Oplink Communications, Inc. (OPLK)
F4Q10 (Qtr End 06/30/10) Earnings Call Transcript
August 2, 2010 5:00 pm ET
Matt Hunt – IR, The Blueshirt Group
Joe Liu – Chairman, President and CEO
Shirley Yin – EVP and CFO
Paul Bonenfant – Morgan Keegan
Vahid Khorsand – BWS Financial
Ajit Pai – Stifel Nicolaus
Christopher Longiaru – Sidoti & Company
Dave Kang – B. Riley
Previous Statements by OPLK
» Oplink Communications Inc. F3Q10 (Qtr End 03/31/2010) Earnings Call Transcript
» Oplink Communications, Inc. F4Q09 (Qtr End 6/30/09) Earnings Call Transcript
» Oplink Communications, Inc. F3Q09 (Qtr End 3/31/09) Earnings Call Transcript
Good afternoon, ladies and gentlemen. Thank you for standing by and welcome to the Oplink Communications fourth-quarter 2010 financial results conference call. During today's presentation, all participants will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions)
This conference is being recorded, today, Monday, August 2, 2010; and at this time, I would like to turn the conference over to Matt Hunt.
Thank you; and good afternoon, ladies and gentlemen. Thank you for joining us on today’s conference call to discuss Oplink’s fourth quarter and fiscal year 2010 financial results. This call is being simultaneously webcast on the Investor Relations section of the company’s website at www.oplink.com. Joining me on the call today are Joe Liu, President and CEO of Oplink; and Shirley Yin, CFO of Oplink.
Before we get started, I would like to remind you that the following discussion contains forward-looking statements that involve risks and uncertainties, and that Oplink’s actual results may vary materially from those discussed here. Information concerning factors that could cause actual results to differ from the forward-looking statements can be found in Oplink’s periodic filings with the SEC.
Forward-looking statements made on this conference call are based on current expectations, and Oplink assumes no responsibility to, and does not intend to update or revise them, whether as a result of new developments or otherwise.
Now, I would like to turn the call over to Joe Liu, President and CEO of Oplink. Please go ahead, Joe.
Thank you, Matt. Hello, and thanks to all of you for joining us today as we report our fourth quarter and fiscal year 2010 results. We are pleased to report a better-than-expected quarter for Oplink, with revenue increase 16% sequentially to $38.9 million and non-GAAP EPS increase from $0.22 to $0.28. Both revenue and EPS were above the outlook we provided last quarter. It was a strong quarter across all lines and geographies.
We feel that the worldwide carriers are spending more on next-generation optical tools to increase bandwidth and service to many new applications. We have experienced these demand trends for several quarters now, and we were able to ramp up our production capacity as a result of our ongoing expansion efforts. Business is strong in both access and metro markets, FTTx is growing, and so is the metro core and the metro edge. We expect these demand trends to continue. 10% customers for Oplink in the fourth quarter were Tellabs, Alcatel-Lucent, and Huawei. We also had a strong contribution from Sienna, Fujitsu, and Cisco.
In summary, we had a good quarter. The outlook for the coming quarter is very positive. However, long-term visibility continues to be limited.
Now, I will turn the call over to Shirley for a detailed financial review. Shirley, please go ahead.
Thanks, Joe; and thanks to all of you for joining us today. Revenue for the fourth quarter was $38.9 million, which compares to $33.6 million reported in the prior quarter. GAAP net income was $3.6 million or $0.17 per diluted share, which includes $1.5 million in stock-based compensation and $999,000 in the amortization of intangibles. On a non-GAAP basis, net income was $6.0 million or $0.28 per diluted share, compared to $4.8 million or $0.22 per diluted share reported in the prior quarter.
For fiscal year 2010, consolidated revenues were $138.8 million. Consolidated GAAP net income for the fiscal year was $11.1 million or $0.51 per diluted share, including $6.0 million in stock-based compensation, $3.8 million in amortization of intangible assets. Our revenue in 2010 was down only slightly over $143.7 million reported in 2009. We effectively managed costs and substantially improved our performance. Non-GAAP net income in 2010 increased to $20.9 million, or $0.97 per diluted share, from $11.0 million or $0.52 per diluted share reported in 2009.
Non-GAAP gross margin for the fourth quarter was 33.5%, slightly down from last quarter, as expected. During the quarter, we substantially increased manufacturing headcount and expenses to increase capacity. For the coming quarter, although we are expecting a substantial increase in revenue, we expect our gross margins to remain flat, due to product mix and increased labor costs in our China manufacturing facilities.
Turning to our operating performance, total non-GAAP operating expenses were $7.4 million, as we continued to invest in R&D and new product initiatives. In addition, the fourth quarter also recorded a full quarter of expenses related to our AMIT acquisition. We expect total operating expenses to continue to increase in the coming quarters, as we continue to spend on R&D.
Interest and other income net for the fourth quarter was $108,000. During the fourth quarter, we recorded $600,000 in gains on disposal of assets, which included $200,000 from sales of certain intangible assets, and $400,000 from dissolving one of our subsidiaries. Our provision for income taxes was $330,000. We expect provision for income taxes in the first quarter to be at a range of $400,000 to $600,000. Total headcount at June 30 was 3,821, up from 3,446 at March 31, which is primarily the result of increases in manufacturing and R&D.