News

4 August 2006

 

Bookham diversification continues to grow sales, cut costs; secures $25m credit facility  

Optical component, module and subsystem maker Bookham Inc of San Jose, CA, USA has reported revenue for its fiscal fourth-quarter 2006 (to end-June) of $55.0m. This is down 11% on $61.0m a year ago but up 3% on last quarter's
$53.4m. Revenue from Nortel fell 23% from $24.1m to $18.5m as previously forecast, but revenue from non-Nortel customers rose 25% from $29.3m to $36.5m (following a 14% rise last quarter). Fiscal 2006 revenue was $231.6m,
up 16% from fiscal 2005's $200.3m.

"Our fourth quarter revenue results reflect the ongoing success we are achieving in diversifying our customer mix," said Dr Giorgio Anania, president and chief executive officer. "Huawei became a 10% customer in the June quarter, while Cisco was close to reaching 10% status. The customer
growth more than compensated for the expected decline in Nortel revenue," he added. "Our non-telecom revenue, which consists primarily of our New Focus and high-power laser businesses, grew 12% sequentially and accounted for
about 19% of total revenue, up from 17% last quarter. A significant amount of the overall Bookham growth came from the strong traction we are obtaining with a range of new products we are introducing and which will be continuing to ramp in the first and second quarters of fiscal 2007."

Under generally accepted accounting principles (GAAP), gross margin fell from 11% last quarter to 9%, but net loss was cut from $48.0m to $27.0m (including restructuring charges of $5.2m). For fiscal 2006, net loss was cut from fiscal 2005's $248.0m to $87.5m.

"We significantly improved our overall financial structure with the elimination of our long-term debt," said Anania. "We extended our supply agreement with Nortel through calendar 2006 and completed the move of our assembly and test manufacturing to Shenzhen, which is already delivering better performance and substantial cost savings."

"We are making good progress on the cost reduction plans we announced in May. Our lasers prototype line with associated engineering support will be transferring to our Shenzhen, China facility in the August to October timeframe, and our chip-on-carrier line will be starting up in Shenzhen in September, with the move to be completed before year-end," said Anania. "We are also in the process of transferring a certain number of development, manufacturing support and administrative functions to Shenzhen to continue driving down our overhead cost structure. This will result in significant reductions in Western-world staff, especially in our Paignton, UK site,
which will occur between the middle of August and November of this year."

Bookham initially expected quarterly cost savings of $5-6m per quarter, but now expects cost savings of about $4m per quarter in the December quarter and an further $1.5-2.5m by the March 2007 quarter, added Anania.

"The market outlook for telecom optical components remains strong," said Anania. "We are seeing solid demand for our new products." In the June quarter, Bookham introduced several new products, including wideband tunable laser products, next-generation high-power 980nm pumps, new optical amplifiers and extended temperature XFPs and SFP DWDM transceiver products.

For its fiscal first-quarter 2007 (to end-September), Bookham expects revenue of $55-58m, gross margin to rebound to 10-15%, and adjusted EBITDA of -$8-12m.

* Bookham has entered into a three-year senior secured credit agreement for $25m with Wells Fargo Foothill, part of Wells Fargo & Company. "This credit facility is an important step in the ongoing improvement to our financial structure," said Steve Abely, chief financial officer. "It provides us with
flexibility as we execute our ongoing restructuring and cost-savings programs."

Visit: http://www.bookham.com