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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
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Delaware
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|
20-1303994
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Large accelerated filer
|
|
x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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Item 1.
|
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 6.
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March 31, 2018
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July 1, 2017
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||||
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(Thousands, except par value)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
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$
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179,969
|
|
|
$
|
219,270
|
|
Restricted cash
|
—
|
|
|
716
|
|
||
Short-term investments
|
124,433
|
|
|
37,559
|
|
||
Accounts receivable, net of allowances for doubtful accounts of $1,333 and $1,533 as of March 31, 2018 and July 1, 2017, respectively
|
111,564
|
|
|
122,287
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||
Inventories
|
103,927
|
|
|
101,068
|
|
||
Prepaid expenses and other current assets
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38,983
|
|
|
40,870
|
|
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Total current assets
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558,876
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|
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521,770
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||
Property and equipment, net
|
137,999
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114,333
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Other intangible assets, net
|
241
|
|
|
699
|
|
||
Deferred tax assets
|
19,325
|
|
|
25,774
|
|
||
Other non-current assets
|
1,622
|
|
|
2,573
|
|
||
Total assets
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$
|
718,063
|
|
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$
|
665,149
|
|
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|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
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|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
73,124
|
|
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$
|
88,316
|
|
Accrued expenses and other liabilities
|
42,159
|
|
|
42,499
|
|
||
Capital lease obligations, current
|
2,514
|
|
|
2,368
|
|
||
Total current liabilities
|
117,797
|
|
|
133,183
|
|
||
Deferred gain on sale-leaseback
|
5,747
|
|
|
5,895
|
|
||
Capital lease obligations, non-current
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1,033
|
|
|
1,379
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|
||
Other non-current liabilities
|
11,212
|
|
|
11,019
|
|
||
Total liabilities
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135,789
|
|
|
151,476
|
|
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Commitments and contingencies (Note 7)
|
|
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|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock: 1,000 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock: $0.01 par value per share; 275,000 shares authorized; 170,211
shares issued and outstanding at March 31, 2018 and 167,639 shares issued and outstanding at July 1, 2017
|
1,701
|
|
|
1,676
|
|
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Additional paid-in capital
|
1,700,120
|
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1,688,777
|
|
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Accumulated other comprehensive income
|
42,441
|
|
|
40,973
|
|
||
Accumulated deficit
|
(1,161,988
|
)
|
|
(1,217,753
|
)
|
||
Total stockholders’ equity
|
582,274
|
|
|
513,673
|
|
||
Total liabilities and stockholders’ equity
|
$
|
718,063
|
|
|
$
|
665,149
|
|
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Three Months Ended
|
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Nine Months Ended
|
||||||||||||
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March 31, 2018
|
|
April 1, 2017
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||
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(Thousands, except per share amounts)
|
||||||||||||||
Revenues
|
$
|
127,293
|
|
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$
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162,182
|
|
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$
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422,226
|
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$
|
451,588
|
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Cost of revenues
|
83,729
|
|
|
95,394
|
|
|
264,130
|
|
|
277,680
|
|
||||
Gross profit
|
43,564
|
|
|
66,788
|
|
|
158,096
|
|
|
173,908
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|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Research and development
|
16,412
|
|
|
14,479
|
|
|
48,205
|
|
|
41,344
|
|
||||
Selling, general and administrative
|
16,002
|
|
|
14,736
|
|
|
47,760
|
|
|
42,883
|
|
||||
Amortization of other intangible assets
|
154
|
|
|
150
|
|
|
460
|
|
|
635
|
|
||||
