HORSHAM, Pa., June 5, 2008 (PRIME NEWSWIRE) -- Optium Corporation (Nasdaq:OPTM), a leading supplier of high-performance optical subsystems, today reported financial results for the third quarter of fiscal year 2008 ended May 3, 2008.
Revenues for the third quarter of fiscal 2008 were $45.0 million, representing an increase of 30.3% from $34.5 million for the same period in the prior year. Compared to the prior quarter, revenues increased 11.7% from $40.3 million.
Record revenues for the third quarter were driven by sequential growth across all product lines -- 10Gb/s and 40Gb/s, ROADMs and Analog & Cable TV. Revenues from Optium's 40Gb/s and ROADM product lines grew substantially compared to the prior quarter, as Optium continues to broaden its portfolio of 40Gb/s and ROADM offerings while expanding manufacturing capacity to meet customer demand. Revenues from 40Gb/s products grew 29.5% sequentially and ROADM revenues increased by 44% compared to the prior quarter.
"Our third quarter results reflect the benefits accruing from solid execution of the growth initiatives we have focused on for fiscal 2008, including customer diversification and expanding our product portfolio and production capacity to address high-growth segments of the optical communications market," commented Eitan Gertel, Chairman and CEO of Optium Corporation. "Our execution in the third quarter continued to build on these growth initiatives. For example, during the third quarter, we passed our WSS ROADM capacity target of 1,000 units per quarter while continuing to expand our breadth of ROADM offerings, such as our high resolution 50GHz ROADM platform. We continue to expand overall WSS ROADM capacity. In 40Gb/s, we took advantage of being first to market with volumes of our DPSK 300pin module for line side applications, with total 40Gb/s revenues reaching 5% of revenues in the quarter."
In accordance with U.S. generally accepted accounting principles (GAAP), net loss in the third quarter of fiscal 2008 was $(0.7) million, or $(0.03) per share, compared to a net loss of $(0.8) million, or $(0.03) per share, in the prior quarter. Compared to $3.4 million, or $0.13 per diluted share for the same period in the prior year, net income in the third quarter declined primarily as a result of operational expenditures related to the accelerated ramp of Optium's 40Gb/s and ROADM product lines and production capacity in anticipation of future sales, higher levels of stock-based compensation, as well as $614,000 of expenses related to the proposed merger transaction with Finisar Corporation.
Non-GAAP net income for the third quarter of fiscal 2008 was $1.7 million, or $0.07 per diluted share, compared to $1.7 million, or $0.07 per diluted share, in the prior quarter. Note: In evaluating the operating performance of its business, management utilizes non-GAAP financial measures that exclude certain charges and credits required by GAAP that are considered by management to be outside Optium's core operating results. See Appendix A and the non-GAAP reconciliation table below for more information.
Non-GAAP net income for the same period in the prior year was $4.6 million, or $0.17 per diluted share. The decrease in non-GAAP net income from the prior year largely reflects the operational expenditures Optium has made to diversify its product portfolio with the addition of products and capacity expansion targeted at the high-growth 40Gb/s and ROADM markets. Revenues from ROADMs and 40Gb/s products represented 24% of total third quarter revenues, compared to 18% in the prior quarter and 3% for the same period a year ago.
"For the fourth quarter, we expect revenues to be in the range of $47-$49 million driven by continued execution and solid growth trends in the optical communications sector," stated Gertel. "In addition, with a significant portion of our new product line investments well underway, we are more focused than ever on demonstrating continued improvement in profitability.
"During the fourth quarter, we will also be working diligently toward regulatory and shareholder approval of our proposed combination with Finisar Corporation (Nasdaq: FNSR) through an all-stock merger. We currently anticipate closing the transaction during the third calendar quarter," concluded Gertel.
Conference Call Information
The Company will host a conference call to discuss its financial performance and further information regarding its projected results for fiscal 2008 following this release on Thursday, June 5, 2008 at 4:30 p.m. eastern. The dial-in number is (877) 440-5791. A webcast of the call, both live and archived, will also be available through the investor relations section of Optium's website at http://ir.optium.com. A replay of the call will be available through midnight on June 12, 2008 and can be accessed by dialing (719) 457-0820 or (888) 203-1112, access code 1774532.
