Avanex Corporation, a pioneer of intelligent photonic solutions that enable next-generation optical networks, has reported financial results for its third fiscal quarter ended March 31, 2006.
Net revenue in the third quarter of fiscal 2006 was $40.1 million, compared with $36.1 million in the prior quarter and $40.3 million in the third fiscal quarter of the prior year.
The company reported a net loss of $10.2 million or a net loss of $0.06 per share in the third fiscal quarter of 2006, a 45.2% improvement over the net loss of $18.5 million or the net loss of $0.13 per share in the prior quarter, and a 46.2% improvement over the net loss of $18.9 million or the net loss of $0.13 per share in the third fiscal quarter of the prior year.
Non-GAAP net loss for the third fiscal quarter of 2006 was $8.9 million or a non-GAAP net loss of $0.06 per share, a 9.4% improvement over the non-GAAP net loss of $9.9 million or the non-GAAP net loss of $0.07 per share in the prior quarter and a 50.3% improvement over the non-GAAP net loss of $18.0 million or the non-GAAP net loss of $0.12 per share in the third fiscal quarter of the prior year. Non-GAAP exclusions from GAAP net loss collectively totaled $1.2 million in the third quarter of fiscal 2006, $8.7 million in the second quarter of fiscal 2006, and $0.9 million in the third quarter of fiscal 2005. Non-GAAP net loss excludes share-based payments, amortization of intangibles, restructuring charges, gains on the disposal of property and equipment, an inventory provision of $1.0 million related to non-RoHS (Restriction of Hazardous Substances) compliant product in the third fiscal quarter of 2006, and a loss on debt refinancing in the second quarter of fiscal 2006. Separate from non-GAAP exclusions, a $1.3 million inventory provision was taken in the third quarter of fiscal 2006 related to the cessation of manufacturing at our New York facility.
"I am pleased with the progress the company has made," said Jo Major, president and CEO of Avanex. "We achieved a 45% reduction in net loss from the second fiscal quarter of this year, and we achieved a similar reduction in net loss from the third fiscal quarter of last year. We continued to meet our restructuring objectives and reached important milestones, including becoming RoHS compliant and returning to revenue growth. As we complete the transition of our manufacturing operations, we are able to focus more on generating revenue, increasing our market share, and launching industry leading new products.
"In addition to the steady progress that we are showing on our income statement, our balance sheet also substantially improved. During the third fiscal quarter, $21.4 million was converted from debt into equity and we raised net proceeds of $44.7 million in an equity stock offering," said Major.
Fiscal Third Quarter Highlights
-Raised net proceeds of $44.7 million in an equity stock offering and ended the quarter with $82.1 million in cash and short-term investments.
-$21.4 million of long term convertible notes converted into equity.
-A 45.2% reduction in net loss over the second fiscal quarter of 2006.
-Launched eight new products including a Xenpak Compatible Hot-Pluggable EDFA and an industry leading Optical Performance Monitoring solution.
-Met RoHS compliance requirements across all product lines.
-Completed planned manufacturing transfers from Italy and France on schedule.
Q4 FY 2006 Outlook
Revenue is expected to be between $42.0 million and $45.0 million in the fourth fiscal quarter of 2006. Gross margin for the fourth fiscal quarter of 2006 is expected to increase over the third fiscal quarter of 2006.
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