Revenue, Gross Margin and Net Income at Five Year Highs MILPITAS,
Calif., Jan. 31 /PRNewswire-FirstCall/ -- JDSU (Nasdaq: JDSU; TSX:
JDU) today reported results for its fiscal 2007 second quarter
ended December 31, 2006. Net revenue for the second quarter was
$366.3 million and GAAP net income was $23.2 million, or $0.10 per
diluted share. This compares to net revenue of $318.1 million and
GAAP net loss of $(17.4) million, or $(0.08) per share, reported
for the first quarter of fiscal 2007, and to net revenue of $312.9
million and a GAAP net loss of $(42.1) million, or $(0.20) per
share, for the second quarter of fiscal 2006. On a non-GAAP basis,
revenue for the second quarter was $366.4 million and non-GAAP net
income was $30.0 million, or $0.13 per diluted share. This compares
to non-GAAP net revenue of $318.2 million and a non-GAAP net income
of $6.8 million, or $0.03 per share, for the first quarter of
fiscal 2007, and to non-GAAP net revenue of $315.0 million and a
non-GAAP net loss of $(3.5) million, or $(0.02) per share, for the
second quarter of fiscal 2006. On a non-GAAP EBITDA basis (non-GAAP
Earnings Before Interest, Taxes, Depreciation and Amortization),
the Company earned $33.9 million for the quarter ended December 31,
2006, which compares to $9.6 million for the first quarter of
fiscal 2007, and to $8.1 million for the second quarter of fiscal
2006. "During the second quarter, JDSU delivered the strongest
revenue, gross margin, and net income results in more than five
years," said Kevin Kennedy, JDSU's Chief Executive Officer.
"Positive earnings per share results show marked improvement from
previous quarters, highlighting the impact of our strategy to
diversify our business and return to profitability, while
continuing to deliver highly innovative products to market."
Financial Overview - Fiscal 2007 Second Quarter Ended December 31,
2006 -- Communications Test and Measurement net revenue of $168.2
million was up 44% from last quarter, and up 15% from the same
quarter a year ago. This segment represented 46% of total revenue.
-- Optical Communications net revenue of $132.7 million was down 4%
from last quarter, and up 21% from the same quarter a year ago,
representing 36% of total net revenue. -- Advanced Optical
Technologies net revenue of $40.4 million was up 3% from last
quarter, and down 2% from the same quarter a year ago. This segment
represented 11% of total net revenue. -- Reported under the heading
of 'All Other,' the Commercial Lasers business reported revenue of
$25.1 million, up 4% sequentially and up 39% from the same quarter
a year ago, representing 7% of total net revenue. -- Americas'
customers represented 57% of net revenue. European and Asia-
Pacific customers represented 27% and 16% of net revenue,
respectively. -- GAAP gross margin was 37.4% of net revenue, and
non-GAAP gross margin was 40.6% of net revenue. -- GAAP operating
expenses were $152.6 million, or 41.7% of net revenue. Non-GAAP
operating expenses were $129.4 million, or 35.3% of net revenue. --
The Company held $1,227.7 million in cash, cash equivalents,
short-term investments and restricted cash at the end of the second
quarter. Business Outlook Coming off a seasonally strong second
quarter, the Company expects net revenue for the third quarter of
fiscal 2007, ending March 31, 2007, to be in the range of $333 to
$353 million. Conference Call The Company will discuss these
results and other related matters at 2:00 p.m. Pacific Time on
January 31, 2007 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/. About JDSU JDSU is committed to
enabling broadband & optical innovation in the communications,
commercial and consumer markets. JDSU is a leading provider of
communications test and measurement solutions and optical products
for telecommunications service providers, cable operators, and
network equipment manufacturers. Furthermore, JDSU is a leading
provider of innovative optical solutions for medical/environmental
instrumentation, semiconductor processing, display, brand
authentication, aerospace and defense, and decorative applications.
More information is available at http://www.jdsu.com/.
Forward-Looking Statements This press release contains, and the
discussions in our subsequent conference call will contain,
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 future
revenue, gross margin, operating expense, operating margin, EBITDA
and other financial metrics; 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. In particular, the Company's
ability to predict future financial performance continues to be
difficult due to, among other things: (a) continuing general
limited visibility across many of our product lines; (b) the
ongoing potential for significant quarter-over-quarter product mix
fluctuations, which can materially impact profitability measures
due to the broad gross margin range across our portfolio; (c)
continuing consolidation affecting our customer base, which, in the
shorter term limits demand visibility, and, in the longer term,
could reduce our business potential; (d) average selling prices
continue to decline across our traditional Optical Communications
and our Advanced Optical Technologies and Commercial Lasers
businesses; (e) we and many of our Optical Communications suppliers
continue to experience execution and delivery challenges which
limit our revenue and impair our profitability; (f) our
Communications Test and Measurement business is notable for
seasonality and a significant level of in-quarter book-and-ship
business that can be particularly back-end loaded in the third
fiscal quarter, further limiting our forecasting abilities; (g) we
are currently engaged in various product and manufacturing
transfers, site consolidations and product discontinuances; and (h)
Optical Communications customer supply chain and inventory
rationalization initiatives could further limit our demand
visibility. 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, 2006 filed with the Securities and
Exchange Commission, as well as in other 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.
