|Infinera Corporation Reports Third Quarter 2017 Financial Results and Announces Restructuring Plan|
•November 8, 2017
SUNNYVALE, Calif., Nov. 08, 2017 (GLOBE NEWSWIRE) -- Infinera Corporation ( INFN), provider of Intelligent Transport Networks, today released financial results for its third quarter ended September 30, 2017. The company also today announced a plan to restructure its worldwide operations to reduce its expenses and establish a more cost-efficient operating structure.
Third Quarter 2017 Financial Review
GAAP revenue for the quarter was $192.6 million compared to $176.8 million in the second quarter of 2017 and $185.5 million in the third quarter of 2016.
GAAP gross margin for the quarter was 35.2% compared to 36.7% in the second quarter of 2017 and 45.6% in the third quarter of 2016. GAAP operating margin for the quarter was (17.8)% compared to (22.9)% in the second quarter of 2017 and (5.9)% in the third quarter of 2016.
GAAP net loss for the quarter was $(37.2) million, or $(0.25) per share, compared to a net loss of $(42.8) million, or $(0.29) per share, in the second quarter of 2017, and net loss of $(11.2) million, or $(0.08) per share, in the third quarter of 2016.
Non-GAAP gross margin for the quarter was 39.1% compared to 40.7% in the second quarter of 2017 and 49.2% in the third quarter of 2016. Non-GAAP operating margin for the quarter was (7.8)% compared to (12.2)% in the second quarter of 2017 and 3.6% in the third quarter of 2016.
Non-GAAP net loss for the quarter was $(17.0) million, or $(0.11) per share, compared to a net loss of $(22.8) million, or $(0.15) per share, in the second quarter of 2017, and net income of $7.4 million, or $0.05 per diluted share, in the third quarter of 2016.
A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP equivalents can be found at the end of this release.
“In the third quarter we continued to bring new products to market and delivered financial results that exceeded our guidance,” said Tom Fallon, Infinera’s Chief Executive Officer. “Our ICE4 products are delivering the technology differentiation we expected and are gaining traction across multiple customer verticals. Despite a softening near-term market outlook, over time I am confident we will return to outgrowing the market and delivering strong financial results.”
Infinera also announced it is implementing a plan to restructure its worldwide operations in order to reduce its expenses and establish a more cost-efficient structure that better aligns its operations with its long-term strategies. As part of this restructuring plan, Infinera will reduce headcount, rationalize certain products and programs, and close a remote R&D facility.
Infinera anticipates annual savings from the restructuring to be approximately $40.0 million, compared to what the projected run-rate of expenses for fiscal 2018 would have been prior to the restructuring. Infinera estimates total costs related to the restructuring will be in the range of $21.0 million to $27.0 million. The company anticipates a majority of the restructuring will be completed during the fourth quarter of 2017.
“In recent years we have made significant investments to become a multi-market company, deliver a fully refreshed product portfolio and establish a faster technology cadence. Reflecting on the internal expansion associated with these investments, we have identified areas where we can be more efficient going forward,” stated Mr. Fallon. “While difficult, my expectation is taking action at this time will result in a more cost-efficient structure that enables us to focus on our strengths and return to profitability as we grow. I believe these are the right steps for our shareholders, our company and our customers.”
Conference Call Information
Infinera will host a conference call for analysts and investors to discuss its third quarter 2017 results and its outlook for the fourth quarter of 2017 today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Interested parties may join the conference call by dialing 1-866-373-6878 (toll free) or 1-412-317-5101 (international). A live webcast of the conference call will also be accessible from the Events & Webcasts section of Infinera’s website at investors.infinera.com. Replay of the audio webcast will be available at investors.infinera.com approximately two hours after the end of the live call.