JDS Uniphase Announces 2005 Second Quarter Results SAN JOSE,
Calif., Jan. 26 /PRNewswire-FirstCall/ -- JDS Uniphase Corporation
(Nasdaq: JDSU; TSX: JDU) today reported results for the second
quarter ended December 31, 2004. Net revenue for the second quarter
was $180.5 million, and net loss was $43.5 million, or $0.03 per
share. This compares to net revenue of $194.5 million and a net
loss of $36.0 million, or $0.02 per share, reported in the first
quarter of fiscal 2005, and to net revenue of $152.6 million, and a
net loss of $58.5 million, or $0.04 per share, for the second
quarter of fiscal 2004. On a non-GAAP basis, net loss in the second
quarter was $31.1 million, or $0.02 per share, as compared to a
non-GAAP net loss of $14.1 million, or $0.01 per share, in the
first quarter of fiscal 2005, and to a non-GAAP net loss of $19.3
million, or $0.01 per share, in the second quarter of fiscal 2004.
On a non-GAAP EBITDA basis (non-GAAP earnings before interest,
taxes, depreciation and amortization), net loss was $25.7 million
for the quarter ended December 31, 2004, as compared to a net loss
of $5.9 million in the first quarter of fiscal 2005, and to a net
loss of $14.7 million in the second quarter of fiscal 2004. Use of
Non-GAAP Financial Measures The Company provides non-GAAP financial
information in order to provide meaningful supplemental information
regarding its operational performance and to enhance its investors'
overall understanding of its core current financial performance and
its prospects for the future. The Company believes that its
investors benefit from seeing its results "through the eyes" of
management in addition to the GAAP presentation. Management
measures segment and enterprise performance using measures such as
are disclosed in this release. This information facilitates
management's internal comparisons to the Company's historical
operating results and comparisons to competitors' operating
results. We believe non-GAAP information provides greater
transparency to supplemental information used by management in its
financial and operational decision-making. Historically, the
Company has reported similar non-GAAP information to its investors
and believes that the inclusion of comparative numbers provides
consistency in its financial reporting. This information is not in
accordance with, or an alternative for, generally accepted
accounting principles in the United States. It excludes items, such
as restructuring and realignment charges, reductions in long-lived
assets, reductions in the fair value of investments, gains on sales
of investments, losses on equity method investments and
amortization, that may have a material effect on the Company's
earnings and earnings per share calculated in accordance with GAAP.
Management monitors these excluded items to ensure that expenses
are in line with management's expectations and that the Company's
GAAP results are correctly stated, but does not use them to measure
the ongoing operating performance of the Company. A detailed
reconciliation is at the end of this press release. Financial
Overview - Second Quarter Ended December 31, 2004 -- Communications
Products Group net revenue of $106.7 million was up slightly from
last quarter, and represented 59% of net revenue. Commercial and
Consumer Products Group net revenue declined 17% sequentially, and
represented $73.8 million, or 41% of net revenue. -- On a
geographic basis, net revenue from North American customers
represented 68% of net revenue. European and Asia-Pacific customers
represented 18% and 14% of net revenue, respectively. -- GAAP gross
margin was 16.5% of net revenue, and non-GAAP gross margin was
16.8% of net revenue. -- GAAP operating expenses were $76.5
million, representing 42.4% of net revenue. Non-GAAP operating
expenses were $66.1 million, or 36.6% of net revenue. -- The
Company held $1,416.4 million in cash, cash equivalents and
short-term investments at the end of the second quarter, of which
approximately $1,362.4 million was cash, money market and other
highly liquid fixed income securities. The Company used
approximately $33.4 million in cash from operations, including
$25.6 million used for restructuring and realignment payments.
Investment related activity consumed approximately $7.7 million in
net cash. Business Outlook Management provided the following
financial guidance. For the third fiscal quarter ending March 31,
2005, the company expects: -- Net revenue in the range of $155 to
$165 million; and -- Non-GAAP loss per share of approximately two
cents. This outlook excludes items which, depending upon actual
results, may be required by GAAP, such as restructuring and related
costs, acquisition related costs, amortization of purchased
intangibles, reductions of goodwill and other long-lived assets,
and gains and losses on investments, the likelihood and amount of
which are uncertain at this time. Conference Call The Company will
discuss these results and other related matters at 2:00 p.m.