Investors: Jacquie Ross, 408-546-4445 or The following financial
tables are presented in accordance with GAAP, unless otherwise
specified. 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, 2006 2005 2006 2005 Net revenue $366.3 $312.9
$684.4 $571.2 Cost of sales 219.2 208.7 429.4 415.4 Amortization of
acquired developed technologies 10.0 9.3 19.9 16.9 Gross profit
137.1 94.9 235.1 138.9 Operating expenses: Research and development
42.8 40.7 82.8 74.4 Selling, general and administrative 94.4 83.3
177.4 153.7 Amortization of other intangibles 6.9 6.3 13.3 11.0
Acquired in-process research and development - 0.3 - 19.9 Reduction
of intangibles and loss on long-lived assets 3.0 (1.4) 3.1 4.6
Restructuring charges 5.5 14.9 10.7 19.7 Total operating expenses
152.6 144.1 287.3 283.3 Loss from operations (15.5) (49.2) (52.2)
(144.4) Interest and other income 15.3 6.5 35.1 7.7 Interest
expense (1.1) (0.7) (3.0) (1.5) Gain on sale of investments 28.2
1.8 28.5 35.1 Income (loss) before income taxes 26.9 (41.6) 8.4
(103.1) Provision for income taxes 3.7 0.5 2.6 6.0 Net income
(loss) $23.2 $(42.1) $5.8 $(109.1) Net income (loss) per share
Basic $0.11 $(0.20) $0.03 $(0.54) Diluted $0.10 $(0.20) $0.03
$(0.54) Shares used in per share calculation Basic 211.1 207.0
211.0 202.3 Diluted 223.5 207.0 223.5 202.3 Note: All shares and
per share amounts have been retroactively restated for all periods
presented to reflect the reverse stock split effective on October
16, 2006. See Form 10-Q for description. JDS UNIPHASE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (in millions, unaudited)
December 31, June 30, 2006 2006 ASSETS Current assets: Cash and
cash equivalents $407.4 $364.9 Short-term investments 806.3 857.3
Restricted cash 14.0 16.4 Accounts receivable, net 274.0 232.3
Inventories, net 235.3 202.2 Refundable income taxes 8.5 23.9 Other
current assets 98.4 108.0 Total current assets 1,843.9 1,805.0
Property, plant and equipment, net 207.7 201.2 Deferred income
taxes 3.5 2.3 Goodwill 662.3 656.7 Other intangibles, net 339.5
362.0 Long-term investments 9.5 10.8 Other non-current assets 25.4
27.1 Total assets $3,091.8 $3,065.1 LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable $126.3 $126.6 Accrued
payroll and related expenses 58.0 60.6 Income taxes payable 83.6
81.2 Deferred income taxes 1.3 - Restructuring accrual 10.6 19.8
Warranty accrual 9.6 11.5 Other current liabilities 111.9 122.7
Total current liabilities 401.3 422.4 Long-term debt 900.0 900.0
Other non-current liabilities 162.0 159.1 Stockholders' equity
1,628.5 1,583.6 Total liabilities and stockholders' equity $3,091.8
$3,065.1 JDS UNIPHASE CORPORATION REPORTABLE SEGMENT INFORMATION
(in millions, unaudited) Three Months Ended Six Months Ended Dec.
