HORSHAM, Pa., March 6, 2008 (PRIME NEWSWIRE) -- Optium Corporation (Nasdaq:OPTM), a leading supplier of high-performance optical subsystems, today reported financial results for the second quarter of fiscal year 2008 ended February 2, 2008.
Revenues for the second quarter of fiscal 2008 were $40.3 million, representing an increase of 18.0% from $34.1 million for the same period in the prior year. Compared to the prior quarter, revenues increased 11.6% from $36.1 million.
Record revenues for the second quarter were driven by sequential growth in ROADMs, Analog & Cable TV and 40Gb/s products. Revenues from Optium's 40Gb/s and ROADM product lines grew substantially as Optium continues to aggressively ramp production capacity for these two new product lines. Compared to the prior quarter, revenues from 40Gb/s products more than doubled in the second quarter and ROADM revenues increased, as anticipated, by 90% sequentially.
"We are pleased with our second quarter results. We are continuing to manage through volatility in demand for 10Gb/s products from one of our larger customers by making great progress in growing revenues through each of our targeted growth platforms," commented Eitan Gertel, Chairman and CEO of Optium Corporation. "During the second quarter, we introduced new high-performance product technologies, expanded capacity for our new product lines and continued to develop relationships with new customers worldwide, particularly in Asia."
Net loss in the second quarter of fiscal 2008, in accordance with U.S. generally accepted accounting principles (GAAP), was $(0.8) million, or $(0.03) per share, compared to a net loss of $(1.1) million, or $(0.04) per share, in the prior quarter. Net income for the same period in the prior year was $3.9 million, or $0.15 per diluted share. Net income declined from the prior year period due primarily to operational expenditures related to the ramp of Optium's 40Gb/s and ROADM product lines in fiscal 2008 in anticipation of future sales, higher levels of stock-based compensation and patent litigation expenses.
Excluding stock-based compensation expenses, patent litigation expenses and other non-GAAP adjustments, non-GAAP net income for the second quarter of fiscal 2008 was $1.7 million, or $0.07 per diluted share, compared to $2.1 million, or $0.08 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 $4.5 million, or $0.17 per diluted share. The decrease in non-GAAP net income from the prior year primarily 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. For the second quarter, approximately 18% of Optium's revenues were generated from these new product areas, compared to less than 1% for the same period a year ago.
"Our execution in the first half of the fiscal year gives us added confidence that we will meet our objective for annual growth of at least 30% for fiscal 2008," continued Gertel. "For the third quarter, we expect revenues to be in the range of $42 to $44 million.
"We are growing our company by expanding our product portfolio and production capacity to address high-growth segments of the optical communications market while building a stronger presence with new customers around the world. Continued momentum in each of these product areas is expected to result in growing operating leverage over time. In the near term, we are focused on satisfying the strong customer acceptance of our new product introductions, which has required additional operational investments. We look forward to continuing to develop these new avenues of growth in fiscal 2008 and to benefit from our strengthening position in the marketplace in the years ahead," 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, March 6, 2008 at 4:30 p.m. eastern. The dial-in number is (877) 681-3373. 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 this evening through midnight on March 13, 2008 and can be accessed by dialing (719) 457-0820 or (888) 203-1112, access code 9833434.
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 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 integrating a newly-acquired business; 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 December 13, 2007. All filings are available through the SEC's website at www.sec.gov or from Optium Corporation's web site at www.optium.com.
