Oplink Reports First Quarter Fiscal 2010 Financial Results

http://www.businesswire.com/news/home/20091029006263/en

FREMONT, Calif.--(Business Wire)--
Oplink Communications, Inc. (Nasdaq:OPLK), a leading provider of design,
integration and optical manufacturing solutions (OMS) for optical networking
components, modules and subsystems, today reported its financial results for its
fiscal 2010 first quarter, ended September 30, 2009.

Revenues for the quarter increased to $33.6 million, compared to $32.4 million
reported for the fourth quarter of fiscal 2009. GAAP net income for the first
quarter of fiscal 2010 increased to $1.8 million, or $0.09 per diluted share,
compared to GAAP net income of $249,000, or $0.01 per diluted share, reported
for the fourth quarter of fiscal 2009.

Non-GAAP net income for the first quarter of fiscal 2010 increased to $4.4
million, or $0.21 per diluted share, compared to non-GAAP net income of $3.1
million, or $0.15 per diluted share, reported for the fourth quarter of fiscal
2009. First quarter of fiscal 2010 non-GAAP results exclude $1.6 million in
stock compensation and $946,000 in amortization of intangible assets. Fourth
quarter of fiscal 2009 non-GAAP results exclude $1.2 million in stock
compensation, $952,000 in amortization of intangibles, and a $725,000 loss on
the sale of assets.

Oplink generated $9.1 million in cash from operations during the first quarter,
and closed the quarter with cash, cash equivalents and short-term investments of
$178.7 million.

"We are pleased to report results that are ahead of the outlook we provided,"
commented Joe Liu, President and CEO of Oplink. "We are winning more advanced
OMS business in part based on our component expertise and industry leadership.
Oplink has become one of the leading providers of advanced photonic sub-systems
product engineering and manufacturing solutions for global long-haul, metro-core
and edge equipment companies. Our reputation for executing customer needs
positions us to benefit as telecom spending resumes."

Business Outlook

For the quarter ending December 31, 2009, the Company expects to report revenues
between $31 million and $35 million and GAAP net income per diluted share of
approximately $0.06 to $0.12. On a non-GAAP basis, excluding stock compensation,
amortization of intangible assets and other non-cash or non-recurring charges,
if any, the Company expects earnings per diluted share for the quarter ending
December 31, 2009 of approximately $0.18 to $0.24.

Conference Call Information

The Company will host a conference call and live webcast at 2:00 p.m. Pacific
Time today, October 29, 2009. To access the conference call, dial 877-941-8418
or 480-629-9809 (outside the U.S. and Canada). The webcast will be available
live on the Investor Relations section of the Company`s corporate website at
http://investor.oplink.com and via replay beginning approximately two hours
after the completion of the call until the Company`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 29, 2009 until 11:59 p.m. Pacific Time on November 5, 2009, by dialing
800-406-7325 or 303-590-3030 (outside the U.S. and Canada) and entering pass
code 4173946#.

Non-GAAP Financial Measures

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, while these non-GAAP measures are not
a substitute for GAAP results, they provide a basis for evaluating the Company`s
cash requirements for ongoing operating activities. These non-GAAP measures have
been reconciled to the nearest GAAP measure as required under Securities and
Exchange Commission rules.

About Oplink

Incorporated in 1995, Oplink is a leading provider of design, integration and
optical manufacturing solutions (OMS) for optical networking components, modules
and subsystems. Oplink offers advanced and cost-effective optical-electrical
components and subsystem manufacturing through its facilities in Zhuhai and
Shanghai, China. In addition, Oplink maintains optical-centric front-end design,
application, and customer service functions at its offices in Fremont and
Calabasas, California and has research facilities in Zhuhai and Wuhan, China and
Hsinchu Science-Based Industrial Park in Taiwan. Oplink's customers include
telecommunications, data communications and cable TV equipment manufacturers
around the globe. Oplink is committed to providing fully customized, photonic
foundry services incorporating its subsystems manufacturing capabilities. To
learn more about Oplink, visit its web site at: http://www.oplink.com/.

Cautionary Statement

This news release contains forward-looking statements, including without
limitation the guidance given for anticipated results for the second quarter of
fiscal year 2010, that involve risks and uncertainties that may cause results to
differ substantially from expectations. These risks include, but are not limited
to, the potential for a sustained continuation and/or worsening of the current
downturn in the telecommunications industry or the overall economy in the United
States and other parts of the world, possible reductions in customer orders,
Oplink`s reliance upon third parties to supply components and materials for its
products, intense competition in Oplink`s target markets and potential pricing
pressure that may arise from changing supply or demand conditions in the
industry, and 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.

