Oclaro ends fiscal 2013 on a down note

While its primary competitor recently touted record revenues (see “Finisar reports fourth consecutive quarter of revenue growth”), Oclaro, Inc. (NASDAQ: OCLR) revealed yesterday that revenues for the fourth quarter of its fiscal 2013 declined sequentially. The optical components, transceivers, and subsystems vendor reported revenues of $136.1 million for the quarter ended June 29, 2013, versus $141.6 million for the previous quarter.

Revenue for the quarter fell within the company’s guidance of $132 million to $144 million.

Oclaro reported GAAP gross margin of 9%, flat sequentially. Non-GAAP gross margin was 11% for the quarter, a 1% improvement over the third quarter’s 10%.

GAAP operating loss was $44.1 million, which included $18.9 million of flood-related income, net of expenses, due to the flooding in Thailand, and an impairment of goodwill and intangible assets of $26.7 million. The previous quarter saw GAAP operating loss of $27.4 million, which included $11.5 million of flood-related income, net of expenses. Non-GAAP operating loss for 4Q13 was $29.5 million versus an operating loss of $31.9 million in the third quarter.

GAAP net loss for the fourth quarter of fiscal 2013 was $47.4 million, while the previous quarter saw a GAAP net loss of $40.0 million. Non-GAAP net loss for 4Q13 was $30.3 million, an improvement over the $33.4 million non-GAAP net loss experience in the third quarter.

"While our fiscal fourth quarter results were in line with our expectations, the continued losses underscore the urgency of our turnaround plans. We remain focused on transforming Oclaro into a sustainable company that will deliver shareholder value over the long-term," said Greg Dougherty, Oclaro’s CEO, in a prepared statement. "Our successful sale of the Zurich Business demonstrates to our employees, customers and suppliers that we are taking deliberate action to create a stable future. With the resulting infusion of cash, we can now begin to take the necessary steps to begin to restructure the company. Our goal will be to focus Oclaro primarily on the optical communications market, and leverage our photonics innovation, vertical integration, and long-term customer relationships to return Oclaro to profitability."

For the year, which included the acquisition of Opnext in July 2012, revenues were $586.0 million versus $385.5 million in fiscal 2012. GAAP gross margin was 11% for fiscal 2013, less than the 18% of fiscal 2012. Non-GAAP gross margin was 12% for recently completed fiscal year, compared with 19% for the previous fiscal year. GAAP operating loss was $124.8 million for fiscal 2013, nearly twice the fiscal 2012 GAAP operating loss of $63.8 million. Non-GAAP operating loss was $114.8 million for fiscal 2013, and excluded approximately $29.5 million in flood related income and goodwill and intangible asset impairment charges of $27.6 million. Fiscal 2012 non-GAAP operating loss was $53.0 million, excluding a gain of approximately $11.7 million on the sale of assets previously held for sale.

GAAP net loss for fiscal 2013 was $122.7 million, compared with a GAAP net loss of $66.5 in fiscal 2012. Non-GAAP net loss for fiscal 2013 was $120.8 million, versus a non-GAAP net loss of $61.1 million in the previous fiscal year.

Looking ahead, the first quarter of 2014, which will close September 28, will see revenues range from $134 million to $138 million, Oclaro’s management predicts. Non-GAAP gross margin should be in the range of 9% to 11%, while adjusted EBITDA will be in the range of negative $24 million to negative $19 million.

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