Pacific Time on January 26, 2005 in a live webcast, which will also
be archived for replay on the Company's website at
http://www.jdsu.com/investors. This press release is being
furnished as a Current Report on Form 8-K with the Securities and
Exchange Commission, and will be available at http://www.sec.gov/
shortly after it becomes public. About JDS Uniphase JDS Uniphase
Corporation designs and manufactures products for markets where its
core optics technologies provide innovative solutions for
industrial, commercial and consumer applications. The Company
offers components, modules and subsystems for data communications,
telecommunications and cable television, display, product and
document authentication, medical/environmental instrumentation,
decorative, aerospace and defense applications. More information is
available at http://www.jdsu.com/. Forward-Looking Statements This
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. These statements
include: (i) any anticipation or guidance as to future financial
performance, including expected revenue levels and non-GAAP
earnings per share projections; and (ii) the Company's beliefs
regarding the purpose, usefulness and efficacy of non-GAAP results
and the measures and items the Company includes in the same, as
well as any benefits to investors the Company believes its non-GAAP
measures provide. These forward-looking statements involve risks
and uncertainties that could cause actual results to differ
materially from those projected, including, without limitation, the
following: (i) the Company's ability to predict future financial
performance continues to be difficult, as among other things,
visibility remains limited, we are experiencing significant quarter
over quarter fluctuations in product mix, average selling prices
continue to decline across our product portfolio, we continue to
experience execution challenges which limit our revenue and impair
our profitability, and we are experiencing declining, but variable,
benefits from certain transient items, such as the release of
previously accrued warranty reserves and the use of previously
written-off inventory; (ii) ongoing cost improvement efforts may
not be successful in achieving their expected benefits (including,
among other things, gross margin and other profitability
improvements), due to, among other things, shifts in product mix,
selling price pressures, costs related to product transfers to
lower cost manufacturing locations, and execution concerns; and
(iii) ongoing efforts to design and introduce products that meet
customers' future needs and to manufacture such products at
competitive costs, and with acceptable quality and profitability,
may not be successful. For more information on these and other
risks affecting the Company's business, please refer to the "Risk
Factors" section included in the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 2004 filed with the
Securities and Exchange Commission, as well as in subsequent
filings on Forms 10-Q and 10-K. The forward-looking statements
contained in this news release are made as of the date hereof and
the Company does not assume any obligation to update the reasons
why actual results could differ materially from those projected in
the forward-looking statements. JDS UNIPHASE CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except
per-share data) (unaudited) Three Months Ended Six Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2004 2003 2004 2003 Net revenue
$180.5 $152.6 $375.0 $300.0 Cost of sales 150.7 120.5 302.3 236.1
Gross profit 29.8 32.1 72.7 63.9 Operating expenses: Research and
development 24.4 24.1 48.9 48.8 Selling, general and administrative
43.5 34.6 80.7 75.6 Amortization of other intangibles 4.8 3.9 9.5
7.8 Reduction of other long-lived assets -- 38.4 4.5 43.3
Restructuring charges 3.8 9.4 9.1 5.8 Total operating expenses 76.5
110.4 152.7 181.3 Loss from operations (46.7) (78.3) (80.0) (117.4)
Interest and other income, net 5.3 8.5 8.0 11.4 Gain on sale of
investments 2.0 19.6 2.3 20.2 Reduction in fair value of
investments (2.7) (1.1) (5.0) (2.3) Loss on equity method
investments (0.8) (4.7) (3.7) (5.9) Loss before income taxes (42.9)
(56.0) (78.4) (94.0) Income tax expense (benefit) 0.6 2.5 1.1
(10.4) Loss before cumulative effect of an accounting change (43.5)
(58.5) (79.5) (83.6) Cumulative effect of an accounting change --
-- -- (2.9) Net loss $(43.5) $(58.5) $(79.5) $(86.5) Net loss per
share - basic and diluted $(0.03) $(0.04) $(0.06) $(0.06) Shares
used in per-share calculation - basic and diluted 1,444.1 1,435.0
1,443.9 1,434.7 JDS UNIPHASE CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS (in millions) December 31, June 30, 2004 2004
(unaudited) ASSETS Current assets: Cash and cash equivalents $314.2
$327.5 Short-term investments 1,102.2 1,221.2 Accounts receivable,
less allowance for doubtful accounts of $12.5 at September 30, 2004
and $11.8 at June 30, 2004 113.6 112.7 Inventories 121.4 125.0
Refundable income taxes 5.8 5.8 Other current assets 81.3 59.5
Total current assets 1,738.5 1,851.7 Property, plant and equipment,
net 171.8 195.6 Deferred income taxes 6.1 12.0 Goodwill 214.4 204.8
Other intangibles, net 78.3 81.4 Long-term investments 42.3 42.4
Other assets 4.3 4.3 Total assets $2,255.7 $2,392.2 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $72.3
$74.1 Accrued payroll and related expenses 35.4 38.4 Income taxes
payable 31.8 33.5 Deferred income taxes 6.1 12.0 Restructuring
accrual 53.5 84.2 Warranty accrual 18.1 25.1 Other current
liabilities 77.7 80.7 Total current liabilities 294.9 348.0
Long-term debt 465.9 464.7 Other non-current liabilities 8.2 8.4
Commitments and contingencies Stockholders' equity: Preferred stock
-- -- Common stock 1.4 1.4 Additional paid-in capital 68,585.5
68,577.1 Accumulated deficit (67,091.5) (67,012.0) Accumulated
other comprehensive income (8.7) 4.6 Total stockholders' equity
1,486.7 1,571.1 Total liabilities and stockholders' equity $2,255.7
$2,392.2 JDS UNIPHASE CORPORATION REPORTABLE SEGMENT INFORMATION
(in millions) (unaudited) Three Months Ended Six Months Ended Dec.
