SUNNYVALE, Calif., Jan. 31, 2008 (PRIME NEWSWIRE) -- Infinera Corporation (Nasdaq:INFN), a leading provider of digital optical communications systems, today released financial results for the fourth quarter and fiscal year ended December 29, 2007.
GAAP Results for Q4 2007: * GAAP revenues for the fourth quarter of 2007 were $76.1 million compared to $62.2 million in the third quarter of 2007 and $43.8 million in the fourth quarter of 2006. * GAAP gross margins were 36% in the fourth quarter of 2007 compared to 34% in the third quarter of 2007 and 6% in the fourth quarter of 2006. * Including non-cash stock-based compensation and warrant revaluation expenses, the GAAP net loss was $3.9 million, or $0.04 per share, in the fourth quarter of 2007 compared to a GAAP net loss of $5.5 million, or $0.07 per share, in the third quarter of 2007 and a GAAP net loss of $25.0 million, or $3.55 per share, in the fourth quarter of 2006. GAAP Results for Fiscal Year 2007: * GAAP revenues for the year ended December 29, 2007 were $245.9 million compared to $58.2 million in 2006. * GAAP gross margins were 31% in 2007 compared to negative 23% in 2006. * Including non-cash stock-based compensation and warrant revaluation expenses, the GAAP net loss was $55.3 million, or $1.09 per share, for the year ended December 29, 2007 compared to a GAAP net loss of $89.9 million, or $14.90 per share, in 2006. Invoiced Shipment Results for Q4 2007: * Invoiced shipments for the fourth quarter of 2007 were $93.4 million compared to $80.4 million in the third quarter of 2007 and $70.5 million in the fourth quarter of 2006, representing growth of 16% from the prior quarter and 32% from the fourth quarter of 2006. * Gross margins on a non-GAAP invoiced shipments basis, excluding non-cash stock-based compensation, were 47% in the fourth quarter of 2007 compared to 43% in the third quarter of 2007 and 25% in the fourth quarter of 2006. * Excluding non-cash stock-based compensation and warrant revaluation expenses, the net income on a non-GAAP invoiced shipments basis was $15.9 million, or $0.17 per diluted share, for the fourth quarter of 2007 compared to $10.9 million, or $0.12 per diluted share, in the third quarter of 2007 and a net loss of $7.3 million, or $1.04 per share, in the fourth quarter of 2006. Invoiced Shipment Results for Fiscal Year 2007: * Invoiced shipments for the year ended December 29, 2007 were $309.3 million compared to $146.0 million in 2006, reflecting annual growth of 112%. * Gross margins on a non-GAAP invoiced shipments basis, excluding non-cash stock-based compensation, were 41% for the year ended December 29, 2007 compared to 16% in 2006. * Excluding non-cash stock-based compensation and warrant revaluation expenses, the net income on a non-GAAP invoiced shipments basis for the year ended December 29, 2007 was $24.1 million, or $0.37 per diluted share, compared to a net loss of $49.4 million, or $8.18 per share, in 2006.
Management Commentary
"Infinera's strong performance in the fourth quarter and fiscal year 2007 reflects solid execution against our business strategy, increased customer momentum in favor of our unique approach to optical networks, and continued growth in world-wide bandwidth demand," said Jagdeep Singh, president and chief executive officer of Infinera. "We saw strength in our sales of both common equipment DTCs and additional channel TAMs in the December quarter, indicators of our new business footprint momentum and the leverage in our business model."
"We have a growing and increasingly diversified global customer set of service providers, cable MSOs and internet content providers who are utilizing Infinera's unique combination of large-scale photonic integration and Bandwidth Virtualization(tm) technology to create what we believe are the most economically-compelling optical networks in the world.
"In particular, customers tell us they are choosing Infinera because of the system's flexibility, rapid service provisioning and ability to deliver differentiated services without having to reengineer their optical plants," Singh said.
