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Infinera Corporation Reports Third Quarter 2017 Financial Results and Announces Restructuring Plan

/EIN News/ -- SUNNYVALE, Calif., Nov. 08, 2017 (GLOBE NEWSWIRE) -- Infinera Corporation (NASDAQ:INFN), provider of Intelligent Transport Networks, today released financial results for its third quarter ended September 30, 2017. The company also today announced a plan to restructure its worldwide operations to reduce its expenses and establish a more cost-efficient operating structure.

Third Quarter 2017 Financial Review

GAAP revenue for the quarter was $192.6 million compared to $176.8 million in the second quarter of 2017 and $185.5 million in the third quarter of 2016.

GAAP gross margin for the quarter was 35.2% compared to 36.7% in the second quarter of 2017 and 45.6% in the third quarter of 2016. GAAP operating margin for the quarter was (17.8)% compared to (22.9)% in the second quarter of 2017 and (5.9)% in the third quarter of 2016.

GAAP net loss for the quarter was $(37.2) million, or $(0.25) per share, compared to a net loss of $(42.8) million, or $(0.29) per share, in the second quarter of 2017, and net loss of $(11.2) million, or $(0.08) per share, in the third quarter of 2016.

Non-GAAP gross margin for the quarter was 39.1% compared to 40.7% in the second quarter of 2017 and 49.2% in the third quarter of 2016. Non-GAAP operating margin for the quarter was (7.8)% compared to (12.2)% in the second quarter of 2017 and 3.6% in the third quarter of 2016.

Non-GAAP net loss for the quarter was $(17.0) million, or $(0.11) per share, compared to a net loss of $(22.8) million, or $(0.15) per share, in the second quarter of 2017, and net income of $7.4 million, or $0.05 per diluted share, in the third quarter of 2016. 

A further explanation of the use of non-GAAP financial information and a reconciliation of the non-GAAP financial measures to the GAAP equivalents can be found at the end of this release.

“In the third quarter we continued to bring new products to market and delivered financial results that exceeded our guidance,” said Tom Fallon, Infinera’s Chief Executive Officer. “Our ICE4 products are delivering the technology differentiation we expected and are gaining traction across multiple customer verticals. Despite a softening near-term market outlook, over time I am confident we will return to outgrowing the market and delivering strong financial results.”

Restructuring Initiative

Infinera also announced it is implementing a plan to restructure its worldwide operations in order to reduce its expenses and establish a more cost-efficient structure that better aligns its operations with its long-term strategies. As part of this restructuring plan, Infinera will reduce headcount, rationalize certain products and programs, and close a remote R&D facility.

Infinera anticipates annual savings from the restructuring to be approximately $40.0 million, compared to what the projected run-rate of expenses for fiscal 2018 would have been prior to the restructuring. Infinera estimates total costs related to the restructuring will be in the range of $21.0 million to $27.0 million. The company anticipates a majority of the restructuring will be completed during the fourth quarter of 2017.

“In recent years we have made significant investments to become a multi-market company, deliver a fully refreshed product portfolio and establish a faster technology cadence. Reflecting on the internal expansion associated with these investments, we have identified areas where we can be more efficient going forward,” stated Mr. Fallon.  “While difficult, my expectation is taking action at this time will result in a more cost-efficient structure that enables us to focus on our strengths and return to profitability as we grow. I believe these are the right steps for our shareholders, our company and our customers.”

Conference Call Information

Infinera will host a conference call for analysts and investors to discuss its third quarter 2017 results and its outlook for the fourth quarter of 2017 today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Interested parties may join the conference call by dialing 1-866-373-6878 (toll free) or 1-412-317-5101 (international). A live webcast of the conference call will also be accessible from the Events & Webcasts section of Infinera’s website at investors.infinera.com. Replay of the audio webcast will be available at investors.infinera.com approximately two hours after the end of the live call.

Contacts:

Media:
Anna Vue
Tel. +1 (916) 595-8157
avue@infinera.com

Investors:
Jeff Hustis
Tel. +1 (408) 213-7150
jhustis@infinera.com


About Infinera

Infinera provides Intelligent Transport Networks, enabling carriers, cloud operators, governments and enterprises to scale network bandwidth, accelerate service innovation and automate optical network operations. Infinera’s end-to-end packet-optical portfolio is designed for long-haul, subsea, data center interconnect and metro applications. Infinera’s unique large scale photonic integrated circuits enable innovative optical networking solutions for the most demanding networks. To learn more about Infinera visit www.infinera.com, follow us on Twitter @Infinera and read our latest blog posts at www.infinera.com/blog.

