Three Months Ended
-----------------------------------------
December 28, September 28, December 29,
2013 2013 2012
------------- ------------- -------------
Cost of revenue $ 489 $ 422 $ 735
Research and development 2,725 2,434 2,852
Sales and marketing 1,965 1,853 2,802
General and administration 1,789 1,807 1,797
------------- ------------- -------------
6,968 6,516 8,186
Cost of revenue - amortization
from balance sheet* 1,206 1,127 1,949
------------- ------------- -------------
Total stock-based compensation
expense $ 8,174 $ 7,643 $ 10,135
============= ============= =============
Twelve Months Ended
---------------------------
December 28, December 29,
2013 2012
------------- -------------
Cost of revenue $ 1,871 $ 2,710
Research and development 10,900 13,306
Sales and marketing 7,624 10,450
General and administration 5,956 9,529
------------- -------------
26,351 35,995
Cost of revenue - amortization
from balance sheet* 5,625 5,824
------------- -------------
Total stock-based compensation
expense $ 31,976 $ 41,819
============= =============
* Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period.
(2) Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. Accordingly, for GAAP purposes, we are required to amortize as a debt discount an amount equal to the fair value of the conversion option that was recorded in equity as interest expense on our $150 million 1.75% convertible debt issuance in May 2013 over the term of the notes. These amounts have been adjusted in arriving at our non-GAAP results because management believes that this non-cash expense is not indicative of ongoing operating performance and provides a better indication of our underlying business performance.
(3) Diluted shares used to calculate net loss per share on a non-GAAP basis provided for informational purposes only.
Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)
December 28, December 29,
2013 2012
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 124,330 $ 104,666
Short-term investments 172,660 76,146
Accounts receivable, net of allowance for
doubtful accounts of $43 in 2013 and $147
in 2012 100,643 107,039
Other receivables 1,313 2,909
Inventory 123,685 127,809
Deferred inventory costs 705 1,029
Deferred tax asset 1,322 155
Prepaid expenses and other current assets 14,412 9,744
------------- -------------
Total current assets 539,070 429,497
Property, plant and equipment, net 79,668 80,343
Deferred inventory costs, non-current 2 100
Long-term investments 64,419 2,874
Cost-method investment 9,000 9,000
Long-term restricted cash 3,904 3,868
Other non-current assets 4,863 2,488
------------- -------------
Total assets $ 700,926 $ 528,170
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 39,843 $ 61,428
Accrued expenses 22,431 26,288
Accrued compensation and related benefits 33,899 22,325
Accrued warranty 12,374 7,262
Deferred revenue 32,402 26,744
------------- -------------
Total current liabilities 140,949 144,047
Long-term debt 109,164 -
Accrued warranty, non-current 10,534 9,220
Deferred revenue, non-current 4,888 3,210
Deferred tax liability 1,364 117
Other long-term liabilities 16,217 15,440
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value
Authorized shares - 25,000 and no shares
issued and outstanding - -
Common stock, $0.001 par value
Authorized shares - 500,000 as of December
28, 2013 and December 29, 2012
Issued and outstanding shares - 119,887 as
of December 28, 2013 and 112,461 as of
December 29, 2012 120 112
Additional paid-in capital 1,025,661 930,618
Accumulated other comprehensive loss (3,486) (2,228)
Accumulated deficit (604,485) (572,366)
------------- -------------
Total stockholders' equity 417,810 356,136
------------- -------------
Total liabilities and stockholders' equity $ 700,926 $ 528,170
============= =============
Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Twelve Months Ended
----------------------------
December 28, December 29,
2013 2012
------------- -------------
Cash Flows from Operating Activities:
Net loss $ (32,119) $ (85,330)
Adjustments to reconcile net loss to net
cashused in operating activities:
Depreciation and amortization 24,562 23,661
