Oplink Overview 4QF14 080814.ppt -...
Transcript of Oplink Overview 4QF14 080814.ppt -...
Oplink Corporate Overview8/19/148/19/14
Joe LiuChairman & CEO
Shirley YinEVP & CFO
Safe Harbor Statements
This presentation contains forward-looking statements that involve risks and uncertainties that may cause Oplink’s actual results to differ substantially from expectations. You are encouraged to refer to the “Risk F t ” ti f O li k’ l d t l t fil d ith thFactors” sections of Oplink’s annual and quarterly reports filed with the Securities and Exchange Commission for details regarding such risks and uncertainties.
E t t f th i th h i di t l b l diExcept as set forth in the paragraph immediately below regarding financial guidance, the forward-looking statements made during this presentation represent Oplink’s outlook only as of the date of this presentation, and Oplink undertakes no obligation to update or revise p , p g pany forward-looking statements, whether as a result of new developments or otherwise.
Oplink’s outlook regarding its expected results for the quarter ending p g g p q gSeptember 28, 2014 was provided in its press release issued on August 7, 2014 and during the earnings conference call held on that date. Nothing in this presentation is intended to, nor shall it be deemed to, confirm revise or in any way update that outlook
© 2014 Oplink Communications, Inc. All rights reserved.
confirm, revise or in any way update that outlook.
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About Oplink
A leading optical communications solution provider offering components, modules & subsystems
to Telecom, Datacom, CATV system & internet companies
Actives • Passives(Components & Modules)
Subsystems(Circuit Packs & Subsystems)
© 2014 Oplink Communications, Inc. All rights reserved.2
Top Tier Customers
US & CanadaUS & Canada AsiaAsia EuropeEurope
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Broad Optical Networking Infrastructure Offerings
TransmissionTransmission(Actives)(Actives)
BBandwidth andwidth CreationCreation AmplificationAmplification Bandwidth Bandwidth
ManagementManagement InterconnectInterconnect
100G Metro DWDM 4x28G CFP100G 4x25 LR4 CFP210G xWDM XFP
Thermal AWGAthermal AWG50G DWDM100G DWDM200G DWDM
EDFAEDFA arrayGain blockRaman moduleMini single
ROADM linecardRayDirector® WSS: 1x2/1x4/1x9MxN Multicast Switch
Connectors & adapters: LC, SC, FC, MU, MPO; lockable SC/LC adapterFixed10G xWDM XFP
and SFP+10GbE SFP+/XFPGbE/2.5G/4G xWDM TDM SFP
Fixed OADMCWDMCompact CWDMBand WDMInterleavers
channel EDFA for 100G TPDRCATV high power EDFAComplete suite of Amp passive
Switch OCM: flexible grid, multiportTunable filterSwitches, 1xNCirculators
Fixed attenuators: LC, SC, FC, MUAir blown fiberJumpers and fanouts
2.5G/6G/10G BiDi SFPVideo SDI SFPAnalog TX, RF RX
PLC splitterWavelength Locker
of Amp passive components: isolators, fused comps, PM, GFF, depolarizer, VOA, PD, hybrid
CirculatorsVOA, VMUXPower monitorPBS for coherent detection
Patch panels: high density, 1RU/2RU, termination box, ODF
© 2014 Oplink Communications, Inc. All rights reserved.4
Oplink’s Value Proposition
Subsystems
ModulesCompact Plug-n-Play
l ti ff i
