Infinera Corporation Reports First Quarter 2021 Financial Results

5/4, 10:03 PM (Source: GlobeNewswire)

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SAN JOSE, Calif., May 04, 2021 (GLOBE NEWSWIRE) -- Infinera Corporation (NASDAQ: INFN) today released financial results for its first quarter ended March 27, 2021.

GAAP revenue for the quarter was $330.9 million compared to $353.5 million in the fourth quarter of 2020 and $330.3 million in the first quarter of 2020.

GAAP gross margin for the quarter was 35.4% compared to 35.7% in the fourth quarter of 2020 and 23.3% in the first quarter of 2020. GAAP operating margin for the quarter was (7.0)% compared to (1.9)% in the fourth quarter of 2020 and (23.3)% in the first quarter of 2020.

GAAP net loss for the quarter was $(48.3) million, or $(0.24) per share, compared to $(9.9) million, or $(0.05) per share, in the fourth quarter of 2020, and $(99.3) million, or $(0.55) per share, in the first quarter of 2020.

Non-GAAP revenue for the quarter was $331.9 million compared to $354.4 million in the fourth quarter of 2020 and $331.4 million in the first quarter of 2020.

Non-GAAP gross margin for the quarter was 37.6% compared to 37.6% in the fourth quarter of 2020 and 28.3% in the first quarter of 2020. Non-GAAP operating margin for the quarter was 0.4% compared to 6.6% in the fourth quarter of 2020 and (9.4)% in the first quarter of 2020.

Non-GAAP net loss for the quarter was $(5.5) million, or $(0.03) per share, compared to net income of $16.7 million, or $0.08 per share, in the fourth quarter of 2020, and a net loss of $(36.5) million, or $(0.20) per share, in the first quarter of 2020.

A further explanation of the use of non-GAAP financial information and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP financial measure can be found at the end of this press release.

"The first quarter marked another quarter of strong performance. Non-GAAP revenue came in ahead of the mid-point of our outlook with both non-GAAP gross margin and non-GAAP operating margin above the high end of our outlook,” said David Heard, Infinera CEO. “I am encouraged by the positive start to 2021 with broad-based demand for our differentiated open optical solutions, and remain confident about the opportunities ahead of us as we continue to manage through the current industry-wide supply chain challenges and ongoing pandemic impact."

Financial Outlook

Infinera's outlook for the second quarter ending June 26, 2021 is as follows:

  • GAAP revenue is expected to be $344 million +/- $10 million. Non-GAAP revenue is expected to be $345 million +/- $10 million.
  • GAAP gross margin is expected to be 33.5% +/- 100 bps. Non-GAAP gross margin is expected to be 36.0% +/- 100 bps.
  • GAAP operating expenses are expected to be $147 million +/- $2 million. Non-GAAP operating expenses are expected to be $127 million +/- $2 million.
  • GAAP operating margin is expected to be (9.0)% +/- 200 bps. Non-GAAP operating margin is expected to be (1.0%) +/- 200 bps.

First Quarter 2021 Investor Slides Available Online

Investor slides reviewing Infinera's first quarter of 2021 financial results will be furnished to the Securities and Exchange Commission (SEC) on a Current Report on Form 8-K and published on Infinera's Investor Relations website at investors.infinera.com prior to the first quarter of 2021 earnings conference call. Analysts and investors are encouraged to review these slides prior to participating in the conference call webcast.

Conference Call Information

Infinera will host a conference call for analysts and investors to discuss its results for the first quarter of 2021 and its outlook for the second quarter of 2021 today at 5:00 p.m. Eastern Time (2:00 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 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:
Amitabh Passi, Head of Investor Relations
Tel. +1 (669) 295-1489
apassi@infinera.com

