2Q '00 Q&A
Q: Raman growth for the quarter and any comments on customers?
A: Better than 40% sequentially. Expect it to be larger and larger, substantial in 2001. Over ten customers, I believe 13 in all. Some are getting production quantities now. How many? It's only for undersea --- we're doing some custom designs now --- production for 2001 time frame. Also in trials today though no customer has given release (for press).
Q: Gross margins, is there room for upside?
A: Yes, there's still room for upside. For example we only had PIRI for 4 wks in Q2.
Q: Is 3.8 ratio for merger fixed?
A: Yes, that's not negotiable.
Q: 300 mW pumps, any design wins? What about 10 gig modulators?
A: Several for 300mW (about a half dozen wins in quarter. 10 gig, Siemens and several others, in all about 4 to 6 in quarter.
Q: Modulators, what variety?
A: lithium niobate carries the L band nicely. Looking at other signal beams. LiNi is right technology.
Q: Contributions from Veritech and Queensgate versus expectations? Is packaging new?
A: All three acquisitions were right on track, but all were more profitable than we expected. Packaging will have 5X increase in capacity.
Q: Will you use all capacity?
A: We wouldn't build it if we didn't need it. New orders must be long term (to be guaranteed). We are sold out for a considerable time. We will need all or more (capacity growth). New packaging will have many efficiencies. Lower costs, too.
Q: IOC, are you ramping customers?
A: Small shipments, in low 100s in Q3 and ramping in Q4.
Q: PIRI, any deisgn wins besides Lucent?
A: Have integrated sales teams and are talking to new customers. 5X progress ag PIRI. ONe new design win from emerging players in optical networking.
Q: PIRI, run rate, how has it expanded from Q1 to Q2?
A: PIRI --- experienced good sequential growth. Is rapidly growing. Is on track. DSOs -- lineraity did help. Customer satisfaction has improved. Better collection. Expectations? Will be same or lower in 2H.
Q: Could you give detail on expansion at PIRI?
A: Rev rate comes from facility expansion plus more functions on products. Facilities --- we have leased near existing plan. Adding 55K more sq. feet.
Q: New customers?
A: A number of new ones b/c of acquisitions. Larger customers are known and have been sampling products over years --- many are coming up in dollar value. Many going from sampling to full deployment.
Q: Integration issues?
A: Want to get module level quickly. Each has different manufacturing bottlenecks. We can help each other.
Q: Arrayed Wave Guides (AWG), is there overlap with thin-film-filters (TFF)?
A: They are complimentary. AWGs are for systems over 40 channels and TFFs for systems 16 channel and under. Together we have a complete product.
Q: You said growth will be 25% for Q3, will that include acquisitions?
A: Yes. I said 25% or better.
Q: Demand vs. supply for 980 nm pumps and lasers?
A: Pump module --- demand is extremely high. We are turning away business. Ramping to meet demand. 5X is necessary. We can make a lot of chips. Not a problem in that area.
Q: Yields?
A: 4.7 increase. 2.7 was base, 2.0 was acquisitions.
Q: Second and third undersea customers?
A: Progressing nicely. Waiting on follow-on for third. We did ship to all three this Q. Three were in the "over 4mil category."
Q: Any implications from LU's spin-off of microelectronics unit?
A: It's a move which indicates competitiveness in industry. Trernd is towards outsourcing by systems houses. It will accelerate our potential for growth. We will need module-level products going forward. Validates need for merger.
Q: Products by %?
A: Combined 980 nm over 50%, undersea over 26% of that.
Q: PIRI --- any new products there?
A: We'll save that discussion for Q3 and Q4. They wre being worked on from internal standpoint.
Q: ASP trends in quarter?
A: ASP --- seeing standard process. Long term customers get lower prices. No supply issues.
Q: Future management of JDSU?
A: Our team will move into JDS fold and be active. I'll be in the actives area.
Q: New competition?
A: GLW ramping volumes 3X in Lasertron. We have great products and can compete. But each product has significant competition.
Q: Raman internal projections, market size?
A: Difficult to predict. Depends on speed of our customers getting qualified for their customers' systems. Dynamic growth area.
Q: Shipments in 2001?
A: Already shipping. Market will expand throughout the year.
Q: Was the 5X at PIRI? Could you explain. . .
A: In victoria it is 5X expansion, going on now; PIRI is also 5X expansion; Veritech is 5X, ahnd IOC and Queensgate, all 5X facility and productivity expansion.
Q: Acquisitions, will you do additional deals while merger is pending?
A: We are still looking. They will be smaller in size. We will be slowed down some.
Q: Which areas are you looking?
A: We don't comment because of competition. We don't want our competitors know where we're looking.
Summary:
Prospects for the company have never been brighter. We're positioned for continued strong results going forward. [Usual thanks to all on call. . .]
>>>>
Transcribed from CC. All errors are mine.
Pat |
