Bookham Announces Fourth Quarter and Fiscal Year 2006 Financial Results
Thursday August 3, 7:02 am ET
SAN JOSE, Calif., Aug. 3 /PRNewswire-FirstCall/ -- Bookham, Inc. (Nasdaq: BKHM - News), a leading provider of optical components, modules and subsystems, today announced financial results for its fourth quarter and fiscal year 2006, ended July 1, 2006.
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Revenue in the fourth quarter of fiscal 2006 was $55.0 million, compared with $53.4 million in the third quarter of fiscal 2006 and $61.0 million in the fourth quarter of fiscal 2005. Revenue from customers other than Nortel increased 25 percent sequentially to $36.5 million from $29.3 million last quarter. Revenue from Nortel in the fourth quarter declined as previously forecast to $18.5 million compared with $24.1 million in the prior quarter.
Under generally accepted accounting principles (GAAP), gross margin in the fourth quarter was 9 percent. This compares with gross margin of 11 percent in the third quarter and gross margin of 19 percent in the same period a year ago.
GAAP net loss in the fourth quarter was $27.0 million, or a net loss of $0.47 per share. Included in fourth quarter GAAP net loss are restructuring charges of approximately $5.2 million. Fourth quarter GAAP net loss compares with a GAAP net loss of $48.0 million, or $0.90 per share in the third quarter and a GAAP net loss of $39.0 million, or $1.16 per share in the fourth quarter of fiscal 2005.
Bookham provides certain supplemental non-GAAP financial measures, including non-GAAP net loss excluding non-cash stock-based compensation, charges such as impairment and restructuring, litigation settlement/recovery, early debt extinguishment, and acquired in-process research and development, along with a measure of Adjusted EBITDA, that also excludes these charges, to provide investors with the opportunity to use the same financial metrics as management to evaluate the Company's performance. Bookham also believes these non-GAAP measures enhance the comparability and transparency of results for the period. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. 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.
Fourth quarter non-GAAP net loss was $20.9 million, or a net loss of $0.37 per share. This compares with a non-GAAP net loss of $17.9 million, or $0.34 per share in the third quarter. Fourth quarter fiscal 2005 non-GAAP net loss was $18.0 million, or $0.54 per share. Please see additional information in the section "Non-GAAP Financial Measures" below.
Fourth quarter Adjusted EBITDA was negative $13.4 million, compared with negative Adjusted EBITDA of $11.5 million in the third quarter and negative Adjusted EBITDA of $9.5 million in the fourth quarter of fiscal 2005. Adjusted EBITDA is calculated as net loss excluding the impact of taxes, net interest income/expense, net foreign currency translation gain/loss, depreciation and amortization, as well as restructuring, impairment, non-cash compensation related to stock and options, and certain other one-time charges and credits specifically identified where applicable, including the litigation settlement and early debt extinguishment. Please see additional information in the section "Non-GAAP Financial Measures" below.
Cash, cash equivalents and restricted cash at the end of the fourth quarter were $43.3 million, compared with $66.9 million at the end of the third quarter and $32.3 million at the end of the fourth quarter of fiscal 2005.
"Our fourth quarter revenue results reflect the ongoing success we are achieving in diversifying our customer mix," said Dr. Giorgio Anania, president and chief executive officer of Bookham, Inc. "We increased revenue to telecom customers other than Nortel by approximately 30 percent sequentially, following a 14 percent sequential increase in the March quarter. In addition, Huawei became a 10 percent customer in the June quarter while Cisco was close to reaching 10 percent status. The customer growth more than compensated for the expected decline in Nortel revenue during the June quarter. In addition, our non-telecom revenue, which consists primarily of our New Focus and high-power laser businesses, grew 12 percent sequentially and accounted for about 19 percent of total revenue, up from 17 percent last quarter. A significant amount of the overall Bookham growth came from the strong traction we are obtaining with a range of new products we are introducing and which will be continuing to ramp in the first and second quarters of fiscal 2007.
"We are making good progress on the cost reduction plans we announced in May. Our lasers prototype line with associated engineering support will be transferring to our Shenzhen, China facility in the August to October timeframe, and our chip-on-carrier line will be starting up in Shenzhen in September with the move to be completed before year-end. We are also in the process of transferring a certain number of development, manufacturing support and administrative functions to Shenzhen to continue driving down our overhead cost structure. This will result in significant reductions in Western-world staff, especially in our Paignton, UK site, which will occur between the middle of August and November of this year," said Dr. Anania.
"We initially expected these moves would result in quarterly cost savings of between $5 million and $6 million per quarter. We now expect cost savings of about $4 million per quarter in the December quarter with an additional $1.5 million to $2.5 million achieved by the March 2007 quarter," added Dr. Anania.
"In a separate press release issued today, we announced the establishment of a $25 million line of credit," said Dr. Anania. "This available credit facility provides us with additional flexibility to finance our ongoing restructuring and cost savings programs."
Fiscal 2006 Financial Results
Net revenue for fiscal 2006 was $231.6 million, compared with $200.3 million in fiscal 2005. GAAP net loss for fiscal 2006 was $87.5 million, or a net loss of $1.87 per share. This compares with a GAAP net loss of $248.0 million, or a net loss of $7.43 per share in fiscal 2005.
"We achieved 16 percent revenue growth in fiscal 2006 and significantly improved our overall financial structure with the elimination of our long-term debt," said Dr. Anania. "On the operations front, we extended our supply agreement with Nortel through calendar 2006 and completed the move of our assembly and test manufacturing to Shenzhen, which is already delivering better performance and substantial cost savings. In addition, we introduced several new products, including wideband tunable laser products, next generation high power 980 pumps, new optical amplifiers and extended temperature XFPs and SFP DWDM transceiver products, all of which, we believe, will be key to our revenue growth in fiscal 2007."
Outlook and Guidance
"The market outlook for telecom optical components remains strong and as a key player in the telecom optical components space we are experiencing the benefits from this positive momentum," said Dr. Anania. "We are seeing solid demand for our new products and believe this will translate into additional growth for these products over the next several 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, 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 first quarter of fiscal 2007, ending September 30, 2006, the Company expects:
* Revenue will be in the range of $55 million to $58 million
* Gross margin will be in the range of 10 percent to 15 percent
* Adjusted EBITDA will be in the range of negative $8 million to negative
$12 million
Conference Call
Bookham is scheduled to hold a conference call to discuss its fourth quarter and fiscal 2006 financial results today at 8:30 a.m. ET/5:30 a.m. PT. To access the call, dial 1-973-582-2741. A live webcast of the call will also be available via the Investors section of the Company's website at www.bookham.com.
A replay of the conference call will be available through August 17, 2006. To access the replay, dial 1-973-341-3080. The conference code for the replay is 7616902.
About Bookham
Bookham, Inc. is a global leader in the design, manufacture and marketing of optical components, modules and subsystems. The Company's optical components, modules and subsystems are used in various applications and industries, including telecommunications, data communications, aerospace, industrial and military. Since 2002, the Company has acquired the optical components businesses from Nortel Networks and Marconi, as well as Ignis Optics, Inc., the business of Cierra Photonics Inc., New Focus, Inc., Onetta, Inc., and Avalon Photonics AG. The Company has manufacturing facilities in the UK, US, Canada, China and Switzerland; and offices in the US, UK, Canada, France and Italy and employs approximately 2000 people worldwide. More information on Bookham, Inc. is available at www.bookham.com |