Subsystems OMSVertically integrated total design and manufacturing
ComponentsProven superior performance and quality
solutions offering more features, performance and value
manufacturing solutions (HW & SW) add intelligence and reduce customer OpEx and CapEx
© 2014 Oplink Communications, Inc. All rights reserved.5
quality
Oplink’s Global Presence
Fremont, CA; HeadquartersZhuhai FTZ, China; Head Office, R&D, Mfg.Wuhan, China; OMS, TRx R&D, and IoTSh h i Chi O i l C i L bShanghai, China; Optical Coating LabTaipei, Taiwan; Emit Office/R&D/Pilot
Fremont, CA(HQ)
Shanghai(Coating)
Wuhan (R&D, IoT)
Taipei
Zhuhai(Mfg, R&D, S&M)
Hsinchu (R&D)
(Emit)
© 2014 Oplink Communications, Inc. All rights reserved.6
Market Opportunities
$4 5B l b l f WDM ROADM ti l
ROADMROADM$4.5B global revenue for WDM ROADM optical equipment in 2013, 13% CAGR thru 2018, fastest-growing segment of optical transportCDC ROADM rollout provides a near-term boost
Long HaulLong Haul& Metro& Metro
$2B worldwide spending in 2013, 3x Y/Y, 20% of all WDM spending$4B Metro 100G by 2018 <$500M in 2014
100G100G$4B Metro 100G by 2018, <$500M in 2014, inflection point in 2015
4G/LTE4G/LTE4G/LTE 4G/LTE Upgrade in Upgrade in
ChinaChina
$12B CapEx on 4G/LTE, 500,000 base stations, by China Mobile in 2014; followed by China Unicom and China Telecom
Data Data CenterCenter
Data center expansion continues to soar; leading players spent $27B in 2013$1.6B GbE/10/40/100G transceivers in 2014, 10%
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CenterCenter $ / / / ,CAGR for 2014-2018
Source: Infonetics. LightCourting and company research
Technology Highlights
Well-positioned for developing the next-generation colorless directionless and contentionless (CDC) ROADM and Edge ROADM with essential building blocks
RayXpress® Wavelength Selective Cross connect (WSX) RayXpress® Wavelength Selective Cross-connect (WSX) RayDirector® Wavelength Selective Switch (WSS) EDFA array Raman moduleRaman module Twin multicast switch Optical channel monitor OSC transceiver Fiber shuffle
Coherent detection PM componentsFocused on developing high-growth 4G wireless and data p g g gcenter transceivers Best-in-class wide-temperature range performance for 4G/LTE
wireless applicationsFi t t k t 4 28G DWDM CFP ith di t d t ti d
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First-to-market 4x28G DWDM CFP with direct detection and digital signal processing
Investment Thesis
A leading provider of comprehensive passive components, modules and subsystems
A focused player in 10/40/100G CWDM/DWDM transceiversA focused player in 10/40/100G CWDM/DWDM transceivers addressing Telecom Transport, Switch, 4G Wireless Back Haul & Data Center markets
A leading circuit pack design & manufacturing supplier servingA leading circuit pack design & manufacturing supplier serving the fastest-growing Metro 100G transport, switching (ROADM) and amplification market
Participating on fast Web 2 0 datacenter expansionParticipating on fast Web 2.0 datacenter expansion
Vertically integrated R&D, manufacturing, service and logistics to provide cost & margin advantages
Solid Financials with 5+ Consecutive Years of Non-GAAP Profitability
