Disclaimer

This Prospectus has been prepared and is made available solely for the purpose of the Offer to Infinera’s employees in Sweden to participate in the ESPP. The information in the Prospectus is only provided in contemplation of the Offer and may not be used for any other purpose. Consequently, this Prospectus is not addressed to persons in, and the Prospectus may not be published or distributed in or into, any country or other jurisdiction where such action would require additional prospectuses, registration or measures besides those required by Swedish law, or otherwise would be in conflict with applicable regulations. Any failure to comply with such restrictions may result in a violation of applicable securities regulations.

Accept Don't Accept

Nasdaq: INFN 4.44 -0.16 ( -3.38% ) Volume: 283,529 Delayed 20 minutes November 20, 2018

Infinera Corporation Reports Third Quarter 2018 Financial Results

November 06, 2018

SUNNYVALE, Calif., Nov. 06, 2018 (GLOBE NEWSWIRE) -- Infinera Corporation, provider of Intelligent Transport Networks, today released financial results for its third quarter ended September 29, 2018.

GAAP revenue for the quarter was $200.4 million compared to $208.2 million in the second quarter of 2018 and $192.6 million in the third quarter of 2017.

GAAP gross margin for the quarter was 35.0% compared to 40.5% in the second quarter of 2018 and 35.2% in the third quarter of 2017. GAAP operating margin for the quarter was (12.6)% compared to (10.4)% in the second quarter of 2018 and (17.8)% in the third quarter of 2017.

GAAP net loss for the quarter was $(32.6) million, or $(0.21) per share, compared to a net loss of $(21.9) million, or $(0.14) per share, in the second quarter of 2018, and net loss of $(37.2) million, or $(0.25) per share, in the third quarter of 2017.

Non-GAAP gross margin for the quarter was 38.4% compared to 43.9% in the second quarter of 2018 and 39.1% in the third quarter of 2017. Non-GAAP operating margin for the quarter was (2.6)% compared to (0.7)% in the second quarter of 2018 and (7.8)% in the third quarter of 2017.

Non-GAAP net loss for the quarter was $(6.7) million, or $(0.04) per share, compared to a net loss of $(1.3) million, or $(0.01) per share, in the second quarter of 2018, and net loss of $(17.0) million, or $(0.11) per share, in the third quarter of 2017.

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.

“In the third quarter we delivered financial results within our guidance ranges and now, with our acquisition of Coriant closed, are executing on our integration plan with intensity,” said Tom Fallon, Infinera CEO. “We remain committed to achieving substantial cost synergies, scaling our business by delivering compelling solutions to our extensive customer base of leading Tier-1s and ICPs, and driving vertical integration of our optical engine across our expanded end-to-end portfolio. While we have experienced a spending pause from certain customers as they evaluate the combined company, I believe this is temporary and that we will grow over the course of 2019. Newly armed with a breadth of significant customers and formidable scale, we are positioned to increasingly leverage our vertical integration advantage to drive profitability and a differentiated business model.”

Financial Outlook

Infinera's outlook for the quarter ending December 29, 2018 is as follows:

  • Revenue is expected to be $325 million +/- $10 million.
  • GAAP gross margin is expected to be 28% +/- 200 bps. Non-GAAP gross margin is expected to be 30% +/- 200 bps.
  • GAAP operating expenses are expected to be $160 million +/- $5 million. Non-GAAP operating expenses are expected to be $140 million +/- $5 million.
  • GAAP operating margin is expected to be approximately (21)%. Non-GAAP operating margin is expected to be approximately (13)%.
  • GAAP EPS is expected to be $(0.43) +/- $0.02. Non-GAAP EPS is expected to be $(0.28) +/- $0.02.

Infinera's Financial Outlook does not include the potential impact of any restructuring-related activities, purchase price allocation adjustments related to the Coriant acquisition, strategic investments and other significant transactions that may be completed or announced after November 6, 2018. Actual results may differ materially from Infinera's Financial Outlook as a result of, among other things, the factors described under “Forward-Looking Statements” below.