Restructuring, acquisition and related (income) expense, net
|
3,084
|
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(301
|
)
|
|
3,084
|
|
|
92
|
|
||||
(Gain) loss on sale of property and equipment
|
(19
|
)
|
|
(16
|
)
|
|
172
|
|
|
(127
|
)
|
||||
Total operating expenses
|
35,633
|
|
|
29,048
|
|
|
99,681
|
|
|
84,827
|
|
||||
Operating income
|
7,931
|
|
|
37,740
|
|
|
58,415
|
|
|
89,081
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income (expense), net
|
253
|
|
|
175
|
|
|
810
|
|
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(13,613
|
)
|
||||
Gain (loss) on foreign currency transactions, net
|
2,107
|
|
|
687
|
|
|
4,195
|
|
|
(3,155
|
)
|
||||
Other income (expense), net
|
906
|
|
|
233
|
|
|
2,416
|
|
|
583
|
|
||||
Total other income (expense)
|
3,266
|
|
|
1,095
|
|
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7,421
|
|
|
(16,185
|
)
|
||||
Income before income taxes
|
11,197
|
|
|
38,835
|
|
|
65,836
|
|
|
72,896
|
|
||||
Income tax provision
|
390
|
|
|
621
|
|
|
9,803
|
|
|
1,064
|
|
||||
Net income
|
$
|
10,807
|
|
|
$
|
38,214
|
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|
$
|
56,033
|
|
|
$
|
71,832
|
|
Net income per share:
|
|
|
|
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|
||||||||
Basic
|
$
|
0.06
|
|
|
$
|
0.23
|
|
|
$
|
0.33
|
|
|
$
|
0.46
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.22
|
|
|
$
|
0.33
|
|
|
$
|
0.44
|
|
Shares used in computing net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
169,602
|
|
|
166,808
|
|
|
168,910
|
|
|
155,037
|
|
||||
Diluted
|
171,261
|
|
|
169,841
|
|
|
171,338
|
|
|
163,237
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||
|
(Thousands)
|
||||||||||||||
Net income
|
$
|
10,807
|
|
|
$
|
38,214
|
|
|
$
|
56,033
|
|
|
$
|
71,832
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities
|
13
|
|
|
(10
|
)
|
|
(27
|
)
|
|
(5
|
)
|
||||
Currency translation adjustments
|
—
|
|
|
1,775
|
|
|
1,495
|
|
|
(1,470
|
)
|
||||
Total comprehensive income
|
$
|
10,820
|
|
|
$
|
39,979
|
|
|
$
|
57,501
|
|
|
$
|
70,357
|
|
|
Nine Months Ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
|
(Thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
56,033
|
|
|
$
|
71,832
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Amortization of deferred gain on sale-leaseback
|
(596
|
)
|
|
(553
|
)
|
||
Amortization (accretion) of premiums and discounts on short-term investments
|
(784
|
)
|
|
—
|
|
||
Amortization of debt discount and issuance costs in connection with convertible notes payable
|
—
|
|
|
102
|
|
||
Depreciation and amortization
|
21,746
|
|
|
15,360
|
|
||
Adjustment in deferred tax assets
|
6,905
|
|
|
—
|
|
||
Interest make-whole charge and induced conversion expense related to convertible notes
|
—
|
|
|
8,463
|
|
||
Stock-based compensation expense
|
11,055
|
|
|
7,922
|
|
||
Write-down of inventories designated to be sold to ZTE
|
3,083
|
|
|
—
|
|
||
Other non-cash adjustments
|
172
|
|
|
(128
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
12,864
|
|
|
(32,402
|
)
|
||
Inventories
|
(4,157
|
)
|
|
(16,068
|
)
|
||
Prepaid expenses and other current assets
|
2,758
|
|
|
(16,579
|
)
|
||
Other non-current assets
|
(167
|
)
|
|
(275
|
)
|
||
Accounts payable
|
(13,081
|
)
|
|
22,266
|
|
||
Accrued expenses and other liabilities
|
(611
|
)
|
|
11,746
|
|
||
Net cash provided by operating activities
|
95,220
|
|
|
71,686
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(47,272
|
)
|
|
(50,022
|
)
|
||
Purchases of short-term investments
|
(197,344
|
)
|
|
(40,001
|
)
|
||
Maturities of short-term investments
|
111,283
|
|
|
—
|
|
||
Transfer from restricted cash
|
716
|
|
|
(1
|
)
|
||
Net cash used in investing activities
|
(132,617
|
)
|
|
(90,024
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the exercise of stock options
|
2,556
|
|
|
4,531
|
|
||
Shares repurchased for tax withholdings on vesting of restricted stock units
|
(3,013
|
)
|
|
(3,675
|
)
|
||
Proceeds from the sale of common stock in connection with the public offering, net of expenses
|
—
|
|
|
135,153
|
|
||
Payments on capital lease obligations
|
(895
|
)
|
|
(1,897
|
)
|
||
Net cash provided by (used in) financing activities
|
(1,352
|
)
|
|
134,112
|
|
||
Effect of exchange rate on cash and cash equivalents
|
(552
|
)
|
|
2,360
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(39,301
|
)
|
|
118,134
|
|
||
Cash and cash equivalents at beginning of period
|
219,270
|
|
|
95,929
|
|
||
Cash and cash equivalents at end of period
|
$
|
179,969
|
|
|
$
|
214,063
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid for interest make-whole and induced conversion charges related to the exercise of convertible notes
|
$
|
—
|
|
|
$
|
4,700
|
|
|
|
|
|
||||
Supplemental disclosures of non-cash transactions:
|
|
|
|
||||
Issuance of common stock in exchange for the net carrying value of the liability component of the convertible notes
|
$
|
—
|
|
|
$
|
62,125
|
|
Purchases of property and equipment funded by accounts payable
|
7,106
|
|
|
11,831
|
|
||
Capital lease obligations incurred for purchases of property and equipment
|
709
|
|
|
397
|
|
(B)
|
0.0636
of a validly issued, fully paid and nonassessable share of the common stock of Lumentum, par value
$0.001
per share (“Lumentum Common Stock”) (such ratio, the “Exchange Ratio”).