31, Dec. 31, Dec. 31, Dec. 31, 2006 2005 2006 2005 Net revenue:
Optical Communications $132.7 $109.6 $270.7 $210.1 Communications
Test and Measurement 168.2 146.0 285.0 241.4 Advanced Optical
Technologies 40.4 41.3 79.7 85.4 All Other, Commercial Lasers 25.1
18.1 49.2 37.3 Deferred revenue related to purchase accounting
adjustment (0.1) (2.1) (0.2) (3.0) Net revenue $366.3 $312.9 $684.4
$571.2 Operating income (loss): Optical Communications $(0.1)
$(10.2) $2.1 $(26.9) Communications Test and Measurement 35.8 26.5
42.6 46.1 Advanced Optical Technologies 12.7 9.4 23.7 19.2 All
Other, Commercial Lasers 2.2 (0.8) 3.9 (0.7) Corporate (31.1)
(30.5) (59.8) (60.2) Total segment operating income (loss) 19.5
(5.6) 12.5 (22.5) Unallocated amounts: Stock based compensation
(8.7) (3.4) (15.3) (6.6) Acquisition-related charges and
amortization of intangibles (17.0) (25.7) (34.1) (87.6) Reduction
of other long-lived assets (3.0) 1.4 (3.1) (4.6) Restructuring
charges (5.5) (14.9) (10.7) (19.7) Other realignment charges (0.8)
(1.0) (1.5) (3.4) Interest and other income 15.3 6.5 35.1 7.7
Interest expense (1.1) (0.7) (3.0) (1.5) Gain on sale of
investments 28.2 1.8 28.5 35.1 Income (loss) before income taxes
$26.9 $(41.6) $8.4 $(103.1) Use of Non-GAAP Financial Measures The
Company provides non-GAAP gross margin, non-GAAP operating expense,
non-GAAP net loss, non-GAAP net loss per share and non-GAAP EBITDA
financial measures as supplemental information regarding the
Company's operational performance. The Company evaluates
Company-wide segment performance using, among other things, the
measures disclosed in this release for the purposes of evaluating
the Company's historical and prospective financial performance, as
well as its performance relative to its competitors. Specifically,
management uses these items to further its own understanding of the
Company's core operating performance. The Company believes its
"core operating performance" represents the Company's performance
in the ordinary, ongoing and customary course of its operations.
Accordingly, management excludes from "core operating performance"
those items, such as those relating to restructuring, investing,
stock-based compensation expense and non-cash activities, that
management does not believe are reflective of such ordinary,
ongoing and customary course activities. The Company believes that
providing this information to its investors, in addition to the
GAAP presentation, allows investors to see Company results "through
the eyes" of management. The Company further believes that
providing this information allows Company investors to both better
understand the Company's financial performance and, importantly, to
evaluate the efficacy of the methodology and information used by
management to evaluate and measure such performance. The non-GAAP
adjustments described in this release have historically been
excluded by the Company from its non-GAAP measures. The non-GAAP
adjustments, and the basis for excluding them, are outlined below:
Restructuring Activities Cost of goods sold, costs of research and
development and costs of selling, general and administrative
related to restructuring events: The Company has incurred periodic
expenses, included in its GAAP presentation of gross margin and
operating expenses primarily due to additional depreciation from
changes in estimated useful life and the write-down of certain
property and equipment that has been identified for disposal but
remained in use until the date of disposal, workforce related
charges such as retention bonuses and employee relocation costs
related to a formal restructuring plan, building costs for
facilities not required for ongoing operations, and costs related
to the relocation of certain facilities and equipment from
buildings which the Company has disposed of or plans to dispose.
The Company excludes these items, for the purposes of calculating
non-GAAP gross margin, non-GAAP operating expenses, non-GAAP net
loss, non-GAAP net loss per share and non-GAAP EBITDA, when it
evaluates the continuing operational performance of the Company.
The Company believes that these items do not reflect expected
future gross profits or operating expenses nor does the Company
believe that they provide a meaningful evaluation of current versus
past core operational performance. Investment Activities Gain or
loss on sale of available for-sale investments and reduction in the
fair value of investments: The Company has sold investments or
adjusted the value of investments from time to time based on market
conditions. The Company's activities in this respect are included
in the Company's GAAP presentation of net income (loss) and net
income (loss) per share. The Company's core business does not
include making financial investments in third parties, and such
investments do not constitute a material portion of the Company's
assets. Moreover, the amount and timing of gains and losses and
adjustments to the value of investments are unpredictable.
Consequently, the Company believes that gains or losses on these
sales and adjustments to the value of investments are not related
to the ongoing core business and operating performance of the
Company. The Company excludes these items, for the purposes of
calculating non-GAAP net loss, non-GAAP net loss per share and
non-GAAP EBITDA, when it evaluates the continuing operational
performance of the Company. The Company believes the GAAP measure
is not indicative of the Company's core operating performance. Gain
or loss on equity method investments: The Company records gains or
losses on its equity investments based on our pro-rata share of
gains or the net losses of the investment. The Company's activities
in this respect are included in the Company's GAAP presentation of
net income (loss) and net income (loss) per share. The Company's
core business is not making financial investments in third parties,
and such investments do not constitute a material portion of the
Company's assets. Moreover, the timing and magnitude of gains or
losses are unpredictable, as they are inherently based on the
performance of the third party subject of a particular investment.
