAP and non-GAAP tax is due to the net tax
effects of the purchase accounting adjustments and acquisition-related
costs related to the Transmode acquisition.
Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)
September 24, December 26,
2016 2015
-------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 130,996 $ 149,101
Short-term investments 136,643 125,561
Short-term restricted cash 9,700 -
Accounts receivable, net of allowance for
doubtful accounts of $807 in 2016 and $630
in 2015 152,467 186,243
Inventory 231,528 174,699
Prepaid expenses and other current assets 30,520 29,511
-------------- --------------
Total current assets 691,854 665,115
Property, plant and equipment, net 120,137 110,861
Intangible assets 133,939 156,319
Goodwill 187,927 191,560
Long-term investments 72,439 76,507
Cost-method investment 19,500 14,500
Long-term restricted cash 6,467 5,310
Other non-current assets 4,196 4,009
-------------- --------------
Total assets $ 1,236,459 $ 1,224,181
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 76,789 $ 92,554
Accrued expenses 37,857 33,736
Accrued compensation and related benefits 37,942 49,887
Accrued warranty 15,875 17,889
Deferred revenue 38,063 42,977
-------------- --------------
Total current liabilities 206,526 237,043
Long-term debt, net 130,924 123,327
Accrued warranty, non-current 22,746 20,955
Deferred revenue, non-current 18,369 13,881
Deferred tax liability 31,419 35,731
Other long-term liabilities 18,161 16,183
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
September 24, 2016 and December 26, 2015
Issued and outstanding shares - 144,536 as
of September 24, 2016 and 140,197 as of
December 26, 2015 145 140
Additional paid-in capital 1,341,501 1,300,301
Accumulated other comprehensive income
(loss) (6,010) 1,123
Accumulated deficit (527,322) (539,413)
-------------- --------------
Total Infinera Corporation stockholders'
equity 808,314 762,151
Noncontrolling interest - 14,910
-------------- --------------
Total stockholders' equity 808,314 777,061
-------------- --------------
Total liabilities and stockholders' equity $ 1,236,459 $ 1,224,181
============== ==============
Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)(Unaudited)
Nine Months Ended
-----------------------------
September 24, September 26,
2016 2015
-------------- --------------
Cash Flows from Operating Activities:
Net income $ 11,823 $ 38,782
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 45,764 22,094
Amortization of debt discount and issuance
costs 7,598 6,873
Amortization of premium on investments 925 2,405
Stock-based compensation expense 29,191 23,868
Other loss (gain) 261 (448)
Changes in assets and liabilities:
Accounts receivable 33,044 28,838
Inventory (61,078) (8,901)
Prepaid expenses and other assets (1,625) (6,058)
Accounts payable (13,935) (2,339)
Accrued liabilities and other expenses (7,580) (7,196)
Deferred revenue (805) 700
Accrued warranty (179) 8,742
-------------- --------------
Net cash provided by operating
activities 43,404 107,360
Cash Flows from Investing Activities:
Purchase of available-for-sale investments (118,017) (126,940)
Acquisition of business, net of cash
acquired - (144,445)
Realized gain from forward contract for
business acquisition - 1,053
Purchase of cost-method investment (5,000) -
Proceeds from sales of available-for-sale
investments - 67,303
Proceeds from maturities and calls of
investments 110,554 178,717
Purchase of property and equipment (32,878) (26,710)
Change in restricted cash (4,950) 127
-------------- --------------
Net cash used in investing activities (50,291) (50,895)
Cash Flows from Financing Activities:
Security pledge related to Squeeze-out
Proceedings (5,921) -
Acquisition of noncontrolling interest (16,771) -
Proceeds from issuance of common stock 16,486 23,433
Minimum tax withholding paid on behalf of
employees for net share settlement (3,592) (5,043)
-------------- --------------
Net cash provided by (used in) financing
activities (9,798) 18,390
Effect of exchange rate changes on cash (1,420) (247)
Net change in cash and cash equivalents (18,105) 74,608
Cash and cash equivalents at beginning of
period 149,101 86,495
-------------- --------------
Cash and cash equivalents at end of period $ 130,996 $ 161,103
============== ==============
Supplemental disclosures of cash flow
information:
Cash paid for income taxes, net of refunds $ 5,557 $ 2,552
Cash paid for interest $ 1,445 $ 1,317
Supplemental schedule of non-cash investing
activities:
Transfer of inventory to fixed assets $ 5,211 $ 5,861
Common stock issued in connection with
acquisition $ - $ 169,507
Infinera Corporation
Supplemental Financial Information
(Unaudited)
Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16
------- ------- ------- ------- ------- ------- ------- -------
Revenue
($ Mil) $186.3 $186.9 $207.3 $232.5 $260.0 $244.8 $258.8 $185.5
GAAP Gross
Margin % 45.3% 47.2% 46.7% 44.2% 44.5% 47.5% 47.8% 45.6%
Non-GAAP
Gross Margin
%(1) 46.1% 47.8% 47.4% 47.5% 48.3% 50.2% 50.4% 49.2%
Revenue
Composition:
Domestic % 58% 68% 75% 68% 62% 71% 64% 56%
International
% 42% 32% 25% 32% 38% 29% 36% 44%
Customers
>10% of
Revenue 1 2 3 2 2 3 2 2
Cash Related
Information:
Cash from
Operations
($ Mil) $ 18.7 $ 19.8 $ 55.0 $ 32.5 $ 25.8 $ 10.0 $ 28.2 $ 5.2
Capital
Expenditures
($ Mil) $ 8.8 $ 7.4 $ 8.7 $ 10.6 $ 15.3 $ 10.8 $ 12.5 $ 9.6
Depreciation
&
Amortization
($ Mil) $ 6.6 $ 6.6 $ 6.3 $ 9.2 $ 13.7 $ 14.7 $ 15.2 $ 15.9
DSO's 76 64 48 55 65 69 68 75
Inventory
Metrics:
Raw Materials
($ Mil) $ 15.2 $ 22.4 $ 30.2 $ 24.2 $ 27.9 $ 33.1 $ 39.1 $ 37.2
Work in
Process
($ Mil) $ 50.0 $ 45.9 $ 43.9 $ 48.5 $ 52.6 $ 59.4 $ 61.0 $ 65.5
Finished
Goods
($ Mil) $ 81.3 $ 88.9 $ 83.1 $ 97.2 $ 94.2 $ 97.2 $102.2 $128.8
------- ------- ------- ------- ------- ------- ------- -------
Total
Inventory
($ Mil) $146.5 $157.2 $157.2 $169.9 $174.7 $189.7 $202.3 $231.5
Inventory
Turns(2) 2.7 2.5 2.8 2.9 3.1 2.6 2.5 1.6
Worldwide
Headcount 1,495 1,530 1,598 1,978 2,056 2,128 2,218 2,262
(1) Non-GAAP adjustments include non-cash stock-based compensation expense,
certain purchase accounting adjustments related to Infinera's
acquisition of Transmode and amortization of acquired intangible assets.
For a description of this non-GAAP financial measure, please see the
section titled, "GAAP to Non-GAAP Reconciliations" of this press release
for a reconciliation to the most directly comparable GAAP financial
measures.
(2) Infinera calculates non-GAAP inventory turns as annualized non-GAAP cost
of revenue before adjustments for non-cash stock-based compensation
expense and certain purchase accounting adjustments, divided by the
average inventory for the quarter.
Contacts: Media: Anna Vue Tel. +1 (916) 595-8157 [email protected] Investors: Jeff HustisTel. +1 (408) [email protected]
Source: Infinera