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Press Release -- January 27th, 2011
Source: Infinera
Tags: 100G, 40G, Earnings, Equipment, Exchange, Expansion, Video

Infinera Corporation Reports Fourth Quarter and Fiscal Year 2010 Financial Results

Revenue of $117.1 Million on Year-Over-Year Growth of 30%; Non-GAAP Profit of $0.07 per Diluted Share; Non-GAAP Gross Margin at 51%

SUNNYVALE, CA, Jan 27, 2011 (MARKETWIRE via COMTEX) --

Infinera Corporation (NASDAQ:INFN, news, filings), a leading provider of digital optical communications systems, today released financial results for the fourth quarter and fiscal year ended December 25, 2010.

Results for Q4 2010:

--  GAAP revenues for the quarter were $117.1 million compared to $130.1
    million in the third quarter of 2010 and $90.2 million in the fourth
    quarter of 2009.
--  GAAP gross margins for the quarter were 49% compared to 50% in the
    third quarter of 2010 and 38% in the fourth quarter of 2009.  GAAP net
    loss for the quarter was $2.7 million, or $(0.03) per share, compared
    to net income of $4.4 million, or $0.04 per basic and diluted share,
    in the third quarter of 2010 and a net loss of $18.7 million, or
    $(0.19) per share, in the fourth quarter of 2009.
--  Non-GAAP gross margins for the quarter were 51%, the same as in the
    third quarter of 2010 and 40% in the fourth quarter of 2009.  Non-GAAP
    net income for the quarter was $7.6 million, or $0.07 per diluted
    share, compared to net income of $18.7 million, or $0.18 per diluted
    share in the third quarter of 2010 and a net loss of $6.5 million, or
    $(0.07) per share, in the fourth quarter of 2009. These Non-GAAP
    measures exclude restructuring and other related costs and non-cash
    stock-based compensation.

Results for Fiscal 2010:

--  GAAP revenues for the year ended December 25, 2010 were $454.4 million
    compared to $309.1 million in 2009.
--  GAAP gross margins for the year were 45% compared to 33% in 2009.  GAAP
    net loss for the year was $27.9 million, or $(0.28) per share compared
    to $86.6 million, or $(0.91) per share in 2009.
--  Non-GAAP gross margins for the year were 47% compared to 36% in 2009.
    Non-GAAP net income for the year was $22.4 million or $0.21 per diluted
    share in 2010, compared to net loss of $45.4 million or $(0.48) per
    share in 2009. These Non-GAAP measures exclude restructuring and other
    related costs and non-cash stock-based compensation.

Management Commentary

"2010 was a year of strong growth in bandwidth demand worldwide, and our customers saw growth in their networks, driven by a number of applications, notably video, mobility, and cloud computing," said Tom Fallon, president and chief executive officer. "We are pleased that we have been able to participate in this growth, showing strong year-over-year performance in revenues and market share, improved profitability and progress toward achieving our long-term business model. Service providers continue to look for ways to improve the economic performance of their networks through both efficiency and rapid response to their revenue-creating opportunities. With our digital optical architecture, we enable them to do so with the unique combination of world class optics and digital network intelligence.

"In fiscal 2011, we will continue to focus on meeting the needs of our customers and on addressing market expansion opportunities. In addition, we will focus on expense management, while at the same time ensuring that we invest appropriately to enable the successful launch of our PIC-based 100G product in 2012. We remain on track to ship our differentiated 40G solution with FlexCoherent technology for our current DTN networks later this year. In the meantime, we will meet customer needs today with what we believe is the industry's most cost effective and flexible portfolio of network solutions -- our differentiated PIC-based DTN network and our ATN metro solution."

Conference Call Information:

Infinera will host a conference call for analysts and investors to discuss its fourth quarter and fiscal year 2010 results and first quarter outlook today at 6:00 p.m. Eastern Time (3:00 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 90 days. To hear the replay, parties in the United States and Canada should call 1-800-839-2334. International parties can access the replay at 1-203-369-3656.

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 customers 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.

