FNSR:
Total revenues in the third quarter of fiscal 2005 were $73.1 million, up 3% on a sequential basis from $71.0 million in the second quarter and 58% from $46.4 million in the third quarter of the prior year. For the second consecutive quarter, the Company's revenues set a new all time record. Total revenues from the sale of optical subsystems were $63.4 million in the third quarter, up 6% on a sequential basis from $59.9 million in the second quarter and 56% from $40.7 million in the third quarter of the prior year. Sales of network test and monitoring systems were $9.7 million in the third quarter, down 13% on a sequential basis from $11.1 million in the second quarter but up 70% from $5.7 million in the third quarter of the prior year.
"While the third quarter marks another revenue record for the Company, even more important was realizing our stated objective of exceeding our EBITDA breakeven point," said Jerry Rawls, Finisar's President and CEO. "Obviously, that's only an interim objective as we strive to return to profitability. We believe the recent acquisition of Infineon's transceiver product lines and their transfer to our manufacturing operations in Malaysia will be an important step in making that happen."
"Our cash burn for the quarter was another positive aspect of this quarter's performance," added Rawls. "Our cash balance at the end of January totaled $101.6 million, down only $2.6 million from $104.2 million at the end of October. This is before adding another $12 million to our cash reserves just after the end of the quarter from the sale-leaseback of one of our facilities in Sunnyvale, California."
OPERATING RESULTS
The Company reported a net loss of $33.0 million, or $0.15 per share, for the third quarter of fiscal 2005, compared to a net loss of $21.2 million, or $0.09 per share, in the second quarter and a net loss of $15.5 million, or $0.07 per share, in the third quarter of fiscal 2004. The current quarter results included a write-down of $18.8 million associated with the impairment in value of our Sunnyvale facility that was sold and leased back subsequent to the end of the quarter. The sale-leaseback transaction will be treated as a financing in accordance with Financial Accounting Standards Board Statement No. 98, "Accounting for Leases." The Company's gross profit for the third quarter was $16.7 million, or 22.8% of total revenues, compared to 16.6% in the second quarter and 19.4% in the third quarter of fiscal 2004. Note that the Company does not intend to recognize any further tax benefits until it returns to profitability.
The Company's operating results include a number of non-cash and cash charges, principally related to acquisitions, restructurings and financing transactions. A table is included which summarizes these items. Excluding these items, the Company's net loss for the third quarter of fiscal 2005 would have been $7.9 million, or $.04 per share, compared to $9.2 million, or $.04 per share, in the second quarter and $13.1 million, or $.06 per share, in the third quarter of the prior year, and the Company's gross margins would have been $21.9 million, or 29.8% of revenues in the third quarter, compared to 30.7% in the second quarter and 22.1% in the third quarter of the prior year.
