Investor Relations Presentation November 30,...
Transcript of Investor Relations Presentation November 30,...
World’s Largest Supplier of Optical Solutions for the Communications Industry
World’s Largest Supplier of Optical Solutions for the Communications Industry
Investor Relations PresentationNovember 30, 2011
Financial Presentation and Forward Looking Statemen ts
� Forward Looking Statements
� This presentation contains forward-looking statements as defined under the Private Securities Litigation Act of 1995. Except for historical information, the matters discussed in this presentation contain forward-looking statements regarding future trends or events that involve risks and uncertainties. Please be aware that these statements are only predictions and that actual events or results may differ materially. Please refer to the Company’s Form 10-K and other interim reports as filed with the Securities and Exchange Commission for a discussion of those risk factors. The Company assumes no obligation to update the information in this presentation.
� GAAP Reconciliation
� References to financial measures in this presentation will include references to non-GAAP financial measures. In addition to reporting financial results in accordance with U.S. GAAP, Finisar provides supplemental information regarding its operating performance on a non-GAAP basis. Finisar believes this supplemental information provides investors and management with additional insight into its underlying core operating performance by excluding a number of non-cash and cash charges, as well as infrequently occurring gains or losses. Finisar provides a complete reconciliation between GAAP and non-GAAP financial information in its earnings release which is posted in the investor relations section of the company’s web site www.finisar.com.
� Financial guidance for fiscal Q3FY12 is per earnings call on November 30, 2011 and is not being updated or confirmed as of any other date.
2© 2011 Finisar Corporation
World’s Largest Supplier of Fiber Optic Components
3© 2011 Finisar Corporation
Company Facts
Founded in 1988, IPO in 1999
Headquarters: Sunnyvale, CA (USA)
Global locations with 8900+ employees
Industry’s broadest product line
Market leader with growing share
Vertically integrated
Low cost, in-house manufacturing
1000+ US patents issued
Financially profitable
$381.3 $401.6
$497.1
$629.9
$948.8
$-
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
$800.0
$900.0
$1,000.0
FY2007 FY2008 FY2009 FY2010 FY2011
Rev
enue
($M
)
Annual Revenue Growth
TELECOM
DATACOM
TELECOM
Broad Product Portfolio and Customer Base
5
SFP+SFP CFPX2/XENPAK
Active Cable
WDM passivesCML Laser Interleaver
300-pinXFP
CATV
PRODUCTS CUSTOMERS
ROADM line card
Tunable laser
AWG Splitters
QuadwireC.wire
QSFPCXP
DATACOM
Optical Engine
SFP
PON
WSS
XFP
6© 2011 Finisar Corporation
Optical Transceivers for Datacom & Telecom
HuaweiOSN 8800
Emulex HBA
CiscoNexus 7000 Switches
BrocadeMLXe Router
Alcatel/Lucent1830 PSS System
Infinera DTN System
FINISAR
JDSU
Emcore
Oclaro
OpLink
Sumitomo/Excelight
Avago
OpNext
NeoPhotonics
7
Industry’s Broadest Product Portfolio
Source Photonics
TELECOMDATACOM
Optics Growth Drivers
7
0.240.6
1.2
2.2
3.8
6.3
0.0
2.0
4.0
6.0
2010 2011E 2012E 2013E 2014E 2015E
EB/Month
0
20
40
60
80
100
2010 2011E 2012E 2013E 2014E 2015E
EB/Month
Internet
Backbone
Mobile
Source: Cisco VNI 2011 Source: Cisco VNI Mobile 2011
© 2011 Finisar Corporation
Servers
Optical:Copper Port Ratio
10
1:5
1
2:1
BEFORE AFTER
Source: Cisco VNI Mobile 2011
Virtualization increases the use of optics in data centers
4.67.8
11.8
17.1
23.7
32.8
0
5
10
15
20
25
30
35
2010 2011E 2012E 2013E 2014E 2015E
EB/Month
VirtualizationVideo Traffic
Mobile BandwidthGlobal IP Traffic
Optics Markets Projected Strong Growth
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2010 2011E 2012E 2013E 2014E 2015E
© 2011 Finisar Corporation 8
Finisar Addressable Market
Source: Lightcounting September 2011 (transceivers); Infonetics September 2011(ROADMs); and Internal Estimates
($MM)
3,3783,718
4,2624,799
5,3225,849
Optics Market Leader with Growing Share
9© 2011 Finisar Corporation
11.9% 11.9% 12.3%13.2%
14.2% 14.8% 15.4% 15.9% 15.8%
Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11
Market Share Growth
Source: Ovum
Source: Ovum
15.8%
10.5%
9.7%
8.5%
7.0%6.0%4.3%3.4%
3.3%3.2%
28.3%
Other
Sumitomo
Avago
Opnext Oclaro
Total Market Share (Q1 2011)
Source Photonics
JDSU
FinisarFinisar
Fujitsu
Neophotonics
Oplink
WSS/ROADM Line Cards
10© 2011 Finisar Corporation
Addressable Market
0
200
400
600
800
2009 2011E 2013E 2015E($MM)Source: Infonetics 2011
WSS – Wavelength Selective SwitchROADM – Reconfigurable Optical Add/Drop Multiplexer
WSS modules and ROADM line cardsare designed for Long-Haul DWDMEquipment and Metro Optical Systems
ROADM line card with WSS module
ROADM functionality benefits • Allows point and click dynamic provisioning• Reduced carrier OPEX spending• Remote traffic management• Seamless all-optical transport layer• Flexible wavelength, bandwidth and data
