Milpitas, California, August 30, 2006 – JDSU today reported results for its fourth quarter and year ended June 30, 2006.

GAAP net revenue for the fourth quarter of $318.2 million grew 86% year-over-year, due primarily to 25% growth in the Optical Communications business and the addition of the Communications Test and Measurement segment in August last year.   For fiscal year 2006, GAAP net revenue of $1,204.3 million grew 69% from $712.2 million in fiscal 2005.

Fourth quarter GAAP net loss of $(45.8) million compares to a GAAP net loss of $(145.7) million in the year-ago quarter, and to GAAP net income of $3.7 million in the third quarter.   For fiscal year 2006, GAAP net loss of $(151.2) improved from a loss of $(261.3) million reported for fiscal 2005.   On a per share basis, GAAP net loss for the fourth quarter narrowed from $(0.10) a year ago, to $(0.03), and compares to approximately breakeven in the third quarter.   Fiscal 2006 GAAP net loss per share of $(0.09) compares to a GAAP net loss per share of $(0.18) in fiscal 2005.

JDSU delivered its third consecutive quarter of positive non-GAAP earnings before interest, taxes, depreciation and amortization, or EBITDA.   For the fourth quarter, non-GAAP EBITDA of $5.5 million compares to a loss of $(19.0) million in the year-ago quarter, and to earnings of $7.9 million in the prior quarter.   For fiscal 2006, non-GAAP EBITDA of $17.2 million compares to fiscal 2005’s loss of $(70.5) million.

On a non-GAAP basis, net loss of $(2.1) million compares to a net loss of $(20.5) million in the year-ago quarter, and to a net loss of $(2.8) million in the prior quarter.   For fiscal year 2006, non-GAAP net loss of $(23.8) million improved from the net loss of $(86.9) million reported for fiscal 2005.   On a per share basis, fourth quarter non-GAAP net income of $(0.00) improved from a net loss of $(0.01) per share a year ago, and compares to a non-GAAP net loss of $(0.00) in the prior quarter.  For fiscal 2006, non-GAAP net loss per share of $(0.01) improved from fiscal 2005’s non-GAAP net loss per share of $(0.06).

“Year-over-year revenue growth and improved profitability metrics highlight JDSU’s advancement towards a profitable and sustainable business model,” said Kevin Kennedy, JDSU’s Chief Executive Officer.  “We remain committed to further execution of our improvement programs throughout fiscal 2007, while at the same time continuing our investment and innovation in the broadband and optics markets.”

Financial Overview – Fiscal 2006 Fourth Quarter Ended June 30, 2006

• On a non-GAAP basis, revenue for the fourth quarter, which includes $0.4 million of revenue associated with acquisition accounting, was $318.6 million.
• Optical Communications net revenue grew 4% from the previous quarter, and 25% from the same quarter a year ago.   Net revenue of $133.0 million represented 42% of total non-GAAP net revenue. 
• Communications Test and Measurement revenue of $126.3 million was slightly down from last quarter, and represented 39% of total non-GAAP net revenue.   This included a partial quarter contribution amounting to approximately 1% of segment revenue associated with the acquisition of Test-Um which closed in May.
• Net revenue from our newly consolidated Advanced Optical Technologies segment was $36.7 million, or 12% of total non-GAAP net revenue.   Reflecting the series of product phase outs in the segment, revenue was down 10% from the previous quarter, and down 24% from the same quarter a year ago. 
• Reported under the heading of ‘All Other’, our Commercial Lasers business reported revenue of $22.6 million, up 10% from the previous quarter, and up 38% from the year-ago quarter.   This business represented 7% of total non-GAAP net revenue.
• Americas’ customers represented 61% of total non-GAAP net revenue. European and Asia-Pacific customers represented 22% and 17% of total non-GAAP net revenue, respectively.
• GAAP gross margin was 30% of net revenue, and non-GAAP gross margin was 34% of net revenue.
• GAAP operating expenses were $160.3 million, or 50% of GAAP net revenue.   Non-GAAP operating expenses were $118.8 million, or 37% of non-GAAP net revenue.
• The Company held $1,238.6 million in cash, cash equivalents, short-term investments and restricted cash at the end of the fourth quarter.   During the fourth quarter, cash, cash equivalents, short-term investments and restricted cash increased by $391.3 million, which includes proceeds of $415.9 million from our recent convertible note offering.

Business Outlook

For the first quarter of fiscal 2007, ending September 30, 2006, the Company expects revenue of $312 to $328 million.

Conference Call

The Company will discuss these results and other related matters at 2:00 p.m. Pacific Time on August 30, 2006 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 JDSU
JDSU (NASDAQ: JDSU; and TSX: JDU) 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 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 or the likelihood, timing or amount of expected profitability improvements; 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, our customer base is consolidating, we continue to experience execution challenges which limit our revenue and impair our profitability, we are currently engaged in various product and manufacturing transfers, site consolidations and product discontinuances, and we are experiencing some near-term compliance challenges related to new European environmental requirements, such as RoHS; (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, volumes 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 March 31, 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.

Contact Information
Investors:   Jacquie Ross, 408-546-4445 or investor.relations@jdsu.com
Press:   Kathleen Greene, 408-546-5852 or kathleen.greene@jdsu.com

The following financial tables are presented in accordance with GAAP, unless otherwise specified.

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