Forward-Looking Statements

This press release contains forward-looking statements, including statements about our belief in the drivers for our customers' bandwidth growth and the need for improvements in the economic performance of their networks, our belief in our ability to satisfy our customers' requirements with our systems and the benefits of our systems, the timing of shipments for our differentiated 40G solution and the timing of the launch of our 100G product in 2012, and our areas of focus and investment for 2011. These forward-looking statements involve risks and uncertainties, as well as assumptions that if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include our ability to react to trends and challenges in our business and the markets in which we operate; our ability to anticipate market needs and develop new or enhanced products to meet those needs; the adoption rate of our products; our ability to establish and maintain successful relationships with our customers; our ability to reduce customer concentration; our ability to compete in our industry; fluctuations in demand, sales cycles and prices for our products and services; shortages or price fluctuations in our supply chain; our ability to protect our intellectual property rights; general political, economic and market conditions and events; and other risks and uncertainties described more fully in our documents filed with or furnished to the U.S. Securities and Exchange Commission (SEC). More information about these and other risks that may impact Infinera's business are set forth in our annual report on Form 10-K, which was filed with the SEC on March 1, 2010, as well as subsequent reports filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these 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 and non-recurring restructuring and other related costs. We believe these adjustments are appropriate to enhance an overall understanding of our underlying financial performance and also our 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 our 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, or gross 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." We anticipate disclosing forward-looking non-GAAP information in our conference call to discuss our fourth quarter and fiscal year 2010 results, including an estimate of non-GAAP earnings for the first quarter of 2011 that excludes non-cash stock-based compensation expenses.

A copy of this press release can be found on the investor relations page of Infinera's website at www.infinera.com.