allocation
WSS module
……
…
LCoS: Key WSS Differentiator
11© 2011 Finisar Corporation
Flexgrid
Metro/Edge WSS
EWP Platform
Core WSS
DWP Platform
DWPf
Next Gen WSS
High Port CountIncreased Bandwidth for 100Gb/s
over 50GHz channel spacing
Instrumentation
WaveShaperSoftware programmable optics• Common Optical Switching Platform• Rapid development of new optical functionality• Mass customization enabled through software
Liquid Crystal on Silicon (LCoS)
Industry Technology Leadership
�
12© 2011 Finisar Corporation
First to Market 100Gb/s Ethernet CFP Modules (2010)
First to Demonstrate 150Gb/s Active Optical Cable (2009)
First to Market 16GFC SAN Interconnection (2010)
First to Demonstrate WSS Flexgrid Technology (2010)
Features: Select channelwidths for initialdeployment
Adjust channelwidths on-the-fly toaccommodate futuretransmission speeds
Applications:StorageNetworkingHPC
Finisar 16G Fibre Channel Transceiver
Finisar 100GBASE-LR4 CFP Module
Differentiation Through Vertical Integration
13© 2011 Finisar Corporation
Lasers and PhotodetectorsIntegrated Circuit Design
World-class analog and digital IC design team
World-class foundries
Highest volume shipping ICs in the industry
World-class analog and digital IC design team
World-class foundries
Highest volume shipping ICs in the industry
Majority of optics revenue contains internally-designed optical chips
Majority of optics revenue contains internally-designed optical chips
Optical Package Design
Majority of optical components used in our modules are designed and manufactured
in-house
Majority of optical components used in our modules are designed and manufactured
in-house
High-Volume, Low-Cost Manufacturing
Shanghai, China
Ipoh, Malaysia
Advantages: Cost, Quality, Responsiveness, IP Protection
14© 2011 Finisar Corporation
Strategic Acquisitions in a Consolidating Industry
40Gbps Technology
November 2005
Big Bear Networks
CML Technology for 10-40Gbps
March 2007
Short wavelength VCSEL lasers
March 2004
Long wavelength FP and DFB lasers
April 2003
10Gbps Technology
January 2005
ROADM, CATV, 10-40Gbps
August 2008
PRODUCTS
VERTICAL INTEGRATION /TECHNOLOGY
Passive components
May 2002
New FocusSyntune tunable lasers, Splitters,
AWGs
May 2011
System on a Transceiver for PON
September 2010
16© 2010 Finisar Corporation
Financial Overview
Q2 FY12 Highlights
� Q2FY12 Revenues of $241.5. million� Up 5.8% Q-Q
� Q2 FY12 non-GAAP profitability� Gross margin of 32.1%
� Operating income $23.6M – up 12.5% from Q1FY12
� Operating margin 9.8% - up from 9.2% in Q1FY12
� Earnings per share of $0.23 – up from $.21 in Q1FY12
� Strong Balance Sheet � Cash - $228.0M on October 30, 2011
� Convertible debt - $40.0M as of October 30, 2011
� Repaid $5.6 million of Ignis’s $9.9M debt during Q2FY12
16© 2011 Finisar Corporation
0
100
200
300
400
500
600
700
800
900
1,000
FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Annual Revenue
326.0381.3 401.6
497.1
629.9
948.8
Annual Revenue Growth
17© 2011 Finisar Corporation
($MM)
Fiscal year ends April 30th. Figures are non-GAAP and exclude Network Tools Division, which was divested.
Quarterly Revenue Growth
18© 2011 Finisar Corporation
($MM)
Fiscal year ends April 30th. Figures are non-GAAP and exclude Network Tools Division, which was divested.
Strong Annual Growth
19
Fiscal year ends April 30th. Figures are non-GAAP and exclude Network Tools Division, which was divested.© 2011 Finisar Corporation
$497.1
$629.9
$948.8
$-$100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0
$1,000.0
FY09 FY10 FY11
Revenue
31.4%31.0%
34.9%
29.0%
30.0%
31.0%
32.0%
33.0%
34.0%
35.0%
36.0%
FY09 FY10 FY11
Gross Margin
$0.30
$0.56
$1.55
$-
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
FY09 FY10 FY11
Diluted EPS
4.7%
7.1%
15.6%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
FY09 FY10 FY11
Operating Margin
Q2-12Actual
Q3 FY12 Quarterly Guidance (non-GAAP)
Revenue $241.5 $235- $250
Gross margin 32.1% ~31.5%
Operating expense $53.8 ~$54
Operating profit $23.6
Operating margin 9.8% 8.5% - 10.0%
EPS $0.23 $0.20 - $0.24
21© 2011 Finisar Corporation
Q3-12Estimate$ Millions
(except EPS)
Financial guidance for fiscal Q3FY12 is per earnings call on November 30, 2011 and is not being updated or confirmed as of any other date.
World’s Largest Supplier of Fiber Optic Components
22© 2011 Finisar Corporation
Investment Considerations
Broadest product portfolio
Global customer base
Strong growth drivers
Market share leader with increasing share
Technology innovator
Differentiation through vertical integration
Skilled at consolidating acquisitions
Record profits with consistent annual growth
$381.3 $401.6
$497.1
$629.9
$948.8
$-
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
$800.0
$900.0
$1,000.0
FY2007 FY2008 FY2009 FY2010 FY2011
Rev
enue
($M
)
Annual Revenue Growth
World’s Largest Supplier of Optical Solutions for the Communications Industry
World’s Largest Supplier of Optical Solutions for the Communications Industry