|
|
March 31, 2018
|
|
July 1, 2017
|
||||
|
(Thousands)
|
||||||
Cash and cash equivalents:
|
|
||||||
Cash-in-bank
|
$
|
91,429
|
|
|
$
|
79,259
|
|
Money market funds
|
64,573
|
|
|
99,037
|
|
||
Commercial paper
|
23,967
|
|
|
22,981
|
|
||
Corporate bonds
|
—
|
|
|
2,012
|
|
||
U.S. agency securities
|
—
|
|
|
15,981
|
|
||
|
$
|
179,969
|
|
|
$
|
219,270
|
|
|
March 31, 2018
|
|
July 1, 2017
|
|||||
Short-term investments
|
(Thousands)
|
|||||||
Commercial paper
|
$
|
58,461
|
|
|
$
|
23,459
|
|
|
U.S. Treasury securities
|
55,833
|
|
|
4,006
|
|
|||
Corporate bonds
|
10,139
|
|
|
10,094
|
|
|||
|
$
|
124,433
|
|
|
$
|
37,559
|
|
|
March 31, 2018
|
|
July 1, 2017
|
||||
|
(Thousands)
|
||||||
Inventories:
|
|
||||||
Raw materials
|
$
|
22,404
|
|
|
$
|
32,421
|
|
Work-in-process
|
58,212
|
|
|
40,171
|
|
||
Finished goods
|
23,311
|
|
|
28,476
|
|
||
|
$
|
103,927
|
|
|
$
|
101,068
|
|
|
March 31, 2018
|
|
July 1, 2017
|
||||
|
(Thousands)
|
||||||
Property and equipment, net:
|
|
||||||
Buildings and improvements
|
$
|
11,601
|
|
|
$
|
10,222
|
|
Plant and machinery
|
135,347
|
|
|
99,779
|
|
||
Fixtures, fittings and equipment
|
3,499
|
|
|
3,225
|
|
||
Computer equipment
|
24,472
|
|
|
15,901
|
|
||
|
174,919
|
|
|
129,127
|
|
||
Less: Accumulated depreciation
|
(36,920
|
)
|
|
(14,794
|
)
|
||
|
$
|
137,999
|
|
|
$
|
114,333
|
|
|
Core and
Current Technology |
|
Development
and Supply Agreements |
|
Customer
Relationships |
|
Patent
Portfolio |
|
Other
Intangibles |
|
Accumulated Amortization
|
|
Total
|
||||||||||||||
|
(Thousands)
|
||||||||||||||||||||||||||
Balance at July 1, 2017
|
$
|
6,249
|
|
|
$
|
4,496
|
|
|
$
|
2,402
|
|
|
$
|
915
|
|
|
$
|
3,338
|
|
|
$
|
(16,701
|
)
|
|
$
|
699
|
|
Amortization
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(460
|
)
|
|
(460
|
)
|
|||||||
Other adjustments
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Balance at March 31, 2018
|
$
|
6,249
|
|
|
$
|
4,498
|
|
|
$
|
2,402
|
|
|
$
|
915
|
|
|
$
|
3,338
|
|
|
$
|
(17,161
|
)
|
|
$
|
241
|
|
|
March 31, 2018
|
|
July 1, 2017
|
||||
|
(Thousands)
|
||||||
Accrued expenses and other liabilities:
|
|
||||||
Trade payables
|
$
|
2,400
|
|
|
$
|
7,805
|
|
Compensation and benefits related accruals
|
13,156
|
|
|
13,837
|
|
||
Warranty accrual
|
4,149
|
|
|
4,124
|
|
||
Purchase commitments in excess of future demand, current
|
7,662
|
|
|
4,009
|
|
||
Other accruals
|
14,792
|
|
|
12,724
|
|
||
|
$
|
42,159
|
|
|
$
|
42,499
|
|
|
March 31, 2018
|
|
July 1, 2017
|
||||
|
(Thousands)
|
||||||
Accumulated other comprehensive income:
|
|
||||||
Currency translation adjustments
|
$
|
42,626
|
|
|
$
|
41,131
|
|
Unrealized loss on marketable securities
|
(35
|
)
|
|
(8
|
)
|
||
Japan defined benefit plan
|
(150
|
)
|
|
(150
|
)
|
||
|
$
|
42,441
|
|
|
$
|
40,973
|
|
Level 1-
|
Quoted prices in active markets for identical assets or liabilities.
