Oplink Communications Reports Third Quarter 2001 Results In-Line With Previous Expectations

Company Posts Year-Over-Year Revenue Growth of 283%



Apr 19, 2001, 01:00 ET from Oplink Communications, Inc.

    SAN JOSE, Calif., April 19 /PRNewswire/ --
 Oplink Communications, Inc. (Nasdaq:   OPLK), a designer and manufacturer of
 innovative optical components and integrated modules, today reported financial
 results for the three and nine-month periods ended March 31, 2001.  Results
 were in-line with previous expectations announced on April 2, 2001.
     Revenues for the third quarter were $36.0 million, a 283% increase over
 revenues of $9.4 million reported for the same period of last year.
     Pro forma net loss for the third quarter was $19.2 million, or $0.12 per
 share, excluding non-cash charges, but including a $19.4 million provision for
 excess inventory.  Excluding the provision for excess inventory taken during
 the third quarter and non-cash charges, the Company reported a slight profit
 and break-even earnings per share. This compares to pro forma net loss of
 $1.5 million, or $0.01 per share, reported in the same period last year.
 Please refer to the financial tables provided with this press release for
 further details regarding non-cash charges.
     Net loss for the quarter, including non-cash charges and the inventory
 provision was $25.2 million, or $0.16 per share, compared to a net loss of
 $4.6 million, or $1.03 per share, reported in the same period last year.
     Revenues for the nine-month period ended March 31, 2001 totaled
 $111.6 million, an increase of 440% from the same period in fiscal 2000.  Pro
 forma net loss for the nine-month period was $15.1 million, or $0.10 per
 share, as compared to a pro forma net loss of $1.5 million, or $0.02 per
 share, reported during the same period in fiscal 2000.
     "We believe that the breadth and quality of our product line, combined
 with our efficient offshore manufacturing capability will continue to enable
 Oplink to expand its worldwide presence in a difficult market environment with
 limited visibility in the coming quarters," commented Fred Fromm, Oplink's
 president.
     "During the third quarter, we diversified and expanded our customer base
 to whom we sold a wide array of Oplink's innovative optical solutions,
 including amplifier modules and components, DWDM and multiplexing solutions,
 switching and monitoring products and optical modules and components.  We
 vigorously pursued new product development efforts to introduce several new
 capabilities, including fiber Bragg gratings, 50GHz Thin Film Filters,
 four-port optical circulators, and an undersea coupler product line. We
 continued to expand our manufacturing facilities in China, which we believe
 will improve our operating efficiencies, although our expansion was at a
 slower pace than originally anticipated.  Finally, we undertook selected
 cost-cutting measures, including a reduction in our full-time work force,
 which we believe will enable Oplink to better manage operating costs in light
 of the current industry environment.
     "We closed the third quarter with approximately $265 million in cash, and
 we expect that our focus on cost-improvement initiatives, including a further
 reduction in our worldwide work force, will again lead us to pro-forma
 profitability within calendar year 2001, which is an important priority for
 Oplink. As we look ahead, we believe that our strong product line, aggressive
 research and development initiatives and continued cost improvement
 initiatives position Oplink to capitalize on the market opportunity for
 optical communications products to the extent demand and sales visibility
 improve in the coming quarters," concluded Fromm.
     Oplink will provide a live webcast of its third quarter financial
 conference call today, Thursday, April 19, 2001 at 4:30 p.m. ET. The webcast
 will be available live on Oplink's website at www.oplink.com and via replay
 beginning two hours after the completion of the call. An audio replay of the
 call will also be available to investors beginning at 4:30 p.m. PT on
 April 19, by dialing 719-457-0820 and entering pass code 758651.  The audio
 replay will be available until midnight ET on April 24, 2001.
 