(Recovery of) provision for other
receivables (88) -
Provision for doubtful accounts 55 94
Amotization of debt discount and issuance
costs 4,522 -
Amortization of premium on investments 1,539 2,068
Stock-based compensation expense 31,976 41,819
Non-cash tax benefit - (7)
Other gain (243) (475)
Changes in assets and liabilities:
Accounts receivable 6,341 (26,517)
Other receivables 1,435 (1,894)
Inventory (3,036) (40,623)
Prepaid expenses and other assets (4,992) 2,293
Deferred inventory costs 395 5,741
Accounts payable (20,202) 15,410
Accrued liabilities and other expenses 11,272 6,915
Deferred revenue 7,337 3,763
Accrued warranty 6,426 3,616
------------- -------------
Net cash provided by (used in) operating
activities 35,180 (49,466)
Cash Flows from Investing Activities:
Purchase of available-for-sale investments (288,140) (54,150)
Proceeds from sale of available-for-sale
investments 2,850 11,584
Proceeds from maturities and calls of
investments 125,624 117,605
Proceeds from disposal of assets 3 1
Purchase of property and equipment (21,068) (25,395)
Reimbursement of manufacturing capacity
advance - 50
Change in restricted cash (69) (827)
------------- -------------
Net cash provided by (used in) investing
activities (180,800) 48,868
Cash Flows from Financing Activities:
Proceeds from issuance of debt, net 144,469 -
Proceeds from issuance of common stock 23,185 11,580
Repurchase of common stock (1,544) (882)
------------- -------------
Net cash provided by financing activities 166,110 10,698
Effect of exchange rate changes on cash (826) 108
Net change in cash and cash equivalents 19,664 10,208
Cash and cash equivalents at beginning of
period 104,666 94,458
------------- -------------
Cash and cash equivalents at end of period $ 124,330 $ 104,666
============= =============
Supplemental disclosures of cash flow
information:
Cash paid for income taxes $ 2,135 $ 923
Cash paid for interest $ 1,320 $ -
Supplemental schedule of non-cash financing
activities:
Non-cash settlement for manufacturing
capacity advance $ - $ 275
Transfer of inventory to fixed assets $ 5,458 $ 3,222
---------------------------------------------------------------------
Infinera Corporation
Supplemental
Financial
Information
(Unaudited)
----------------------------------------------------------------------------
Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13
----------------------------------------------------------------------------
Revenue ($ Mil) $104.7 $93.5 $112.2 $128.1 $124.6 $138.4 $142.0 $139.1
Gross Margin % (1) 40% 37% 39% 36% 36% 39% 49% 41%
----------------------------------------------------------------------------
Invoiced Shipment
Composition:
Domestic % 71% 70% 70% 63% 63% 64% 73% 54%
International % 29% 30% 30% 37% 37% 36% 27% 46%
Largest Customer % 13% 15% 13% 13% 14% < 10% 17% 11%
----------------------------------------------------------------------------
Cash Related
Information:
Cash from (used in)
Operations ($ Mil) ($5.8)($22.7)($29.3) $8.3 ($21.3) $17.9 $12.8 $25.8
Capital Expenditures
($ Mil) $13.6 $6.1 $2.5 $3.2 $4.9 $4.5 $4.2 $7.5
Depreciation &
Amortization ($
Mil) $5.5 $5.7 $6.1 $6.4 $6.3 $6.3 $5.9 $6.0
DSO's 57 55 74 76 82 64 56 66
----------------------------------------------------------------------------
Inventory Metrics:
Raw Materials ($
Mil) $15.3 $14.8 $12.4 $13.0 $12.2 $9.8 $12.1 $14.3
Work in Process ($
Mil) $41.6 $49.4 $59.8 $57.3 $53.1 $41.0 $45.7 $49.2
Finished Goods ($
Mil) $44.7 $50.9 $46.3 $57.5 $65.7 $70.5 $65.7 $60.2
----------------------------------------------------------------------------
Total Inventory ($
Mil) $101.6 $115.1 $118.5 $127.8 $131.0 $121.3 $123.5 $123.7
Inventory Turns (1) 2.5 2.1 2.3 2.6 2.4 2.8 2.3 2.6
----------------------------------------------------------------------------
Worldwide Headcount 1,210 1,228 1,235 1,242 1,219 1,238 1,296 1,318
----------------------------------------------------------------------------
--------------------
(1) Amounts reflect non-GAAP results. Non-GAAP adjustments include non-cash
stock-based compensation expense.
Infinera Corporation Reports Fourth Quarter and Fiscal Year 2013 Financial Results
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