Stable Management Team
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Stable Management Team
Financial Results (Non-GAAP)
$51.5$54.8
$50.4$49.3 $48.1$55.0
($Millions)
$43.7 $44.2$44.0$43.4 $44.1$44.9 $45.1$43.3
$35.0
$45.0
30%29%32%33%36%35%34%36% 31% 31%
37% 37% 36%
$15.0
$25.0
$0.3$3.4 $2.4$4.0$4.7$5.0$3.8$2.5$2.0$3.1
$5.9 $4.6$1.8
($5.0)
$5.0
J S t D M J S D M J S D M JJun. 11
Sept. 11
Dec. 11
Mar. 12
Jun. 12
Sep. 12
Dec. 12
Mar. 13
Jun. 13
Sep. 13
Dec. 13
Mar. 14
Jun.14
Revenue Gross Margin Net Income
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Revenue Gross Margin Net Income
Cash Flow($Million's) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14($Million s) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14
9/30/12 12/30/12 3/31/13 6/30/13 9/29/13 12/29/13 3/30/14 6/29/14Cash flows from operating activities:
Net income (loss) 3.4$ 3.5$ 2.0$ 4.5$ 2.2$ 1.3$ (0.5)$ (4.2)$ Depreciation 1.8 1.8 1.8 1.8 2.0 2.1 2.3 2.4 Amortization of intangible and other assets 0.1 0.1 0.2 0.1 0.2 - - 0.1 Stock compensation expense 2 0 1 1 1 3 1 4 2 1 1 2 1 3 1 3Stock compensation expense 2.0 1.1 1.3 1.4 2.1 1.2 1.3 1.3 Net (Gain) loss on sale/disposal of assets - - (0.3) (3.2) 0.1 0.1 (0.3) (0.3) Deferred income tax - - (0.2) 1.3 (0.1) (0.1) (0.3) (0.4) Others 0.1 0.1 0.2 0.5 0.1 0.2 0.3 0.3 Changes in assets and liabilities: 0.4 (4.2) 1.9 (3.8) (2.2) (0.1) (4.0) (2.3)
Net cash provided by operating activities 7.8 2.4 6.9 2.6 4.4 4.7 (1.2) (3.1)
Cash flows from investing activities:Net (purchase) sales of investments (13.6) (2.2) (4.1) (1.6) (8.3) 0.4 14.4 7.6 Net (purchase) sales of property and equipment (1.4) (6.9) 4.1 (3.3) (5.5) (4.4) 0.1 (0.6) Acquisition of business, net of cash acquired - (1.1) - - - - - -
Net cash provided by (used in) investing activities (15 0) (10 2) (0 0) (4 9) (13 8) (4 0) 14 5 7 0Net cash provided by (used in) investing activities (15.0) (10.2) (0.0) (4.9) (13.8) (4.0) 14.5 7.0
Cash flows from financing activities:Proceeds from issuance of common stock 1.2 0.9 0.1 1.3 0.6 0.9 0.4 1.2 Excess tax benefits from stock-based compensations 0.1 0.1 (0.2) (0.2) - - - - Repurchase of common stock (3.7) (5.6) - - (1.1) (0.5) (15.5) (17.7)
Net cash provided by (used in) financing activities (2.4) (4.6) (0.1) 1.1 (0.5) 0.4 (15.1) (16.5)
Effect of exchange rate changes on cash and cash equiva - 0.1 - 0.1 0.1 - - (0.1) Net increase (decrease) in cash and cash equivalents (9.6) (12.3) 6.8 (1.1) (9.8) 1.1 (1.8) (12.7) Cash and cash equivalents, beginning of period 81.2 71.6 59.3 66.1 65.0 55.2 56.3 54.5
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Cash and cash equivalents, end of period 71.6$ 59.3$ 66.1$ 65.0$ 55.2$ 56.3$ 54.5$ 41.8$
Solid Balance Sheet($Million's) Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14($Million s) Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14
Sep.'12 Dec.'12 Mar.'13 Jun.'13 Sep.'13 Dec.'13 Mar.'14 Jun.'14ASSETS
Current assetsCash and cash equivalents 71.5$ 59.3$ 66.1$ 65.0$ 55.2$ 56.3$ 54.5$ 41.8$ Short-term investments 107.9 107.2 107.3 105.8 106.3 103.9 97.1 87.7 Accounts receivable, net 34.0 39.5 40.9 40.8 40.8 31.4 37.2 43.6 ,Inventories 19.1 20.0 20.8 30.0 35.9 40.5 40.3 38.8 Prepaid expenses and other current assets 7.6 7.5 7.5 7.0 7.5 7.4 6.3 5.3 Deferred tax assets 1.6 1.6 1.5 0.8 0.8 0.8 0.8 0.8
