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28 July 2009


Oclaro reports positive adjusted EBITDA in first post-merger quarter

For its fiscal fourth-quarter and fiscal 2009 (ended 27 June), Oclaro Inc of San Jose, CA, USA has reported revenue of $66.9m (up 62% on $41.2m for the March quarter). However, this includes two months of revenue from Avanex.

Oclaro was formed on 27 April through a merger that combined the optical component expertise of San Jose-based Bookham Inc with the module and subsystem expertise of Avanex Corp of Fremont, CA to create what is claimed to be one of the largest suppliers of optical components, modules and subsystems to the long-haul and metro optical telecoms markets.

Also, the March- and June-quarter figures exclude revenues from photonics products maker New Focus of $5.8m and $5.1m, respectively, after the business’ transfer to Newport Corp of Irvine, CA in exchange for their Spectra-Physics laser diode business and $3m in cash in a deal that closed on 4 July. Including New Focus, non-GAAP revenue is up 53% from $47m in the March quarter to $72m in the June quarter.

Gross margin has risen from 21.5% to 24.8%. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was positive $0.7m, an improvement on negative $0.7m in the March quarter.

Net loss has risen from $13.3m in the March quarter to $14.6m. However, this included $5.2m of restructuring and related costs. Despite this, during the quarter, cash, cash equivalents, restricted cash and short-term investments rose from $38.3m to $58m.

“Being positive adjusted EBITDA in our first quarter together is an important milestone for Oclaro,” says CEO Alain Couder. “Our integration is going smoothly, our synergies are on track... These results are a visual indicator of the progress taking place behind the scenes and with customers,” he adds.

“We are also proud of having improved our annual gross margin and annual adjusted EBITDA, in spite of the current economic downturn that began in September,” says Couder. For full-year fiscal 2009, gross margin rose from 20.1% to 22%, while adjusted EBITDA improved from negative $4m to negative $1m, and non-GAAP net loss was cut from $14m to $3.1m. Including the two months of Avanex revenue, fiscal 2009 revenue was $210.9m, up from $202.7m in fiscal 2008.

“Times continue to be challenging, and we expect only modest revenue growth in the remainder of calendar 2009,” cautions Couder. “Over the upcoming quarters we will continue to focus to advance the profitability of Oclaro towards our ultimate operating model targets.”

For its fiscal first-quarter 2010 (ending 26 September 2009), Oclaro expects revenue to rise 14-26% to $76-84m. Non-GAAP gross margin will fall to 19-23%, but this reflects 2-3% of temporary gross margin dilution from swapping New Focus for the Spectra-Physics laser diode business, due to additional costs while transitioning related fabrication activities in Tucson, AZ to Oclaro’s fabs in Caswell, UK and Zurich, Switzerland over the next 6-12 months. Correspondingly, adjusted EBITDA should be negative $6m to breakeven.

See related items:

Oclaro and Newport close deal to exchange New Focus and Spectra Physics high-power laser diode businesses

Bookham and Avanex merge into Oclaro

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