Optium is a leading designer and manufacturer of high-performance optical subsystems supporting core to the edge applications for use in telecommunications and cable TV network systems. Optium's broad suite of optical transport solutions features fixed and wavelength agile 10Gb/s and 40Gb/s transceivers and subsystems, 10Gb/s pluggable transceivers, cable TV trunking and distribution subsystems and Optium's next generation WSS ROADM product line. Quoted on the NASDAQ Global Market under the symbol "OPTM," Optium is headquartered in Horsham, Pennsylvania and has offices in Sydney, Australia and Nes Ziona, Israel. For more information, visit http://www.optium.com.
Certain statements made in this press release that are not based on historical information are forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This press release contains express or implied forward-looking statements relating to, among other things, business outlook of Optium Corporation (the "Company"). These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: risks associated with completion of the pending combination of Optium and Finisar, and if it is consummated, with the operation of the combined company; risks associated with our revenue and other financial forecasts, which may differ materially from our actual results; risks associated with the Company's dependence on a limited number of customers for a significant percentage of its revenues; risks associated with demand patterns from specific customers and for specific products, including higher-end 10Gb/s products and cable TV products; risks associated with the Company's ability to sell a sufficient number of ROADMs to realize the operational benefits expected from the Company's acquisition of LCoS IP assets;; risks associated with changes in the demand for the Company's products and/or aggressive competition, which may force the Company to reduce prices; risks associated with the development and acceptance of new products and product features; risks associated with dependence on a limited number of component suppliers and/or increased demand for components, which could lead to shortages that could disrupt or delay company shipments; risks associated with making significant investments in the expansion of the business and with increased operating and capital expenditures ahead of anticipated revenues; risks associated with the Company's products being dependent upon the ability to anticipate and quickly respond to evolving technologies and customer requirements; risk associated with our foreign operations, including foreign currency exchange risks; risks associated with becoming subject to defending and resolving allegations or claims of infringement of intellectual property rights; risks associated with others infringing on the Company's intellectual property rights; risks associated with the Company's ability to retain existing personnel and recruit and retain qualified personnel; risks associated with rapidly changing technology and the ability of the Company to introduce new products on a timely and cost-effective basis; risks associated with changes in the competitive or regulatory environment in which the Company operates; and other risks. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Optium Corporation undertakes no obligation to update or revise its forward looking statements contained in this press release, whether as a result of new information, future events or circumstances or otherwise. For additional disclosure regarding these and other risks faced by Optium Corporation, see the disclosure contained in Optium Corporation's public filings with the Securities and Exchange Commission, including the risk factors included in Optium Corporation's Quarterly Report on Form 10-Q, filed March 13, 2008. All filings are available through the SEC's website at www.sec.gov or from Optium Corporation's web site at www.optium.com.
Important Additional Information
In connection with the proposed combination of Finisar Corporation ("Finisar") and Optium announced on May 16, 2008, Finisar plans to file with the Securities and Exchange Commission (the "SEC") a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus and Optium plans to file with the SEC the same Joint Proxy Statement/Prospectus. The definitive Joint Proxy Statement/Prospectus will be mailed to the stockholders of Finisar and Optium after clearance with the SEC. Each company will also file with the SEC from time to time other documents relating to the proposed combination. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT IS FILED WITH THE SEC, AND OTHER DOCUMENTS FILED BY EITHER FINISAR OR OPTIUM WITH THE SEC RELATING TO THE PROPOSED COMBINATION WHEN THEY ARE FILED, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED COMBINATION.
Copies of the documents filed with the SEC by Finisar or Optium may be obtained free of charge from the SEC website maintained at www.sec.gov. In addition, Finisar's SEC filings may be obtained free of charge from Finisar's website (www.finisar.com) or by calling Finisar's Investor Relations department at 408-542-5050 and Optium's filings may be obtained free of charge from Optium's website (www.optium.com) or by calling Optium's Investor Relations department at 267-803-3801.
