Avanex Corporation (Nasdaq: AVNX), a provider of photonic processors that accelerate the deployment of the next generation optical networks, reported third quarter results for its fiscal year 2001, which ended March 31, 2001.
Walter Alessandrini, Chairman of the Board and CEO of the company, pointed out that March quarter revenues increased $19.8 million compared to the same quarter of last year. He attributes the March quarter revenue from next generation products, including the company's PowerMux and PowerExchanger.
Alessandrini also announced that Paul Engle, President and Chief Operating Officer, would become Chief Executive Officer of the company effective July 1, 2001. Engle joined Avanex in September 2000 as its President and COO, and has "extensive experience" in the fiber optics industry. Alessandrini will continue as Chairman of the company through the end of calendar year 2003.
Avanex's net revenues for the quarter ending March 31, 2001 were $30.3 million, an increase of $19.8 million over the Company's revenues of $10.5 million for the third quarter of fiscal 2000 ended March 31, 2000. The Company reported revenues of $47.9 million in the second fiscal quarter ended December 31, 2000.
Pro forma net loss for the quarter was $1.6 million, or $0.03 per share excluding charges for amortization of deferred stock compensation, excess inventory, amortization of intangibles, and stock accretion. This compared with a pro forma net income of $4.1 million, or $0.06 per share in the second quarter of fiscal 2001 ended December 31, 2000. Pro forma net loss for the prior year's third quarter was $2.9 million, or $0.08 per share.
Net loss for the quarter including charges for amortization of deferred stock compensation, excess inventory, amortization of intangibles, and stock accretion was $36.4 million, or $0.62 per share compared to a net loss of $29.2 million or $0.85 per share for the same period in the prior year. A provision for excess inventory of $21.6 million was recorded due to the substantial and unexpected drop in customer demand the Company experienced. This provision consists of a $11.4 million reserve against current inventory and a $10.2 million accrual for non-cancelable purchase commitments. Net loss was $11.3 million or $0.20 per share loss in the second fiscal quarter ended December 31, 2000.
Net revenues for the nine months ended March 31, 2001 were $113.0 million, compared with $21.4 million for the same period of fiscal 2000. Pro forma net income for the nine months ended March 31, 2001, excluding charges for amortization of deferred stock compensation, excess inventory, amortization of intangibles, in-process research and development charge and stock accretion, was $4.8 million, or $0.07 per share, compared with pro forma net loss of $7.0 million, or $0.45 per share, in the same period of fiscal 2000. Net loss for the nine months ended March 31, 2001, including the above-mentioned charges, was $73.0 million, or $1.28 per share, compared with $69.0 million, or $4.45 per share, in the same period of fiscal 2000.
Although Avanex showed a profit increase over last year, the company reduced its workforce by 350 in the March quarter, mostly in manufacturing. As the Company announced earlier this month, management is implementing a cost containment plan in the fourth fiscal quarter and expects to take a restructuring charge of approximately $18 million to $24 million during the fourth quarter. The restructuring charge will include costs related to the reduction in workforce and a provision for excess facilities and assets.
The Company updated its revenue and EPS outlook for the fourth fiscal quarter and calendar year 2001. Avanex expects fourth fiscal quarter revenues to be approximately $25 million, and calendar year 2001 revenues to range between $110 million and $115 million. The Company expects EPS for the fourth fiscal quarter to range between a loss per share of two cents and a loss per share of three cents. For the calendar year 2001, Avanex expects EPS to range between a loss per share of eight cents and a loss per share of ten cents, excluding charges for amortization of deferred stock compensation, excess inventory, amortization of intangibles, and the Company's expected fourth quarter restructuring charge.
About Avanex:
Avanex designs, manufactures and markets photonic processors for the communications industry. For more information, visit www.avanex.com