Infinera

Solutions of Infinera company are most effective at construction of high-speed backbone networks of big extent and also flexible regional networks with difficult topology that it is especially demanded in our country.

Performance Indicators

Financial year of the company ends on December 31.

2012

By estimates of specialists of Infinera, the annual volume of the domestic market of products for transport networks of regional and longhaul is about 250 million dollars in the prices of producers. Considering demand for the products and also development of the Russian telecommunications, the Moscow representative office believes that will manage to provide growth of business in 2012 not less than 40-50%.

According to Dell’Oro Group, in the second quarter 2011 the volume of the world market of products for optical transport networks of DWDM increased by 30% in comparison with the same period of 2010 and reached 1.9 billion dollars. Leaders of sales of steel of Huawei, Ciena and Alcatel-Lucent. Analysts of ACG Research reported that in the third quarter 2011 world sales of products for packet transport networks increased year on year by 21%.

2011

Turnover of the company for 2011 financial year made 404.9 million dollars according to the GAAP standard in comparison with 454.4 million dollars of turnover in 2010.

Profit margin on GAAP for the year period was 41% while the indicator was equal to 45% in 2010.

Net loss on GAAP is equal to 81.7 million dollars, or 78 cents on an action in comparison with 27.9 million dollars of net loss, or 28 cents on an action, in 2010.

Profit margin on non-GAAP for the year period was 43% while the indicator was equal to 47% in 2010.

Net loss on non-GAAP in 2011 is equal to 31.7 million dollars, or 29 cents on a watered action in comparison with 22.4 million dollars of net profit, or 21 cents on a watered action, in 2010.

Results of operating activities on the non-GAAP standard do not include the means spent for non-cash compensation to shareholders, restructuring and other costs.

"Revenue of the company in the fourth quarter exceeded our expectations; it confirms stable demand of customers who include operators of cable networks and also large telecom operators and suppliers of interoperator services, on unique solutions in the field of digital optical networks of Infinera, - Tom Fallon, the president and the chief executive officer of Infinera said. – In the end of the year we unexpectedly received payments from a number of clients that allowed our company to be engaged closely in process of recovery of production after a destructive flood in Thailand".

In addition to the annual report, the company reported on progress of the business, namely:

• Receiving the first profit on project 40G that displays the growing interest of key clients in this technology;

• Two cable operators among five most big customers of the company, besides one of them excess of of 10% of revenue;

• Presence of the client of the highest priority (Tier One) among five largest customers the second quarter in a row;

• Signing of the contracts with five new clients, thus, made a total quantity of clients 16 during 2011 and 98 generally;

• 36 clients from the industry of networks currently – they purchased several products for different applications.

Business in Russia

• Infinera is present at the Russian market since 2009, but before opening of office in September, 2011 its interests were represented by NVision Group company.

• On September 5, 2011 the Infinera company announced opening of office in Moscow. In Russia Infinera will concentrate the main efforts on sales, marketing and also close cooperation with local partners for increase in presence of the company in the market. The new division was created for support of telecom operators and service providers in Russia and the CIS, in full accordance with plans of Infinera company for increasing the international presence.

Products & Services

The Infinera company specializes in the digital optical network systems intended for improvement of economic indicators of fiber optic networks, integrating the speed of optical technologies and simplicity of digital. Infinera offers a unique revolutionary semiconductor technology "large-scale photon integrated circuits" (PIC). The Infinera systems use PIC technology for providing a ready network architecture to clients that allows to reduce time of payback and to provide big profitability due to efficiency of network and capability quickly to provide the differentiated services without reengineering of the existing optical infrastructure.

DTN-X

The Infinera company noted that in the first quarter 2012 testings of the announced DTN-X platform are planned, mass deliveries of this solution will begin in the second quarter 2012, and initial recognition of income is expected in the second half of 2012 calendar year.

In the first quarter 2012 four laboratory testings with the assistance of priority operators were appointed, and in in February the company prepares for increase in production of this product.

"The interest of clients in our new solution of DTN-X was obvious already from the moment of its release, - Fallon noted. – We hope that manifestation of such interest is confirmation of unique opportunities which are given by the integrated platform from Infinera. It is the only platform offering the built-in functions of the integrated routing in DWDM and OTN networks".

2015: Infinera wants to purchase Transmode

On April 15, 2015 the Infinera company announced intention to purchase Transmode company.

Absorption should strengthen the offer of Infinera in the market of city packet optical networks and build a complex product portfolio in this market.

• The product offer purchased with Transmode will add a portfolio of DWDM solutions for longhaul networks, city and cloud networks. According to forecasts the size of the market of similar products will reach $15 billion by 2019.

• Holding the first place in the world ranking of producers of WDM solutions for networks 100G (except for China), Infinera will get strategic advantage combining efforts with Transmode, in the market of solutions for city packet optical networks in EMEA region.

• The moment of the transaction is successful in terms of strategic development of business: the company relies upon increase in demand for solutions for transport networks of city infrastructures.

• It is expected that the transaction will promote growth of an income per share (according to the non-GAAP standard) in 2016.

Infinera begins to expand the business in the market of technologies of city cloud networks, new to it. Therefore, a complex solution portfolio for city networks (the kernel level, boundary and terminal connections) which offers Transmode, will give to Infinera company an opportunity of complete market coverage of WDM solutions and will open new opportunities of profit earning in connection with active junction of city networks on 100G which, according to forecasts of analysts, will begin in 2016.

Infinera and Transmode supplement each other from the point of view of clients and the used technologies: Transmode concentrates, generally in the market of city networks in Europe, and Infinera is in the lead in the field of longhaul networks and cloud networks in North America.

According to the management of Infinera, acquisition of Transmode will accelerate implementation of a long-term strategic objective of the company – the offer to clients of a complex solution portfolio for world-class optical transport networks.

In accordance with the terms Offers, shareholders will receive cash in the amount of 300 Swedish kronur and 4.705 stocks Infinera for each 10 stocks of Transmode. The cost of purchase means the price for an action in the amount of 109 Swedish kronur, at capitalization of Transmode estimated approximately at $350 million.

In total Infinera will pay about $96 million the cash withdrawn from balance of the company will transfer about 13 million new stocks of Infinera to shareholders of Transmode. For December 27, 2014 the volume of available cash of means on balance of Infinera company was made by about $391 million. As a result of the transaction shareholders of Transmode will own 8.7% of the united company (holding watered shares).

Absorption is approved by Board of Directors of Infinera and it is unanimously recommended Board of Directors of Transmode. Closing of the transaction is planned for the third quarter of 2015 financial year of Infinera, on condition of compliance to a number of requirements, including a broadcast of 90% of stocks Transmode and other, earlier resolutive conditions.

It is expected that the transaction will render the neutral or slightly watering effect on income of Infinera according to the non-GAAP standard in the second half of the year 2015 and will promote increase in income of Infinera on non-GAAP in 2016.

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