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28 October 2008


Bookham reports its first profit following record revenue

For its fiscal first-quarter 2009 (ended 27 September), optical component, module and subsystem maker Bookham Inc of San Jose, CA, USA has reported record revenue of $66.5m, up 6% on $62.6m last quarter and 23% on $54.3m a year ago. Growth was driven by tunable products, amplifiers, and 980nm pump lasers.

Excluding stock compensation expense of $0.4m and $0.4m of one-time costs related to the transfer of San Jose photonics operations to Shenzhen, China, non-GAAP gross margin was 26%, up from 23% last quarter and 24% a year ago, boosted by the higher-volume low-cost Shenzhen plant. In particular, margins on Bookham’s tunable lasers have risen to the industry average, and are no longer a drag on the profitability of the telecom business (for which margin now exceeds the overall gross margin of 26%), according to president & CEO Alain Couder.

Even excluding a non-cash gain of $6.5m (from the foreign currency translation of intercompany balances between subsidiaries), non-GAAP net income was $4.7m, compared with net losses of $1.5m last quarter and $8m a year ago. This is Bookham’s first profit since the firm went public in 2000. On a non-GAAP basis, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were a record $2.2m, an improvement from negative $0.7m last quarter and negative $2.5m a year ago.

The further quarter of financial improvement (including record revenue and adjusted EBITDA, were driven by progress with product innovation and operational execution, says Couder.

However, during the quarter, cash, cash equivalents, short-term investments and restricted cash fell from $51.9m to $43.2m. About $6m of this drop was due to receivables scheduled for collection in the last week of the quarter for which certain customers shifted payments into the first week of October. In particular, three large North American customers (probably including 18%-customer Nortel Networks) have excess inventory. “The economic environment is reducing demand from some of our customers,” warns Couder.

For its fiscal second-quarter 2009 (ending 27 December), Bookham expects revenue down at $57-62m, non-GAAP gross margin down to 21-26%, and adjusted EBITDA of negative $2m to positive $2m (break-even). “Our priority remains unchanged: to achieve sustained operating profitability,” empahasizes Couder.

See related items:

Bookham losses narrow towards positive cash flow in December quarter

Bookham’s tunable product growth hits constraints

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