Optium Second Quarter Fiscal Year 2008 Results:
Consolidated Statement of Operations, GAAP Basis (in thousands,
except per share amounts):
Three months ended Six months ended
Feb. 2, Nov. 3, Jan. 27, Feb. 2, Jan.27,
2008 2007 2007 2008 2007
(unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
Revenues $40,294 $36,120 $34,139 $ 76,414 $64,149
Cost of revenues 29,413 26,451 24,214 55,864 45,519
------- ------- ------- -------- -------
Gross profit 10,881 9,669 9,925 20,550 18,630
Operating
expenses:
Research and
product
development 5,995 5,037 3,513 11,032 6,509
Selling, general
and
administrative 6,231 6,351 3,359 12,582 6,186
------- ------- ------- -------- -------
Total operating
expenses 12,226 11,388 6,872 23,614 12,695
------- ------- ------- -------- -------
Income (loss) from
operations (1,345) (1,719) 3,053 (3,064) 5,935
Interest and other
income (expense),
net 614 706 1,102 1,319 1,158
------- ------- ------- -------- -------
Income (loss)
before income tax (731) (1,013) 4,155 (1,745) 7,093
Income tax
provision 69 66 293 134 472
------- ------- ------- -------- -------
Net income (loss) $ (800) $(1,079) $ 3,862 $ (1,879) $ 6,621
======== ======== ======= ========= =======
Net income (loss)
per share:
Basic $(0.03) $(0.04) $0.16 $(0.07) $0.48
======= ======= ===== ======= =====
Diluted $(0.03) $(0.04) $0.15 $(0.07) $0.28
======= ======= ===== ======= =====
Weighted average
shares
outstanding:
Basic 25,452 25,434 24,592 25,443 13,668
====== ====== ====== ====== ======
Diluted 25,452 25,434 26,592 25,443 23,564
====== ====== ====== ====== ======
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)
Three months ended Six months ended
February 2, November 3, January 27, February 2, January 27,
2008 2007 2007 2008 2007
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Reconciliation
of GAAP to
non-GAAP
gross profit:
GAAP gross
profit $ 10,881 $ 9,669 $ 9,925 $ 20,550 $ 18,630
GAAP gross
profit
margin 27.0% 26.8% 29.1% 26.9% 29.0%
Non-GAAP
adjustments
to gross
profit:
Cost of
revenues:
Stock-based
compensa-
tion (a) 84 60 10 144 11
-------- -------- -------- -------- --------
Total non-GAAP
adjustments
to gross
profit 84 60 10 144 11
-------- -------- -------- -------- --------
Non-GAAP
gross
profit $ 10,965 $ 9,729 $ 9,935 $ 20,694 $ 18,641
======== ======== ======== ======== ========
Non-GAAP
gross profit
margin 27.2% 26.9% 29.1% 27.1% 29.1%
======== ======== ======== ======== ========
Reconciliation
of GAAP to
non-GAAP net
income (loss)
and non-
GAAP net
income (loss)
per share:
GAAP net
income
(loss) $ (800) $ (1,079) $ 3,862 $ (1,879) $ 6,621
Cost of
revenues:
Stock-based
compensa-
tion (a) 84 60 10 144 11
Operating
expenses:
Research and
product
development
Stock-based
compensa-
tion (a) 492 362 22 854 24
Selling,
general
and
administrative
Amortization of
purchased
intangibles 101 101 -- 202 --
Duplicate
facility
costs during
facility move 65 -- 216 65 439
Patent
litigation
expenses 774 1,999 265 2,773 319
Stock-based
compensa-
tion (a) 1,009 644 208 1,653 397
Deferred tax
adjustment 32 35 -- 67 --
Income tax
(benefit)
provision on
non-GAAP
adjustments (53) (70) (36) (123) (57)
-------- -------- -------- -------- --------
Non-GAAP net
income
(loss) $ 1,704 $ 2,052 $ 4,547 $ 3,756 $ 7,754
======== ======== ======== ======== ========
GAAP net
income
(loss) per
share:
Basic $(0.03) $(0.04) $ 0.16 $(0.07) $ 0.48
====== ====== ====== ====== ======
Diluted $(0.03) $(0.04) $ 0.15 $(0.07) $ 0.28
====== ====== ====== ====== ======
Shares used
in computing
GAAP net
income (loss)
per share:
Basic 25,452 25,434 24,592 25,443 13,668
====== ====== ====== ====== ======
Diluted 25,452 25,434 26,592 25,443 23,564
====== ====== ====== ====== ======
Non-GAAP net
income (loss)
per share:
Basic $ 0.07 $ 0.08 $ 0.18 $ 0.15 $ 0.57
====== ====== ====== ====== ======
Diluted $ 0.07 $ 0.08 $ 0.17 $ 0.14 $ 0.33
====== ====== ====== ====== ======
Shares used in
computing
non-GAAP net
income (loss)
per share:
Basic 25,452 25,434 24,592 25,443 13,668
====== ====== ====== ====== ======