Each of Finisar and Optium, and its respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from that company's respective stockholders in connection with the proposed combination. Information about the directors and executive officers of Finisar (including their respective ownership of Finisar shares) is contained in Finisar's annual meeting proxy statement filed with the SEC on February 21, 2008 and available free of charge in the manner described above. Information about the directors and executive officers of Optium (including their respective ownership of Optium shares) is contained in Optium's annual meeting proxy statement filed with the SEC on November 13, 2007 and available free of charge in the manner described above. Additional information regarding the interests of such participants in the proposed combination will be included in the Joint Proxy Statement/Prospects and the other documents filed by each company with the SEC relating to the proposed combination (when filed).
Optium Third Quarter Fiscal Year 2008 Results:
Consolidated Statement of Operations, GAAP Basis
(in thousands, except per share amounts):
(unaudited)
------------------------------------------------
Three months ended Nine months ended
--------------------------- ------------------
May 3, Feb. 2, April 28, May 3, April 28,
2008 2008 2007 2008 2007
------- ------- ------- -------- -------
Revenues $45,004 $40,294 $34,547 $121,418 $98,696
Cost of revenues 33,077 29,413 25,190 88,941 70,709
------- ------- ------- -------- -------
Gross profit 11,927 10,881 9,357 32,477 27,987
Operating expenses:
Research and product
development 6,149 5,995 3,379 17,181 9,888
Selling, general and
administrative 7,059 6,231 3,711 19,641 9,897
------- ------- ------- -------- -------
Total operating
expenses 13,208 12,226 7,090 36,822 19,785
------- ------- ------- -------- -------
Income (loss) from
operations (1,281) (1,345) 2,267 (4,345) 8,202
Interest and other
income (expense), net 402 614 1,333 1,721 2,491
------- ------- ------- -------- -------
Income (loss) before
income tax (879) (731) 3,600 (2,624) 10,693
Income tax (benefit)
provision (217) 69 182 (83) 654
------- ------- ------- -------- -------
Net income (loss) $ (662) $ (800) $ 3,418 $ (2,541) $10,039
======= ======= ======= ======== =======
Net income (loss)
per share:
Basic $ (0.03) $ (0.03) $ 0.13 $ (0.10) $ 0.57
======= ======= ======= ======== =======
Diluted $ (0.03) $ (0.03) $ 0.13 $ (0.10) $ 0.41
======= ======= ======= ======== =======
Weighted average shares
outstanding:
Basic 25,499 25,452 25,350 25,461 17,576
======= ======= ======= ======== =======
Diluted 25,499 25,452 26,647 25,461 24,639
======= ======= ======= ======== =======
Use of Non-GAAP Financial Measures
In evaluating the operating performance of its business, Optium's management utilizes non-GAAP financial measures that exclude certain charges and credits that are required by GAAP. These items, which are identified in the table below, share one or more of the following characteristics: they are unusual and Optium does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; or they are unrelated to the ongoing operation of the business in the ordinary course. The Company believes these non-GAAP financial measures are useful indications of the Company's baseline operating performance before gains, losses or other charges that are considered by management to be outside of the Company's core operating results. A reconciliation of each of the non-GAAP financial measures to the nearest GAAP financial measure is set forth in the table below.
Please see Appendix A for additional information about this table.