     About Oplink Communications
     Oplink designs, manufactures and markets fiber optic networking components
 and integrated optical modules that expand optical bandwidth, amplify optical
 signals, monitor and protect wavelength performance and redirect light signals
 within an optical network.  Oplink offers a broad line of products that
 increase the performance of optical networks and enable service providers and
 optical system manufacturers to provide flexible and scalable bandwidth to
 support the exponential increase of data traffic on the Internet.  The Company
 currently sells products worldwide to telecommunications equipment suppliers.
 To learn more about Oplink investor or sales information call toll free
 866-ASK-OPLK. Oplink is online at www.oplink.com.
     Except for the purely historical information contained herein, this news
 release regarding third quarter results contains forward-looking statements
 regarding our expected financial results and other matters that involve risks
 and uncertainties. These risks include, but are not limited to, the widespread
 downturns in the overall economy in the United States and other parts of the
 world and the telecommunications industry, sudden reductions in customer
 orders, the challenge to effectively manage our inventory levels and operating
 expenses during periods of weakening demand, the impact of reductions in work
 force and other restructuring on financial results, the impact of reductions
 in work force on productivity and expected product manufacturing and other
 plans, our reliance upon third parties to supply our raw materials and
 equipment, intense competition in our target markets and potential pricing
 pressure that may arise from changing supply-demand conditions in the
 industry,  the need to retain  and motivate key personnel, the concentration
 and success of our manufacturing operations in China, risks associated with
 the protection of our, and possible infringement of others', intellectual
 property and other risks detailed from time to time in our SEC filings,
 including our registration statement on Form S-1, dated October 3, 2000, and
 Form 10-Q, dated February 14, 2001.
     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.
     PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (Unaudited)
     (In thousands, except per share amounts)
 
                                     Three Months Ended     Nine Months Ended
                                          March 31,             March 31,
                                       2001      2000        2001      2000
 
     Revenues                         $36,042   $9,412     $111,560  $20,661
     Cost of revenues                  45,465    8,824      100,981   17,420
     Gross profit (loss)               (9,423)     588       10,579    3,241
     Operating expenses:
      Research and development          4,888      855       13,523    1,362
      Sales and marketing               2,955      600        8,488    1,392
      General and administrative        4,777      928       11,152    2,259
        Total operating expenses       12,620    2,383       33,163    5,013
     Loss from operations             (22,043)  (1,795)     (22,584)  (1,772)
     Interest and other income, net     2,820      262        7,441      320
     Net loss                        $(19,223) $(1,533)    $(15,143) $(1,452)
     Basic and diluted net loss per
      share                            $(0.12)  $(0.01)      $(0.10)  $(0.02)
     Basic and diluted weighted
      average shares outstanding      157,668  105,374      150,253   95,471
 
     Pro forma net loss for the three months ended March 31, 2001 excludes the
 amortization of deferred compensation and amortization of goodwill.
     Pro forma net loss for the nine months ended March 31, 2001 excludes the
 amortization of deferred compensation, amortization of goodwill, sales and
 marketing expense of $8.8 million representing the fair value of the discount
 feature of the convertible note payable to Cisco Systems and interest expense
 on the convertible note payable to Cisco Systems.
     The pro forma net loss for the three months and nine months ended
 March 31, 2000 excludes the amortization of deferred compensation.
     Shares used to calculate the pro forma net income per share assumes the
 weighted average number of common shares outstanding and assumes conversion of
 all convertible preferred stock and the convertible note payable from date of
 issuance.
     Our fiscal quarter ends on the Sunday closest to the calendar quarter end.
     For presentation purposes, we present this fiscal quarter as if it ended
 on March 31.
 