Infinera Corporation 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
GAAP Condensed Consolidated Statements of Operations
(In thousands, except per share data)
 (Unaudited)
                           Three Months Ended       Twelve Months Ended
                        ------------------------  ------------------------
                        December 25, December 26, December 25, December 26,
                            2010         2009        2010         2009
                        -----------  -----------  -----------  -----------
Revenue:
  Product               $   102,255  $    82,100  $   401,578  $   276,012
  Ratable product and
   related support and
   services                   1,417        1,025        6,155        4,231
  Services                   13,461        7,056       46,619       28,858
                        -----------  -----------  -----------  -----------
      Total revenue         117,133       90,181      454,352      309,101
Cost of revenue (1):
  Cost of product            53,523       52,686      225,183      189,723
  Cost of ratable
   product and related
   support and services         659          399        3,217        1,931
  Cost of services            5,659        2,627       19,945       12,308
  Restructuring and
   other costs (credit)
  related to cost of
   revenue                        -          302         (182)       3,038
                        -----------  -----------  -----------  -----------
      Total cost of
       revenue               59,841       56,014      248,163      207,000
Gross profit                 57,292       34,167      206,189      102,101
Operating expenses (1):
  Research and
   development               31,226       26,843      118,518       97,288
  Sales and marketing        16,537       13,446       58,103       48,391
  General and
   administrative            12,304       13,291       58,098       45,269
  Restructuring and
   other costs                    -          213          159          814
                        -----------  -----------  -----------  -----------
      Total operating
       expenses              60,067       53,793      234,878      191,762
Loss from operations         (2,775)     (19,626)     (28,689)     (89,661)
Other income (expense),
 net:
  Interest income               296          732        1,390        2,688
    Total
     other-than-
     temporary
     impairment
     losses                       -            -            -       (2,747)
    Portion of loss
     recognized in
     other
     comprehensive loss           -            -            -        1,653
                        -----------  -----------  -----------  -----------
  Net credit impairment
   losses recognized in
   earnings                       -            -            -       (1,094)
  Other gain (loss),
   net                           36         (288)        (316)        (426)
                        -----------  -----------  -----------  -----------
      Total other
       Income (expense),
       net                      332          444        1,074        1,168
Loss before income
 taxes                       (2,443)     (19,182)     (27,615)     (88,493)
Provision for (benefit
 from) income taxes             297         (531)         317       (1,871)
                        -----------  -----------  -----------  -----------
Net loss                $    (2,740) $   (18,651) $   (27,932) $   (86,622)
                        ===========  ===========  ===========  ===========
Net loss per common
 share - basic and
 diluted                $     (0.03) $     (0.19) $     (0.28) $     (0.91)
                        ===========  ===========  ===========  ===========
Weighted average shares
 used in computing net
 loss per common share
  - basic and diluted       101,654       96,573       99,380       95,468
                        ===========  ===========  ===========  ===========
(1) The following table summarizes the effects of stock-based compensation
    related to employees and non-employees for the three and twelve months
    ended December 25, 2010 and December 26, 2009:
                            Three Months Ended       Twelve Months Ended
                        ------------------------  ------------------------
                        December 25, December 26, December 25, December 26,
                            2010         2009        2010         2009
                        -----------  -----------  -----------  -----------
   Cost of revenue      $       740  $       515  $     2,598  $     1,861
   Research and
    development               3,755        3,236       14,301       10,302
   Sales and marketing        1,709        1,782        7,896        6,505
   General and
    administration            2,715        4,919       19,903       15,061
                        -----------  -----------  -----------  -----------
                              8,919       10,452       44,698       33,729
   Cost of revenue -
    amortization from
    balance sheet*            1,455        1,189        5,637        3,646
                        -----------  -----------  -----------  -----------
   Total stock-based
    compensation
    expense             $    10,374  $    11,641  $    50,335  $    37,375
                        ===========  ===========  ===========  ===========
* Stock-based compensation expense deferred to inventory and deferred
  inventory costs in prior periods and recognized in the current period.
Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands, except per share data)
(Unaudited)
                         Three Months Ended           Twelve Months Ended
                   -------------------------------  ----------------------
                    December  September  December    December    December
                    25, 2010  25, 2010   26, 2009    25, 2010    26, 2009
                   ---------  --------  ----------  ----------  ----------
Reconciliation of
 Gross Profit:
U.S. GAAP as
 reported          $  57,292  $ 64,471  $   34,167  $  206,189  $  102,101
Restructuring and
 other related
 costs(1)                  -       (60)        302        (182)      3,038
Stock-based
 compensation(2)       2,195     2,242       1,704       8,235       5,507
                   ---------  --------  ----------  ----------  ----------
Non-GAAP as
 adjusted          $  59,487  $ 66,653  $   36,173  $  214,242  $  110,646
                   =========  ========  ==========  ==========  ==========