Reconciliation of GAAP and Non-GAAP Financial Measures
(in thousands, except per share data)
(unaudited)
-----------------------------------------------
Three months ended Nine months ended
--------------------------- -----------------
May 3, Feb. 2, April 28, May 3, April 28,
2008 2008 2007 2008 2007
------- ------- ------- ------- -------
Reconciliation of GAAP
to non-GAAP gross
profit:
GAAP gross profit $11,927 $10,881 $ 9,357 $32,477 $27,987
GAAP gross profit
margin 26.5% 27.0% 27.1% 26.7% 28.4%
Non-GAAP adjustments
to gross profit:
Cost of revenues:
Stock-based
compensation (a) 52 84 23 196 34
------- ------- ------- ------- -------
Total non-GAAP
adjustments to
gross profit 52 84 23 196 34
------- ------- ------- ------- -------
Non-GAAP gross profit $11,979 $10,965 $ 9,380 $32,673 $28,021
======= ======= ======= ======= =======
Non-GAAP gross profit
margin 26.6% 27.2% 27.2% 26.9% 28.4%
======= ======= ======= ======= =======
Reconciliation of GAAP
to non-GAAP net income
(loss) and non-GAAP
net income (loss) per
share:
GAAP net income
(loss) $ (662) $ (800) $ 3,418 $(2,541) $10,039
Cost of revenues:
Stock-based
compensation (a) 52 84 23 196 34
Operating expenses:
Research and product
development
Stock-based
compensation (a) 343 492 69 1,197 93
Selling, general and
administrative
Amortization of
purchased
intangibles 101 101 -- 303 --
Duplicate facility
costs during
facility move 103 65 171 168 610
Merger transaction
expenses 614 -- -- 614 --
Patent litigation
expenses 614 774 614 3,387 933
Stock-based
compensation (a) 841 1,009 325 2,494 722
Deferred tax adjustment (227) 32 -- (160) --
Income tax provision on
non-GAAP adjustments (81) (53) (60) (204) (117)
------- ------- ------- ------- -------
Non-GAAP net income
(loss) $ 1,698 $ 1,704 $ 4,560 $ 5,454 $12,314
======= ======= ======= ======= =======
GAAP net income (loss)
per share:
Basic $ (0.03) $ (0.03) $ 0.13 $ (0.10) $ 0.57
======= ======= ======= ======= =======
Diluted $ (0.03) $ (0.03) $ 0.13 $ (0.10) $ 0.41
======= ======= ======= ======= =======
Shares used in computing
GAAP net income (loss)
per share:
Basic 25,499 25,452 25,350 25,461 17,576
======= ======= ======= ======= =======
Diluted 25,499 25,452 26,647 25,461 24,639
======= ======= ======= ======= =======
Non-GAAP net income
(loss) per share:
Basic $ 0.07 $ 0.07 $ 0.18 $ 0.21 $ 0.70
======= ======= ======= ======= =======
Diluted $ 0.07 $ 0.07 $ 0.17 $ 0.21 $ 0.50
======= ======= ======= ======= =======
Shares used in computing
non-GAAP net income
(loss) per share:
Basic 25,499 25,452 25,350 25,461 17,576
======= ======= ======= ======= =======
Diluted 26,108 26,178 26,647 26,053 24,639
======= ======= ======= ======= =======
(a) Of the aggregate $1,236, $1,585 and $3,886 in stock-based
compensation expense for the three months ended May 3, 2008,
February 2, 2008 and the nine months ended May 3, 2008,
respectively, $105, $232 and $429, respectively, relates to
stock-based compensation expense resulting from one-year
restricted stock unit grants made in satisfaction of certain
bonus payments under the Company's employee and executive bonus
plans.
Condensed Consolidated Balance Sheets
(in thousands)
May 3, July 28,
2008 2007
--------------------
(unaudited)
Assets
------
Current assets:
Cash and cash equivalents $ 42,614 $ 25,359
Short-term investments 3,600 36,018
Accounts receivable, net 32,758 21,853
Inventories, net 27,699 20,684
Restricted cash 415 68
Deferred tax asset, current portion 6,219 4,976
Prepaid expenses and other current assets 1,941 1,039
-------- --------
Total current assets 115,246 109,997
Property and equipment, net 16,164 9,124
Goodwill 38,993 37,923
Deferred tax asset, non-current portion 7,776 8,881
Intangible assets, net 1,705 2,006
Other assets 612 170
-------- --------
Total assets $180,496 $168,101
======== ========
Liabilities and stockholders' equity
------------------------------------
Current liabilities:
Accounts payable $ 28,768 $ 20,222
Accrued expenses 5,155 4,389
Accrued warranty 385 359
Current portion of debt 31 46
-------- --------
Total current liabilities 34,339 25,016
Long-term debt, net of current portion -- 17
Other long-term liabilities 404 189
-------- --------
Total liabilities 34,743 25,222
-------- --------
Stockholders' equity:
Common stock 3 3
Additional paid-in capital-common stock 194,634 191,118
Deferred compensation (549) (924)
Treasury stock (2,762) (2,762)
Accumulated deficit (49,032) (46,395)
Accumulated other comprehensive income 3,459 1,839
-------- --------
Total stockholders' equity 145,753 142,879
-------- --------
Total liabilities and stockholders' equity $180,496 $168,101
======== ========
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
May 3, April 30,
2008 2007
--------------------
(unaudited)
Cash flows from operating activities:
Net income (loss) $ (2,541) $ 10,039
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and amortization 3,379 1,969
Stock-based compensation 3,615 881
Provision for doubtful accounts 23 11
Loss on disposal of property and equipment 4 9
Change in deferred taxes (103) --
Changes in operating assets and liabilities:
Accounts receivable (10,987) (7,787)
Inventories, net (6,794) (5,133)
Prepaid expenses and other current assets (933) (1,065)
Other assets (475) (180)
Accounts payable 8,366 3,369
Accrued expenses 896 343
Other current liabilities -- (2,640)
Warranty liabilities 24 82
Other long-term liabilities 64 92
--------------------
Net cash used in operating activities $ (5,462) $ (10)
--------------------
Cash flows from investing activities:
Purchase of property and equipment (9,542) (3,964)
Proceeds from sale of property
and equipment -- 30
Release of restricted cash (167) --
Purchases of marketable securities (57,557) (45,562)
Maturities and sales of marketable
securities 89,975 22,384
--------------------
Net cash provided by (used in)
investing activities $ 22,709 $(27,112)
--------------------
Cash flows from financing activities:
Payments on line of credit (32) (671)
Net proceeds from initial public
offering -- 95,378
Proceeds from exercise of employee
stock options 28 47
--------------------
Net cash (used in) provided by
financing activities $ (4) $ 94,754
--------------------
Effect of exchange rate changes on
cash and cash equivalents 12 33
Net increase in cash and cash
equivalents 17,255 67,665
Cash and cash equivalents, beginning
of period 25,359 10,377
--------------------
Cash and cash equivalents,
end of period $ 42,614 $ 78,042
====================
Appendix A
In calculating the non-GAAP financial measures contained elsewhere in this release, the Company adjusted its GAAP results to exclude certain charges and credits that are required by GAAP as follows:
* Stock-based compensation expense -- The Company incurs
stock-based compensation expense with respect to equity
incentive awards made to employees, directors and other service
providers, including (a) long-term equity incentive awards made
to new hires and existing employees and (b) equity incentive
awards made in satisfaction of certain bonus payments as earned
under the Company's executive and employee bonus plans, which
can be satisfied with equity incentive awards or cash at the
option of the Company.
* Amortization of purchased intangibles -- The Company purchased
intangible technology assets from Microdisplay Corporation in
July 2007 and is amortizing the purchase price of these
purchased intangibles over a five year useful life.
* Duplicate facility costs during facility move -- The Company has
incurred duplicate facility costs during facility move as a
result of (a) the execution of a lease for its current U.S.
operating facility and the early termination of the lease for
its prior U.S. operating facility and (b) the execution of a
lease for its future Australian operating facility. The Company
completed the U.S. facility relocation during the third quarter
of fiscal 2007 and expects to complete the Australian facility
relocation during calendar 2008.
* Merger transaction expenses -- The Company has incurred
expenses in connection with its proposed merger transaction
with Finisar Corporation announced May 16, 2008. These expenses
have included legal fees and expenses, accounting due diligence
fees and expenses, and travel and related expenses.
* Patent litigation expenses -- Since the first quarter of
fiscal 2007, the Company has incurred expenses in connection
with the defense of patent infringement lawsuits brought
against Optium with respect to certain of Optium's cable TV
products.
* Deferred tax adjustment -- The Company recognized a tax benefit
in July 2007 as the result of removal of valuation allowances
associated with NOLs and other credits in the United States and,
as a result, will incur non-cash tax expense in certain future
taxable periods.
While non-GAAP financial measures are not calculated in accordance with GAAP or alternatives for measures calculated in accordance with GAAP, the Company believes that providing this information to investors, in addition to GAAP measures, allows investors to better evaluate its current core operating performance relative to prior periods and its financial results in comparison to its competitors. However, non-GAAP financial measures:
* are not measures of financial performance calculated in
accordance with GAAP;
* do not represent financial measures as defined by GAAP; and,
* should not be considered as an alternative to financial
measures prepared in conformity with GAAP.
Further, the Company's non-GAAP financial measures as calculated may not be necessarily comparable to similarly titled measures reported by other companies.
Optm-F