     OPLINK COMMUNICATIONS, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
     (In thousands, except per share amounts)
 
                                        Three Months Ended  Nine Months Ended
                                             March 31,          March 31,
                                           2001     2000      2001     2000
 
     Revenues                            $36,042   $9,412  $111,560  $20,661
     Cost of revenues                     45,465    8,824   100,981   17,420
     Gross profit (loss)                  (9,423)     588    10,579    3,241
     Operating expenses:
      Research and development             4,888      855    13,523    1,362
      Sales and marketing                  2,955      600    17,312    1,392
      General and administrative           4,777      928    11,152    2,259
      Amortization of deferred
       compensation                        5,022    3,049    23,631    5,242
      Amortization of goodwill               984       --     2,950       --
        Total operating expenses          18,626    5,432    68,568   10,255
     Loss from operations                (28,049)  (4,844)  (57,989)  (7,014)
     Interest and other income, net        2,820      262     6,970      320
     Net loss                           $(25,229) $(4,582) $(51,019) $(6,694)
     Basic and diluted net loss per
      share                               $(0.16)  $(1.03)   $(0.45)  $(2.11)
     Basic and diluted weighted average
      shares outstanding                 157,668    4,457   112,481    3,178
 
     OPLINK COMMUNICATIONS, INC.
     CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
     (In thousands)
 
                                                   March 31,          June 30,
                                                     2001               2000
     ASSETS
     Current assets:
      Cash and cash equivalents                    $264,603           $26,665
      Accounts receivable, net                       21,740            10,100
      Inventories                                    24,787            11,308
      Prepaid expenses                                5,035             3,974
      Deferred tax assets                             4,990             1,080
        Total current assets                        321,155            53,127
     Property and equipment, net                     76,557            21,270
     Intangible assets                               16,481            20,600
     Other assets                                     1,606               935
        Total assets                               $415,799           $95,932
 
     LIABILITIES, MANDATORILY REDEEMABLE
      CONVERTIBLE PREFERRED STOCK AND
      STOCKHOLDERS' EQUITY
     Current liabilities:
      Accounts payable                              $24,273           $15,188
      Accrued liabilities and other
       current liabilities                           21,358             7,321
        Total current liabilities                    45,631            22,509
     Non-current liabilities                          7,433             4,225
        Total liabilities                            53,064            26,734
     Convertible preferred stock                         --            58,373
     Stockholders' equity                           362,735            10,825
         Total liabilities, convertible
          preferred stock
          and stockholders' equity                 $415,799           $95,932
 
 

SOURCE Oplink Communications, Inc.
    SAN JOSE, Calif., April 19 /PRNewswire/ --
 Oplink Communications, Inc. (Nasdaq:   OPLK), a designer and manufacturer of
 innovative optical components and integrated modules, today reported financial
 results for the three and nine-month periods ended March 31, 2001.  Results
 were in-line with previous expectations announced on April 2, 2001.
     Revenues for the third quarter were $36.0 million, a 283% increase over
 revenues of $9.4 million reported for the same period of last year.
     Pro forma net loss for the third quarter was $19.2 million, or $0.12 per
 share, excluding non-cash charges, but including a $19.4 million provision for
 excess inventory.  Excluding the provision for excess inventory taken during
 the third quarter and non-cash charges, the Company reported a slight profit
 and break-even earnings per share. This compares to pro forma net loss of
 $1.5 million, or $0.01 per share, reported in the same period last year.
 Please refer to the financial tables provided with this press release for
 further details regarding non-cash charges.
     Net loss for the quarter, including non-cash charges and the inventory
 provision was $25.2 million, or $0.16 per share, compared to a net loss of
 $4.6 million, or $1.03 per share, reported in the same period last year.
     Revenues for the nine-month period ended March 31, 2001 totaled
 $111.6 million, an increase of 440% from the same period in fiscal 2000.  Pro
 forma net loss for the nine-month period was $15.1 million, or $0.10 per
 share, as compared to a pro forma net loss of $1.5 million, or $0.02 per
 share, reported during the same period in fiscal 2000.
     "We believe that the breadth and quality of our product line, combined
 with our efficient offshore manufacturing capability will continue to enable
 Oplink to expand its worldwide presence in a difficult market environment with
 limited visibility in the coming quarters," commented Fred Fromm, Oplink's
 president.
     "During the third quarter, we diversified and expanded our customer base
 to whom we sold a wide array of Oplink's innovative optical solutions,
 including amplifier modules and components, DWDM and multiplexing solutions,
 switching and monitoring products and optical modules and components.  We
 vigorously pursued new product development efforts to introduce several new
 capabilities, including fiber Bragg gratings, 50GHz Thin Film Filters,
 four-port optical circulators, and an undersea coupler product line. We
 continued to expand our manufacturing facilities in China, which we believe
 will improve our operating efficiencies, although our expansion was at a
 slower pace than originally anticipated.  Finally, we undertook selected
 cost-cutting measures, including a reduction in our full-time work force,
 which we believe will enable Oplink to better manage operating costs in light
 of the current industry environment.
     "We closed the third quarter with approximately $265 million in cash, and
 we expect that our focus on cost-improvement initiatives, including a further
 reduction in our worldwide work force, will again lead us to pro-forma
 profitability within calendar year 2001, which is an important priority for
 Oplink. As we look ahead, we believe that our strong product line, aggressive
 research and development initiatives and continued cost improvement
 initiatives position Oplink to capitalize on the market opportunity for
 optical communications products to the extent demand and sales visibility
 improve in the coming quarters," concluded Fromm.
     Oplink will provide a live webcast of its third quarter financial
 conference call today, Thursday, April 19, 2001 at 4:30 p.m. ET. The webcast
 will be available live on Oplink's website at www.oplink.com and via replay
 beginning two hours after the completion of the call. An audio replay of the
 call will also be available to investors beginning at 4:30 p.m. PT on
 April 19, by dialing 719-457-0820 and entering pass code 758651.  The audio
 replay will be available until midnight ET on April 24, 2001.
 