Singh noted several additional fourth quarter performance highlights:
* Continued diversification of the customer base with four customers accounting for 10% or greater of Q4 invoiced shipments and no single customer accounting for more than 18%. Cox Communications and Level 3 were among the top four Q4 customers on an invoiced shipment basis. One year ago, the company had two 10% or greater customers, with our largest customer accounting for 47% of invoiced shipments. * Approximately 33% of Q4 invoiced shipments were accounted for by unannounced customers. * Growth in the customer base to 41 customers, including additions in Q4 from both the cable MSO and fast-growing internet content provider spaces. The company's customer base now includes four of the top five cable MSOs in North America.
Conference Call Information:
Infinera will host a conference call for analysts and investors to discuss its fourth quarter and year end results today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference call will also be accessible from the "Investor Relations" section of the company's website at www.infinera.com. Following the webcast, an archived version will be available on the website for 30 days. To hear the replay, parties in the United States and Canada should call 1-800-835-3844. International parties can access the replay at +1-402-280-1655.
About Infinera
Infinera provides Digital Optical Networking systems to telecommunications carriers worldwide. Infinera's systems are unique in their use of a breakthrough semiconductor technology: the Photonic Integrated Circuit (PIC). Infinera's systems and PIC technology are designed to provide optical networks with simpler and more flexible engineering and operations, faster time-to-service, and the ability to rapidly deliver differentiated services without reengineering their optical infrastructure. For more information, please visit www.infinera.com.
Forward Looking Statements
This press release contains forward-looking statements, including statements relating to Infinera's ability to change the economics of optical communications networks and design products that are flexible and economical for our customers, including our belief that the fourth quarter and fiscal year 2007 results reflects the strength and long-term potential of our business model and strategy, our belief regarding the indicators of our new business footprint momentum and the leverage in our business model, our belief that we have a growing and increasingly diversified set of customers, our belief that our unique combination of large-scale photonic integration and Bandwidth Virtualization(tm) technology enable us to create the most economically-compelling optical networks in the world, and our belief that our customer base now includes four of the top five cable MSOs in North America. These forward-looking statements involve risks and uncertainties, as well as assumptions that if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs and develop new or enhanced products to meet those needs; the adoption rate of our products; our ability to establish and maintain successful relationships with our customers; our ability to reduce customer concentration; our ability to compete in our industry; fluctuations in demand, sales cycles and prices for our products and services; shortages or price fluctuations in our supply chain; our ability to protect our intellectual property rights; general political, economic and market conditions and events; and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission (SEC). More information about these and other risks that may impact Infinera's business are set forth in our quarterly report on Form 10-Q, which was filed with the SEC on November 9, 2007, the Registration Statement on Form S-1which was filed with the SEC on October 12, 2007, as well as subsequent reports filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.
Non-GAAP and other Financial Measures
In addition to disclosing financial measures prepared in accordance with United States Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP and other financial measures that reflect invoiced shipments and exclude non-GAAP non-cash stock-based compensation and warrant valuation expenses. For a description of these non-GAAP financial measures, including the reasons why management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled "GAAP to Non-GAAP Invoiced Shipment Reconciliation" as well as the accompanying notes on the use of certain non-GAAP measures. We anticipate disclosing forward-looking non-GAAP and other financial information in our conference call to discuss our fourth quarter of 2007 results, including an estimate of non-GAAP invoiced shipment earnings for the first quarter of 2008 that excludes non-GAAP non-cash stock-based compensation expenses related to our equity awards and the right to purchase common stock under our Employee Stock Purchase Plan in the period.
A copy of this press release can be found on the investor relations page of Infinera's website at www.infinera.com.