Forward-Looking Statements

This press release contains certain forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties. Such forward-looking statements include, without limitation, Infinera’s ability to continue to gain traction across multiple customer verticals; Infinera's ability to outgrow the market and deliver strong financial results; Infinera's ability to become a multi-market company, deliver a fully refreshed product portfolio and establish a faster technology cadence; Infinera’s expectations regarding its restructuring and the expected cost and annual savings associated with the restructuring plan. Forward-looking statements can also be identified by forward-looking words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or similar words. These statements are based on information available to Infinera as of the date hereof and actual results could differ materially from those stated or implied due to risks and uncertainties. The risks and uncertainties that could cause Infinera’s results to differ materially from those expressed or implied by such forward-looking statements include, delays in the development and introduction of new products or updates to existing products and market acceptance of these products; the effects of increased customer consolidation; fluctuations in demand, sales cycles and prices for products and services, including discounts given in response to competitive pricing pressures, as well as the timing of purchases by our key customers; the effect that changes in product pricing or mix, and/or increases in component costs could have on Infinera’s gross margin; Infinera’s ability to respond to rapid technological changes; aggressive business tactics by Infinera’s competitors; Infinera's ability to adequately respond to demand as a result of the restructuring plan; Infinera's reliance on single and limited source suppliers; Infinera’s ability to protect Infinera’s intellectual property; claims by others that Infinera infringes their intellectual property; the effect of global macroeconomic conditions on Infinera's business; war, terrorism, public health issues, natural disasters and other circumstances that could disrupt the supply, delivery or demand of Infinera's products; and other risks and uncertainties detailed in Infinera’s SEC filings from time to time. More information on potential factors that may impact Infinera’s business are set forth in its Quarterly Report on Form 10-Q for the quarter ended on July 1, 2017 as filed with the SEC on August 8, 2017, as well as subsequent reports filed with or furnished to the SEC from time to time. These reports are available on Infinera’s website at www.infinera.com and the SEC’s website at www.sec.gov. Infinera assumes no obligation to, and does not currently intend to, update any such forward-looking statements.

Use of Non-GAAP Financial Information

In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain certain non-GAAP measures that exclude non-cash stock-based compensation expenses, amortization of debt discount on Infinera’s convertible senior notes, amortization and impairment of acquired intangible assets, acquisition-related costs, and certain purchase accounting adjustments related to Infinera's acquisition of Transmode AB, which closed during the third quarter of 2015, along with related tax effects. Infinera believes these adjustments are appropriate to enhance an overall understanding of its underlying financial performance and also its prospects for the future and are considered by management for the purpose of making operational decisions. In addition, these results are the primary indicators management uses as a basis for its planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income (loss), basic and diluted net income (loss) per share, gross margin or operating margin prepared in accordance with GAAP. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations. For a description of these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measures, please see the section titled, “GAAP to Non-GAAP Reconciliations.” Infinera anticipates disclosing forward-looking non-GAAP information in its conference call to discuss its third quarter 2017 results, including an estimate of certain non-GAAP financial measures for the fourth quarter of 2017 that excludes non-cash stock-based compensation expenses, amortization of acquired intangible assets and related tax effects, and amortization of debt discount on Infinera’s convertible senior notes.

A copy of this press release can be found on the Investor Relations page of Infinera’s website at www.infinera.com.

Infinera and the Infinera logo are trademarks or registered trademarks of Infinera Corporation. All other trademarks used or mentioned herein belong to their respective owners.


Infinera Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited) 