|
Level 2-
|
Inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices of identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets), or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3-
|
Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
|
|
|
Fair Value Measurement at March 31, 2018 Using
|
||||||||||||||
|
|
Quoted Prices
|
|
Significant
|
|
|
|
|
||||||||
|
|
in Active
|
|
Other
|
|
Significant
|
|
|
||||||||
|
|
Markets for
|
|
Observable
|
|
Unobservable
|
|
|
||||||||
|
|
Identical Assets
|
|
Inputs
|
|
Inputs
|
|
|
||||||||
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
||||||||
|
|
(Thousands)
|
||||||||||||||
Assets:
|
|
|||||||||||||||
Cash and cash equivalents:
(1)
|
|
|
|
|
|
|
|
|||||||||
Money market funds
|
$
|
64,573
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64,573
|
|
|
Commercial paper
|
—
|
|
|
23,967
|
|
|
—
|
|
|
23,967
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|||||||||
Commercial paper
|
—
|
|
|
58,461
|
|
|
—
|
|
|
58,461
|
|
|||||
U.S. Treasury securities
|
—
|
|
|
55,833
|
|
|
—
|
|
|
55,833
|
|
|||||
Corporate bonds
|
—
|
|
|
10,139
|
|
|
—
|
|
|
10,139
|
|
|||||
Total assets measured at fair value
|
$
|
64,573
|
|
|
$
|
148,400
|
|
|
$
|
—
|
|
|
$
|
212,973
|
|
(1)
|
Excludes
$91.4 million
in cash held in our bank accounts at
March 31, 2018
.
|
|
|
Fair Value Measurement at July 1, 2017 Using
|
||||||||||||||
|
|
Quoted Prices
|
|
Significant
|
|
|
|
|
||||||||
|
|
in Active
|
|
Other
|
|
Significant
|
|
|
||||||||
|
|
Markets for
|
|
Observable
|
|
Unobservable
|
|
|
||||||||
|
|
Identical Assets
|
|
Inputs
|
|
Inputs
|
|
|
||||||||
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
||||||||
|
|
(Thousands)
|
||||||||||||||
Assets:
|
|
|||||||||||||||
Cash and cash equivalents:
(1)
|
|
|
|
|
|
|
|
|||||||||
Money market funds
|
$
|
99,037
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,037
|
|
|
Commercial paper
|
—
|
|
|
22,981
|
|
|
—
|
|
|
22,981
|
|
|||||
U.S. agency securities
|
—
|
|
|
15,981
|
|
|
—
|
|
|
15,981
|
|
|||||
Corporate bonds
|
—
|
|
|
2,012
|
|
|
—
|
|
|
2,012
|
|
|||||
Restricted cash:
|
|
|
|
|
|
|
|
|||||||||
Money market funds
|
712
|
|
|
—
|
|
|
—
|
|
|
712
|
|
|||||
Short-term investments:
|
|
|
|
|
|
|
|
|||||||||
Commercial paper
|
—
|
|
|
23,459
|
|
|
—
|
|
|
23,459
|
|
|||||
Corporate bonds
|
—
|
|
|
10,094
|
|
|
—
|
|
|
10,094
|
|
|||||
U.S. Treasury securities
|
—
|
|
|
4,006
|
|
|
—
|
|
|
4,006
|
|
|||||
Total assets measured at fair value
|
$
|
99,749
|
|
|
$
|
78,533
|
|
|
$
|
—
|
|
|
$
|
178,282
|
|
(1)
|
Excludes
$79.3 million
in cash held in our bank accounts at
July 1, 2017
.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||
|
(Thousands)
|
||||||||||||||
Service cost
|
$
|
163
|
|
|
$
|
172
|
|
|
$
|
477
|
|
|
$
|
480
|
|
Interest cost
|
5
|
|
|
1
|
|
|
15
|
|
|
3
|
|
||||
Net periodic pension costs
|
$
|
168
|
|
|
$
|
173
|
|
|
$
|
492
|
|
|
$
|
483
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||
|
(Thousands)
|
||||||||||||||
Warranty provision—beginning of period
|
$
|
4,206
|
|
|
$
|
4,560
|
|
|
$
|
4,124
|
|
|
$
|
3,827
|
|
Warranties issued
|
135
|
|
|
991
|
|
|
435
|
|
|
2,533
|
|
||||
Warranties utilized or expired
|
(243
|
)
|
|
(901
|
)
|
|
(516
|
)
|
|
(1,505
|
)
|
||||
Currency translation and other adjustments
|
51
|
|
|
9
|