Reconciliation of
 Gross Margin:
U.S. GAAP as
 reported                 49%       50%         38%         45%         33%
Restructuring and
 other related
 costs(1)                 - %       - %         - %          -%          1%
Stock-based
 compensation(2)           2%        1%          2%          2%          2%
                   ---------  --------  ----------  ----------  ----------
Non-GAAP as
 adjusted                 51%       51%         40%         47%         36%
                   =========  ========  ==========  ==========  ==========
Reconciliation of
 Income (Loss)
from Operations:
U.S. GAAP as
 reported          $  (2,775) $  4,129  $  (19,626) $  (28,689) $  (89,661)
Restructuring and
 other related
 costs(1)                  -       (60)        515         (23)      3,852
Stock-based
 compensation(2)      10,374    14,444      11,641      50,335      37,375
                   ---------  --------  ----------  ----------  ----------
Non-GAAP as
 adjusted          $   7,599  $ 18,513  $   (7,470) $   21,623  $  (48,434)
                   =========  ========  ==========  ==========  ==========
Reconciliation of
 Net Income
 (Loss):
U.S. GAAP as
 reported          $  (2,740) $  4,360  $  (18,651) $  (27,932) $  (86,622)
Restructuring and
 other related
 costs(1)                  -       (60)        515         (23)      3,852
Stock-based
 compensation(2)      10,374    14,444      11,641      50,335      37,375
                   ---------  --------  ----------  ----------  ----------
Non-GAAP as
 adjusted          $   7,634  $ 18,744  $   (6,495) $   22,380  $  (45,395)
                   =========  ========  ==========  ==========  ==========
Net Income (Loss)
 per Common
Share - Basic:
U.S. GAAP          $   (0.03) $   0.04  $    (0.19) $    (0.28) $    (0.91)
                   =========  ========  ==========  ==========  ==========
Non-GAAP           $    0.08  $   0.19  $    (0.07) $     0.23  $    (0.48)
                   =========  ========  ==========  ==========  ==========
Net Income (Loss)
 per Common
Share - Diluted:
U.S. GAAP          $   (0.03) $   0.04  $    (0.19) $    (0.28) $    (0.91)
                   =========  ========  ==========  ==========  ==========
Non-GAAP           $    0.07  $   0.18  $    (0.07) $     0.21  $    (0.48)
                   =========  ========  ==========  ==========  ==========
Weighted average
 Shares used in
 computing net
 income (loss)
 per common share -
 U.S. GAAP:
Basic                101,654    99,976      96,573      99,380      95,468
                   =========  ========  ==========  ==========  ==========
Diluted              101,654   105,159      96,573      99,380      95,468
                   =========  ========  ==========  ==========  ==========
Weighted average
 Shares used in
 computing net
 income (loss)
 per common share -
 Non-GAAP:
Basic                101,654    99,976      96,573      99,380      95,468
                   =========  ========  ==========  ==========  ==========
Diluted              108,393   105,159      96,573     104,622      95,468
                   =========  ========  ==========  ==========  ==========
(1) Adjustment amount represents restructuring and other related costs
    (credit) recorded in relation to the closure of our Maryland FAB
    announced on July 21, 2009.  These amounts have been adjusted in
    arriving at our non-GAAP results as they are non-recurring in nature
    and the adjusted numbers provide a better indication of our underlying
    business performance.
                    Twelve Months Ended            Three Months Ended
                      December 25, 2010            September 25, 2010
                ----------------------------  ----------------------------
                Cost of   Operating           Cost of   Operating
                Revenue   Expenses    Total   Revenue   Expenses    Total
                --------  --------- --------  --------  --------- --------
Severance and
 related
 expenses       $   (144) $      55 $    (89) $      -  $       - $      -
Equipment and
 facility-rela-
 ted costs           (38)         -      (38)      (60)         -      (60)
Lease
 termination           -        104      104         -          -        -
                --------  --------- --------  --------  --------- --------
Total           $   (182) $     159 $    (23) $    (60) $       - $    (60)
                ========  ========= ========  ========  ========= ========
                     Three Months Ended           Twelve Months Ended
                      December 26, 2009             December 26, 2009
                ----------------------------  -----------------------------
                Cost of   Operating           Cost of   Operating
                Revenue    Expenses   Total   Revenue    Expenses   Total
                --------  --------- --------  --------  --------- --------
Severance and
 related
 expenses       $   (157) $      57 $   (100) $    647  $     154 $    801
Equipment and
 facility-rela-
 ted costs           459       (255)     204     2,359        160    2,519
Lease
 termination           -        411      411         -        411      411
Other                  -          -        -        32         89      121
                --------  --------- --------  --------  --------- --------
Total           $    302  $     213 $    515  $  3,038  $     814 $  3,852
                ========  ========= ========  ========  ========= ========
(2) Stock-based compensation expense is calculated in accordance with the
    fair value recognition provisions of Financial Accounting Standards
    Board Accounting Standards Codification (ASC) 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:
                       Three Months Ended            Twelve Months Ended
               ----------------------------------- -----------------------
                 December    September   December    December    December
                 25, 2010    25, 2010    26, 2009    25, 2010    26, 2009
                ----------- ----------- ----------- ----------- -----------
Cost of revenue $       740 $       725 $       515 $     2,598 $     1,861
Research and
 development          3,755       3,773       3,236      14,301      10,302
Sales and
 marketing            1,709       2,148       1,782       7,896       6,505
General and
 administration       2,715       6,281       4,919      19,903      15,061
                ----------- ----------- ----------- ----------- -----------