Total current assets 241.7 235.1 244.1 249.4 246.5 240.3 236.2 218.0
Long-term investments 0.8 0.2 3.0 3.3 12.5 16.1 9.3 10.4 gProperty and equipment 44.7 50.6 45.0 47.7 51.2 53.9 54.0 52.1 Goodwill and intangibles, net 1.5 1.4 1.3 1.2 1.1 1.0 1.0 0.9 Deferred tax assets 7.1 7.6 7.7 7.1 7.2 7.2 7.5 7.8 Other assets 12.6 12.6 12.8 16.5 16.3 16.3 13.4 13.5
Total assets 308.4$ 307.5$ 313.9$ 325.2$ 334.8$ 334.8$ 321.4$ 302.7$
LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities
Accounts payable 9.6 10.8 13.1 18.2 20.0 14.6 12.4 15.8 Accrued liabilities and other current liabilities 13.9 14.0 16.1 13.5 15.8 15.1 16.1 15.1
Total current liabilities 23.5 24.8 29.2 31.7 35.8 29.7 28.5 30.9
Non-current liabilities 9.4 9.3 9.4 10.3 10.5 10.8 11.5 11.6
Total liabilities 32.9 34.1 38.6 42.0 46.3 40.5 40.0 42.5
Stockholders' equity 275.5 273.4 275.3 283.2 288.5 294.3 281.4 260.2
© 2014 Oplink Communications, Inc. All rights reserved.12
Total liabilities & stockholders' equity 308.4$ 307.5$ 313.9$ 325.2$ 334.8$ 334.8$ 321.4$ 302.7$
Reconciliation of GAAP to Non-GAAP Financial Measures
($Million's)
Reconciliation of GAAP net income (loss) to Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14non-GAAP net income: Sep.'12 Dec.'12 Mar.'13 Jun.'13 Sep.'13 Dec.'13 Mar.'14 Jun.'14
Net Income (loss), GAAP 3.4$ 3.5$ 2.0$ 4.5$ 2.2$ 1.3$ (0.5)$ (4.2)$
Stock-based compensation expense 2.0 1.1 1.3 1.4 2.1 1.2 1.3 1.3 Amortization of intangible assets 0.1 0.1 0.2 0.1 0.1 0.1 - 0.1 Gain on sale of equity investments - - - (1.8) - - (0.3) (0.6) Reserve for excess inventory related to Oplink Connected - - - - - - - 4.9 Tax effects on non-GAAP adjustments (0.5) (0.1) (0.1) 0.5 (0.4) (0.2) (0.2) 0.3 Total Adjustments 1.6 1.1 1.4 0.2 1.8 1.1 0.8 6.0
Non-GAAP net income 5.0$ 4.6$ 3.4$ 4.7$ 4.0$ 2.4$ 0.3$ 1.8$
Reconciliation of GAAP gross profit Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14t GAAP fit S '12 D '12 M '13 J '13 S '13 D '13 M '14 J '14to non-GAAP gross profit: Sep.'12 Dec.'12 Mar.'13 Jun.'13 Sep.'13 Dec.'13 Mar.'14 Jun.'14
GAAP gross profit 16.6$ 16.5$ 15.7$ 17.5$ 17.7$ 15.9$ 14.0$ 10.4$
Stock-based compensation expense included 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 Reserve for excess inventory related to Oplink Connected - - - - - - - 4.9 Amortization of intangible and other assets 0 1Amortization of intangible and other assets 0.1 - - - - - - -
Non-GAAP gross profit 16.8$ 16.6$ 15.8$ 17.6$ 17.8$ 16.0$ 14.1$ 15.4$
GAAP gross margin rate 37.1% 36.7% 35.5% 35.5% 32.3% 31.6% 29.2% 20.1%
Non GAAP gross margin rate 37 4% 36 8% 35 7% 35 8% 32 6% 31 8% 29 4% 29 9%
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Non-GAAP gross margin rate 37.4% 36.8% 35.7% 35.8% 32.6% 31.8% 29.4% 29.9%
OPLINKOPLINK
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Oplink Communications, Inc.
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Oplink Communications, Inc.46335 Landing Parkway, Fremont, California 94538
T: (510) 933-7200 www.oplink.com