|
|
106
|
|
|
(196
|
)
|
||||
Warranty provision—end of period
|
$
|
4,149
|
|
|
$
|
4,659
|
|
|
$
|
4,149
|
|
|
$
|
4,659
|
|
|
Capital Leases
|
||
|
(Thousands)
|
||
Fiscal Year Ending:
|
|
||
2018 (remaining)
|
$
|
942
|
|
2019
|
1,784
|
|
|
2020
|
638
|
|
|
2021
|
276
|
|
|
Total minimum lease payments
|
3,640
|
|
|
Less amount representing interest
|
(93
|
)
|
|
Present value of capitalized payments
|
3,547
|
|
|
Less: current portion
|
(2,514
|
)
|
|
Long-term portion
|
$
|
1,033
|
|
|
Shares
Available
For Grant
|
|
Stock
Options /
SARs
Outstanding
|
|
Weighted-
Average
Exercise Price
|
|
Time and Performance-based Restricted Stock
Awards / Units
Outstanding
|
|
Weighted-
Average Grant
Date Fair Value
|
|||||||
|
(Thousands)
|
|
(Thousands)
|
|
|
|
(Thousands)
|
|
|
|||||||
Balance at July 1, 2017
|
13,581
|
|
|
1,858
|
|
|
$
|
7.84
|
|
|
5,687
|
|
|
$
|
5.43
|
|
Increase in share reserve
|
8,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Granted
|
(5,677
|
)
|
|
—
|
|
|
—
|
|
|
4,055
|
|
|
8.20
|
|
||
Exercised or released
|
26
|
|
|
(518
|
)
|
|
4.93
|
|
|
(2,432
|
)
|
|
5.02
|
|
||
Forfeited or expired
|
792
|
|
|
(179
|
)
|
|
16.47
|
|
|
(440
|
)
|
|
6.67
|
|
||
Balance at March 31, 2018
|
16,722
|
|
|
1,161
|
|
|
$
|
7.80
|
|
|
6,870
|
|
|
$
|
7.13
|
|
|
Shares
|
|
Weighted-
Average
Exercise Price
|
|
Weighted-
Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic
Value
|
|||||
|
(Thousands)
|
|
|
|
(Years)
|
|
(Thousands)
|
|||||
Options and SARs exercisable
|
1,138
|
|
|
$
|
7.92
|
|
|
2.2
|
|
$
|
3,546
|
|
Options and SARs outstanding
|
1,161
|
|
|
$
|
7.80
|
|
|
2.3
|
|
$
|
3,727
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||
|
(Thousands, except per share amounts)
|
||||||||||||||
Net income
|
$
|
10,807
|
|
|
$
|
38,214
|
|
|
$
|
56,033
|
|
|
$
|
71,832
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares - Basic
|
169,602
|
|
|
166,808
|
|
|
168,910
|
|
|
155,037
|
|
||||
Effect of dilutive potential common shares from:
|
|
|
|
|
|
|
|
||||||||
Stock options and stock appreciation rights
|
336
|
|
|
651
|
|
|
409
|
|
|
712
|
|
||||
Restricted stock units and awards
|
1,323
|
|
|
2,382
|
|
|
2,019
|
|
|
2,484
|
|
||||
Convertible notes
|
—
|
|
|
—
|
|
|
—
|
|
|
5,004
|
|
||||
Weighted-average shares - Diluted
|
171,261
|
|
|
169,841
|
|
|
171,338
|
|
|
163,237
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income per share
|
$
|
0.06
|
|
|
$
|
0.23
|
|
|
$
|
0.33
|
|
|
$
|
0.46
|
|
Diluted net income per share
|
$
|
0.06
|
|
|
$
|
0.22
|
|
|
$
|
0.33
|
|
|
$
|
0.44
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||
|
(Thousands)
|
||||||||||||||
Asia-Pacific:
|
|
|
|
|
|
|
|
||||||||
China
|
$
|
40,281
|
|
|
$
|
57,882
|
|
|
$
|
133,146
|
|
|
$
|
180,551
|
|
Thailand
|
15,559
|
|
|
24,722
|
|
|
45,572
|
|
|
78,852
|
|
||||
Malaysia
|
692
|
|
|
4,000
|
|
|
4,112
|
|
|
15,703
|
|
||||
Other Asia-Pacific
|
5,353
|
|
|
6,329
|
|
|
14,789
|
|
|
12,693
|
|
||||
Total Asia-Pacific
|
$
|
61,885
|
|
|
$
|
92,933
|
|
|
$
|
197,619
|
|
|
$
|
287,799
|
|
|
|
|
|
|
|
|
|
||||||||
Americas:
|
|
|
|
|
|
|
|
||||||||
United States
|
9,604
|
|
|
22,832
|
|
|
66,807
|
|
|
54,574
|
|
||||
Mexico
|
22,399
|
|
|
8,930
|
|
|
73,530
|
|
|
26,290
|
|
||||
Other Americas
|
1,934
|
|
|
14,115
|
|
|
10,403
|
|
|
22,327
|
|
||||
Total Americas
|
$
|