Infinera Corporation 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 share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
------------------- -------------------
Dec. 29, Dec. 31, Dec. 29, Dec. 31,
2007 2006 2007 2006
-------- -------- -------- --------
Revenue:
Ratable product and
related support and
services $ 75,257 $ 40,153 $237,745 $ 52,978
Product 832 3,680 8,107 5,258
-------- -------- -------- --------
Total revenue 76,089 43,833 245,852 58,236
Cost of revenue(1):
Cost of ratable product
and related support
and services 42,867 30,132 152,859 48,072
Lower of cost or market
adjustment 5,843 9,539 12,313 21,693
Cost of product 222 1,349 4,091 1,660
-------- -------- -------- --------
Total cost of revenue 48,932 41,020 169,263 71,425
Gross profit (loss) 27,157 2,813 76,589 (13,189)
Operating expenses(1):
Sales and marketing 10,689 8,905 32,721 20,682
Research and development 16,093 11,215 60,851 38,967
General and administrative 7,981 5,026 25,965 12,650
Amortization of intangible
assets 37 37 148 56
-------- -------- -------- --------
Total operating
expenses 34,800 25,183 119,685 72,355
-------- -------- -------- --------
Loss from operations (7,643) (22,370) (43,096) (85,544)
Other income (expense), net:
Interest income 3,149 456 6,522 2,100
Interest expense (2) (1,311) (2,251) (4,852)
Other gain (loss), net(2) 733 (1,706) (16,249) (1,567)
-------- -------- -------- --------
Total other income
(expense), net 3,880 (2,561) (11,978) (4,319)
Loss before provision
of income taxes (3,763) (24,931) (55,074) (89,863)
Provision for income taxes 144 19 268 72
-------- -------- -------- --------
Net loss $ (3,907) $(24,950) $(55,342) $(89,935)
======== ======== ======== ========
Net loss per common
share, basic and diluted $ (0.04) $ (3.55) $ (1.09) $ (14.90)
======== ======== ======== ========
Weighted average shares
used in computing basic
and diluted net loss per
common share 87,672 7,038 50,732 6,036
======== ======== ======== ========
------------------------
(1) The following table summarizes the effects of stock-based
compensation related to employees, non-recourse notes and
non-employees for the three and twelve months ended December 29,
2007 and December 31, 2006:
Three Months Ended Twelve Months Ended
------------------- -------------------
Dec. 29, Dec. 31, Dec. 29, Dec. 31,
2007 2006 2007 2006
-------- -------- -------- --------
Cost of revenue $ 156 $ 25 $ 410 $ 41
Research and development 1,315 127 3,751 411
Sales and marketing 732 51 1,854 198
General and administration 1,282 157 3,314 335
-------- -------- -------- --------
3,485 360 9,329 985
Cost of revenue -
amortization from
balance sheet* 198 7 327 7
-------- -------- -------- --------
Total stock-based
compensation expense $ 3,683 $ 367 $ 9,656 $ 992
======== ======== ======== ========
* Stock-based compensation expense deferred to inventory and deferred
inventory costs in prior periods and recognized in the current
period.
(2) The following table summarizes the remeasurement of our
freestanding preferred stock warrants under FAS 150:
Three Months Ended Twelve Months Ended
------------------- -------------------
Dec. 29, Dec. 31, Dec. 29, Dec. 31,
2007 2006 2007 2006
-------- -------- -------- --------
Other gain (loss) $ -- $ (2,228) $(19,761) $ (2,376)
Infinera Corporation
GAAP to Non-GAAP Invoiced Shipment Reconciliation
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended December 29, 2007
---------------------------------------------------
Non-GAAP
Invoiced
Shipments
Deferral Non-GAAP Excluding
Adjust- Invoiced Stock Stock
GAAP ments Shipments Comp Comp
-------- ------- -------- ------- --------
Revenue $ 76,089 $17,287(a) $ 93,376 $ -- $ 93,376
Cost of revenue 48,932 1,735(b) 50,667 (965)(c) 49,702
-------- ------- -------- ------- --------
Gross profit 27,157 15,552 42,709 965 43,674
Gross margin 36% 47%
Operating expenses 34,800 -- 34,800 (3,329)(c) 31,471
-------- ------- -------- ------- --------
Income (loss)
