Company Description
We design, manufacture and sell a comprehensive line of high performance,
highly reliable optoelectronic subsystems and modules for metropolitan area
networks and high-speed premises networks using fiber optic technology. Our
subsystems and modules include optical transmitters, receivers, transceivers
and transponders that convert electronic signals into optical signals and back
to electronic signals, enabling high-speed communication of voice and data
traffic over public and private networks. We target metropolitan area and high-
speed premises networks, where we believe our products offer superior price and
performance characteristics. We have established a track record of delivering a
comprehensive line of high performance, cost-effective fiber optic subsystems
and modules to our customers supported by volume production capabilities. Our
revenue was $36.0 million for fiscal year 1999 and $69.1 million for the nine-
month period ended June 30, 2000. Our top customers include communication
original equipment manufacturers and networking equipment manufacturers such as
3Com, ADC Telecommunications, Alcatel, CIENA, Chromatis Networks,
Cisco Systems, ECI Telecom, Lucent Technologies, Marconi Communications and
Nortel Networks.
According to Ryan, Hankin & Kent, or RHK, a leading market research and
consulting firm, Internet traffic capacity in North America is estimated to
grow at an average annual rate of 160% between 2000 and 2003. To accommodate
the expected increase in demand for network bandwidth, communication service
providers are increasingly replacing copper cable-based transmission technology
with fiber optic transmission technology. To date, the deployment of fiber
optic transmission technology has occurred primarily in long-haul networks,
which connect the communication networks of metropolitan areas around the world
and facilitate transport of voice and data traffic over long distances. As
voice and data traffic in the metropolitan area and high-speed premises
networks increases, fiber optic technology is increasingly being deployed in
these networks to address growing network congestion. The challenge faced by
providers of subsystems and modules for network systems in the metropolitan
area and high-speed premises markets is to combine the high performance
requirements of the long haul networks, such as high data-rate transmissions
over long distances, with cost-effective solutions that operate reliably in
harsh outdoor conditions.
We believe that we are in a strong position to take advantage of the developing
metropolitan area and high-speed premises network markets. RHK estimates that
the market for fiber optic components, which was approximately $6.6 billion in
1999, will grow to $22.5 billion in 2003. Since our inception in 1991, we have
devoted resources to developing the design and production expertise needed for
these markets and have developed a comprehensive line of products to address
the challenge of these markets. Our products support a wide range of network
applications, transmission speeds, distances and standards, including
SONET/SDH, Gigabit Ethernet, Fast Ethernet and ATM. Our innovative design
capabilities enable us to produce optical subsystems and modules that have the
performance, reliability, ruggedness, and cost-effectiveness needed by our
customers.
We provide a broad range of solutions that allow our customers to shorten their
design cycle time and bring new products to market more rapidly. By working
closely with our customers, we are able to anticipate the future needs of the
metropolitan area and high-speed premises markets. As an example, we are
developing products that use advanced technologies such as wavelength division
multiplexing and 10 Gigabit per second networking. We believe that we have a
competitive advantage over companies who target the long-haul market, who may
not be able to match our cost effectiveness in the metropolitan area and high-
speed premises markets, and companies in the local area network market, whose
products may not be able to achieve our performance over longer distances. Our
goal is to become the global leader in the design, development and manufacture
of subsystems and modules for optical network equipment for the metropolitan
area and high-speed premises networks.
OUR RELATIONSHIP WITH FURUKAWA
In connection with our formation in 1991, Furukawa provided our initial capital
investment through a wholly-owned subsidiary. We are currently a 70.3% owned
subsidiary of Furukawa. Upon completion of this offering, Furukawa will own all
of our outstanding Class B common stock, which will represent approximately
% of our outstanding shares and approximately % of the combined voting
power of all of our outstanding stock. In the past, we have purchased
substantially all of our requirements for lasers and the majority of our
requirements for other optical components from Furukawa, and we expect to
purchase a majority of these components from Furukawa in the foreseeable
future. Our relationship with Furukawa has allowed us to benefit from the
optical device and packaging technologies developed by Furukawa. References to
Furukawa in this prospectus refer to our parent company, Furukawa Electric
North America, Inc. based in Santa Clara, California, and its parent company,
The Furukawa Electric Co., Ltd., based in Tokyo, Japan. |