33,937
|
|
|
$
|
45,877
|
|
|
$
|
150,740
|
|
|
$
|
103,191
|
|
|
|
|
|
|
|
|
|
||||||||
EMEA:
|
|
|
|
|
|
|
|
||||||||
Italy
|
12,466
|
|
|
7,577
|
|
|
31,703
|
|
|
23,601
|
|
||||
Germany
|
7,790
|
|
|
5,116
|
|
|
15,181
|
|
|
11,493
|
|
||||
Other EMEA
|
9,464
|
|
|
6,836
|
|
|
21,592
|
|
|
18,182
|
|
||||
Total EMEA
|
$
|
29,720
|
|
|
$
|
19,529
|
|
|
$
|
68,476
|
|
|
$
|
53,276
|
|
|
|
|
|
|
|
|
|
||||||||
Japan
|
$
|
1,751
|
|
|
$
|
3,843
|
|
|
5,391
|
|
|
7,322
|
|
||
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
$
|
127,293
|
|
|
$
|
162,182
|
|
|
$
|
422,226
|
|
|
$
|
451,588
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
March 31, 2018
|
|
April 1, 2017
|
||||||||
|
(Thousands)
|
||||||||||||||
100 Gb/s + transmission modules
|
$
|
95,663
|
|
|
$
|
125,818
|
|
|
$
|
326,675
|
|
|
$
|
337,424
|
|
40 Gb/s and lower transmission modules
|
31,630
|
|
|
36,364
|
|
|
95,551
|
|
|
114,164
|
|
||||
|
$
|
127,293
|
|
|
$
|
162,182
|
|
|
$
|
422,226
|
|
|
$
|
451,588
|
|
(B)
|
0.0636
of a validly issued, fully paid and nonassessable share of the common stock of Lumentum, par value
$0.001
per share (“Lumentum Common Stock”) (such ratio, the “Exchange Ratio”).
|
|
Three Months Ended
|
|
|
|
Increase
|
|
|||||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
Change
|
|
(Decrease)
|
|
|||||||||||||
|
(Thousands)
|
|
%
|
|
(Thousands)
|
|
%
|
|
(Thousands)
|
|
%
|
|
|||||||||
Revenues
|
$
|
127,293
|
|
|
100.0
|
|
|
$
|
162,182
|
|
|
100.0
|
|
|
$
|
(34,889
|
)
|
|
(21.5
|
)
|
|
Cost of revenues
|
83,729
|
|
|
65.8
|
|
|
95,394
|
|
|
58.8
|
|
|
(11,665
|
)
|
|
(12.2
|
)
|
|
|||
Gross profit
|
43,564
|
|
|
34.2
|
|
|
66,788
|
|
|
41.2
|
|
|
(23,224
|
)
|
|
(34.8
|
)
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Research and development
|
16,412
|
|
|
12.9
|
|
|
14,479
|
|
|
8.9
|
|
|
1,933
|
|
|
13.4
|
|
|
|||
Selling, general and administrative
|
16,002
|
|
|
12.6
|
|
|
14,736
|
|
|
9.1
|
|
|
1,266
|
|
|
8.6
|
|
|
|||
Amortization of other intangible assets
|
154
|
|
|
0.1
|
|
|
150
|
|
|
0.1
|
|
|
4
|
|
|
2.7
|
|
|
|||
Restructuring, acquisition and related (income) expense, net
|
3,084
|
|
|
2.4
|
|
|
(301
|
)
|
|
(0.2
|
)
|
|
3,385
|
|
|
n/m
|
|
(1)
|
|||
Gain on sale of property and equipment
|
(19
|
)
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(3
|
)
|
|
18.8
|
|
|
|||
Total operating expenses
|
35,633
|
|
|
28.0
|
|
|
29,048
|
|
|
17.9
|
|
|
6,585
|
|
|
22.7
|
|
|
|||
Operating income
|
7,931
|
|
|
6.2
|
|
|
37,740
|
|
|
23.3
|
|
|
(29,809
|
)
|
|
(79.0
|
)
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest income (expense), net
|
253
|
|
|
0.2
|
|
|
175
|
|
|
0.1
|
|
|
78
|
|
|
44.6
|
|
|
|||
Gain (loss) on foreign currency transactions, net
|
2,107
|
|
|
1.7
|
|
|
687
|
|
|
0.4
|
|
|
1,420
|
|
|
206.7
|
|
|
|||
Other income (expense), net
|
906
|
|
|
0.7
|
|
|
233
|
|
|
0.1
|
|
|
673
|
|
|
288.8
|
|
|
|||
Total other income (expense)
|
3,266
|
|
|
2.6
|
|
|
1,095
|
|
|
0.7
|
|
|
2,171
|
|
|
198.3
|
|
|
|||
Income before income taxes
|
11,197
|
|
|
8.8
|
|
|
38,835
|
|
|
23.9
|
|
|
(27,638
|
)
|
|
(71.2
|
)
|
|
|||
Income tax provision
|
390
|
|
|
0.3
|
|
|
621
|
|
|
0.4
|
|
|
(231
|
)
|
|
(37.2
|
)
|
|
|||
Net income
|
$
|
10,807
|
|
|
8.5
|
|
|
$
|
38,214
|
|
|
23.6
|
|
|
$
|
(27,407
|
)
|
|
(71.7
|
)
|
|
(1)
|
Not meaningful.