    Three Months Ended   Nine Months Ended
    September 30,
2017
  September 24,
2016
  September 30,
2017
  September 24,
2016
Revenue:                
Product   $ 159,579     $ 156,188     $ 449,992     $ 599,802  
Services   33,001     29,264     94,931     89,290  
      Total revenue   192,580     185,452     544,923     689,092  
Cost of revenue:                
Cost of product   111,803     91,064     311,437     331,564  
Cost of services   12,951     9,786     36,772     32,842  
      Total cost of revenue   124,754     100,850     348,209     364,406  
Gross profit   67,826     84,602     196,714     324,686  
Operating expenses:                
Research and development   56,616     50,855     169,076     164,541  
Sales and marketing   27,824     27,960     86,662     88,434  
General and administrative   17,634     16,646     53,556     51,617  
      Total operating expenses   102,074     95,461     309,294     304,592  
Income (loss) from operations   (34,248 )   (10,859 )   (112,580 )   20,094  
Other income (expense), net:                
Interest income   857     647     2,470     1,764  
Interest expense   (3,549 )   (3,313 )   (10,408 )   (9,644 )
Other gain (loss), net:   (80 )   (188 )   (462 )   (1,116 )
      Total other income (expense), net   (2,772 )   (2,854 )   (8,400 )   (8,996 )
Income (loss) before income taxes   (37,020 )   (13,713 )   (120,980 )   11,098  
Provision for (benefit from) income taxes   211     (2,416 )   (459 )   (725 )
Net income (loss)   (37,231 )   (11,297 )   (120,521 )   11,823  
Less: Net loss attributable to noncontrolling interest       (125 )       (503 )
Net income (loss) attributable to Infinera Corporation   $ (37,231 )   $ (11,172 )   $ (120,521 )   $ 12,326  
Net income (loss) per common share attributable to Infinera Corporation:                
Basic   $ (0.25 )   $ (0.08 )   $ (0.82 )   $ 0.09  
Diluted   $ (0.25 )   $ (0.08 )   $ (0.82 )   $ 0.08  
Weighted average shares used in computing net income (loss) per common share:                
Basic   148,777     143,850     147,367     142,350  
Diluted   148,777     143,850     147,367     145,921  
                         


Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands, except percentages and per share data)
(Unaudited) 

  Three Months Ended   Nine Months Ended
  September 30,
2017
      July 1,
2017
      September 24,
2016
      September 30,
2017
      September 24,
2016
   
Reconciliation of
Revenue:
                                     
U.S. GAAP as reported $ 192,580         $ 176,821         $ 185,452         $ 544,923         $ 689,092      
Acquisition-related
deferred revenue
adjustment(1)
                                400      
Non-GAAP as adjusted $ 192,580         $ 176,821         $ 185,452         $ 544,923         $ 689,492      
                                       
Reconciliation of Gross Profit:                                      
U.S. GAAP as reported $ 67,826     35.2 %   $ 64,832     36.7 %   $ 84,602     45.6 %   $ 196,714     36.1 %   $ 324,686     47.1 %
Acquisition-related
deferred revenue
adjustment(1)
                                400      
Stock-based
compensation(2)
2,063         2,071         1,424         5,965         4,614      
Amortization of acquired
intangible assets(3)
5,390         5,035         5,102         15,305         14,970      
Acquisition-related costs(4)         6         38         46         117      
Non-GAAP as adjusted $ 75,279     39.1 %   $ 71,944     40.7 %   $ 91,166     49.2 %   $ 218,030     40.0 %   $ 344,787     50.0 %
                                       
Reconciliation of Operating Expenses:                                      
U.S. GAAP as reported $ 102,074         $ 105,337         $ 95,461         $ 309,294         $ 304,592      
Stock-based
compensation(2)
10,103         10,309         8,787         29,458         24,577      
Amortization of acquired
intangible assets(3)
1,622         1,515         1,537         4,605         4,753      
Acquisition-related costs(4)         16         563         322         1,453      
Intangible asset
impairment(5)
                        252              
Non-GAAP as adjusted $ 90,349         $ 93,497         $ 84,574         $ 274,657         $ 273,809      
                                       
Reconciliation of Income
(Loss) from Operations:
                                     
U.S. GAAP as reported $ (34,248 )   (17.8 )%   $ (40,505 )   (22.9 )%   $ (10,859 )   (5.9 )%   $ (112,580 )   (20.7 )%   $ 20,094     2.9 %
Acquisition-related
deferred revenue
adjustment(1)
                                400      
Stock-based compensation(2) 12,166         12,380         10,211         35,423         29,191      
Amortization of acquired
intangible assets(3)
7,012         6,550         6,639         19,910         19,723      
Acquisition-related costs(4)         22         601         368         1,570      
Intangible asset
impairment(5)
                        252              
Non-GAAP as adjusted $ (15,070 )   (7.8 )%   $ (21,553 )   (12.2 )%   $ 6,592     3.6 %   $ (56,627 )   (10.4 )%   $ 70,978     10.3 %
                                       
                                       
Reconciliation of Net
Income (Loss)
Attributable to Infinera
Corporation:
                                     