Third Quarter 2018 Financial Commentary Available Online

A CFO Commentary reviewing Infinera's third quarter of 2018 financial results will be furnished to the SEC on Form 8-K and published on Infinera's Investor Relations website at investors.infinera.com. Analysts and investors are encouraged to review this commentary prior to participating in the conference call webcast.

Conference Call Information

Infinera will host a conference call for analysts and investors to discuss its results for the third quarter of 2018 and its outlook for the fourth quarter of 2018 today at 5:00 p.m. Eastern Time (2:00 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 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.

Contacts:
Media:
Anna Vue
Tel. +1 (916) 595-8157
avue@infinera.com

Investors:
Jeff Hustis
Tel. +1 (408) 213-7150
jhustis@infinera.com

About Infinera

Infinera provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and automate optical network operations. Infinera’s end-to-end packet-optical portfolio is designed for long-haul, subsea, data center interconnect and metro applications. To learn more about Infinera visit www.infinera.com, follow us on Twitter @Infinera and read our latest blog posts at www.infinera.com/blog.

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 the execution of its integration plan; Infinera's ability to achieve substantial cost synergies, scale its business, and drive vertical integration of its optical engine across its expanded end-to-end portfolio; Infinera's ability to grow over the course of 2019 and to drive profitability; Infinera's expectations regarding the potential impact of restructuring-related activities and purchase price allocation adjustments related to the Coriant acquisition; and Infinera's expectations regarding its financial outlook for the fourth quarter of 2018.

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, the combined company's ability to promptly and effectively integrate the businesses; Infinera's ability to realize synergies in a timely manner; market acceptance of the combined company's end-to-end portfolio; the diversion of management time on issues related to the acquisition and integration; delays in the development and introduction of new products or updates to existing products and market acceptance of these products; fluctuations in demand, sales cycles and prices for products and services, including discounts given in response to competitive pricing pressures, as well as the timing of purchases by Infinera's key customers; the effect that changes in product pricing or mix, and/or increases in component costs could have on Infinera’s gross margin; the effects of customer consolidation; Infinera’s ability to respond to rapid technological changes; aggressive business tactics by Infinera’s competitors; Infinera's reliance on single and limited source suppliers; Infinera’s ability to protect Infinera’s intellectual property; 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 30, 2018 as filed with the SEC on August 8, 2018, 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 restructuring and related costs (credits), non-cash stock-based compensation expenses, amortization of debt discount on Infinera’s convertible senior notes, impairment charge and the gain on the sale related to non-marketable equity investments, amortization and impairment of acquired intangible assets, acquisition and integration costs related to Infinera's acquisitions of Coriant and Transmode AB, and certain purchase accounting adjustments related to Infinera's acquisition of Transmode AB, along with related tax effects. 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 has included forward-looking non-GAAP information in this press release, including an estimate of certain non-GAAP financial measures for the fourth quarter of 2018 that exclude non-cash stock-based compensation expenses, acquisition and integration costs related to Infinera's acquisition of Coriant, and amortization of acquired intangible assets and related tax effects. Please see the section titled, “GAAP to Non-GAAP Reconciliations of Financial Outlook” below on specific adjustments.

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 gross margin, operating margin, net loss, or basic and diluted net loss per share 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.

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
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited) 
 