|
|
Nine Months Ended
|
|
|
|
Increase
|
|
||||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
Change
|
|
(Decrease)
|
|
||||||||||||
|
(Thousands)
|
|
%
|
|
(Thousands)
|
|
%
|
|
(Thousands)
|
|
%
|
|
||||||||
Revenues
|
$
|
422,226
|
|
|
100.0
|
|
$
|
451,588
|
|
|
100.0
|
|
|
$
|
(29,362
|
)
|
|
(6.5
|
)
|
|
Cost of revenues
|
264,130
|
|
|
62.6
|
|
277,680
|
|
|
61.5
|
|
|
(13,550
|
)
|
|
(4.9
|
)
|
|
|||
Gross profit
|
158,096
|
|
|
37.4
|
|
173,908
|
|
|
38.5
|
|
|
(15,812
|
)
|
|
(9.1
|
)
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Research and development
|
48,205
|
|
|
11.4
|
|
41,344
|
|
|
9.2
|
|
|
6,861
|
|
|
16.6
|
|
|
|||
Selling, general and administrative
|
47,760
|
|
|
11.3
|
|
42,883
|
|
|
9.5
|
|
|
4,877
|
|
|
11.4
|
|
|
|||
Amortization of other intangible assets
|
460
|
|
|
0.1
|
|
635
|
|
|
0.1
|
|
|
(175
|
)
|
|
(27.6
|
)
|
|
|||
Restructuring, acquisition and related (income) expense, net
|
3,084
|
|
|
0.7
|
|
92
|
|
|
—
|
|
|
2,992
|
|
|
3,252.2
|
|
|
|||
(Gain) loss on sale of property and equipment
|
172
|
|
|
—
|
|
(127
|
)
|
|
—
|
|
|
299
|
|
|
n/m
|
|
(1)
|
|||
Total operating expenses
|
99,681
|
|
|
23.6
|
|
84,827
|
|
|
18.8
|
|
|
14,854
|
|
|
17.5
|
|
|
|||
Operating income
|
58,415
|
|
|
13.8
|
|
89,081
|
|
|
19.7
|
|
|
(30,666
|
)
|
|
(34.4
|
)
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income (expense), net
|
810
|
|
|
0.2
|
|
(13,613
|
)
|
|
(3.0
|
)
|
|
14,423
|
|
|
n/m
|
|
(1)
|
|||
Gain (loss) on foreign currency transactions, net
|
4,195
|
|
|
1.0
|
|
(3,155
|
)
|
|
(0.7
|
)
|
|
7,350
|
|
|
n/m
|
|
(1)
|
|||
Other income (expense), net
|
2,416
|
|
|
0.6
|
|
583
|
|
|
0.1
|
|
|
1,833
|
|
|
314.4
|
|
|
|||
Total other income (expense)
|
7,421
|
|
|
1.8
|
|
(16,185
|
)
|
|
(3.6
|
)
|
|
23,606
|
|
|
n/m
|
|
(1)
|
|||
Income before income taxes
|
65,836
|
|
|
15.6
|
|
72,896
|
|
|
16.1
|
|
|
(7,060
|
)
|
|
(9.7
|
)
|
|
|||
Income tax provision
|
9,803
|
|
|
2.3
|
|
1,064
|
|
|
0.2
|
|
|
8,739
|
|
|
821.3
|
|
|
|||
Net income
|
$
|
56,033
|
|
|
13.3
|
|
$
|
71,832
|
|
|
15.9
|
|
|
$
|
(15,799
|
)
|
|
(22.0
|
)
|
|
•
|
develop or respond to new technologies or technical standards;
|
•
|
react to changing customer requirements and expectations;
|
•
|
devote needed resources to the development, production, promotion and sale of products;
|
•
|
attain high manufacturing yields on new product designs; and
|
•
|
deliver competitive products at lower prices.