                      8,919      12,927      10,452      44,698      33,729
Cost of revenue
 - amortization
 from balance
 sheet*               1,455       1,517       1,189       5,637       3,646
                ----------- ----------- ----------- ----------- -----------
Total
 stock-based
 compensation
 expense        $    10,374 $    14,444 $    11,641 $    50,335 $    37,375
                =========== =========== =========== =========== ===========
* Stock-based compensation expense deferred to inventory and deferred
  inventory costs in prior periods and recognized in the current period.
Infinera Corporation
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(Unaudited)
                                              December 25,   December 26,
                                                  2010           2009
                                              -------------  -------------
ASSETS
Current assets:
  Cash and cash equivalents                   $     113,649  $     109,859
  Short-term investments                            168,013        143,350
  Short-term restricted cash                          1,856          1,533
  Accounts receivable                                75,931         69,483
  Other receivables                                   4,420            927
  Inventories, net                                   81,893         68,872
  Deferred inventory costs                            6,715          5,891
  Prepaid expenses and other current assets           9,118          8,313
                                              -------------  -------------
      Total current assets                          461,595        408,228
Property, plant and equipment, net                   51,740         43,656
Deferred inventory costs, non-current                 2,512          4,438
Long-term investments                                 9,953         18,255
Cost-method investment                                4,500              -
Long-term restricted cash                             2,235          2,480
Deferred tax asset                                   11,882         12,449
Other non-current assets                              7,108          2,439
                                              -------------  -------------
      Total assets                            $     551,525  $     491,945
                                              =============  =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                            $      35,658  $      31,129
  Accrued expenses                                   19,790         13,929
  Accrued compensation and related benefits          25,098         19,248
  Accrued warranty                                    5,696          6,091
  Deferred revenue                                   21,958         18,295
  Deferred tax liability                             11,882         12,649
                                              -------------  -------------
      Total current liabilities                     120,082        101,341
  Accrued warranty, non-current                       5,726          5,049
  Deferred revenue, non-current                       4,633          8,080
  Other long-term liabilities                        10,335          8,968
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
     December 25, 2010 and December 26, 2009
    Issued and outstanding shares - 102,492
     as of December 25, 2010 and 96,874
     as of December 26, 2009                            102             97
  Additional paid-in capital                        817,200        747,580
  Accumulated other comprehensive loss               (1,261)        (1,810)
  Accumulated deficit                              (405,292)      (377,360)
                                              -------------  -------------
  Total stockholders' equity                        410,749        368,507
                                              -------------  -------------
      Total liabilities and stockholders'
       equity                                 $     551,525  $     491,945
                                              =============  =============
Infinera Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
 (Unaudited)
                                                  Twelve Months Ended
                                              ----------------------------
                                              December 25,   December 26,
                                                  2010           2009
                                              -------------  -------------
Cash Flows from Operating Activities:
Net loss                                      $     (27,932) $     (86,622)
Adjustments to reconcile net loss to net cash
   provided by (used in) operating
    activities:
  Depreciation and amortization                      15,619         16,547
  Recovery of doubtful accounts                           -         (1,700)
  Non-cash restructuring and other costs                100          2,973
  Net credit impairment losses in earnings                -          1,094
  Amortization of premium on investments              3,761            604
  Stock-based compensation expense                   50,335         37,375
  Unrealized loss on Put Rights                       1,696          3,761
  Unrealized holding gain for trading
   securities                                        (1,696)        (4,584)
  Non-cash tax benefit                                 (316)          (315)
  Reversal from stock option transactions                 -           (593)
  Reduction of tax benefit from stock option
   transactions                                           -            248
  Gain on disposal of assets                           (179)          (284)
  Other gain                                            (96)          (134)
  Changes in assets and liabilities:
    Accounts receivable                              (6,755)         1,834
    Inventories, net                                (13,143)        (8,618)
    Prepaid expenses and other current assets         1,296         (2,244)
    Deferred inventory costs                            928         (6,180)
    Other non-current assets                         (3,936)        (7,345)
    Accounts payable                                  1,161         (2,594)
    Accrued liabilities and other expenses            9,196         18,964
    Deferred revenue                                    216          3,968
