Expects Manufacturing Consolidation To Realize Annualized Savings of $80 Million
San Jose, California, April 27, 2005 – JDS Uniphase Corporation (NASDAQ: JDSU and TSX: JDU) today reported results for the third quarter ended March 31, 2005.
Net revenue for the third quarter was $166.3 million, and net loss was $38.6 million, or $0.03 per share. This compares to net revenue of $180.5 million, and a net loss of $41.0 million, or $0.03 per share, reported for the second quarter of fiscal 2005, and to net revenue of $161.4 million, and a net loss of $7.3 million, or $0.01 per share, for the third quarter of fiscal 2004.
On a non-GAAP basis, net loss in the third quarter was $23.5 million, or $0.02 per share, as compared to a non-GAAP net loss of $28.6 million, or $0.02 per share, for the second quarter of fiscal 2005, and to a non-GAAP net loss of $6.7 million, or $0.00 per share, for the third quarter of fiscal 2004.
On a non-GAAP EBITDA basis (non-GAAP earnings before interest, taxes, depreciation and amortization), net loss was $19.8 million for the quarter ended March 31, 2005, as compared to a net loss of $25.7 million for the second quarter of fiscal 2005, and to a net loss of $9.7 million for the third quarter of fiscal 2004.
“Quarterly revenue results were at the high end of expectations, while initiatives to streamline our cost structure picked up momentum,” said Kevin Kennedy, President and Chief Executive Officer of JDS Uniphase. “The divestiture of our Fuzhou operation in China, announced today, and the North American manufacturing consolidation, announced last week, are two elements of our broader profitability strategy.”
Financial Overview – Third Quarter Ended March 31, 2005
- Communications Products Group net revenue of $101.7 million was down by $5.0 million from last quarter, and represented 61.2% of net revenue. Commercial and Consumer Products Group net revenue declined 12.5% sequentially, and represented $64.6 million, or 38.8% of net revenue.
- On a geographic basis, net revenue from North American customers represented 64.2% of net revenue. European and Asia-Pacific customers represented 19.7% and 16.1% of net revenue, respectively.
- GAAP gross margin was 14.9% of net revenue, and non-GAAP gross margin was 16.1% of net revenue.
- GAAP operating expenses were $69.4 million, representing 41.7% of net revenue. Non-GAAP operating expenses were $57.5 million, or 34.6% of net revenue.
- The Company held $1,380.2 million in cash, cash equivalents and short-term investments at the end of the third quarter, of which approximately $1,327.8 million was cash, money market and other highly liquid fixed income securities. The Company used approximately $21.6 million in cash from operations.
Business Outlook
The Company provided the following financial guidance. For the fourth fiscal quarter ending June 30, 2005, the Company expects net revenue in the range of $160 to $170 million.
When fully implemented in the fourth quarter of fiscal 2006, the announced manufacturing consolidations and related actions are expected to save at least $20 million a quarter.
Conference Call
The Company will discuss these results and other related matters at 2:00 p.m. Pacific Time on April 27, 2005 in a live webcast, which will also be archived for replay on the Company's website at 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 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 the amount of future revenue performance or the timing or amount of expected cost savings; 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 reserves and the use of previously written-off inventory; (ii) the Company’s cost improvement efforts may not be successful in achieving their expected benefits (including, among other things, cost structure, gross margin and other profitability improvements), due to, among other things, shifts in product mix, selling price pressures, costs and delays related to product transfers to lower cost manufacturing locations and associated facility closures, costs and delays associated with facility and asset divestitures, 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 December 31, 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.
-SELECTED FINANCIAL DATA FOLLOWS- (PDF format 52K)
Contact Information
Investors: Investor Relations, 408-546-4445, investor.relations@jdsu.com
Press: Randall Sutherland, 408-546-7028, randall.sutherland@jdsu.com
The following financial tables are presented in accordance with GAAP, unless otherwise specified.