from operations (7,643) 15,552 7,909 4,294 12,203
Other income
(expense), net 3,880 -- 3,880 -- 3,880
-------- ------- -------- ------- --------
Income (loss)
before provision
for income taxes (3,763) 15,552 11,789 4,294 16,083
Provision for
income taxes 144 -- 144 -- 144
-------- ------- -------- ------- --------
Net income (loss) $ (3,907) $15,552 $ 11,645 $ 4,294 $ 15,939
======== ======= ======== ======= ========
Net income (loss)
per common share:
Basic $ (0.04) $ 0.18
======== ========
Diluted $ (0.04) $ 0.17
======== ========
Weighted average
shares used in
computing net
income (loss)
per common
share:
Basic 87,672 87,672
======== ========
Diluted 87,672 95,317
======== ========
Twelve Months Ended December 29, 2007
---------------------------------------------------
Non-GAAP
Invoiced
Shipments
Non-GAAP Excluding
Stock Stock
Comp/ Comp/
Deferral Warrant Warrant
Adjust- Invoiced Revalua- Revalua-
GAAP ments Shipments tion tion
-------- ------- -------- ------- --------
Revenue $245,852 $63,484(a) $309,336 $ -- $309,336
Cost of revenue 169,263 14,369(b) 183,632 (1,661)(c) 181,971
-------- ------- -------- ------- --------
Gross profit 76,589 49,115 125,704 1,661 127,365
Gross margin 31% 41%
Operating
expenses 119,685 -- 119,685 (8,919)(c) 110,766
-------- ------- -------- ------- --------
Income (loss)
from operations (43,096) 49,115 6,019 10,580 16,599
Other income
(expense), net (11,978) -- (11,978) 19,761 7,783
-------- ------- -------- ------- --------
Income (loss)
before provision
for income taxes (55,074) 49,115 (5,959) 30,341 24,382
Provision for
income taxes 268 -- 268 -- 268
-------- ------- -------- ------- --------
Net income (loss) $(55,342) $49,115 $ (6,227) $30,341 $ 24,114
======== ======= ======== ======= ========
Net income (loss)
per common share:
Basic $ (1.09) $ 0.48
======== ========
Diluted $ (1.09) $ 0.37
======== ========
Weighted average
shares used in
computing net
income (loss)
per common
share:
Basic 50,732 50,732
======== ========
Diluted 50,732 64,785
======== ========
Infinera Corporation
GAAP to Non-GAAP Invoiced Shipment Reconciliation
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended December 31, 2006
---------------------------------------------------
Non-GAAP
Invoiced
Shipments
Non-GAAP Excluding
Stock Stock
Comp/ Comp/
Deferral Warrant Warrant
Adjust- Invoiced Revalua- Revalua-
GAAP ments Shipments tion tion
-------- ------- -------- ------- --------
Revenue $ 43,833 $26,669(a) $ 70,502 $ -- $ 70,502
Cost of revenue 41,020 11,641(b) 52,661 (45)(c) 52,616
-------- ------- -------- ------- --------
Gross profit 2,813 15,028 17,841 45 17,886
Gross margin 6% 25%
Operating expenses 25,183 -- 25,183 (335)(c) 24,848
-------- ------- -------- ------- --------
Income (loss) from
operations (22,370) 15,028 (7,342) 380 (6,962)
Other income
(expense), net (2,561) -- (2,561) 2,228(d) (333)
-------- ------- -------- ------- --------
Income (loss)
before provision
for income taxes (24,931) 15,028 (9,903) 2,608 (7,295)
Provision for
income taxes 19 -- 19 -- 19
-------- ------- -------- ------- --------
Net income
(loss) $(24,950) $15,028 $ (9,922) $ 2,608 $ (7,314)
======== ======= ======== ======= ========
Net income (loss)
per common share:
Basic $ (3.55) $ (1.04)
======== ========
Diluted $ (3.55) $ (1.04)
======== ========
Weighted average
shares used in
computing net
income (loss) per
common share:
Basic 7,038 7,038
======== ========
Diluted 7,038 7,038
======== ========
Twelve Months Ended December 31, 2006
---------------------------------------------------
Non-GAAP
Invoiced
Shipments
Non-GAAP Excluding
Stock Stock
Comp/ Comp/
Deferral Warrant Warrant
Adjust- Invoiced Revalua- Revalua-
GAAP ments Shipments tion tion
-------- ------- -------- ------- --------
Revenue $ 58,236 $87,753(a) $145,989 $ -- $145,989
Cost of revenue 71,425 50,566(b) 121,991 (64)(c) 121,927
-------- ------- -------- ------- --------
Gross profit (13,189) 37,187 23,998 64 24,062