    Three Months Ended   Nine Months Ended
    September 29,
2018
  September 30,
2017
  September 29,
2018
  September 30,
2017
Revenue:                
Product   $ 167,030     $ 159,579     $ 513,947     $ 449,992  
Services   33,383     33,001     97,374     94,931  
Total revenue   200,413     192,580     611,321     544,923  
Cost of revenue:                
Cost of product   117,152     111,803     335,674     311,437  
Cost of services   13,075     12,951     38,945     36,772  
Restructuring and related   7         50      
Total cost of revenue   130,234     124,754     374,669     348,209  
Gross profit   70,179     67,826     236,652     196,714  
Operating expenses:                
Research and development   50,658     56,616     165,497     169,076  
Sales and marketing   26,073     27,824     86,286     86,662  
General and administrative   18,415     17,634     54,616     53,556  
Restructuring and related   191         1,708      
Total operating expenses   95,337     102,074     308,107     309,294  
Loss from operations   (25,158 )   (34,248 )   (71,455 )   (112,580 )
Other income (expense), net:                
Interest income   292     857     1,818     2,470  
Interest expense   (2,160 )   (3,549 )   (8,344 )   (10,408 )
Other gain (loss), net:   (5,449 )   (80 )   (3,514 )   (462 )
Total other income (expense), net   (7,317 )   (2,772 )   (10,040 )   (8,400 )
Loss before income taxes   (32,475 )   (37,020 )   (81,495 )   (120,980 )
Provision for (benefit from) income taxes   135     211     (667 )   (459 )
Net loss   (32,610 )   (37,231 )   (80,828 )   (120,521 )
                 
Net loss per common share - basic and diluted:   $ (0.21 )   $ (0.25 )   $ (0.53 )   $ (0.82 )
Weighted average shares used in computing net loss                
per common share - basic and diluted:   153,492     148,777     152,028     147,367  
                         


 
Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands, except percentages and per share data)
(Unaudited)
 
  Three Months Ended   Nine Months Ended
  September 29,
2018
      June 30,
2018
      September 30,
2017
      September 29,
2018
      September 30,
2017
   
Reconciliation of Gross Profit:                                      
U.S. GAAP as reported $ 70,179     35.0 %   $ 84,305     40.5 %   $ 67,826     35.2 %   $ 236,652     38.7 %   $ 196,714     36.1 %
Stock-based compensation(1) 1,968         2,039         2,063         5,001         5,965      
Amortization of acquired intangible assets(2) 4,876         4,943         5,390         15,160         15,305      
Acquisition and integration costs(3)                                 46      
Restructuring and related(4) 7         26                 50              
Non-GAAP as adjusted $ 77,030     38.4 %   $ 91,313     43.9 %   $ 75,279     39.1 %   $ 256,863     42.0 %   $ 218,030     40.0 %
                                       
Reconciliation of Operating Expenses:                                      
U.S. GAAP as reported $ 95,337         $ 105,924         $ 102,074         $ 308,107         $ 309,294      
Stock-based compensation(1) 9,399         10,005         10,104         29,393         29,458      
Amortization of acquired intangible assets(2) 1,467         1,487         1,622         4,561         4,605      
Acquisition and integration costs(3) 2,067                         2,067         322      
Restructuring and related(4) 191         1,680                 1,708              
Intangible asset impairment(5)                                 252      
Non-GAAP as adjusted $ 82,213         $ 92,752         $ 90,348         $ 270,378         $ 274,657      
                                       
Reconciliation of Loss from Operations:                                      
U.S. GAAP as reported $ (25,158 )   (12.6 )%   $ (21,619 )   (10.4 )%   $ (34,248 )   (17.8 )%   $ (71,455 )   (11.7 )%   $ (112,580 )   (20.7 )%
Stock-based compensation(1) 11,367         12,044         12,167         34,394         35,423      
Amortization of acquired intangible assets(2) 6,343         6,430         7,012         19,721         19,910      
Acquisition and integration costs(3) 2,067                         2,067         368      
Restructuring and related(4) 198         1,706                 1,758              
Intangible asset impairment(5)                                 252      
Non-GAAP as adjusted $ (5,183 )   (2.6 )%   $ (1,439 )   (0.7 )%   $ (15,069 )   (7.8 )%   $ (13,515 )   (2.2 )%   $ (56,627 )   (10.4 )%
                                       