About Infinera

Infinera is a global supplier of innovative networking solutions that enable carriers, cloud operators, governments, and enterprises to scale network bandwidth, accelerate service innovation, and automate network operations. The Infinera end-to-end packet-optical portfolio delivers industry-leading economics and performance in long-haul, submarine, data center interconnect, and metro transport applications. To learn more about Infinera, visit www.infinera.com, follow us on Twitter @Infinera, and read Infinera's latest blog posts at www.infinera.com/blog.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Infinera's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "will," and "would" or the negative of these words or similar terms or expressions that concern Infinera's expectations, strategy, priorities, plans or intentions. Such forward-looking statements in this press release include, without limitation, the presence of opportunities ahead of Infinera, including as it continues to manage industry-wide supply chain challenges and ongoing pandemic impact, and Infinera's financial outlook for the second quarter of 2021. These forward-looking statements are based on estimates and information available to Infinera as of the date hereof and are not guarantees of future performance; 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 the effect of the COVID-19 pandemic on Infinera’s business, results of operations, financial condition, stock price and personnel; the effect of global and regional economic conditions on Infinera’s business, including effects on purchasing decisions by customers; Infinera’s future capital needs and its ability to generate the cash flow or otherwise secure the capital necessary to make anticipated capital expenditures; Infinera's ability to service its debt obligations and pursue its strategic plan; delays in the development and introduction of new products or updates to existing products; market acceptance of Infinera’s end-to-end portfolio; Infinera's reliance on single and limited source suppliers; 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 Infinera's 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; the effects of customer consolidation; our ability to identify, attract and retain qualified personnel; the impacts of foreign currency fluctuations; Infinera’s ability to protect its intellectual property; claims by others that Infinera infringes their intellectual property; impacts of the recent presidential administration change in the United States; 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 Infinera's periodic reports filed with the SEC, including its Annual Report on Form 10-K for the year ended on December 26, 2020 as filed with the SEC on March 3, 2021, 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 financial measures that exclude acquisition-related deferred revenue adjustment, stock-based compensation expenses, amortization of acquired intangible assets, acquisition and integration costs, restructuring and related costs, COVID-19 related costs, amortization of debt discount on Infinera’s convertible senior notes, foreign exchange (gains) losses, net, and income tax effects. For a description of these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measures, please see the table titled “GAAP to Non-GAAP Reconciliations” and related footnotes.

Infinera has included forward-looking non-GAAP information in this press release, including an estimate of certain non-GAAP financial measures for the second quarter of 2021 that exclude acquisition-related deferred revenue adjustment, stock-based compensation expense, amortization of acquired intangible assets, acquisition and integration costs, and restructuring and related costs. Please see the section titled “GAAP to Non-GAAP Reconciliation of Financial Outlook” below on specific adjustments.

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 revenue, gross margin, operating expenses, operating margin, and net income (loss) 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.

A copy of this press release can be found on the Investor Relations page of Infinera’s website at investors.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
 March 27,
2021
 March 28,
2020
Revenue:   
Product$254,161  $255,192 
Services76,746  75,081 
    Total revenue330,907  330,273 
Cost of revenue:   
Cost of product165,485  201,792 
Cost of services43,260  40,695 
Amortization of intangible assets4,616  8,628 
Acquisition and integration costs  1,035 
Restructuring and related514  1,157 
    Total cost of revenue213,875  253,307 
Gross profit117,032  76,966 
Operating expenses:   
Research and development73,529  68,180 
Sales and marketing32,772  36,689 
General and administrative26,506  29,620 
Amortization of intangible assets4,405  4,555 
Acquisition and integration costs614  9,222 
Restructuring and related2,319  5,580 
    Total operating expenses140,145  153,846 
Loss from operations(23,113) (76,880)
Other income (expense), net:   
Interest income40  24 
Interest expense(11,843) (8,794)
Other gain (loss), net(12,395) (12,682)
    Total other income (expense), net(24,198) (21,452)
Loss before income taxes(47,311) (98,332)
Provision for income taxes1,011  936 
Net loss$(48,322) $(99,268)
Net loss per common share:   
Basic$(0.24) $(0.55)
Diluted$(0.24) $(0.55)
Weighted average shares used in computing net loss per common share:   
Basic202,638  182,024 
Diluted202,638  182,024 