Gross margin -23% 16%
Operating expenses 72,355 -- 72,355 (944)(c) 71,411
-------- ------- -------- ------- --------
Income (loss) from
operations (85,544) 37,187 (48,357) 1,008 (47,349)
Other income
(expense), net (4,319) -- (4,319) 2,376(d) (1,943)
-------- ------- -------- ------- --------
Income (loss)
before provision
for income taxes (89,863) 37,187 (52,676) 3,384 (49,292)
Provision for
income taxes 72 -- 72 -- 72
-------- ------- -------- ------- --------
Net income (loss) $(89,935) $37,187 $(52,748) $ 3,384 $(49,364)
======== ======= ======== ======= ========
Net income (loss)
per common share:
Basic $ (14.90) $ (8.18)
======== ========
Diluted $ (14.90) $ (8.18)
======== ========
Weighted average
shares used in
computing net
income (loss) per
common share:
Basic 6,036 6,036
======== ========
Diluted 6,036 6,036
======== ========
Infinera Corporation
GAAP to Non-GAAP Invoiced Shipment Reconciliation
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended September 29, 2007
---------------------------------------------------
Non-GAAP
Invoiced
Shipments
Non-GAAP Excluding
Stock Stock
Comp/ Comp/
Deferral Warrant Warrant
Adjust- Invoiced Revalua- Revalua-
GAAP ments Shipments tion tion
-------- ------- -------- ------- --------
Revenue $ 62,155 $18,195(a) $ 80,350 $ -- $ 80,350
Cost of revenue 40,822 5,181(b) 46,003 (470)(c) 45,533
-------- ------- -------- ------- --------
Gross profit 21,333 13,014 34,347 470 34,817
Gross margin 34% 43%
Operating expenses 29,722 -- 29,722 (2,931)(c) 26,791
-------- ------- -------- ------- --------
Income (loss) from
operations (8,389) 13,014 4,625 3,401 8,026
Other income
(expense), net 2,925 -- 2,925 -- 2,925
-------- ------- -------- ------- --------
Income (loss)
before provision
for income taxes (5,464) 13,014 7,550 3,401 10,951
Provision for
income taxes 62 -- 62 -- 62
-------- ------- -------- ------- --------
Net income (loss) $ (5,526) $13,014 $ 7,488 $ 3,401 $ 10,889
======== ======= ======== ======= ========
Net income (loss)
per common share:
Basic $ (0.07) $ 0.13
======== ========
Diluted $ (0.07) $ 0.12
======== ========
Weighted average
shares used in
computing net
income (loss) per
common share:
Basic 84,017 84,017
======== ========
Diluted 84,017 92,007
======== ========
Use of Non-GAAP Financial Measures:
To supplement our condensed consolidated financial statements presented on a GAAP basis, Infinera uses invoiced shipment measures of operating results and net income, which include changes in our deferred revenue and deferred cost of inventory balances from the prior period. We also present non-GAAP measures of operating results, net income and net income per share, which are adjusted to reflect invoiced shipments and exclude non-GAAP stock-based compensation and warrant valuation expenses. We believe these adjustments are appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Infinera's underlying operating results and trends and our marketplace performance. The non-GAAP results are an indication of our baseline performance 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 our 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 or basic and diluted net income 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) Included amount represents the change in the deferred revenue
balance for the period as reported on our balance sheet. We
believe investors want to see the income statement with the
change in deferred revenue balance included in order to
understand the gross margin profile of the underlying invoiced
shipments.
(b) Included amount represents the change in the deferred cost of
inventory balance for the period as reported on our balance
sheet. We believe investors want to see the income statement
with the change in the deferral balance included in order to
understand the gross margin profile of the underlying invoiced
shipments and in order to compare our financial performance with
that of other companies and between periods.
