News

7 November 2006

Bookham's declining Nortel sales offset by Cisco

For its fiscal first-quarter 2007 (to end-September), optical component, module and subsystem maker Bookham Inc of San Jose, CA, USA has reported revenue of $56.4m, down 10% on last year but up 3% on last quarter. Revenue
from Nortel fell 21% sequentially to $14.6m, while non-Nortel revenue rose 15% to $41.8m, including Cisco revenue up 47% to 13% of total revenue. Non-telecom revenue (including the industrial laser business) rose 14% to $11.6m.

Compared with just $0.5m a year ago, net loss was $22.9m, but this includes restructuring charges of $2.9m and an impairment charge of $1.9m for the Paignton, UK facility and is down from $27.0m last quarter. Cash reserves have risen from $43.3m last quarter to $58.2m, which include net proceeds of $28.8m from a private placement of common stock in September. During the quarter, Bookham also agreed to sell its assembly and
test facility in Paignton, which it expects to generate net proceeds of $9m on closing this month.

"The continued growth in our non-Nortel revenue and the positive impact of our cost reduction plans, resulted in better-than-forecast first quarter gross margin [17%, down from 23% a year ago but up from 9% last quarter] and
adjusted EBITDA [-$7.7m, cut from -$13.4m last quarter]," said president and chief executive officer Dr Giorgio Anania.

"The current cost reduction plans [started in May] are progressing as planned and are producing the significant savings we expected [$5.5-6.5m per quarter by the March 2007 quarter]," said Anania. "We initiated our chip-on-carrier line in Shenzhen [China] last month and are on track to complete this transition by the end of the year. Also, we are moving other functions to Shenzhen, which will result in additional staff reductions elsewhere, as previously announced," he adds.

"The telecom spending environment continues to be healthy, especially in areas where Bookham has competitive product advantages. In addition, a number of our new products, especially our tunable lasers, are seeing significant new design-in activity," claims Anania. "I do not anticipate any let-up in long-term customer demand and believe that in the second quarter we expect to achieve revenue growth and greater savings in our overhead cost structure through our cost reduction plans."

For its fiscal Q2/2007 (to end-December) Bookham expects revenue of $56-59m, gross margin of 16-20%, and adjusted EBITDA of -$6m to -$10m.

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