Finisar Corp. (NASDAQ:FNSR) Q1 2019 Earnings Conference Call Transcript
Sep 06, 2019 • 05:00 pm ET
Good afternoon, ladies and gentlemen, and welcome to the Finisar Corporation Announces First Quarter Results Conference Call. Just a quick reminder, today's call is being recorded.
And now at this time, I'd like to turn things over to Kurt Adzema, CFO.
Thank you, and good afternoon, everyone. I need to remind you that any forward-looking statements are subject to risks and uncertainties which are discussed at length in our SEC filings. Actual events and results can differ materially from any forward-looking statements. The company assumes no obligations to update any forward-looking information presented. Unless otherwise indicated, all results discussed are on a non-GAAP basis. A reconciliation of GAAP to non-GAAP results may be found in our press release and on our website.
We have also prepared some slides for today's call that can be found on our website. Moving to our first quarter results, overall revenue for the first fiscal quarter was $317.3 million compared to $310.1 million in the fourth quarter of fiscal 2018. Sales of telecom products increased by $17.1 million compared to the fourth quarter of fiscal 2018 to $78.2 million in total. This is primarily due to an increase in demand for wavelength selective switches driven by carrier deployments in India and China.
Sales of datacom and sensing products decreased by $9.9 million compared to the fourth quarter of fiscal 2018 to a total of $238.1 million, primarily due to lower demand for 40-gig transceivers. In the first quarter, we had two 10% or greater customers. Our top 10 customers represented 62% of total revenues compared to 58.4% in the fourth quarter of fiscal 2018.
Non-GAAP gross margin was 27.5% compared to 24.7% in the fourth quarter of fiscal '18, primarily due to lower levels of additions to non-cash inventory reserves and a favorable product mix compared to the prior quarter. Non-GAAP operating expenses were $68.3 million compared to $72 million in the fourth quarter. Non-GAAP operating income was $18.8 million or 5.9% of revenues compared to $4.6 million or 1.5% of revenue in the fourth quarter, primarily due to higher revenue, higher gross margins and lower operating expenses.
Non-GAAP interest and other income was approximately $4.2 million in the first quarter. Non-GAAP net income was $21.3 million or $0.18 per diluted share compared to $5.8 million or $0.05 per diluted share in the fourth quarter. Non-GAAP taxes for the first quarter were approximately $1.7 million and non-GAAP tax rate for the remainder of fiscal 2019 is expected to be approximately 10%. Average diluted shares for the first quarter for non-GAAP purposes totaled $117.2 million and are expected to be approximately $118 million in the second quarter.
Capital expenditures were approximately $112.7 million in the first quarter, of which approximately $4 million related to the construction of the third building of our Wuxi manufacturing site and approximately $97 million related to the uplift of the building in Sherman, Texas and the delivery of capital equipments for that site.
We expect the construction of our -- the third