Oclaro Issues Statement Regarding U.S. Department of Commerce Ruling on ZTE

08 Mar, 2016, 08:30 ET from Oclaro, Inc.

SAN JOSE, Calif., March 8, 2016 /PRNewswire/ -- Oclaro, Inc. (Nasdaq: OCLR), a leading provider and innovator of optical communications solutions, today provided a statement regarding the publication by the United States Department of Commerce in the Federal Register of a "final rule" amending the Export Administration Regulations to add four entities to the "Entity List" maintained by the Department for actions contrary to the national security and foreign policy interests of the United States, including Zhongxing Telecommunications Equipment Corporation and its subsidiary, ZTE Kangxun Telecommunications Ltd., or ZTE.  These amendments became effective immediately.  ZTE purchases multiple products from Oclaro.  Oclaro is currently reviewing the impact of this action by the Department of Commerce on our ability to continue to ship products to ZTE and intends to fully comply with the Department's final rule.

Revenues to date from ZTE are currently projected to exceed 10% in Oclaro's third fiscal quarter of 2016. Oclaro currently expects its results for the third fiscal quarter to be at the low end of the guidance ranges it provided on February 2, 2016.   

About Oclaro

Oclaro, Inc. (Nasdaq: OCLR), is a leader in optical components, modules and subsystems for the core optical, enterprise and data center markets. Leveraging more than three decades of laser technology innovation, photonics integration, and subsystem design, Oclaro's solutions are at the heart of the fast optical networks and high-speed interconnects driving the next wave of streaming video, cloud computing, voice over IP and other bandwidth-intensive and high-speed applications. For more information, visit www.oclaro.com or follow on Twitter at @OclaroInc.

Copyright 2016. All rights reserved. Oclaro, the Oclaro logo, and certain other Oclaro trademarks and logos are trademarks and/or registered trademarks of Oclaro, Inc. or its subsidiaries in the US and other countries. All other trademarks are the property of their respective owners. Information in this release is subject to change without notice.

Safe Harbor Statement

This press release, in association with Oclaro's second quarter of fiscal year 2016 financial results conference call on February 2, 2016, contains statements about management's future expectations, plans or prospects of Oclaro and its business, and together with the assumptions underlying these statements, constitute forward-looking statements for the purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements concerning (i) financial guidance for the fiscal quarter ending March 26, 2016 regarding revenues, non-GAAP gross margin and Operating Income, (ii) the growth of Oclaro's 100G product revenues, (iii) Oclaro's future financial performance and operating prospects and (iv) Oclaro's ability to sell products to ZTE in light of the Department of Commerce's final rule published today. Such statements can be identified by the fact that they do not relate strictly to historical or current facts and may contain words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," "will," "should," "outlook," "could," "target," "model," "objective," and other words and terms of similar meaning in connection with any discussion of future operations or financial performance. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including (i) Oclaro's ability to timely develop, commercialize and ramp the production of new products, (ii) Oclaro's ability to respond to evolving technologies, customer requirements and demands, and product design challenges, (iii) Oclaro's ability to continue increasing the percentage of sales associated with its new products, (iv) Oclaro's ability to maintain strong relationships with certain customers, (v) competition and pricing pressure, (vi) the effects of fluctuating product mix on Oclaro's results, (vii) Oclaro's ability to meet or exceed its gross margin expectations, (viii) Oclaro's dependence on a limited number of customers for a significant percentage of its revenues,  (ix) Oclaro's ability to effectively manage its inventory, (x) Oclaro's ability to timely capitalize on any increase in market demand, (xi) the risks associated with Oclaro's international operations, including the impact of export control laws and regulations on Oclaro's ability to sell its products, (xii) the effects of fluctuations in foreign currency exchange rates, (xiii) Oclaro's ability to maintain or increase its cash reserves and obtain debt or equity-based financing on acceptable terms or at all, (xiv) Oclaro's ability to effectively compete with companies that have greater name recognition, broader customer relationships and substantially greater financial, technical and marketing resources, (xv) Oclaro's ability to service and repay its outstanding indebtedness pursuant to the terms of the applicable agreements, (xvi) Oclaro's ability to further reduce costs and operating expenses, (xvii) the impact of continued uncertainty in world financial markets and any resulting reduction in demand for Oclaro's products, (xviii) the outcome of tax audits or similar proceedings, (xix) the outcome of pending litigation against Oclaro and (xx) other factors described in Oclaro's most recent annual report on Form 10-K, quarterly report on Form 10-Q and other documents it periodically files with the SEC.

Non-GAAP Financial Measures

Oclaro provides certain supplemental non-GAAP financial measures to its investors as a complement to the most comparable GAAP measures. The GAAP measure most directly comparable to non-GAAP gross margin rate is gross margin rate. The GAAP measure most directly comparable to non-GAAP operating income/loss and Adjusted EBITDA is operating income/loss. The GAAP measure most directly comparable to non-GAAP net income/loss is net income/loss. An explanation and reconciliation of each of these non-GAAP financial measures to GAAP information is set forth below.

Oclaro believes that providing these non-GAAP measures to its investors, in addition to corresponding income statement measures, provides investors the benefit of viewing Oclaro's performance using the same financial metrics that the management team uses in making many key decisions and evaluating how Oclaro's "core operating performance" and its results of operations may look in the future. Oclaro defines "core operating performance" as its ongoing performance in the ordinary course of its operations. Items that are non-recurring or do not involve cash expenditures, such as impairment charges, income taxes, restructuring and severance programs, costs relating to specific major projects (such as acquisitions), non-cash compensation related to stock and options and certain income, purchase accounting adjustments related to the fair market value of acquired inventories, costs to outsource our back-end manufacturing activities, write-offs and expenses related to flooding in Thailand, including advance payments received from insurers, impairment of fixed assets and inventory and related expenses, are not included in Oclaro's view of "core operating performance." Management does not believe these items are reflective of Oclaro's ongoing core operations and accordingly excludes those items from non-GAAP gross margin rate, non-GAAP operating income/loss, non-GAAP net income/loss and Adjusted EBITDA. Additionally, each non-GAAP measure has historically been presented by Oclaro as a complement to its most comparable GAAP measure, and Oclaro believes that the continuation of this practice increases the consistency and comparability of Oclaro's earnings releases.

Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States of America. Non-GAAP measures should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.

Adjusted EBITDA

Adjusted EBITDA is calculated as net income/loss excluding the impact of income taxes, net interest income/expense, depreciation and amortization, net gains/losses on foreign currency transactions, as well as restructuring, acquisition and related costs, non-cash compensation related to stock and options, and other unusual one-time charges, specifically identified in the non-GAAP reconciliation schedules set forth below. Oclaro uses Adjusted EBITDA in evaluating Oclaro's historical and prospective cash usage, as well as its cash usage relative to its competitors. Specifically, management uses this non-GAAP measure to further understand and analyze the cash used in/generated from Oclaro's core operations. Oclaro believes that by excluding these non-cash and non-recurring charges, more accurate expectations of its future cash needs can be assessed in addition to providing a better understanding of the actual cash used in or generated from core operations for the periods presented. Oclaro further believes that providing this information allows Oclaro's investors greater transparency and a better understanding of Oclaro's core cash position.

Oclaro, Inc. Contact

Investor Contact

Pete Mangan

Jim Fanucchi

Chief Financial Officer

Darrow Associates, Inc.

(408) 383-1400

(408) 404-5400

ir@oclaro.com

ir@oclaro.com

 

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SOURCE Oclaro, Inc.



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