Reconciliation of Net Loss:                                      
U.S. GAAP as reported $ (32,610 )       $ (21,938 )       $ (37,231 )       $ (80,828 )       $ (120,521 )    
Stock-based compensation(1) 11,367         12,044         12,167         34,394         35,423      
Amortization of acquired intangible assets(2) 6,343         6,430         7,012         19,721         19,910      
Acquisition and integration costs(3) 4,567                         4,567         257      
Restructuring and related(4) 198         1,706                 1,758              
Intangible asset impairment(5)                                 252      
Amortization of debt discount(6) 1,578         1,892         2,643         6,249         7,734      
Gain on non-marketable equity investment(7) (1,050 )                       (1,050 )            
Impairment of non-marketable equity investment(7) 4,260                         4,260              
Income tax effects(8) (1,395 )       (1,415 )       (1,543 )       (4,339 )       (4,467 )    
Non-GAAP as adjusted $ (6,742 )       $ (1,281 )       $ (16,952 )       $ (15,268 )       $ (61,412 )    
                                       
                                       


  Three Months Ended   Nine Months Ended
  September 29,
2018
    June 30,
2018
    September 30,
2017
    September 29,
2018
    September 30,
2017
 
Net Loss per Common Share - Basic and Diluted:                            
U.S. GAAP as reported $ (0.21 )     $ (0.14 )     $ (0.25 )     $ (0.53 )     $ (0.82 )  
Non-GAAP as adjusted $ (0.04 )     $ (0.01 )     $ (0.11 )     $ (0.10 )     $ (0.42 )  
                             
Weighted Average Shares Used in Computing Net Loss per Common Share - Basic and Diluted: 153,492       152,259       148,777       152,028       147,367    

____________________________

(1) 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   Nine Months Ended
    September 29,
2018
  June 30,
2018
  September 30,
2017
  September 29,
2018
  September 30,
2017
Cost of revenue   $ 590     $ 624     $ 779     $ 1,092     $ 2,337  
Research and development   4,077     4,192     4,040     12,593     12,004  
Sales and marketing   2,744     3,046     3,025     8,688     9,024  
General and administration   2,578     2,767     3,039     8,112     8,431  
    9,989     10,629     10,883     30,485     31,796  
Cost of revenue - amortization from balance sheet*   1,378     1,415     1,284     3,909     3,628  
Total stock-based compensation expense   $ 11,367     $ 12,044     $ 12,167     $ 34,394     $ 35,424  

_____________________________
* Stock-based compensation expense deferred to inventory in prior periods and recognized in the current period.

(2) Amortization of acquired 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.

(3) Acquisition and integration costs consist of legal, financial, employee-related costs and other professional fees incurred in connection with Infinera's recent acquisition of Coriant, which closed in October 2018, and the acquisition of Transmode AB, which closed during the third quarter of 2015. 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.

(4) Restructuring and related costs are related to Infinera's plan to restructure its worldwide operations, which was implemented during the fourth quarter of 2017. Management has excluded the impact of these charges in arriving at Infinera's non-GAAP results as they are non-recurring in nature and its exclusion provides a better indication of Infinera's underlying business performance.

(5) Intangible asset impairment is associated with previously acquired intangibles, which Infinera has determined that the carrying value will not be recoverable. Management has excluded the impact of this charge in arriving at Infinera's non-GAAP results because it is non-recurring, and management believes that these expenses 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 the $402.5 million in aggregate principal amount of its 2.125% convertible debt issuance in September 2018 due September 2024, and the $150 million in aggregate principal amount of its 1.75% convertible debt issuance in May 2013 due June 2018, over the term of the respective 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) Management has excluded the impairment charge and the gain on the sale related to non-marketable equity investments in arriving at Infinera's non-GAAP results because it is non-recurring, and management believes that these expenses are not indicative of ongoing operating performance.

(8) The difference between the GAAP and non-GAAP tax is due to the net tax effects of the purchase accounting adjustments, acquisition-related costs and amortization of acquired intangible assets.