    Accrued warranty                                    282          1,199
                                              -------------  -------------
      Net cash provided by (used in)
       operating activities                          30,537        (32,646)
Cash Flows from Investing Activities:
  Purchase of available-for-sale investments       (253,130)      (163,870)
  Purchase of cost-method investment                 (4,500)             -
  Proceeds from sale of available-for-sale
   investments                                            -          1,536
  Proceeds from maturities and calls of
   investments, and exercise of Put Rights          232,333        144,795
  Proceeds from disposal of assets                      324            699
  Purchase of property and equipment                (20,672)       (15,394)
  Change in restricted cash                             (77)        (1,113)
                                              -------------  -------------
      Net cash used in investing activities         (45,722)       (33,347)
Cash Flows from Financing Activities:
  Proceeds from issuance of common stock             19,348          9,310
  Reduction of tax benefit from stock option
   transactions                                           -           (248)
  Repurchase of common stock                            (14)           (31)
  Payments for purchase of assets under
   financing arrangement                               (349)           (87)
                                              -------------  -------------
      Net cash provided by financing
       activities                                    18,985          8,944
Effect of exchange rate changes on cash                 (10)           138
Net change in cash and cash equivalents               3,790        (56,911)
Cash and cash equivalents at beginning of
 period                                             109,859        166,770
                                              -------------  -------------
Cash and cash equivalents at end of period    $     113,649  $     109,859
                                              =============  =============
Supplemental disclosures of cash flow
 information:
  Cash paid for income taxes                  $         739  $       1,442
Supplemental schedule of non-cash financing
 activities:
  Purchase of assets under financing
   arrangement                                $           -  $         567
Infinera Corporation
Supplemental Financial Information
(Unaudited)
                                 Q1'09      Q2'09      Q3'09      Q4'09
                               ---------  ---------  ---------  ---------
Revenue ($ Mil) (1)            $    66.6  $    68.9  $    83.4  $    90.2
Gross Margin % (1)                    31%        31%        38%        40%
                               ---------  ---------  ---------  ---------
  Invoiced Shipment
   Composition:
  Domestic %                          74%        64%        63%        74%
  International %                     26%        36%        37%        26%
  Largest Customer %                  30%        20%        15%        17%
                               ---------  ---------  ---------  ---------
  Cash Related Information:
  Cash from Operations ($ Mil) $   (2.9)  $   (18.8) $    (8.3) $    (2.7)
  Capital Expenditures ($ Mil) $     6.0  $     2.8  $     2.8  $     4.4
  Depreciation & Amortization
   ($ Mil)                     $     3.9  $     4.0  $     4.2  $     4.5
  DSO's                               61         72         61         71
                               ---------  ---------  ---------  ---------
  Inventory Metrics:
  Raw Materials ($ Mil)        $     7.7  $    10.1  $     7.4  $     6.9
  Work in Process ($ Mil)      $    43.2  $    40.1  $    36.2  $    32.1
  Finished Goods ($ Mil)       $    13.6  $    22.3  $    29.3  $    29.9
                               ---------  ---------  ---------  ---------
  Total Inventory ($ Mil)      $    64.5  $    72.5  $    72.9  $    68.9
Inventory Turns (1)                  2.8        2.6        3.0        3.2
                               ---------  ---------  ---------  ---------
  Worldwide Headcount                962        973        970        974
                               ---------  ---------  ---------  ---------
                                 Q1'10      Q2'10      Q3'10      Q4'10
                               ---------  ---------  ---------  ---------
Revenue ($ Mil) (1)            $    95.8  $   111.4  $   130.1  $   117.1
Gross Margin % (1)                    41%        44%        51%        51%
                               ---------  ---------  ---------  ---------
  Invoiced Shipment
   Composition:
  Domestic %                          79%        81%        73%        70%
  International %                     21%        19%        27%        30%
  Largest Customer %                  22%        13%        19%        10%
                               ---------  ---------  ---------  ---------
  Cash Related Information:
  Cash from Operations ($ Mil) $     2.3  $    11.2  $    10.0  $     7.0
  Capital Expenditures ($ Mil) $     4.7  $     5.0  $     5.9  $     5.0
  Depreciation & Amortization
   ($ Mil)                     $     4.0  $     3.7  $     3.9  $     4.0
  DSO's                               56         45         45         59
                               ---------  ---------  ---------  ---------
  Inventory Metrics:
  Raw Materials ($ Mil)        $     7.5  $     9.1  $    11.0  $    23.1
  Work in Process ($ Mil)      $    31.5  $    29.2  $    36.5  $    14.8
  Finished Goods ($ Mil)       $    33.0  $    45.9  $    41.2  $    44.0
                               ---------  ---------  ---------  ---------
  Total Inventory ($ Mil)      $    72.0  $    84.2  $    88.7  $    81.9
Inventory Turns (1)                  3.2        3.0        2.9        2.8
                               ---------  ---------  ---------  ---------
  Worldwide Headcount                999      1,028      1,040      1,072
                               ---------  ---------  ---------  ---------
(1) Periods Q1'09 and going forward reflect non-GAAP results.  Non-GAAP
adjustments include restructuring and other related costs and non-cash
stock-based compensation.
Contacts:
Press:
Jeff Ferry
jferry@infinera.com
Infinera Corporation
408-572-5213

Investors/Analysts:
Bob Blair
bblair@infinera.com
Infinera Corporation
408-716-4879

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