(c) Excluded amount represents stock-based compensation expense on
a non-GAAP basis. Stock-based compensation is a non-cash expense
accounted for in accordance with the fair value recognition
provisions of Statement of Financial Accounting Standards
No. 123(R). While a large component of our expense, we believe
investors want to evaluate our financial results both
including and excluding the effects of stock-based compensation
expense in order to compare our financial performance with that
of other companies and between time periods.
The stock-based compensation expense excluded from cost of
revenue is a non-GAAP financial measure and is reconciled to the
corresponding GAAP amount in the table below:
Twelve Months
Three Months Ended Ended
-------------------------- ----------------
Dec. 29, Sept. 29, Dec. 31, Dec. 29, Dec. 31,
2007 2007 2006 2007 2006
------- -------- ------- ------- -------
GAAP stock-based
compensation in cost of
revenue $ 156 $ 143 $ 25 $ 410 $ 41
GAAP stock-based compen-
sation in cost of
revenue - amortization
from balance sheet 198 89 7 327 7
Stock-based compensation
not deferred to deferred
inventory cost 797 308 17 1,213 21
Stock-based compensation
previously recognized on
invoiced shipment basis (186) (70) (4) (289) (5)
----- ------ ----- ------ -----
Non-GAAP stock-based
compensation in cost
of revenue $ 965 $ 470 $ 45 $1,661 $ 64
===== ====== ===== ====== =====
(d) Excluded amount represents the adjustment to revalue our
convertible preferred warrants to fair value as required by
FAS 150. Subsequent to our IPO, we are no longer required to
revalue these warrants and, therefore, we believe investors
want to evaluate our financial results both including and
excluding the effect of this revaluation expense in order to
compare our financial performance with that of other companies
and between periods.
Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited) December 29, December 31,
2007 2006
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 91,209 $ 28,884
Short-term investments 181,168 688
Short-term restricted cash 743 --
Accounts receivable 39,216 41,635
Other receivables 1,127 513
Inventory 58,579 58,269
Deferred inventory costs 78,362 62,936
Prepaid expenses and other current assets 3,941 3,115
--------- ---------
Total current assets 454,345 196,040
Property, plant and equipment, net 36,973 26,665
Intangible assets 1,541 1,806
Deferred inventory costs, non-current 3,260 4,317
Long-term investments 30,116 --
Long-term restricted cash 2,594 --
Other non-current assets 359 1,638
--------- ---------
Total assets $ 529,188 $ 230,466
========= =========
LIABILITIES, CONVERTIBLE PREFERRED
STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 17,504 $ 41,767
Accrued expenses 9,497 16,574
Accrued compensation and related benefits 17,749 7,628
Accrued warranty 4,974 1,339
Deferred revenue 167,031 101,080
Preferred stock warrant liability -- 5,409
Current portion of debt -- 20,025
--------- ---------
Total current liabilities 216,755 193,822
Long-term portion of debt -- 8,357
Accrued warranty, non-current 5,018 1,378
Deferred revenue, non-current 7,406 9,873
Long-term exercised unvested options 825 996
Other long-term liabilities 4,610 1,811
Convertible preferred stock -- 320,550
Stockholders' equity (deficit):
Common stock 92 9
Additional paid-in capital 663,834 7,911
Accumulated other comprehensive
income (loss) 78 (153)
Accumulated deficit (369,430) (314,088)
--------- ---------
Total stockholders' equity (deficit) 294,574 (306,321)
--------- ---------
Total liabilities, convertible preferred
stock and stockholders' equity (deficit) $ 529,188 $ 230,466
========= =========
Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited) Twelve Months Ended
--------------------------
December 29, December 31,
2007 2006
--------- ---------
Cash Flows from Operating Activities:
Net loss $ (55,342) $ (89,935)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization 9,824 7,458
Amortization of debt discount 282 218
Issuance of warrants -- 189