     About Oplink Communications
     Oplink designs, manufactures and markets fiber optic networking components
 and integrated optical modules that expand optical bandwidth, amplify optical
 signals, monitor and protect wavelength performance and redirect light signals
 within an optical network.  Oplink offers a broad line of products that
 increase the performance of optical networks and enable service providers and
 optical system manufacturers to provide flexible and scalable bandwidth to
 support the exponential increase of data traffic on the Internet.  The Company
 currently sells products worldwide to telecommunications equipment suppliers.
 To learn more about Oplink investor or sales information call toll free
 866-ASK-OPLK. Oplink is online at www.oplink.com.
     Except for the purely historical information contained herein, this news
 release regarding third quarter results contains forward-looking statements
 regarding our expected financial results and other matters that involve risks
 and uncertainties. These risks include, but are not limited to, the widespread
 downturns in the overall economy in the United States and other parts of the
 world and the telecommunications industry, sudden reductions in customer
 orders, the challenge to effectively manage our inventory levels and operating
 expenses during periods of weakening demand, the impact of reductions in work
 force and other restructuring on financial results, the impact of reductions
 in work force on productivity and expected product manufacturing and other
 plans, our reliance upon third parties to supply our raw materials and
 equipment, intense competition in our target markets and potential pricing
 pressure that may arise from changing supply-demand conditions in the
 industry,  the need to retain  and motivate key personnel, the concentration
 and success of our manufacturing operations in China, risks associated with
 the protection of our, and possible infringement of others', intellectual
 property and other risks detailed from time to time in our SEC filings,
 including our registration statement on Form S-1, dated October 3, 2000, and
 Form 10-Q, dated February 14, 2001.
     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.
     PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
     (Unaudited)
     (In thousands, except per share amounts)
 
                                     Three Months Ended     Nine Months Ended
                                          March 31,             March 31,
                                       2001      2000        2001      2000
 
