creating the worldcreating the world’s largest supplier of...

© 2008 Finisar Corporation, Confidential

Creating the World’s Largest Supplier of Optical Solutions for the Communications IndustryCreating the WorldCreating the World’’s Largest Supplier of Optical s Largest Supplier of Optical Solutions for the Communications IndustrySolutions for the Communications Industry

2© 2008 Finisar Corporation, Confidential

Financial Presentation and Forward Looking Statements

Forward Looking Statements This presentation contains forward-looking statements as defined under the Private Securities Litigation Act of 1995. Except for historical information, the matters discussed in this presentation contain forward-looking statements regarding future trends or events that involve risks and uncertainties. Please be aware that these statements are only predictions and that actual events or results may differ materially. Please refer to the Company’s Form 10-K and other interim reports as filed with the Securities and Exchange Commission for a discussion of those risk factors. The Company assumes no obligation to update the information in this presentation.

GAAP ReconciliationReferences to financial measures in this presentation will include references to non-GAAP financial measures. Finisar provides a complete reconciliation between GAAP and non-GAAP financial information in its earnings release which is posted on the company’s web site (www.finisar.com)


Finisar Pre-Merger

A market leaderBroad product offering of fiber optic transceivers/transponders and components Experts in storage systems test and analysis tools

Focused on high-speed data communicationsLocal Area Networks (LANs)Storage Area Networks (SANs)Metropolitan Networks (Metro/Telecom)

Vertically integrated business modelVertical integration

• VCSELs for LAN/SAN• FP/DFBs for Metro/Telecom• Passive components• Optical packaging• Integrated circuit design

Internal off-shore manufacturing capability

SAN/LAN Transceivers

Network Protocol Analysis

Metro/Telecom Transceivers/Transponders


Data Center InnovationVirtualization drives SAN growth and optical port count Cloud computing; SAAS applications

Bandwidth Demand Continues to Drive Industry Growth

The Digital HomeProliferation of HD, video and gaming

Global IPTV and IP Video

HDTV5x - 10x

bandwidth demand over standard video

Video over wireless networks

Video and data services driving significant increase in mobile

phone traffic


Annual Revenue FY94 – FY08

0

50

100

150

200

250

300

350

400

450

$ M

illio

ns

'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08

188.8

67.2

147.3

280.8

418.5

364.3

35.522.1

8.55.72.71.4

166.5185.6

440.2


Optical Transceivers for LAN/SAN/Metro/Telecom

HuaweiOptix 7500

Emulex and Qlogic HBA’s

CiscoCatalyst 4500

BrocadeSilkWorm 24000

Alcatel/LucentDMX System

Tellabs


Expanding Product Portfolio and Market Share

Building the Vertically Integrated Business Model

May 2001 March 2003 April 2004 2003-Present

FY 2006

Low-cost off-shore

production

Long Wavelength FP and DFB

lasers

Short Wavelength

VCSEL Lasers

Creating Internal IC

Design Capability

Integrate the pieces

for profitability

Step 1 Step 2 Step 3 Step 4 Step 5

Malaysia


0

500

1,000

1,500

2,000

2,500

3,000

3,500$

Mill

ions

Other 139 130 157 185 213 248 292CATV 90 95 100 105 110 116 122ROADMs 20 49 85 140 192 239 271FTTx 251 299 332 353 369 393 422Parallel 41 53 59 68 79 92 106Telecom 823 1,070 1,241 1,367 1,488 1,599 1,680LAN/SAN 372 496 461 515 556 588 602

CY05 CY06 CY07 CY08 CY09 CY10 CY11

Total Optics Market*3,494

3,2763,007

2,435

1,737

2,191

2,733

Source: Lightcounting and OVUM RHK; excludes components and optical amplifiers


0

200

400

600

800

1,000

1,200

1,400

1,600$

Mill

ions

10/40/100G Metro/Telecom 315 487 651 830 1,000 1,164 1,29910/40/100G LAN 58 95 124 198 235 261 284

CY05 CY06 CY07 CY08 CY09 CY10 CY11

The 10-40 Gigabit Opportunity

Source: Lightcounting

1,235

1,028

775

582373

1,4261,583


Optium Overview

Formed in 2000 with IPO November 2006Profitable on non-GAAP basis every quarter since IPO except oneAddressing fast growing markets with complementary products:

10Gb/s subsystems for telecom (300pin/tunable)40Gb/s subsystems for telecom (300pin/lineside)ROADMsCATV

Fast turnaround manufacturing expertise for customizationCustomer overlap but with broader product portfolio


Finisar/Optium Merger - Complementary Product Portfolio

Optium ProductsFinisar Products

40Gb/s line side

RF over fiber

10Gb/s 300pin fixed wavelength10Gb/s XFP

40Gb/s client side 10Gb/s 300pin tunable

Cable TV transmission

WSS ROADM & ROADM circuit packs

CMLs

1Gb/s - 10Gb/s pluggable modules

GPON/EPON optics

VCSELs/1310nm lasers

10Gb/s 300pin tunable (MLSE)

Minimal Product Overlap

Minimal Overlap Drives Product Synergies

Passive optics


Combination Creates Unmatched Product Line

SFP SFP+ XFP

10G Line Side 300pin

Tunable

40G Client Side

300pin

40G Line Side

300pin tunable

100Ghz ROADM

50Ghz ROADM FTTx CATV

Network Test

● ● ● ● ● ● ● ● ● ● ●

JDSU ● ● ● ● ● ● ●OpNext ● ● ● ● ●Emcore ● ● ● ● ●Avanex ● ● ● ●OpLink ● ● ●Sumitomo/Excelight ● ● ●Bookham ● ●Avago ● ● ●CoAdna ●Mintera ● ●


0

500

1,000

1,500

2,000

2,500

3,000

$ M

illio

ns

Organic growth (GPON, Parallel) 0 183Optium (ROADM, 10G, CATV) 0 827Finisar 1,353 1,518

CY07 CY09

Merger Expands Addressable Market Over 50%

Source: Lightcounting and Ovum RHK

2,528

1,353


Finisar Today

Annualized combined pro-forma* revenues: $700 millionAnnualized combined pro-forma* EBITDA (Non-GAAP): $90 million5,500 employees in 14 locations

Revenue & Profitability Leadership

Revenue & Profitability Leadership

Diversified Market FocusDiversified

Market Focus

Industry's Broadest

Product Line

Industry's Broadest

Product Line

Unmatched Manufacturing/

Engineering Capabilities

Unmatched Manufacturing/

Engineering Capabilities

Enterprise networking (LAN/SAN)Telecommunications (components, modules and subsystems)Other: Cable TV transport; Network Test & Analysis

LAN/SAN transceivers10G and 40G transceivers/transponders, WSS ROADMs, line cards and circuit packsNetwork Test & Analysis, FTTH and Cable TV transmitters, RF over Fiber

Vertical integration: Active/passive optical components and ICsInternal, off-shore manufacturing for high volume, low cost productsInternal design and quick turn manufacturing expertise for mass customization

Some of our Customers (FY2008)*

Some of our Customers (FY2008)*

* Finisar Q1FY09 annualized plus Optium Q4FY08 annualized* Finisar Q1FY09 annualized plus Optium Q4FY08 annualized


Vertical Integration: High Volume Manufacturing

2008 Huawei Core Supplier Award2005 Cisco Operational Excellence Award

Ipoh, MalaysiaAcquired 200120 acres of land640,000 ft2 facility200,000 ft2 clean room

Finisar is one of few optics companies to own assembly / manufacturing facilities


Expanding Shanghai

Originally acquired in 2001 with acquisition of Transwave FiberProvides internal source for passive optics used in long wavelength transceiversSells passives optics to merchant market (e.g. interleavers, couplers)Expansion tied to internal demand and producing new products (e.g. CML)

Expanding total space from 50,000sq ft to 150,000 sq ft Oct 2008


Xgig® The Leader in Protocol Analysis

Single unified platform for multi-protocol and multi-function analysis and test of complex networks (optical and electrical)