In-process research and development -- 4,474
Asset impairment charges 393 --
Stock-based compensation expense 9,656 992
Revaluation of warrant liabilities 19,761 2,376
Gain on disposal of fixed assets (52) --
Gain on sale of assets held for sale (2,724) --
Other gain (73) --
Changes in assets and liabilities:
Accounts receivable 2,587 (38,377)
Other receivables (541) (361)
Inventory 2,515 (33,513)
Prepaid expenses and other current
assets (1,454) (2,325)
Deferred inventory costs (14,696) (50,566)
Other non-current assets 826 (555)
Accounts payable (24,220) 27,249
Accrued liabilities and other
expenses 5,557 16,123
Deferred revenue 63,484 87,753
Accrued warranty 7,275 1,025
--------- ---------
Net cash provided by (used in)
operating activities 23,058 (67,775)
Cash Flows from Investing Activities:
Purchases of available-for-sale investments
and restricted cash (299,159) (6,501)
Proceeds from maturities and sales
of investments 85,820 6,912
Proceeds from disposition of acquired assets -- 1,450
Proceeds from disposal of fixed assets 146 --
Proceeds from sales of assets held for sale 3,140 --
Purchase of property and equipment (20,215) (15,255)
Acquisition of certain assets, net -- (4,675)
--------- ---------
Net cash used in investing activities (230,268) (18,069)
Cash Flows from Financing Activities:
Principal payments on loan obligations (35,401) (21,520)
Cash payments for debt issuance costs -- (14)
Proceeds from loans 7,119 21,628
Proceeds from initial public offering,
net of issuance costs 190,078 --
Proceeds from follow-on offering, net
of issuance costs 104,016 --
Proceeds from issuance of common stock 3,535 4,377
Proceeds from issuance of preferred stock,
net of issuance costs -- 74,055
Proceeds from exercise of warrants 45 --
Proceeds from repayment of non-recourse
notes 145 261
Repurchase of common stock (59) (7)
--------- ---------
Net cash provided by financing
activities 269,478 78,780
Effect of exchange rate changes 57 (65)
Net change in cash and cash equivalents 62,325 (7,129)
Cash and cash equivalents at
beginning of period 28,884 36,013
--------- ---------
Cash and cash equivalents
at end of period $ 91,209 $ 28,884
========= =========
Supplemental disclosures of cash
flow information:
Cash paid for interest $ 2,497 $ 3,585
Cash paid for income taxes $ 121 $ 28
Supplemental schedules of non-cash
investing and financing activities
Debt assumed in connection with
acquisition of certain assets of
Little Optics, Inc. $ -- $ 4,500
Issuance of Series G convertible
preferred stock warrants $ -- $ 902
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Infinera Corporation
Supplemental Financial Information
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Q1'06 Q2'06 Q3'06 Q4'06 Q1'07 Q2'07 Q3'07 Q4'07
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Invoiced
Shipments $13.8 $19.7 $42.0 $70.5 $66.7 $69.0 $80.4 $93.4
Gross
Margin % -43% 16% 21% 25% 35% 37% 43% 47%
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Invoiced
Shipment
Composition:
Domestic % 76% 89% 78% 72% 89% 84% 81% 81%
International % 24% 11% 22% 28% 11% 16% 19% 19%
Largest
Customer% 64% 58% 55% 47% 57% 48% 28% 18%
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Cash
Related
Information:
Cash from
Operations ($21.6)($12.3)($18.8)($15.0) $6.9 ($0.8) ($2.0) $18.9
Capital
Expenditures $2.1 $2.9 $6.2 $4.1 $5.2 $3.6 $3.0 $8.5
Depreciation
&
Amortization $1.6 $1.7 $1.9 $1.8 $2.1 $2.0 $2.7 $2.7
DSO's 54 48 49 54 27 36 47 39
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Inventory
Metrics:
Raw
Materials $4.0 $5.1 $7.8 $6.7 $7.4 $8.8 $7.5 $10.5
Work in
Process $16.7 $21.2 $30.9 $38.1 $31.6 $36.0 $34.8 $35.1
Finished
Goods $5.7 $12.0 $11.8 $13.5 $18.4 $13.7 $14.8 $13.0
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Total
Inventory $26.5 $38.3 $50.5 $58.3 $57.3 $58.5 $57.1 $58.6
Inventory
Turns 3.0 1.7 2.6 3.6 3.0 3.0 3.2 3.4
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Worldwide
Headcount 363 470 576 605 617 646 668 711
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