 
Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)
 
    September 29, 2018   December 30, 2017
ASSETS        
Current assets:        
Cash and cash equivalents   $ 416,406     $ 116,345  
Short-term investments   30,480     147,596  
Accounts receivable, net of allowance for doubtful accounts of $866 in 2018 and $892 in 2017   153,901     126,152  
Inventory   211,945     214,704  
Prepaid expenses and other current assets   43,756     43,140  
Total current assets   856,488     647,937  
Property, plant and equipment, net   131,923     135,942  
Intangible assets   66,144     92,188  
Goodwill   180,986     195,615  
Long-term investments   850     36,129  
Other non-current assets   11,007     9,859  
Total assets   $ 1,247,398     $ 1,117,670  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable   $ 83,249     $ 58,124  
Accrued expenses   43,324     39,782  
Accrued compensation and related benefits   35,738     45,751  
Short-term debt       144,928  
Accrued warranty   13,475     13,670  
Deferred revenue   42,724     72,421  
Total current liabilities   218,510     374,676  
Long-term debt   262,580      
Accrued warranty, non-current   17,007     17,239  
Deferred revenue, non-current   15,790     22,502  
Deferred tax liability   14,977     21,609  
Other long-term liabilities   14,217     16,279  
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 29, 2018 and December 30, 2017        
Issued and outstanding shares - 153,989 as of September 29, 2018 and 149,471 as of December 30, 2017   154     149  
Additional paid-in capital   1,547,451     1,417,043  
Accumulated other comprehensive income (loss)   (19,785 )   6,254  
Accumulated deficit   (823,503 )   (758,081 )
Total stockholders’ equity   704,317     665,365  
Total liabilities and stockholders’ equity   $ 1,247,398     $ 1,117,670  
                 


 
Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 
    Nine Months Ended
    September 29,
2018
  September 30,
2017
Cash Flows from Operating Activities:        
Net loss   $ (80,828 )   $ (120,521 )
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization   50,339     49,391  
Non-cash restructuring and related credits   (81 )    
Amortization of debt discount and issuance costs   6,752     8,399  
Realized gain on sale of non-marketable equity investment   (1,050 )    
Impairment on non-marketable equity investment   4,260      
Stock-based compensation expense   34,394     35,424  
Other loss   214     622  
Changes in assets and liabilities:        
Accounts receivable   (27,728 )   15,078  
Inventory   (926 )   (9,601 )
Prepaid expenses and other assets   294     (15,366 )
Accounts payable   26,254     25,840  
Accrued liabilities and other expenses   (30,754 )   (18,757 )
Deferred revenue   (8,669 )   8,575  
  Net cash used in operating activities   (27,529 )   (20,916 )
Cash Flows from Investing Activities:        
Purchase of available-for-sale investments   (2,986 )   (122,249 )
Proceeds from sales of available-for-sale investments   53,039     10,531  
Proceeds from maturities of investments   98,112     111,970  
Proceeds from sale of non-marketable equity investment   1,050      
Purchase of property and equipment   (27,027 )   (50,247 )
  Net cash provided by (used in) investing activities   122,188     (49,995 )
Cash Flows from Financing Activities:        
Proceeds from issuance of debt, net   391,431      
Purchase of capped call transactions   (48,880 )    
Repayment of debt   (150,000 )    
Acquisition of noncontrolling interest       (471 )
Proceeds from issuance of common stock   17,693     17,991  
Minimum tax withholding paid on behalf of employees for net share settlement   (1,093 )   (963 )
  Net cash provided by financing activities   209,151     16,557  
Effect of exchange rate changes on cash and restricted cash   (3,054 )   3,855  
Net change in cash, cash equivalents and restricted cash   300,756     (50,499 )
Cash, cash equivalents and restricted cash at beginning of period   121,486     177,580  
Cash, cash equivalents and restricted cash at end of period(1)   $ 422,242     $ 127,081  
Supplemental disclosures of cash flow information:        
Cash paid for income taxes, net of refunds   $ 3,320     $ 4,159  
Cash paid for interest   $ 1,332     $ 1,317  
Supplemental schedule of non-cash investing and financing activities:        
Transfer of inventory to fixed assets   $ 1,165     $ 3,110  

_____________________________

(1) Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:

  September 29,
2018
  September 30,
2017
       
  (In thousands)
Cash and cash equivalents $ 416,406     $ 122,042  
Short-term restricted cash 402     740  
Long-term restricted cash 5,434     4,299  
Total cash, cash equivalents and restricted cash $ 422,242     $ 127,081  
               