The Company excludes these items, for the purposes of calculating
non-GAAP net loss, non-GAAP net loss per share and non-GAAP EBITDA,
when it evaluates the continuing operational performance of the
Company. The Company believes the GAAP measure is not indicative of
its core operating performance. Stock-based compensation expense:
Non-GAAP net income (loss) and net income (loss) per share excludes
stock-based compensation expense under SFAS 123R for fiscal 2006,
and under APB 25 for earlier comparative periods. The Company
excludes this item, for the purposes of calculating non-GAAP net
loss, non-GAAP net loss per share and non-GAAP EBITDA, when it
evaluates the continuing operational performance of the Company.
The Company believes this GAAP measure is not indicative of its
core operating performance. Non-Cash Activities Amortization of
intangibles from acquisitions: The Company incurs amortization of
intangibles, included in its GAAP presentation of operating
expense, related to the various acquisitions it has made.
Management excludes these items, for the purposes of calculating
non-GAAP operating expense, non- GAAP net loss, non-GAAP net loss
per share and non-GAAP EBITDA, when it evaluates the continuing
operational performance of the Company. The Company believes that
eliminating this expense from operating income is useful to
investors because it believes the GAAP measure, alone, is not
indicative of its core operating expenses and performance.
Reduction of goodwill and other long-lived assets: The Company
incurs costs, included in its GAAP presentation of operating
expense, related to the reduction of the carrying value of goodwill
and other long-lived assets primarily related to SFAS 142 and SFAS
144 adjustments, respectively. SFAS 142 and SFAS 144 adjustments
typically occur when the financial performance of the business
utilizing the affected assets falls below certain thresholds or
certain assets are designated as held for sale. Accordingly, SFAS
142 and SFAS 144 related asset value reductions are non-recurring
and generally unpredictable. The Company believes that eliminating
this item, for the purposes of calculating non-GAAP operating
expense, non-GAAP net loss, non-GAAP net loss per share and
non-GAAP EBITDA, is useful to investors. We believe this non-GAAP
adjustment will assist investors to compare current versus past
performance. The Company's historical adjustments to the carrying
value of certain of its assets under SFAS 142 and SFAS 144, as well
as the methodology used by the Company in assessing the same, are
more particularly described in its quarterly reports on form 10-Q
and annual reports on Form 10-K. Interest, taxes, and depreciation
expense: The Company incurs depreciation expense in its operating
results. The Company's calculation of non-GAAP EBITDA excludes
items as a result of interest, taxes, depreciation and
amortization. Management believes non-GAAP EBITDA is indicative of
the Company's core operational cash flow. Acquired In-Process
Research and Development: The Company recorded charges for acquired
in-process research and development, included in its GAAP
presentation of operating expense, in connection with its
acquisitions. These amounts were expensed on the acquisition dates
as the acquired technology had not yet reached technological
feasibility and had no future alternative uses. There can be no
assurance that acquisition of businesses, products or technologies
in the future will not result in substantial charges for acquired
IPR&D. Accordingly, acquired IPR&D are non-recurring and
generally unpredictable. The Company believes that eliminating this
expense, for the purposes of calculating non-GAAP operating
expense, non-GAAP net loss, non- GAAP net loss per share and
non-GAAP EBITDA, is useful to investors. Non-GAAP financial
measures are not in accordance with, or an alternative for,
generally accepted accounting principles in the United States. The
GAAP measure most directly comparable to non-GAAP gross margin is
gross margin. The GAAP measure most directly comparable to non-GAAP
operating expense is operating expense. The GAAP measure most
directly comparable to non-GAAP net loss is net loss. The GAAP
measure most directly comparable to non-GAAP net loss per share is
net loss per share. The GAAP measure most directly comparable to
non-GAAP EBITDA is loss from operations. The Company believes that
these GAAP measures alone are not indicative of its core operating
expenses and performance. The following table reconciles the
