Bookham Announces Second Quarter Fiscal Year 2006 Financial Results
Thursday February 2, 4:01 pm ET
SAN JOSE, Calif., Feb. 2 /PRNewswire-FirstCall/ -- Bookham, Inc. (Nasdaq: BKHM - News), a leading provider of optical components, modules and subsystems, today announced financial results for its second quarter of fiscal year 2006, ended December 31, 2005.
Net revenue in the second quarter of fiscal 2006 was $60.7 million. This compares with net revenue of $62.6 million in the first quarter of fiscal 2006 and with net revenue of $45.8 million in the second quarter of fiscal 2005.
Under generally accepted accounting principles (GAAP), gross margin in the second quarter was 27 percent. This compares with gross margin of 23 percent in the first quarter and negative 8 percent in the same period a year ago.
GAAP net loss in the second quarter was $11.9 million, or a net loss of $0.28 per share. Second quarter GAAP net loss compares with a first quarter GAAP net loss of $0.5 million, or a net loss of $0.02 per share. First quarter GAAP net loss included a one-time tax gain of $11.8 million from recognizing tax assets related to the Company's acquisition of Creekside. GAAP net loss in the second quarter of fiscal 2005 was of $41.1 million, or a net loss of $1.23 per share.
The Company provides certain supplemental non-GAAP financial measures, including pro-forma net loss excluding non-cash stock and option compensation, charges such as impairment and restructuring, and the one-time tax gain, and a measure of Adjusted EBITDA, that also excludes these charges, to provide readers with the opportunity to use the same financial metrics as management to evaluate the Company's performance. The Company also believes these non- GAAP measures enhance the comparability and transparency of results for the period. A reconciliation table of GAAP to non-GAAP measures is included in the financial tables section of this release, and further discussion of these measures is also included later in this release.
Second quarter non-GAAP net loss, which excludes restructuring charges of $1.8 million and non-cash stock and option compensation of $1.9 million, was $8.3 million, or a non-GAAP net loss of $0.19 per share. Second quarter non- GAAP net loss compares with a first quarter non-GAAP net loss of $8.9 million, or a non-GAAP net loss of $0.26 per share. Non-GAAP net loss in the second quarter of fiscal 2005 was $33.0 million, or a non-GAAP net loss of $0.99 per share. Please see additional information in the section "Non-GAAP Financial Measures" below.
Second quarter Adjusted EBITDA was a profit of $0.7 million. This compares with Adjusted EBITDA of $0.7 million in the first quarter and an Adjusted EBITDA loss of $26.2 million in the second quarter of fiscal 2005. The Company calculates Adjusted EBITDA as net income/loss before net interest expense, income taxes, depreciation and amortization, and excludes restructuring costs, impairment charges, non-cash compensation costs related to stock options and restricted stock grants, and the one-time tax gain. Please see additional information in the section "Non-GAAP Financial Measures" below.
Cash, cash equivalents and restricted cash at the end of the second quarter was $81.3 million compared with $43.0 million at the end of the first quarter. The second quarter cash balance includes $49.3 million in net proceeds, excluding fees and expenses, from the Company's public offering of common stock completed on October 12, 2005.
Recent Business Highlights
-- Raised $49.3 million through public offering of common stock on
October 12, 2005
-- Executed series of transactions on January 13, 2006 that eliminated
remaining long-term debt
-- Signed an extended supply agreement with Nortel on January 13, 2006
whereby Nortel agreed to purchase $72 million in product during
calendar year 2006
"In the past four months we executed multiple financing actions that have significantly improved our financial position," said Dr. Giorgio Anania, president and chief executive officer of Bookham, Inc. "In September and October 2005, we raised $77 million through a combination of asset sales and a public equity offering. Last month, we entered into a series of transactions that eliminated our long-term debt. Our financial results in the second quarter were highlighted by our GAAP gross margin reaching 27 percent, a 4 percentage point increase over the previous quarter, and a 35 percentage point increase over the year-ago level. In addition, we achieved our second consecutive quarter of positive Adjusted EBITDA.
"On the operations front, we continued to make significant progress moving our assembly and test operations to Shenzhen, China," said Dr. Anania. "Revenue from Shenzhen in the second quarter was $27.0 million, a 37 percent increase over the $19.7 million we generated in the first quarter. Revenue from Shenzhen is expected to increase over the next two quarters as we complete the move of our assembly and test operations by the end of fiscal 2006. Equally important is that we believe that the operational risk associated with the transfer of product to China is fully behind us and the savings are beginning to come through more strongly than initially forecasted."
Outlook and Guidance
"As we have noted over the past few quarters, under the terms of the original supply agreement with Nortel, revenue from Nortel will decline over the remainder of fiscal 2006 as we complete the sales of products we have decided to discontinue," said Dr. Anania. "We believe that our efforts to diversify our customer base and expand revenue with other customers will continue to progress throughout the remainder of fiscal 2006. In addition, by increasing our revenue to other customers and finishing the move to Shenzhen, we expect to substantially offset the impact that lower revenue from Nortel will have on our gross margin and Adjusted EBITDA results in the next few quarters."
The following forecasts are based on current expectations. These statements are forward looking, and actual results may differ materially. Please see the Safe Harbor statement in this release for a description of certain important risk factors that could cause actual results to differ, and refer to Bookham's annual and quarterly reports on file with the Securities and Exchange Commission (SEC) for a more complete description of the risks.
Furthermore, our outlook excludes items that may be required by GAAP such as restructuring and related costs, acquisition or disposal related costs, and impairments of goodwill and other long-lived assets for which the likelihood and amounts are not determinable at this time, extraordinary items, as well as the expensing of stock options and restricted stock grants under SFAS 123R.
For the third quarter of fiscal 2006, ending April 1, 2006, the Company expects revenue will be in the range of $51 million to $54 million.
The Company expects third quarter gross margin will be in the range of 23 percent to 27 percent.
The Company expects adjusted EBITDA in the third quarter will be in the range of negative $3 million to positive $1 million. |