U.S. GAAP as reported $ (37,231 )       $ (42,839 )       $ (11,172 )       $ (120,521 )       $ 12,326      
Acquisition-related
deferred revenue
adjustment(1)
                                400      
Stock-based
compensation(2)
12,166         12,380         10,211         35,423         29,191      
Amortization of acquired
intangible assets(3)
7,012         6,550         6,639         19,910         19,723      
Acquisition-related costs(4)         (4 )       874         257         2,263      
Intangible asset
impairment(5)
                        252              
Amortization of debt
discount(6)
2,643         2,577         2,391         7,734         6,996      
Income tax effects(7) (1,543 )       (1,450 )       (1,519 )       (4,467 )       (4,531 )    
Non-GAAP as adjusted $ (16,953 )       $ (22,786 )       $ 7,424         $ (61,412 )       $ 66,368      
                                       
Net Income (Loss) per
Common Share
Attributable to Infinera
Corporation - Basic:
                                     
U.S. GAAP as reported $ (0.25 )       $ (0.29 )       $ (0.08 )       $ (0.82 )       $ 0.09      
Non-GAAP as adjusted $ (0.11 )       $ (0.15 )       $ 0.05         $ (0.42 )       $ 0.47      
Net Income (Loss) per
Common Share
Attributable to Infinera
Corporation - Diluted:
                                     
U.S. GAAP as reported $ (0.25 )       $ (0.29 )       $ (0.08 )       $ (0.82 )       $ 0.08      
Non-GAAP as adjusted $ (0.11 )       $ (0.15 )       $ 0.05         $ (0.42 )       $ 0.45      
Weighted Average
Shares Used in
Computing Net Income
(Loss) per Common
Share:
                                     
Basic 148,777         147,538         143,850         147,367         142,350      
Diluted 148,777         147,538         144,993         147,367         145,921      

____________________________

(1)   Business combination accounting principles require Infinera to write down to fair value its maintenance support contracts assumed in the Transmode acquisition. The revenue for these support contracts is deferred and typically recognized over a one year period, so Infinera's GAAP revenue for the one year period after the acquisition will not reflect the full amount of revenue that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP adjustment eliminates the effect of the deferred revenue write-down. Management believes these adjustments to the revenue from these support contracts are useful to investors as an additional means to reflect revenue trends of Infinera's business.
     
(2)   Stock-based compensation expense is calculated in accordance with the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation effective January 1, 2006. The following table summarizes the effects of non-cash stock-based compensation related to employees and non-employees (in thousands):


    Three Months Ended   Nine Months Ended
    September 30,
2017
  July 1,
2017
  September 24,
2016
  September 30,
2017
  September 24,
2016
Cost of revenue   $ 779     $ 834     $ 756     $ 2,337     $ 2,175  
Research and development   4,040     4,184     3,496     12,004     9,721  
Sales and marketing   3,025     3,273     2,826     9,024     8,006  
General and administration   3,039     2,852     2,465     8,431     6,850  
    10,883     11,143     9,543     31,796     26,752  
Cost of revenue - amortization from balance sheet*   1,284     1,237     668     3,628     2,439  
Total stock-based compensation expense   $ 12,167     $ 12,380     $ 10,211     $ 35,424     $ 29,191  

 _____________________________

*   Stock-based compensation expense deferred to inventory and deferred inventory costs in prior periods and recognized in the current period. 
     
(3)   Amortization of acquisition-related intangible assets consists of amortization of developed technology, trade names, and customer relationships acquired in connection with the Transmode acquisition. U.S. GAAP accounting requires that acquired intangible assets are recorded at fair value and amortized over their useful lives. As this amortization is non-cash, Infinera has excluded it from its non-GAAP operating expenses, gross margin and net income measures. Management believes the amortization of acquired intangible assets is not indicative of ongoing operating performance and its exclusion provides a better indication of Infinera's underlying business performance.
     
(4)   Acquisition-related costs associated with the Transmode acquisition include legal, financial, employee retention costs and other professional fees incurred in connection with the transaction, including squeeze-out proceedings. These amounts have been adjusted in arriving at Infinera's non-GAAP results because management believes that these expenses are non-recurring, not indicative of ongoing operating performance and their exclusion provides a better indication of Infinera's underlying business performance.
     
