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JDSU Announces Fiscal 2010 Third Quarter Results

Milpitas, California, May 5, 2010 – JDSU (NASDAQ: JDSU; and TSX: JDU) today reported results for its third fiscal quarter ended April 3, 2010.

Net revenue for the third fiscal quarter was $332.3 million and the net loss was $(11.9) million, or $(0.05) per share. This compares to net revenue of $342.9 million and a net loss of $(19.5) million or $(0.09) per share for the prior quarter, and net revenue of $279.1 million and a net loss of $(101.7) million or $(0.47) per share for the third fiscal quarter of 2009. 

On a non-GAAP basis, net revenue for the third quarter was $332.9 million and net income for the quarter was $23.2 million or $0.10 per share.  This compares to non-GAAP net revenue of $343.8 million and net income of $26.6 million or $0.12 per share for the prior quarter, and non-GAAP net revenue of $279.2 million and net loss of $(5.4) million or $(0.03) per share for the third fiscal quarter of 2009.   

“We began the calendar year with the highest quarterly bookings JDSU has reported in the last two years, with each of our businesses achieving a book to bill of greater than one in the quarter,” said Tom Waechter, JDSU’s President and Chief Executive Officer.  “The combination of the recovery in our markets, and our innovation and new product offerings are driving the strength of our customer demand.”  

Financial Overview – Third Fiscal Quarter Ended April 3, 2010

All numbers in this section are non-GAAP unless stated otherwise.

  • Net revenue of $332.9 million decreased 3% compared to the prior quarter and increased 19% compared to the third quarter of fiscal 2009.
  • Gross margin was 44.1% compared to 44.6% in the prior quarter and 41.8% in third quarter of fiscal 2009.
  • Operating margin was 6.6% compared to 8.2% in the prior quarter and (2.3%) in third quarter of fiscal 2009.
  • Communications Test and Measurement revenue of $145.7 million decreased 18% compared to the prior quarter and increased 14% compared to the third quarter of fiscal 2009. Revenue from this segment represented 44% of total net revenue.
  • Communications and Commercial Optical Products revenue of $128.6 million increased 14% compared to the prior quarter and increased 28% compared to the third quarter of fiscal 2009.  Revenue from this segment represented 39% of total net revenue.
    • Optical Communications revenue of $109.9 million increased 15% compared to the prior quarter and increased 23% compared to the third quarter of fiscal 2009.
    • Commercial Lasers revenue of $18.7 million increased 12% compared to the prior quarter and increased 63% compared to the third quarter of fiscal 2009.
  • Advanced Optical Technologies revenue of $58.6 million increased 7% compared to the prior quarter and 15% compared to the third quarter of fiscal 2009.  Revenue from this segment represented 17% of total net revenue.
  • Americas’ customers represented 45% of total net revenue for the quarter. European and Asia-Pacific customers represented 29% and 26% of total net revenue, respectively.
  • The Company held $713.1 million in total cash and investments and generated free cash flow of $7.9 million for the quarter.

Business Outlook

For the fourth quarter of fiscal 2010, ending July 3, 2010, the Company expects non-GAAP net revenue to be in the range of $385 million to $410 million. 

Conference Call

The Company will discuss these results and other related matters at 2:00 p.m. Pacific Time on Wednesday, May 5, 2010 in alive webcast, which will also be archived for replay on the Company's website at www.jdsu.com/investors.  This press releaseis being furnished as a Current Report on Form 8-K with the Securities and Exchange Commission, and will be available at www.sec.gov/.

About JDSU

JDSU (NASDAQ: JDSU; and TSX: JDU) enables broadband and 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.  JDSU is also 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, cash flow 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 exacerbated by the current credit and financial market uncertainty, as well as the migration to vendor managed inventory programs; (b) quarter-over-quarter product mix fluctuations, which can materially impact profitability measures due to the broad gross margin range across our portfolio; (c) consolidation of 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 businesses; (e) our Communications Test and Measurement business is notable for seasonality and a significant level of in-quarter book-and-ship business, further limiting our forecasting abilities; (f) we are currently engaged in various product and manufacturing transfers, site consolidations and product discontinuances, which has caused and may cause short term disruptions; and (g) the ability of our suppliers and contract manufacturers to meet additional production and delivery requirements to our forecasted demand.

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 Annual Report on Form 10-K for the fiscal year ended June 27, 2009 filed with the Securities and Exchange Commission. 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:  Michelle Levine Schwartz, 408-546-4421 or michelle.levine@jdsu.com 
Press:  Jim Monroe, 240-404-1922, or jim.monroe@jdsu.com

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

SELECTED FINANCIAL DATA FOLLOWS