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

 Three Months Ended
 March 27,
2021
  December 26,
2020
  March 28,
2020
 
Reconciliation of Revenue:        
U.S. GAAP as reported$330,907   $353,525   $330,273  
Acquisition-related deferred revenue adjustment(1)978   892   1,110  
Non-GAAP as adjusted$331,885   $354,417   $331,383  
         
Reconciliation of Gross Profit:        
U.S. GAAP as reported$117,032 35.4% $126,143 35.7% $76,966 23.3%
Acquisition-related deferred revenue adjustment(1)978   892   1,110  
Stock-based compensation expense(2)1,796   1,742   2,102  
Amortization of acquired intangible assets(3)4,616   4,611   8,628  
Acquisition and integration costs(4)      1,035  
Restructuring and related costs(5)514   (106)  1,157  
COVID-19 related costs(6)      2,880  
Non-GAAP as adjusted$124,936 37.6% $133,282 37.6% $93,878 28.3%
         
Reconciliation of Operating Expenses:        
U.S. GAAP as reported$140,145   $132,919   $153,846  
Stock-based compensation expense(2)9,178   11,177   9,601  
Amortization of acquired intangible assets(3)4,405   4,745   4,555  
Acquisition and integration costs(4)614   (265)  9,222  
Restructuring and related costs(5)2,319   7,230   5,580  
Non-GAAP as adjusted$123,629   $110,032   $124,888  
         
Reconciliation of Income/(Loss) from Operations:        
U.S. GAAP as reported$(23,113)(7.0)% $(6,776)(1.9)% $(76,880)(23.3)%
Acquisition-related deferred revenue adjustment(1)978   892   1,110  
Stock-based compensation expense(2)10,974   12,919   11,703  
Amortization of acquired intangible assets(3)9,021   9,356   13,183  
Acquisition and integration costs(4)614   (265)  10,257  
Restructuring and related costs(5)2,833   7,124   6,737  
COVID-19 related costs(6)      2,880  
Non-GAAP as adjusted$1,307 0.4% $23,250 6.6% $(31,010)(9.4)%



 Three Months Ended
 March 27,
2021
 December 26,
2020
 March 28,
2020

 
Reconciliation of Net Income/(Loss):        
U.S. GAAP as reported$(48,322) $(9,924) $(99,268) 
Acquisition-related deferred revenue adjustment(1)978  892  1,110  
Stock-based compensation expense(2)10,974  12,919  11,703  
Amortization of acquired intangible assets(3)9,021  9,356  13,183  
Acquisition and integration costs(4)614  (265) 10,257  
Restructuring and related costs(5)2,833  7,124  6,737  
COVID-19 related costs(6)    2,880  
Amortization of debt discount on Infinera's convertible senior notes(7)7,083  6,910  5,121  
Foreign exchange (gains) losses, net(8)11,706  (9,671) 12,905  
Income tax effects(9)(353) (691) (1,170) 
Non-GAAP as adjusted$(5,466) $16,650  $(36,542) 
         
Net Income/(Loss) per Common Share - Basic and Diluted:     
U.S. GAAP as reported$(0.24) $(0.05) $(0.55) 
Non-GAAP as adjusted$(0.03) $0.08  $(0.20) 
         
Weighted Average Shares Used in Computing Net Income/(Loss) per Common Share:
        
Basic202,638  195,655  182,024  
Diluted(10)202,638  203,259  182,024  


(1)Business combination accounting principles require Infinera to write down to fair value its maintenance support contracts assumed in Infinera's acquisition of Coriant, which closed during the fourth quarter of 2018. The revenue for these support contracts is deferred and typically recognized over a period of time after the Coriant acquisition, so Infinera's GAAP revenue for a period of time 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 revenue from support contracts assumed in the Coriant acquisition are useful to investors as an additional means to reflect revenue trends in 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 stock-based compensation related to employees and non-employees (in thousands):


 Three Months Ended
 March 27,
2021
 December 26,
2020
 March 28,
2020
Cost of revenue$1,796  $1,742  $2,102 
Total cost of revenue1,796  1,742  2,102 
Research and development4,297  4,501  3,774 
Sales and marketing3,199  2,771  2,644 
General and administration1,682  3,905  3,183 
Total operating expenses 9,178   11,177   9,601 
Total stock-based compensation expense$10,974  $12,919  $11,703 