3G ,6G SAS/SATA

2G, 4G, 8G Fibre Channel

Xgig PlatformExpert Analysis

Traffic Generation

Jammer / BERT

1G, 10G iSCSI/Ethernet/FCoE


Explosion of Protocols Drives our Market

Time

SpeedsAndComplexity

Protocols are the internal language of storage networks…

And their number, complexity, and pace of change are all increasing

Today

ESCON .2GESCON .2G

FC 1GFC 1G

FC 2GFC 2G

FC 4GFC 4G

FC 8GFC 8G

FC 34GFC 34G

SAS 6GSAS 6G

SATA 6GSATA 6GSATA 12GSATA 12G

SAS 12GSAS 12G

SCSISCSIATAATA

FCoEFCoE

10GE10GE

SCSI-320SCSI-320

iFCPiFCP

FCIPFCIP

PCIeG2PCIeG2

FC 17GFC 17G

40/100GE40/100GE

SAS 3GSAS 3G

CE-ATACE-ATA

SATA 3GSATA 3G

FC 10GFC 10G

FC: Fibre Channel SAS: Serial Attached SCSI SATA: Serial ATA PCIe: PCI Express FCoE: Fibre Channel over Ethernet

USB 3.0USB 3.0

UWBUWB


Annual Revenue Trend

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450$

Mill

ions

LAN/SAN 199.302 227.418 218.097Metro-Telecom 126.654 153.845 183.528Network Test 38.337 37.284 38.555

FY06 FY07 FY08

$418.5$364.3

$440.2


$-

$20

$40

$60

$80

$100

$120

$140

$ M

illio

ns

LAN/SAN 45.625 46.435 49.640 57.602 62.577 62.627 55.499 46.715 49.389 50.716 55.288 62.703 60.831Metro/Telecom 26.744 31.014 34.559 34.336 33.466 36.381 42.508 41.490 46.971 40.213 47.669 48.674 54.942Network Test 9.362 9.173 9.336 10.466 10.200 9.180 9.512 8.392 9.375 9.769 9.784 9.627 12.938

Q106A Q206A Q306A Q406A Q107A Q207A Q307A Q407A Q108A Q208 Q308 Q408 Q109

Quarterly Revenue Trends

108.2106.2102.4

93.586.6

81.7

107.596.6

105.7100.7

112.7121.0

128.7


$-

$5

$10

$15

$20

$25

$30

$35

$ M

illio

ns

LAN/SAN 0.496 0.853 1.269 0.567 0.907 1.228 1.891 0.968 3.096 5.244 9.929 12.150 10.024Metro-Telecom 1.952 3.874 4.165 4.892 4.896 6.828 9.673 13.893 15.147 12.993 19.213 19.065 22.194

Q106A Q206A Q306A Q406A Q107A Q207A Q307A Q407A Q108A Q208 Q308 Q408 Q109

10-40 Gbps Quarterly Revenue Trend

8.15.85.55.4

4.72.4

11.6

14.9

18.2 18.2

29.131.2

32.2


$-

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50$

Mill

ions

CATV 7.022 5.981 7.139 8.441 8.085ROADM 1.882 3.054 5.800 8.353 8.628Metro/Telecom >10G 17.182 26.933 27.012 27.829 30.055LAN/SAN >10G 0.693 0.153 0.344 0.382 0.441

Q108A Q208 Q308 Q408 Q109

Optium Quarterly Revenue Trends

26.8

36.140.3

45.029.1

47.2


$1.1$11.6$20.8Net (loss) income

$0.8$14.1$28.4Operating income (loss)

1.7%11.0%6.4%Operating margins

$2.0$20.5$54.3EBITDA

$11.4

26.0%

$47.2

NA

$47.2

Q109 Optium*

$135.2

37.2%

$440.2

$38.6

$401.6

FY 2008 Actual

$37.3Operating expense

40.0%Gross margins

$128.7Total revenue

$12.9Network Tools revenue

$115.8Optics revenue

Q109Actual

$ Millions

Financial Statements (Non-GAAP)

*Optium results not included with Finisar for Q109


Cash and EBITDA (nonGAAP)*

100

105

110

115

120

125

130

135

140

Q107AQ207A Q307AQ407A Q108AQ208AQ308A Q408AQ109A

Cas

h ($

Mill

ions

)

0

5

10

15

20

25

EBIT

DA

($ M

illio

ns)

Cash EBITDA

*Convertible debt totals $242 million ($92 million matures Oct 2008)Since Q307, $27M cash used to acquire Kodeos and AZNA


The Finisar Advantage

Technology pioneerMarket share leader

Diverse customer baseGlobal reach

Broad product portfolioVertically integrated

Internal manufacturing facilityDiversifying into new markets

Profitable

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