non-GAAP gross margin, operating expense, net loss, net loss per
share, and EBITDA financial measures to GAAP (in millions, except
per share amounts): Three Months Ended December 31, 2006 Net Gross
Operating Income EBITDA Profit Expense (Loss) Non-GAAP $148.9
$129.4 $30.0 $33.9 Costs related to restructuring events - 5.5
(5.5) (5.5) Costs related to acquisition activities (0.5) 0.4 (0.9)
(0.9) Costs related to stock based compensation expense (1.3) 7.4
(8.7) (8.7) Amortization of acquired developed technologies &
acquisition intangibles (10.0) 6.9 (16.9) - Reduction in
intangibles and other long lived assets - 3.0 (3.0) (3.0) Acquired
in-process R&D - - - - Interest and other income - - - - Gain,
loss, or reduction in fair value of investments - - 28.2 - Income
tax expense - - - - GAAP $137.1 $152.6 $23.2 $15.8 Non-GAAP income
(loss) per share - basic $0.14 Non-GAAP income (loss) per share -
diluted $0.13 GAAP income (loss) per share - basic $0.11 GAAP
income (loss) per share - diluted $0.10 Shares used in per-share
calculation - basic 211.1 Shares used in per-share calculation -
diluted 223.5 Three Months Ended December 31, 2005 Gross Operating
Net Loss EBITDA Profit Expense Non-GAAP $114.4 $119.9 $(3.5) $8.1
Costs related to restructuring events - 14.9 (14.9) (14.9) Costs
related to acquisition activities (9.1) 1.8 (10.9) (10.9) Costs
related to stock based compensation expense (1.1) 2.3 (3.4) (3.4)
Amortization of acquired developed technologies & acquisition
intangibles (9.3) 6.3 (15.6) - Reduction in intangibles and other
long lived assets - (1.4) 1.4 1.4 Acquired in-process R&D - 0.3
(0.3) (0.3) Interest and other income - - 1.1 - Gain, loss, or
reduction in fair value of investments - - 1.9 - Income tax expense
- - 2.1 - GAAP $94.9 $144.1 $(42.1) $(20.0) Non-GAAP income (loss)
per share - basic $(0.02) Non-GAAP income (loss) per share -
diluted $(0.02) GAAP income (loss) per share - basic $(0.20) GAAP
income (loss) per share - diluted $(0.20) Shares used in per-share
calculation - basic 207.0 Shares used in per-share calculation -
diluted 207.0 Six Months Ended December 31, 2006 Net Gross
Operating Income EBITDA Profit Expense (Loss) Non-GAAP $259.2
$246.7 $36.8 $43.5 Costs related to restructuring events - 10.7
(10.7) (10.7) Costs related to acquisition activities (2.1) 0.3
(2.4) (2.4) Costs related to stock based compensation expense (2.1)
13.2 (15.3) (15.3) Amortization of acquired developed technologies
& acquisition intangibles (19.9) 13.3 (33.2) - Reduction in
intangibles and other long lived assets - 3.1 (3.1) (3.1) Acquired
in-process R&D - - - - Interest and other income - - 5.1 -
Gain, loss, or reduction in fair value of investments - - 28.6 -
Income tax expense (benefit) - - - - GAAP $235.1 $287.3 $5.8 $12.0
Non-GAAP income (loss) per share - basic $0.17 Non-GAAP income
(loss) per share - diluted $0.16 GAAP income (loss) per share -
basic $0.03 GAAP income (loss) per share - diluted $0.03 Shares
used in per-share calculation - basic 211.0 Shares used in
per-share calculation - diluted 223.5 Six Months Ended December 31,
2005 Gross Operating Net Loss EBITDA Profit Expense Non-GAAP $196.4
$218.8 $(18.9) $3.8 Costs related to restructuring events - 19.7
(19.7) (19.7) Costs related to acquisition activities (39.1) 4.2
(43.3) (43.3) Costs related to stock based compensation expense
(1.5) 5.1 (6.6) (6.6) Amortization of acquired developed
technologies & acquisition intangibles (16.9) 11.0 (27.9) -
Reduction in intangibles and other long lived assets - 4.6 (4.6)
(4.6) Acquired in-process R&D - 19.9 (19.9) (19.9) Interest and
other income - - 0.8 - Gain, loss, or reduction in fair value of
investments - - 32.5 - Income tax expense (benefit) - - (1.5) -
GAAP $138.9 $283.3 $(109.1) $(90.3) Non-GAAP income (loss) per
share - basic $(0.09) Non-GAAP income (loss) per share - diluted
$(0.09) GAAP income (loss) per share - basic $(0.54) GAAP income
(loss) per share - diluted $(0.54) Shares used in per-share
calculation - basic 202.3 Shares used in per-share calculation -
diluted 202.3 Note: All shares and per share amounts have been
retroactively restated for all periods presented to reflect the
reverse stock split effective on October 16, 2006. See Form 10-Q
for description.
http://www.newscom.com/cgi-bin/prnh/20050913/SFTU125LOGO
http://photoarchive.ap.org/ DATASOURCE: JDSU CONTACT: investors,
Jacquie Ross, +1-408-546-4445, or , or media, Kathleen Greene,
+1-408-546-5852, or , both of JDSU Web site: http://www.jdsu.com/
Copyright