(5)   Intangible asset impairment is associated with previously acquired intangibles, which Infinera has determined that the carrying value will not be recoverable. Management has excluded the impact of this charge in arriving at Infinera's non-GAAP results because it is non-recurring and management believes that these expenses are not indicative of ongoing operating performance.
     
(6)   Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. Accordingly, for GAAP purposes, Infinera is required to amortize as debt discount an amount equal to the fair value of the conversion option that was recorded in equity as interest expense on its $150 million in aggregate principal amount of 1.75% convertible debt issuance in May 2013 over the term of the notes. Interest expense has been excluded from Infinera's non-GAAP results because management believes that this non-cash expense is not indicative of ongoing operating performance and provides a better indication of Infinera's underlying business performance.
     
(7)   The difference between the GAAP and non-GAAP tax is due to the net tax effects of the purchase accounting adjustments, acquisition-related costs and amortization of acquired intangible assets.
     


Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)

    September 30,
2017
  December 31,
2016
ASSETS        
Current assets:        
Cash and cash equivalents   $ 122,042     $ 162,641  
Short-term investments   134,319     141,697  
Short-term restricted cash   740     8,490  
Accounts receivable, net of allowance for doubtful accounts of $885 in 2017 and $772 in 2016   137,133     150,370  
Inventory   242,848     232,955  
Prepaid expenses and other current assets   50,320     34,270  
            Total current assets   687,402     730,423  
Property, plant and equipment, net   143,217     124,800  
Intangible assets   99,953     108,475  
Goodwill   197,325     176,760  
Long-term investments   47,575     40,779  
Cost-method investment   7,000     7,000  
Long-term restricted cash   4,299     6,449  
Other non-current assets   4,328     3,897  
           Total assets   $ 1,191,099     $ 1,198,583  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable   $ 89,310     $ 62,486  
Accrued expenses   30,080     31,580  
Accrued compensation and related benefits   40,571     46,637  
Short-term debt, net   141,985      
Accrued warranty   14,245     16,930  
Deferred revenue   65,328     58,900  
           Total current liabilities   381,519     216,533  
Long-term debt, net       133,586  
Accrued warranty, non-current   17,917     23,412  
Deferred revenue, non-current   21,794     19,362  
Deferred tax liability   23,384     25,327  
Other long-term liabilities   14,547     18,035  
Commitments and contingencies        
Stockholders’ equity:        
Preferred stock, $0.001 par value        
      Authorized shares - 25,000 and no shares issued and outstanding        
Common stock, $0.001 par value        
      Authorized shares - 500,000 as of September 30, 2017 and December 31, 2016        
      Issued and outstanding shares - 149,305 as of September 30, 2017 and 145,021 as of December 31, 2016   149     145  
Additional paid-in capital   1,406,936     1,354,082  
Accumulated other comprehensive income (loss)   8,949     (28,324 )
Accumulated deficit   (684,096 )   (563,575 )
Total stockholders’ equity   731,938     762,328  
           Total liabilities and stockholders’ equity   $ 1,191,099     $ 1,198,583  
                 


Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

    Nine Months Ended
    September 30,
2017
  September 24,
2016
Cash Flows from Operating Activities:        
Net income (loss)   $ (120,521 )   $ 11,823  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:        
Depreciation and amortization   49,391     45,764  
Amortization of debt discount and issuance costs   8,399     7,598  
Amortization of premium on investments   359     925  
Impairment of intangible assets   252      
Stock-based compensation expense   35,424     29,191  
Other loss   11     261  
Changes in assets and liabilities:        
     Accounts receivable   15,078     33,044  
     Inventory   (9,601 )   (61,078 )
     Prepaid expenses and other assets   (15,366 )   (1,625 )
     Accounts payable   25,840     (13,935 )
     Accrued liabilities and other expenses   (10,310 )   (7,580 )
     Deferred revenue   8,575     (805 )
     Accrued warranty   (8,447 )   (179 )
         Net cash provided by (used in) operating activities   (20,916 )   43,404  
Cash Flows from Investing Activities:        
Purchase of available-for-sale investments   (122,249 )   (118,017 )
Proceeds from sales of available-for-sale investments   10,531      
Proceeds from maturities of investments   111,970     110,554  
Purchase of cost-method investment       (5,000 )
Purchase of property and equipment   (50,247 )   (32,878 )
Change in restricted cash   4,389     (4,950 )
         Net cash used in investing activities   (45,606 )   (50,291 )
Cash Flows from Financing Activities:        
Security pledge to acquire noncontrolling interest   5,596     (5,921 )
Acquisition of noncontrolling interest   (471 )   (16,771 )
Proceeds from issuance of common stock   17,991     16,486  
Minimum tax withholding paid on behalf of employees for net share settlement   (963 )   (3,592 )
         Net cash provided by (used in) financing activities   22,153     (9,798 )
Effect of exchange rate changes on cash   3,770     (1,420 )
Net change in cash and cash equivalents   (40,599 )   (18,105 )
Cash and cash equivalents at beginning of period   162,641     149,101  
Cash and cash equivalents at end of period   $ 122,042     $ 130,996  
Supplemental disclosures of cash flow information:        
Cash paid for income taxes, net of refunds   $ 4,159     $ 5,557  
Cash paid for interest   $ 1,317     $ 1,445  
Supplemental schedule of non-cash investing activities:        
Transfer of inventory to fixed assets   $ 3,110     $ 5,211  
                 