OPLINK COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

September 30, June 30,
2009 2009
(Unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $ 53,266 $ 49,702
Short-term investments 125,390 115,774
Accounts receivable, net 27,222 29,023
Inventories 7,907 10,031
Prepaid expenses and other current assets 3,092 2,648

Total current assets 216,877 207,178

Long-term investments - 3,180
Property, plant and equipment, net 29,145 30,318
Intangible assets, net 7,902 8,848
Other assets 424 423

Total assets $ 254,348 $ 249,947

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,908 $ 7,580
Accrued liabilities and other current liabilities 10,979 10,688
Accrued transitional costs for contract manufacturing 160 160

Total current liabilities 18,047 18,428

Non-current liabilities 3,601 3,492

Total liabilities 21,648 21,920

Stockholders' equity 232,700 228,027

Total liabilities and stockholders` equity $ 254,348 $ 249,947

(1) The June 30, 2009 condensed consolidated balance sheet has been derived from audited consolidated financial statements at that date.

OPLINK COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)
Three Months Ended
September 30, June 30, September 30,
2009 2009 2008
(Unaudited) (Unaudited) (Unaudited)

Revenues $ 33,565 $ 32,364 $ 42,952

Cost of revenues:

Cost of revenues 23,634 23,009 36,645

Stock compensation expense 99 107 118

Total cost of revenues 23,733 23,116 36,763

Gross profit 9,832 9,248 6,189

Operating expenses:

Research and development 2,225 2,275 3,282

Sales and marketing 2,086 2,057 2,257

General and administrative 1,721 1,940 2,666

Stock compensation expense 1,547 1,100 1,449

Amortization of intangible and other assets 404 412 412

Total operating expenses 7,983 7,784 10,066

Income (loss) from operations 1,849 1,464 (3,877 )

Interest and other income, net 274 429 1,040

Gain (loss) on sale/disposal of assets 124 (740 ) (119 )

Income (loss) before provision for income taxes 2,247 1,153 (2,956 )

Provision for income taxes (438 ) (904 ) (456 )

Net income (loss) $ 1,809 $ 249 $ (3,412 )

Net income (loss) per share:

Basic $ 0.09 $ 0.01 $ (0.16 )

Diluted $ 0.09 $ 0.01 $ (0.16 )

Shares used in per share calculation:

Basic 20,566 20,447 20,757

Diluted 21,173 20,892 20,757

RECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(unaudited, in thousands, except per share amounts)

Three Months Ended
Reconciliation of GAAP net income (loss) to non-GAAP net income: September 30, June 30, September 30,
2009 2009 2008

Net income (loss), GAAP $ 1,809 $ 249 $ (3,412 )

Adjustments to measure non-GAAP:

Related to cost of revenues:

Provision for excess and obsolete inventory - - 4,065

Stock compensation expense 99 107 118

Amortization of intangible and other assets 542 540 542

Total related to cost of revenues 641 647 4,725

Related to operating expenses:

Stock compensation expense 1,547 1,100 1,449

Amortization of intangible and other assets 404 412 412

Total related to operating expenses 1,951 1,512 1,861

Loss on sale/disposal of assets - 725 -

Total related to net income (loss) 2,592 2,884 6,586

Non-GAAP net income $ 4,401 $ 3,133 $ 3,174

Net income per share, non-GAAP:

Basic $ 0.21 $ 0.15 $ 0.15

Diluted $ 0.21 $ 0.15 $ 0.15

Shares used in per share calculation:

Basic 20,566 20,447 20,757

Diluted 21,173 20,892 21,268

Reconciliation of GAAP gross profit to non-GAAP gross profit:

GAAP gross profit $ 9,832 $ 9,248 $ 6,189

Provision for excess and obsolete inventory included in cost of revenues - - 4,065

Stock compensation expense included in cost of revenues 99 107 118

Amortization of intangible and other assets included in cost of revenues 542 540 542

Non-GAAP gross profit $ 10,473 $ 9,895 $ 10,914

GAAP gross margin rate 29.3 % 28.6 % 14.4 %

Non-GAAP gross margin rate 31.2 % 30.6 % 25.4 %

OPLINK COMMUNICATIONS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
Three Months Ended
September 30,
2009 2008
(Unaudited)
Cash flows from operating activities:
Net income (loss) $ 1,809 $ (3,412 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 1,666 1,835
Inventory adjustments - 4,065
Amortization of intangible assets 946 954
Stock compensation expense 1,646 1,567
Gain on sale/disposal of assets (124 ) -
Other 3 (481 )
Change in assets and liabilities 3,187 (200 )
Net cash provided by operating activities 9,133 4,328

Cash flows from investing activities:
Net (purchases) sales of investments (6,289 ) 22,986
Net (purchases) sales of property and equipment (394 ) 6
Net cash (used in) provided by investing activities (6,683 ) 22,992

Cash flows from financing activities:
Proceeds from issuance of common stock 1,109 353
Net cash provided by financing activities 1,109 353

Effect of exchange rate changes on cash and cash equivalents 5 (224 )

Net increase in cash and cash equivalents 3,564 27,449

Cash and cash equivalents, beginning of period 49,702 72,001

Cash and cash equivalents, end of period $ 53,266 $ 99,450

For Oplink Communications, Inc.
Investor Relations:
Erica Abrams, 415-217-5864
erica@blueshirtgroup.com
Matthew Hunt, 415-489-2194
matt@blueshirtgroup.com

Copyright Business Wire 2009