Infinera Corporation: Infinera Corporation Reports Fourth Quarter and Fiscal Year 2009 Financial Results

Infinera Corporation (Nasdaq: INFN), a leading provider of digital optical communications systems, today released financial results for the fourth quarter and fiscal year ended December 26, 2009.

Results for Q4 2009:

-- GAAP revenues for the fourth quarter of 2009 were $90.2 million compared to $83.4 million in the third quarter of 2009 and $86.2 million on an adjusted GAAP basis in the fourth quarter of 2008.

-- GAAP gross margins for the quarter were 38%. Excluding restructuring and other related costs and non-cash stock-based compensation, non-GAAP gross margins were 40% compared to 38% in the third quarter of 2009 and 36% on an adjusted GAAP basis in the fourth quarter of 2008.

-- GAAP net loss for the quarter was $18.7 million, or $0.19 per share. Excluding restructuring and other related costs and non-cash stock-based compensation, the net loss on a non-GAAP basis was $6.5 million, or $0.07 per share, compared to net loss of $3.1 million, or $0.03 per share in the third quarter of 2009 and net loss on an adjusted GAAP basis of $9.0 million, or $0.10 per share, in the fourth quarter of 2008.

Results for Fiscal 2009:

-- GAAP revenues for the year ended December 26, 2009 were $309.1 million compared to $353.4 million on an adjusted GAAP basis in 2008.

-- GAAP gross margins for the year were 33%. Excluding restructuring and other related costs and non-cash stock-based compensation, gross margins were 36% in 2009 compared to 43% on an adjusted GAAP basis in 2008.

-- GAAP net loss for the year was $86.6 million, or $0.91 per share. Excluding restructuring and other related costs and non-cash stock-based compensation, the net loss on a non-GAAP basis was $45.4 million or $0.48 per share in 2009, compared to net income on an adjusted GAAP basis of $14.3 million or $0.15 per diluted share in 2008.

Management Commentary

"We are pleased with the continuation of our sequential growth in revenues and gross margins in the fourth quarter as well as our record bookings for the quarter and year, reflecting our success in expanding our customer footprint throughout fiscal year 2009, " said Tom Fallon, president and chief executive officer. "In the fourth quarter, we invoiced our highest level of tributary adapter modules (TAMs) in six quarters and saw continued strength in our common equipment sales.

"We are seeing good opportunities with both current and prospective customers across all served markets," said Fallon. "The market continues to embrace Infinera's disruptive PIC-based approach of providing the best, most cost-effective and most flexible optical networks to address their bandwidth needs-both with our existing products and the new products on our roadmap. To meet these needs, we are committed to continuing to invest in technologies and products that will advance Infinera's technology leadership position across our expanded addressable markets of submarine, ultra long haul, long haul, metro core, and metro edge."

The company noted the following additional developments:

The addition of three new customers bringing the company's total customer count to 69.

Among the new customers was Tiscali, one of the leading telecommunications companies in Italy, which selected both the Infinera DTN and ATN for its nationwide Italian backbone and metro networks.

Shipment of Infinera equipment for a nationwide build-out for an unnamed leading internet content provider in the fourth quarter-for a win that was achieved and for which initial orders were received in Q3. As a result of this rapid deployment, the customer finished as Infinera's top customer for the first time in Q4.

The other large Q4 customer was Level 3, which contributed 12% of revenues vs. slightly less than 10% in Q3.

The top 5 customers for the quarter included two of the largest internet content providers in the world, two established European customers as well as Level 3.

In addition to previously announced submarine network wins in the Americaswith Global Crossing and Telefonica, the company recently won a 6,000 kilometer Trans-Atlantic submarine route with an existing customer.

Note: For an explanation of our use of Non-GAAP and Adjusted GAAP measures and a full reconciliation of these measures to our GAAP results, please see the section of the accompanying tables titled "GAAP to Non-GAAP and Adjusted GAAP Reconciliations." We have not shown comparisons to our fourth quarter and fiscal 2008 GAAP results in the body of this press release because those results were significantly affected by the recognition of ratable product and related support and services revenue from shipments made prior to the fourth quarter of 2008, which we believe makes those comparisons less useful for investors. See our GAAP Condensed Consolidated Statements of Operations attached to this release for these GAAP to GAAP comparisons.

Conference Call Information:

Infinera will host a conference call for analysts and investors to discuss its fourth quarter results and first quarter outlook today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live webcast of the conference call will also be accessible from the "Investor Relations" section of the company's website at www.infinera.com. Following the webcast, an archived version will be available on the website for 30 days. To hear the replay, parties in the United Statesand Canadashould call 1-866-416-4355. International parties can access the replay at 1-203-369-0719.

About Infinera

Infinera provides Digital Optical Networking systems to telecommunications carriers worldwide. Infinera's systems are unique in their use of a breakthrough semiconductor technology: the Photonic Integrated Circuit (PIC). Infinera's systems and PIC technology are designed to provide optical networks with simpler and more flexible engineering and operations, faster time-to-service, and the ability to rapidly deliver differentiated services without reengineering their optical infrastructure. For more information, please visit www.infinera.com.

CONTACT: Infinera WWW: http://www.infinera.com Katie Swan, Speed e-mail: Katie.Swan@speedcommunications.com Tel: +44 (0)20 7842 3271 WWW: http://www.speedcommunications.com

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