31, Dec. 31, Dec. 31, Dec. 31, 2004 2003 2004 2003 Communications
Products Group: Net revenue $106.7 $77.8 $212.8 $152.1 Intersegment
revenue -- -- -- -- Net revenue from external customers 106.7 77.8
212.8 152.1 Operating loss (14.5) (9.4) (24.8) (20.2) Commercial
and Consumer Products Group: Net revenue 73.8 75.9 162.2 149.9
Intersegment revenue -- (1.1) -- (2.0) Net revenue from external
customers 73.8 74.8 162.2 147.9 Operating income 4.1 11.5 18.4 20.5
Net revenue by reportable segments 180.5 152.6 375.0 300.0
Operating income (loss) by reportable segments (10.4) 2.1 (6.4) 0.3
All other operating (loss) (25.4) (27.5) (45.7) (55.0) Unallocated
amounts: Acquisition-related charges and amortization of
intangibles (4.8) (4.5) (9.5) (9.6) Reduction of other long-lived
assets -- (38.4) (4.5) (43.3) Restructuring charges (3.8) (9.4)
(9.1) (5.9) Other realignment charges (2.3) (0.6) (4.8) (4.0)
Interest and other income, net 5.3 8.5 8.0 11.4 Gain on sale of
investments 2.0 19.6 2.3 20.3 Reduction in fair value of
investments (2.7) (1.1) (5.0) (2.3) Loss on equity method
investments (0.8) (4.7) (3.7) (5.9) Loss before income taxes and
cumulative effect of an accounting change $(42.9) $(56.0) $(78.4)
$(94.0) JDS UNIPHASE CORPORATION NON-GAAP CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in millions, except per-share data)
(unaudited) Three Months Ended December 31, 2004 As Reported
Reconciling GAAP Items* Non-GAAP* Net revenue $180.5 $-- $180.5
Cost of sales 150.7 (0.5) (a) 150.2 Gross profit 29.8 0.5 30.3
Operating expenses: Research and development 24.4 (0.4) (b) 24.0
Selling, general and administrative 43.5 (1.4) (c) 42.1
Amortization of other intangibles 4.8 (4.8) (d) -- Restructuring
charges 3.8 (3.8) (f) -- Total operating expenses 76.5 (10.4) 66.1
Loss from operations (46.7) 10.9 (35.8) Interest and other income,
net 5.3 -- 5.3 Gain on sale of investments 2.0 (2.0) (g) --
Reduction in fair value of investments (2.7) 2.7 (h) -- Loss on
equity method investments (0.8) 0.8 (i) -- Loss before income taxes
(42.9) 12.4 (30.5) Income tax expense 0.6 -- 0.6 Net loss $(43.5)
$12.4 $(31.1) Net loss per share - basic and diluted $(0.03)
$(0.02) Shares used in per-share calculation - basic and diluted
1,444.1 1,444.1 Three Months Ended December 31, 2003 As Reported
Reconciling GAAP Items* Non-GAAP* Net revenue $152.6 $-- $152.6
Cost of sales 120.5 (1.3) (a) 119.2 Gross profit 32.1 1.3 33.4
Operating expenses: Research and development 24.1 (0.3) (b) 23.8
Selling, general and administrative 34.6 0.3 (c) 34.9 Amortization
of other intangibles 3.9 (3.9) (d) -- Reduction of other long-lived
assets 38.4 (38.4) (e) -- Restructuring charges 9.4 (9.4) (f) --
Total operating expenses 110.4 (51.7) 58.7 Loss from operations
(78.3) 53.0 (25.3) Interest and other income, net 8.5 -- 8.5 Gain
on sale of investments 19.6 (19.6) (g) -- Reduction in fair value
of investments (1.1) 1.1 (h) -- Loss on equity method investments
(4.7) 4.7 (i) -- Loss before income taxes and cumulative effect of
an accounting change (56.0) 39.2 (16.8) Income tax expense 2.5 --
2.5 Net loss $(58.5) $39.2 $(19.3) Net loss per share - basic and
diluted $(0.04) $(0.01) Shares used in per-share calculation -
basic and diluted 1,435.0 1,435.0 * The above non-GAAP results
exclude the following items which are included in the Company's
Statement of Operations when presented in accordance with generally
accepted accounting principles (GAAP): (a) Cost of goods sold
related to realignment events (b) Costs of research and development
related to realignment events (c) Costs of selling, general and
administrative related to realignment events (d) Amortization of
intangibles from acquisitions (e) Adjustment to the carrying value
of the Company's assets held for sale (f) Restructuring expense
primarily due to severance and lease costs (g) Gain on sale of
available for sale investments (h) Reduction in the fair value of