Infinera Corporation
Supplemental Financial Information
(Unaudited)
 
    Q4'16   Q1'17   Q2'17   Q3'17   Q4'17   Q1'18   Q2'18   Q3'18
GAAP Revenue ($ Mil)   $181.0     $175.5     $176.8     $192.6     $195.8     $202.7     $208.2     $200.4  
GAAP Gross Margin %   38.1 %   36.5 %   36.7 %   35.2 %   24.1 %   40.5 %   40.5 %   35.0 %
Non-GAAP Gross Margin %(1)   41.8 %   40.3 %   40.7 %   39.1 %   37.5 %   43.7 %   43.9 %   38.4 %
Revenue Composition:                                                
Domestic %   53 %   57 %   63 %   59 %   53 %   64 %   58 %   49 %
International %   47 %   43 %   37 %   41 %   47 %   36 %   42 %   51 %
Customers >10% of Revenue   2     1     3     2     1     2     2     2  
Cash Related Information:                                
Cash from Operations ($ Mil)   ($5.0 )   $3.0     ($3.0 )   ($20.9 )   ($1.0 )   ($14.1 )   $7.0     ($20.4 )
Capital Expenditures ($ Mil)   $10.4     $14.7     $24.5     $11.0     $7.8     $8.0     $13.5     $5.5  
Depreciation & Amortization ($ Mil)   $15.7     $16.0     $16.6     $16.8     $16.6     $17.0     $16.3     $17.1  
DSOs   81     64     64     65     59     73     65     70  
Inventory Metrics:                                
Raw Materials ($ Mil)   $33.2     $34.8     $36.7     $35.8     $27.4     $30.3     $30.5     $33.6  
Work in Process ($ Mil)   $74.5     $81.1     $91.6     $84.3     $59.6     $66.5     $61.6     $56.4  
Finished Goods ($ Mil)   $125.3     $118.0     $117.7     $122.7     $127.7     $119.1     $127.2     $121.9  
Total Inventory ($ Mil)   $233.0     $233.9     $246.0     $242.8     $214.7     $215.9     $219.3     $211.9  
Inventory Turns(2)   1.8     1.8     1.7     1.9     2.3     2.1     2.1     2.3  
Worldwide Headcount   2,240     2,245     2,272     2,296     2,145     2,084     2,070     2,079  
Weighted Average Shares Outstanding (in thousands):                                
Basic   144,770     145,786     147,538     148,777     149,412     150,333     152,259     153,492  
Diluted   145,497     147,017     148,662     149,714     150,098     151,633     154,777     154,228  

_____________________________

(1) Non-GAAP adjustments include restructuring and related costs, 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 restructuring and related costs, non-cash stock-based compensation expense, and certain purchase accounting adjustments, divided by the average inventory for the quarter.


Infinera Corporation
GAAP to Non-GAAP Reconciliation of Financial Outlook
(In millions, except percentages and per share data)
(Unaudited)

The following amounts represent the midpoint of the expected range:

    Q4'18
    Outlook
Reconciliation of Gross Margin:    
U.S. GAAP   28 %
Stock-based compensation   1 %
Amortization of acquired intangible assets   1 %
Non-GAAP   30 %
     
Reconciliation of Operating Expenses:    
U.S. GAAP   $ 160  
Stock-based compensation   (9 )
Acquisition and integration costs   (2 )
Amortization of acquired intangible assets   (9 )
Non-GAAP   $ 140  
     
Reconciliation of Operating Margin:    
U.S. GAAP   (21 )%
Stock-based compensation   3 %
Acquisition and integration costs   2 %
Amortization of acquired intangible assets   3 %
Non-GAAP   (13 )%
     
Reconciliation of Net Loss per Common Share:    
U.S. GAAP   $ (0.43 )
Stock-based compensation   0.06  
Acquisition and integration costs   0.04  
Amortization of acquired intangible assets   0.05  
Non-GAAP   $ (0.28 )
     

 

Infinera_NewLOGOtagline_wht-sm.jpg

Source: Infinera Corporation