Infinera Corporation
Supplemental Financial Information
(Unaudited)

    Q4'15   Q1'16   Q2'16   Q3'16   Q4'16   Q1'17   Q2'17   Q3'17
GAAP Revenue ($ Mil)   $ 260.0     $ 244.8     $ 258.8     $ 185.5     $ 181.0     $ 175.5     $ 176.8     $ 192.6  
GAAP Gross Margin %     44.5 %     47.5 %     47.8 %     45.6 %     38.1 %     36.5 %     36.7 %     35.2 %
Non-GAAP Gross Margin %(1)     48.3 %     50.2 %     50.4 %     49.2 %     41.8 %     40.3 %     40.7 %     39.1 %
Revenue Composition:                                
Domestic %     62 %     71 %     64 %     56 %     53 %     57 %     63 %     59 %
International %     38 %     29 %     36 %     44 %     47 %     43 %     37 %     41 %
Customers >10% of Revenue     2       3       2       2       2       1       3       2  
Cash Related Information:                                
Cash from Operations ($ Mil)   $ 25.8     $ 10.0     $ 28.2     $ 5.2     ($ 5.0 )   $ 3.0     ($ 3.0 )   ($ 20.9 )
Capital Expenditures ($ Mil)   $ 15.3     $ 10.8     $ 12.5     $ 9.6     $ 10.4     $ 14.7     $ 24.5     $ 11.0  
Depreciation & Amortization ($ Mil)   $ 13.7     $ 14.7     $ 15.2     $ 15.9     $ 15.7     $ 16.0     $ 16.6     $ 16.8  
DSOs     65       69       68       75       81       64       64       65  
Inventory Metrics:                                
Raw Materials ($ Mil)   $ 27.9     $ 33.1     $ 39.1     $ 37.2     $ 33.2     $ 34.8     $ 36.7     $ 35.8  
Work in Process ($ Mil)   $ 52.6     $ 59.4     $ 61.0     $ 65.5     $ 74.5     $ 81.1     $ 91.6     $ 84.3  
Finished Goods ($ Mil)   $ 94.2     $ 97.2     $ 102.2     $ 128.8     $ 125.3     $ 118.0     $ 117.7     $ 122.7  
Total Inventory ($ Mil)   $ 174.7     $ 189.7     $ 202.3     $ 231.5     $ 233.0     $ 233.9     $ 246.0     $ 242.8  
Inventory Turns(2)     3.1       2.6       2.5       1.6       1.8       1.8       1.7       1.9  
Worldwide Headcount     2,056       2,128       2,218       2,262       2,240       2,245       2,272       2,296  
Weighted Average Shares Outstanding (in thousands):                                
Basic     140,015       140,805       142,396       143,850       144,770       145,786       147,538       148,777  
Diluted     149,439       146,880       145,891       144,993       145,497       147,017       148,662       149,714  

 _____________________________

(1)   Non-GAAP adjustments include non-cash stock-based compensation expense, certain purchase accounting adjustments related to Infinera's acquisition of Transmode and amortization of acquired intangible assets. For a description of this non-GAAP financial measure, please see the section titled, “GAAP to Non-GAAP Reconciliations” of this press release for a reconciliation to the most directly comparable GAAP financial measures.
     
(2)   Infinera calculates non-GAAP inventory turns as annualized non-GAAP cost of revenue before adjustments for non-cash stock-based compensation expense and certain purchase accounting adjustments, divided by the average inventory for the quarter.
     

 

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