cost basis investments (i) Loss on equity method investments,
primarily due to the Company's share of losses in equity
investments JDS UNIPHASE CORPORATION NON-GAAP CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except
per-share data) (unaudited) Six Months Ended December 31, 2004 As
Reported Reconciling GAAP Items* Non-GAAP* Net revenue $375.0 $--
$375.0 Cost of sales 302.3 (1.8) (a) 300.5 Gross profit 72.7 1.8
74.5 Operating expenses: Research and development 48.9 (0.4) (b)
48.5 Selling, general and administrative 80.7 (2.6) (c) 78.1
Amortization of other intangibles 9.5 (9.5) (d) -- Reduction of
other long-lived assets 4.5 (4.5) (e) -- Restructuring charges 9.1
(9.1) (f) -- Total operating expenses 152.7 (26.1) 126.6 Loss from
operations (80.0) 27.9 (52.1) Interest and other income, net 8.0 --
8.0 Gain on sale of investments 2.3 (2.3) (g) -- Reduction in fair
value of investments (5.0) 5.0 (h) -- Loss on equity method
investments (3.7) 3.7 (i) -- Loss before income taxes (78.4) 34.3
(44.1) Income tax expense 1.1 -- 1.1 Net loss $(79.5) $34.3 $(45.2)
Net loss per share - basic and diluted $(0.06) $(0.03) Shares used
in per-share calculation - basic and diluted 1,443.9 1,443.9 Six
Months Ended December 31, 2003 As Reported Reconciling GAAP Items*
Non-GAAP* Net revenue $300.0 $-- $300.0 Cost of sales 236.1 (2.5)
(a) 233.6 Gross profit 63.9 2.5 66.4 Total operating expenses
Research and development 48.8 (0.9) (b) 47.9 Selling, general and
administrative 75.6 (2.5) (c) 73.1 Amortization of other
intangibles 7.8 (7.8) (d) -- Reduction of goodwill and other
long-lived assets 43.3 (43.3) (e) -- Restructuring charges 5.8
(5.8) (f) -- Total operating expenses 181.3 (60.3) 121.0 Loss from
operations (117.4) 62.8 (54.6) Interest and other income, net 11.4
-- 11.4 Gain on sale of investments 20.2 (20.2) (g) -- Reduction in
fair value of investments (2.3) 2.3 (h) -- Loss on equity method
investments (5.9) 5.9 (i) -- Loss before income taxes (94.0) 50.8
(43.2) Income tax expense (benefit) (10.4) -- (10.4) Loss before
cumulative effect of an accounting change $(83.6) $50.8 $(32.8)
Cumulative effect of an accounting change (2.9) 2.9 (j) $-- Net
loss (86.5) 53.7 (32.8) Net loss per share - basic and diluted
(0.06) (0.02) Shares used in per-share calculation - basic and
diluted 1,434.7 1,434.7 * The above non-GAAP results exclude the
following items which are included in the Company's Statement of
Operations when presented in accordance with generally accepted
accounting principles (GAAP): (a) Cost of goods sold related to
realignment events (b) Costs of research and development related to
realignment events (c) Costs of selling, general and administrative
related to realignment events (d) Amortization of intangibles from
acquisitions (e) Adjustment to the carrying value of the Company's
assets held for sale (f) Restructuring expense primarily due to
severance and lease costs (g) Gain on sale of available for sale
investments (h) Reduction in the fair value of cost basis
investments (i) Loss on equity method investments, primarily due to
the Company's share of losses in equity investments (j) Cumulative
depreciation on assets under a synthetic lease agreement - assets
purchased by JDSU on September 16, 2003 ADDITIONAL SELECTED
FINANCIAL INFORMATION Following is a reconciliation of non-GAAP
loss from operations to non-GAAP EBITDA (in millions) (unaudited)
Three Months Ended Dec. 31, Sept. 30, Dec. 31, 2004 2004 2003
Non-GAAP loss from operations $(35.8) $(16.3) $(25.3) Add back
depreciation expense 10.1 10.4 10.6 Non-GAAP EBITDA $(25.7) $ (5.9)
$(14.7) DATASOURCE: JDS Uniphase Corporation CONTACT: investors,
Jacquie Ross, Director of Investor Relations, +1-408-546-4445, or ,
or media, Gerald Gottheil, Director of Corporate Marketing and
Communications, +1-408-546-4400, , both of JDS Uniphase Corporation
Web site: http://www.jdsu.com/
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