Revenue for the fourth quarter was $51.5 million, up from $48.1 million in the prior quarter, and up from fourth quarter fiscal 2013 revenue of $49.3 million.

GAAP net loss was $4.2 million, or $(0.23) per diluted share, compared to a net loss of $0.5 million, or ($0.03) per diluted share, in the prior quarter and net income of $4.5 million, or $0.23 per diluted share, reported for the fourth quarter of fiscal 2013.  The GAAP net loss for the fourth quarter of fiscal 2014 was due primarily to a $4.9 million reserve for excess inventory relating to the Oplink Connected business as part of the Company's recently announced decision to seek strategic alternatives for that business.  Excluding this inventory reserve, Oplink Connected expenses for the quarter totaled $2.3 million.

Non-GAAP net income for the fourth quarter was $1.8 million, or $0.10 per diluted share, compared to non-GAAP net income of $0.3 million, or $0.01 per diluted share, reported in the prior quarter, and non-GAAP net income of $4.7 million, or $0.24 per diluted share, reported for the fourth quarter of fiscal 2013.

Oplink repurchased $18.2 million of its stock during the fourth quarter and closed the quarter with cash and marketable securities of $140 million.

For the full 2014 fiscal year, revenue was $204.8 million, up from $183.4 million for the 2013 fiscal year.  GAAP net loss for fiscal 2014 was $1.2 million, or $(0.06) per diluted share, compared to net income of $13.4 million, or $0.69 per diluted share, in fiscal 2013.  Non-GAAP net income for fiscal 2014 was $8.5 million, or $0.44 per diluted share, compared to non-GAAP net income of $17.6 million, or $0.91 per diluted share, reported for fiscal 2013.

A reconciliation of the non-GAAP financial measures to their GAAP equivalents is included in the financial tables accompanying this press release.

"We are extremely pleased with our fourth quarter performance, which was driven primarily by meaningful demand in the North American telecom and datacom markets, as well as continued wireless network build-out in China," said Joe Liu, Chairman and CEO of Oplink.  "These results highlight the fundamental strength of our core optical business, and we are intently focused on capitalizing on the significant growth opportunities ahead."

Liu continued, "Following constructive conversations over the last several months with a number of our shareholders, on July 29, 2014, we announced the commencement of a process to seek strategic alternatives for the Oplink Connected business as well as a number of key initiatives to enhance shareholder value, including a significant expansion to our existing share repurchase program; the initiation of a quarterly dividend to shareholders beginning in the first quarter of fiscal 2015; and a plan to expand Oplink's Board of Directors by up to two members in order to add further industry expertise.  We are moving quickly on these initiatives and have already begun contacting prospective buyers for the Connected business.  While it is early in the process and premature to speculate about the outcome, we believe this is the right decision for the Connected business, our company and our investors."

 

In this earnings release and during the earnings conference call and webcast as described above, Oplink will discuss certain non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. A reconciliation between non-GAAP and GAAP measures can be found in the accompanying tables.

Oplink believes that providing these non-GAAP measures to its investors provides investors the benefit of viewing Oplink's performance using the same financial metrics that the management team uses in making many key decisions and evaluating how Oplink's "core operating performance" and its results of operations may look in the future. Oplink defines "core operating performance" as its on-going performance in the ordinary course of its operations. Items that are non-recurring or do not involve cash expenditures, such as one-time tax benefits or charges, impairment charges, restructuring charges, amortization of intangible assets and non-cash compensation related to stock and options, are not included in Oplink's view of "core operating performance."

This press release contains forward-looking statements, including without limitation the statements relating to (a) the possible sale of the Oplink Connected business, (b) potential future repurchases of the Company's stock, (c) the planned expansion of the Company's board of directors by up to two additional members, and (d) expected financial results for the quarter ending September 28, 2014.  These forward-looking statements involve risks and uncertainties that could cause Oplink's results to differ materially from those expressed or implied by such forward-looking statements, including the following risks and uncertainties: (1) the risk that the process being undertaken to seek the sale of the Oplink Connected business fails to identify any parties willing to acquire or invest in that business; (2) potential changes in circumstances that lead Oplink to scale back stock repurchases; (3) the risk that the process of identifying qualified candidates interested in serving on Oplink's board of directors is more difficult or time-consuming that expected; (4) possible reductions in customer orders or delays in shipments of products to customers; (5) Oplink's reliance on third parties to supply critical components and materials for its products; (6) intense competition in Oplink's target markets and potential pricing pressure that may arise from changing supply or demand conditions in the industry; (7) increasing reliance on sales to datacom customers, which can fluctuate more than sales to our traditional telecom customers; (8) changes in our effective tax rate, which could reduce our net income; and (9) other risks detailed from time to time in Oplink's periodic reports filed with the Securities and Exchange Commission, including the Company's latest Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 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 is a leading provider of optical communication components, intelligent modules and subsystems. We offer advanced solutions in DWDM and CWDM bandwidth creation, optical amplification, switching & routing, wavelength conditioning, monitoring & protection, connectivity and system-level integration, as well as a broad portfolio of optical transceivers for metro WDM, aggregation and access applications. We supply to global leading and emerging telecommunications, data communications and cable TV equipment makers. We are headquartered in Fremont, California and own multiple research and manufacturing facilities in Asia. To learn more about Oplink, visit our web site at www.oplink.com.