(3)Amortization of acquired intangible assets consists of developed technology, trade names, customer relationships and backlog acquired in connection with the Coriant acquisition. Amortization of acquired intangible assets also consists of amortization of developed technology, trade names and customer relationships acquired in connection with Infinera’s acquisition of Transmode AB, which closed in 2015. 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 gross profit, operating expenses 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 and integration costs consist of legal, financial, IT, manufacturing-related costs, employee-related costs and professional fees incurred in connection with the Coriant acquisition. 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)Restructuring and related costs are primarily associated with the reduction of operating costs, the closure of Infinera's Berlin, Germany site, the reduction of headcount at Infinera's Munich, Germany site and other sites, and Coriant's historical restructuring plan associated with its early retirement plan. In addition, this includes accelerated amortization on operating lease right-of-use assets due to the cessation of use of certain facilities. Management has excluded the impact of these charges in arriving at Infinera's non-GAAP results as they are non-recurring in nature and its exclusion provides a better indication of Infinera's underlying business performance.

(6)COVID-19 related costs consist of higher replacement costs associated with certain warranty parts customers were unable to return for repair due to logistics issues and mobility issues related to COVID-19 public health mandates and restrictions. In addition, Infinera needed to source certain key components from an alternate supplier at substantially higher cost in order to fulfill delivery commitments in the normal course of business. Management has excluded these expenses from non-GAAP financial measures because they were caused by atypical circumstances during the COVID-19 pandemic, as their exclusion provides a better indication of Infinera's underlying business performance.

(7)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 the $402.5 million in aggregate principal amount of its 2.125% convertible debt issuance in September 2018 due September 2024 and $200 million in aggregate principal amount of 2.50% convertible debt issued in March 9, 2020 due March 2027. 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 its exclusion provides a better indication of Infinera's underlying business performance.

(8)Foreign exchange gains and losses have been excluded from Infinera's non-GAAP results because management believes that this expense is not indicative of ongoing operating performance and its exclusion provides a better indication of Infinera's underlying business performance. Exclusion of foreign exchange gains and losses from non-GAAP results commenced in the first quarter of 2021 and prior periods have been adjusted for comparability.

(9)The difference between the GAAP and non-GAAP tax provision is due to the net tax effects of the purchase accounting adjustments, acquisition-related costs and amortization of acquired intangible assets. Management believes the exclusion of these tax effects provides a better indication of Infinera's underlying business performance.

(10)The non-GAAP diluted shares include the potentially dilutive securities from Infinera's stock-based benefit plans and convertible senior notes excluded from the computation of dilutive net loss per share attributable to common stockholders on a GAAP basis because the effect would have been anti-dilutive. These potentially dilutive securities are added for the computation of diluted net income per share on a non-GAAP basis in periods when Infinera has net income on a non-GAAP basis as its inclusion provides a better indication of Infinera's underlying business performance.


Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands)
(Unaudited) 

Free Cash Flow

We define free cash flow as net cash provided by (used in) operating activities in the period minus the purchase of property and equipment, net made in the period.

Free cash flow is considered a non-GAAP financial measure under the SEC’s rules. Management believes that free cash flow is an important financial measure for use in evaluating the Company’s financial performance, as it measures our ability to generate additional cash from our business operations. Free cash flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance or net cash provided by operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited and does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations. Therefore, we believe it is important to view free cash flow as supplemental to our entire statement of cash flows.