Diluted 26,178 26,347 26,592 26,364 23,564
====== ====== ====== ====== ======
(a) Of the aggregate $1,585, $1,066 and $2,651 stock-based
compensation expense for the three months ended February 2, 2008 and
November 3, 2007 and the six months ended February 2, 2008,
respectively, $233, $91 and $324, 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)
February 2, July 28,
2008 2007
----------------------------------------------
(unaudited)
Assets
Current assets:
Cash and cash
equivalents $ 47,805 $ 25,359
Short-term
investments 4,597 36,018
Accounts
receivable, net 30,345 21,853
Inventories, net 23,834 20,684
Restricted cash 68 68
Deferred tax asset,
current portion 6,071 4,976
Prepaid expenses
and other current
assets 1,873 1,039
--------- ---------
Total current assets 114,593 109,997
Property and
equipment, net 14,482 9,124
Goodwill 38,509 37,923
Deferred tax asset,
non-current portion 7,745 8,881
Intangible assets, net 1,806 2,006
Other assets 433 170
--------- ---------
Total assets $ 177,568 $ 168,101
========= =========
Liabilities and
stockholders' equity
Current liabilities:
Accounts payable $ 26,756 $ 20,222
Accrued expenses 5,969 4,389
Accrued warranty 392 359
Current portion
of debt 41 46
--------- ---------
Total current
liabilities 33,158 25,016
Long-term debt,
net of current
portion 3 17
Other long-term
liabilities 361 189
--------- ---------
Total liabilities 33,522 25,222
--------- ---------
Stockholders' equity:
Common stock 3 3
Additional paid-in
capital-common stock 193,324 191,118
Deferred compensation (674) (924)
Treasury stock (2,762) (2,762)
Accumulated deficit (48,370) (46,395)
Accumulated other
comprehensive income 2,525 1,839
--------- ---------
Total stockholders'
equity 144,046 142,879
--------- ---------
Total liabilities
and stockholders'
equity $ 177,568 $ 168,101
========= =========
Consolidated Statements of Cash Flows
(in thousands)
Six months Six months
February 2, 2008 January 27, 2007
----------------------------------------
(unaudited) (unaudited)
Cash flows from
operating activities:
Net income (loss) $ (1,879) $ 6,621
Adjustments to
reconcile net income
(loss) to net cash
used in operating
activities:
Depreciation and
amortization 2,001 1,318
Stock-based
compensation 2,195 433
Provision for
doubtful accounts (13) 38
Loss on disposal of
property and
equipment -- 9
Change in deferred
taxes 76 --
Changes in operating
assets and
liabilities:
Accounts receivable (8,591) (2,624)
Inventories, net (2,969) (3,801)
Prepaid expenses
and other current
assets (915) (741)
Other assets (242) (128)
Accounts payable 6,455 (2,011)
Accrued expenses 1,621 753
Other current
liabilities -- (2,640)
Warranty liabilities 32 39
Other long term
liabilities 19 127
----------------------------------------
Net cash used in
operating activities $ (2,210) $ (2,607)
----------------------------------------
Cash flows from
investing activities:
Purchase of property
and equipment (6,873) (2,299)
Proceeds from sale
of property and
equipment -- 30
Release of
restricted cash 180 --
Purchases of
marketable securities (35,854) (27,819)
Maturities and sales
of marketable
securities 67,275 8,384
----------------------------------------
Net cash provided by
(used in) investing
activities $ 24,728 $ (21,704)
----------------------------------------
Cash flows from
financing activities:
Payments of line
of credit (19) (671)
Net proceeds from
initial public
offering -- 95,378
Proceeds from exercise
of employee
stock options 13 38
----------------------------------------
Net cash (used in)
provided by financing
activities $ (6) $ 94,745
----------------------------------------
Effect of exchange rate
changes on cash and
cash equivalents (66) (12)
Net increase in cash
and cash equivalents 22,446 70,422
Cash and cash
equivalents, beginning
of period 25,359 10,377
----------------------------------------
Cash and cash
equivalents,
end of period $ 47,805 $ 80,799
========================================
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.
* 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