     Revenues                         $36,042   $9,412     $111,560  $20,661
     Cost of revenues                  45,465    8,824      100,981   17,420
     Gross profit (loss)               (9,423)     588       10,579    3,241
     Operating expenses:
      Research and development          4,888      855       13,523    1,362
      Sales and marketing               2,955      600        8,488    1,392
      General and administrative        4,777      928       11,152    2,259
        Total operating expenses       12,620    2,383       33,163    5,013
     Loss from operations             (22,043)  (1,795)     (22,584)  (1,772)
     Interest and other income, net     2,820      262        7,441      320
     Net loss                        $(19,223) $(1,533)    $(15,143) $(1,452)
     Basic and diluted net loss per
      share                            $(0.12)  $(0.01)      $(0.10)  $(0.02)
     Basic and diluted weighted
      average shares outstanding      157,668  105,374      150,253   95,471
 
     Pro forma net loss for the three months ended March 31, 2001 excludes the
 amortization of deferred compensation and amortization of goodwill.
     Pro forma net loss for the nine months ended March 31, 2001 excludes the
 amortization of deferred compensation, amortization of goodwill, sales and
 marketing expense of $8.8 million representing the fair value of the discount
 feature of the convertible note payable to Cisco Systems and interest expense
 on the convertible note payable to Cisco Systems.
     The pro forma net loss for the three months and nine months ended
 March 31, 2000 excludes the amortization of deferred compensation.
     Shares used to calculate the pro forma net income per share assumes the
 weighted average number of common shares outstanding and assumes conversion of
 all convertible preferred stock and the convertible note payable from date of
 issuance.
     Our fiscal quarter ends on the Sunday closest to the calendar quarter end.
     For presentation purposes, we present this fiscal quarter as if it ended
 on March 31.
 
     OPLINK COMMUNICATIONS, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
     (In thousands, except per share amounts)
 
                                        Three Months Ended  Nine Months Ended
                                             March 31,          March 31,
                                           2001     2000      2001     2000
 
     Revenues                            $36,042   $9,412  $111,560  $20,661
     Cost of revenues                     45,465    8,824   100,981   17,420
     Gross profit (loss)                  (9,423)     588    10,579    3,241
     Operating expenses:
      Research and development             4,888      855    13,523    1,362
      Sales and marketing                  2,955      600    17,312    1,392
      General and administrative           4,777      928    11,152    2,259
      Amortization of deferred
       compensation                        5,022    3,049    23,631    5,242
      Amortization of goodwill               984       --     2,950       --
        Total operating expenses          18,626    5,432    68,568   10,255
     Loss from operations                (28,049)  (4,844)  (57,989)  (7,014)
     Interest and other income, net        2,820      262     6,970      320
     Net loss                           $(25,229) $(4,582) $(51,019) $(6,694)
     Basic and diluted net loss per
      share                               $(0.16)  $(1.03)   $(0.45)  $(2.11)
     Basic and diluted weighted average
      shares outstanding                 157,668    4,457   112,481    3,178
 
     OPLINK COMMUNICATIONS, INC.
     CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
     (In thousands)
 
                                                   March 31,          June 30,
                                                     2001               2000
     ASSETS
     Current assets:
      Cash and cash equivalents                    $264,603           $26,665
      Accounts receivable, net                       21,740            10,100
      Inventories                                    24,787            11,308
      Prepaid expenses                                5,035             3,974
      Deferred tax assets                             4,990             1,080
        Total current assets                        321,155            53,127
     Property and equipment, net                     76,557            21,270
     Intangible assets                               16,481            20,600
     Other assets                                     1,606               935
        Total assets                               $415,799           $95,932
 
     LIABILITIES, MANDATORILY REDEEMABLE
      CONVERTIBLE PREFERRED STOCK AND
      STOCKHOLDERS' EQUITY
     Current liabilities:
      Accounts payable                              $24,273           $15,188
      Accrued liabilities and other
       current liabilities                           21,358             7,321
        Total current liabilities                    45,631            22,509
     Non-current liabilities                          7,433             4,225
        Total liabilities                            53,064            26,734
     Convertible preferred stock                         --            58,373
     Stockholders' equity                           362,735            10,825
         Total liabilities, convertible
          preferred stock
          and stockholders' equity                 $415,799           $95,932
 
 SOURCE  Oplink Communications, Inc.