 Three Months Ended
 March 27, 2021 December 26, 2020 March 28, 2020
Net cash provided by (used in) operating activities$18,630  $52,216  $(91,517)
Purchase of property and equipment, net(11,721) (11,861) (8,464)
Free cash flow$6,909  $40,355  $(99,981)


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

 March 27,
2021
 December 26,
2020
ASSETS   
Current assets:   
Cash$234,029  $298,014 
Short-term restricted cash3,288  3,293 
Accounts receivable, net of allowance for doubtful accounts of $3,102 in 2021 and $2,912 in 2020276,855  319,428 
Inventory262,827  269,307 
Prepaid expenses and other current assets139,245  171,831 
    Total current assets916,244  1,061,873 
Property, plant and equipment, net153,118  153,133 
Operating lease right-of-use assets64,942  68,851 
Intangible assets115,164  124,882 
Goodwill265,216  273,426 
Long-term restricted cash12,228  14,076 
Other non-current assets40,043  36,256 
    Total assets$1,566,955  $1,732,497 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$151,984  $175,762 
Accrued expenses and other current liabilities129,598  150,550 
Accrued compensation and related benefits56,050  52,976 
Short-term debt, net25,068  101,983 
Accrued warranty18,943  19,369 
Deferred revenue124,285  133,246 
    Total current liabilities505,928  633,886 
Long-term debt, net453,427  445,996 
Long-term financing lease obligations1,964  1,383 
Long-term accrued warranty19,944  21,339 
Long-term deferred revenue28,960  29,810 
Long-term deferred tax liability3,681  4,164 
Long-term operating lease liabilities72,912  76,126 
Other long-term liabilities86,791  93,509 
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 March 27, 2021
   and December 26, 2020
   Issued and outstanding shares – 204,812 as of March 27, 2021 and
   201,397 as of December 26, 2020
205  201 
Additional paid-in capital1,983,599  1,965,245 
Accumulated other comprehensive loss(14,870) (11,898)
Accumulated deficit(1,575,586) (1,527,264)
Total stockholders' equity393,348  426,284 
    Total liabilities and stockholders’ equity$1,566,955  $1,732,497 


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

 Three Months Ended
 March 27,
2021
 March 28,
2020
Cash Flows from Operating Activities:   
Net loss$(48,322) $(99,268)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:   
Depreciation and amortization20,546  25,445 
Non-cash restructuring charges and related costs1,410  1,760 
Amortization of debt discount and issuance costs7,822  5,731 
Operating lease expense5,228  5,204 
Stock-based compensation expense10,974  11,703 
Other, net2,065  1,153 
Changes in assets and liabilities:   
Accounts receivable38,671  70,238 
Inventory4,059  17,737 
Prepaid expenses and other assets20,669  (18,744)
Accounts payable(23,584) (72,355)
Accrued liabilities and other expenses(11,964) (32,083)
Deferred revenue(8,944) (8,038)
    Net cash provided by (used in) operating activities18,630  (91,517)
Cash Flows from Investing Activities:   
Purchase of property and equipment, net(11,721) (8,464)
    Net cash used in investing activities(11,721) (8,464)
Cash Flows from Financing Activities:   
Proceeds from issuance of 2027 Notes  194,500 
Proceeds from revolving line of credit  55,000 
Repayment of revolving line of credit(77,000)  
Payment of debt issuance cost  (1,775)
Repayment of mortgage payable(22) (99)
Payment of term license obligation(2,544)  
Principal payments on financing lease obligations(309)  
Proceeds from issuance of common stock9,344  7,395 
Minimum tax withholding paid on behalf of employees for net share settlement(1,938)  
    Net cash (used in) provided by financing activities(72,469) 255,021 
Effect of exchange rate changes on cash and restricted cash(278) (4,369)
Net change in cash and restricted cash(65,838) 150,671 
Cash and restricted cash at beginning of period315,383  132,797 
Cash and restricted cash at end of period(1)$249,545  $283,468 


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

 Three Months Ended
 March 27,
2021
 March 28,
2020
Supplemental disclosures of cash flow information:   
Cash paid for income taxes, net$4,355  $1,072 
Cash paid for interest$7,654  $5,131 
Supplemental schedule of non-cash investing and financing activities:   
Unpaid debt issuance cost$  $1,793 
Property and equipment included in accounts payable and accrued liabilities$255  $3,370 
Transfer of inventory to fixed assets$1,041  $118 
Unpaid term licenses (included in accounts payable, accrued liabilities and other long-term liabilities)$10,533  $ 

(1)         Reconciliation of cash and restricted cash to the condensed consolidated balance sheets:

 March 27,
2021
 March 28,
2020
    
 (In thousands)
Cash$234,029  $261,534 
Short-term restricted cash3,288  4,126 
Long-term restricted cash12,228  17,808 
Total cash and restricted cash$249,545  $283,468 


Infinera Corporation
Supplemental Financial Information
(Unaudited)

 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21
GAAP Revenue ($ Mil)$296.3  $325.3  $384.6  $330.3  $331.6  $340.2  $353.5  $330.9 
GAAP Gross Margin %20.7% 26.7% 29.0% 23.3% 29.4% 31.8% 35.7% 35.4%
Non-GAAP Gross Margin %(1)30.7% 33.1% 35.2% 28.3% 33.8% 35.2% 37.6% 37.6%
Revenue Composition:                 
Domestic %45% 51% 52% 52% 50% 49% 36% 48%
International %55% 49% 48% 48% 50% 51% 64% 52%
Customers >10% of Revenue1  1  1  1  1  1    1 
Cash Related Information:                 
Cash from Operations ($ Mil)($63.8) ($37.2) ($10.2) ($91.5) ($36.6) ($36.4) $52.2  $18.6 
Capital Expenditures ($ Mil)$9.2  $12.5  $2.7  $8.5  $10.5  $8.1  $11.9  $11.7 
Depreciation & Amortization ($ Mil)$31.2  $29.0  $28.6  $25.4  $25.9  $22.9  $25.9  $20.5 
DSOs80  80  83  75  79  78  82  76 
Inventory Metrics:                 
Raw Materials ($ Mil)$70.4  $47.2  $47.4  $50.0  $43.4  $39.3  $34.7  $31.8 
Work in Process ($ Mil)$59.5  $52.2  $48.8  $52.0  $50.9  $51.6  $55.8  $55.5 
Finished Goods ($ Mil)$208.9  $225.4  $244.1  $217.7  $193.9  $185.0  $178.8  $175.5 
Total Inventory ($ Mil)$338.8  $324.8  $340.3  $319.7  $288.2  $275.9  $269.3  $262.8 
Inventory Turns(2)2.5  2.7  2.9  3.0  3.1  3.2  3.3  3.1 
Worldwide Headcount3,632  3,557  3,261  3,302  3,209  3,074  3,050  3,041 
Weighted Average Shares Outstanding (in thousands):               
Basic178,677  179,988  180,864  182,024  185,596  189,589  195,655  202,638 
Diluted179,343  182,073  186,349  189,246  190,127  195,868  203,259  217,970 


(1)Non-GAAP adjustments include acquisition-related deferred revenue and inventory adjustments, stock-based compensation expenses, amortization of acquired intangible assets, acquisition and integration costs, restructuring and related costs, and COVID-19 related costs. 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 restructuring and related costs, non-cash stock-based compensation expense, and certain purchase accounting adjustments, divided by the average inventory for the quarter.


Infinera Corporation
GAAP to Non-GAAP Reconciliation of Financial Outlook
(In millions, except percentages)
(Unaudited) 

The following amounts represent the midpoint of the expected range:

 Q2'21
 Outlook
Reconciliation of Revenue: 
U.S. GAAP$344.0  
Acquisition-related deferred revenue adjustment1.0  
Non-GAAP$345.0  
  
Reconciliation of Gross Margin: 
U.S. GAAP33.5 %
Acquisition-related deferred revenue adjustment0.5 %
Stock-based compensation expense0.5 %
Amortization of acquired intangible assets1.0 %
Restructuring and related costs0.5 %
Non-GAAP36.0 %
  
Reconciliation of Operating Expenses: 
U.S. GAAP$147.0  
Stock-based compensation expense(12.0) 
Amortization of acquired intangible assets(4.0) 
Restructuring and related costs(4.0) 
Non-GAAP$127.0  
  
Reconciliation of Operating Margin: 
U.S. GAAP(9.0)%
Acquisition-related deferred revenue adjustment0.5 %
Stock-based compensation expense4.0 %
Amortization of acquired intangible assets2.0 %
Restructuring and related costs1.5 %
Non-GAAP(1.0)%

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