|
•
|
qualify our manufacturing lines and the products we produce in Shenzhen, as required by our customers; and
|
•
|
attract and retain qualified personnel to operate our Shenzhen facility.
|
•
|
currency fluctuations, which could result in increased operating expenses;
|
•
|
changes in national infrastructure development priorities and associated capital budgets;
|
•
|
trade restrictions, including restrictions imposed by the United States government on trading with parties in foreign countries, particularly with respect to China;
|
•
|
difficulty in enforcing or adequately protecting our intellectual property;
|
•
|
ability to hire qualified candidates;
|
•
|
foreign income, value added and customs taxes;
|
•
|
greater difficulty in accounts receivable collection and longer collection periods;
|
•
|
political, legal and economic instability in foreign markets;
|
•
|
foreign regulations;
|
•
|
changes in, or impositions of, legislative or regulatory requirements;
|
•
|
transportation delays;
|
•
|
epidemics and illnesses;
|
•
|
terrorism and threats of terrorism;
|
•
|
work stoppages and infrastructure problems due to adverse weather conditions or natural disasters;
|
•
|
work stoppages related to employee dissatisfaction; and
|
•
|
the effective protections of, and the ability to enforce, contractual arrangements.
|
•
|
fluctuations in our financial condition and results of operations, including our gross margins and cash flow;
|
•
|
changes in our business, operations or prospects;
|
•
|
hiring or departure of key personnel;
|
•
|
new contractual relationships with key suppliers or customers by us or our competitors;
|
•
|
proposed acquisitions and dispositions by us or our competitors;
|
•
|
financial results or projections that fail to meet public market analysts’ expectations and changes in stock market analysts’ recommendations regarding us, other optical technology companies or the telecommunication industry in general;
|
•
|
future sales of common stock, or securities convertible into, exchangeable or exercisable for common stock, including in connection with acquisitions or other strategic transactions;
|
•
|
adverse judgments or settlements obligating us to pay damages;
|
•
|
acts of war, terrorism, or natural disasters;
|
•
|
industry, domestic and international market and economic conditions, including sovereign debt issues in certain parts of the world and related global macroeconomic issues;
|
•
|
low trading volume in our stock;
|
•
|
developments relating to patents or property rights; and
|
•
|
government regulatory changes.
|
•
|
adversely affect the voting power of the holders of our common stock;
|
•
|
make it more difficult for a third-party to gain control of us;
|
•
|
discourage bids for our common stock at a premium;
|
•
|
limit or eliminate any payments that the holders of our common stock could expect to receive upon our liquidation; or
|
•
|
otherwise adversely affect the market price of our common stock.
|
•
|
authorizing the board of directors to issue preferred stock;
|
•
|
prohibiting cumulative voting in the election of directors;
|
•
|
limiting the persons who may call special meetings of stockholders;
|
•
|
prohibiting stockholder actions by written consent;
|
•
|
creating a classified board of directors pursuant to which our directors are elected for staggered three-year terms;
|
•
|
permitting the board of directors to increase the size of the board and to fill vacancies;
|
•
|
requiring a super-majority vote of our stockholders to amend our bylaws and certain provisions of our certificate of incorporation; and
|
•
|
establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.
|
Exhibit
Number |
|
Description of Exhibit
|
|
||
|
||
|
||
|
||
|
||
|
||
101.INS
|
|
XBRL Instance Document.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
(1)
|
Filed herewith.
|
(2)
|
Management contract or compensatory plan or arrangement.
|
|
|
OCLARO, INC.
(Registrant)
|
|
|
|
|
|
May 8, 2018
|
|
By:
|
/s/ G
REG
D
OUGHERTY
|
|
|
|
Greg Dougherty
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
May 8, 2018
|
|
By:
|
/s/ P
ETE
M
ANGAN
|
|
|
|
Pete Mangan
Chief Financial Officer
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Oclaro, Inc. for the period ended
March 31, 2018
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
May 8, 2018
|
|
By:
|
/s/ GREG DOUGHERTY
|
|
|
|
Greg Dougherty
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Oclaro, Inc. for the period ended
March 31, 2018
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
May 8, 2018
|
|
By:
|
/s/ P
ETE
M
ANGAN
|
|
|
|
Pete Mangan
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
May 8, 2018
|
By:
|
|
/s/ G
REG
D
OUGHERTY
|
|
|
|
Greg Dougherty
|
|
|
|
Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
May 8, 2018
|
By:
|
|
/s/ P
ETE
M
ANGAN
|
|
|
|
Pete Mangan
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|