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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Mark Konrad who wrote (48439)	3/5/2001 4:59:12 PM
From: vagabond	Respond to of 57584

New Focus Lowers Revenue Guidance for 2001 and Schedules Conference Call To Discuss Business Outlook Monday March 5, 4:01 pm Eastern Time SAN JOSE, Calif., March 5 /PRNewswire/ -- New Focus, Inc., (Nasdaq: NUFO - news), a leading supplier of innovative fiber optic products for next-generation optical networks under the Smart Optics for Networks(TM) brand, today announced lower revenue guidance for its fiscal year ending December 30, 2001. The company also announced an expected revenue range for its first quarter ending April 1, 2001 and outlined action plans to reduce the rate of production in both its U.S. and China operations. The company will host a conference call at 4:30 p.m. EST today to review recent developments in its business. Business Outlook: Noting a widespread softening in the U.S. economy and the telecommunications industry, New Focus lowered guidance for its fiscal 2001 net revenue to $170-190 million. Previous revenue guidance for fiscal 2001, released in conjunction with the company's fourth quarter earnings press release on January 30, 2001, was $240 million. For fiscal year 2000 New Focus reported net revenue of $80.4 million. The company indicated that first quarter 2001 net revenue is now expected to be $38-41 million. The company's previous guidance did not specify a revenue estimate for the first quarter of 2001. Net revenue in the fourth quarter of 2000 was approximately $43 million based on the pro-forma combined results of New Focus, JCA Technology, Inc., and Globe Y. Technology, Inc., consisting of $34 million for New Focus, $7 million for JCA, and $2 million for Globe Y. New Focus completed its acquisitions of JCA and Globe Y on January 16 and February 15, 2001, respectively. For the first quarter of 2000 New Focus reported net revenue of $9.8 million. ``While our business will continue to demonstrate strong year-over-year growth, recent order cancellations and push-outs have changed our revenue outlook for fiscal 2001. First quarter 2001 net revenue will be up relative to our reported fourth quarter net revenue of $33.9 million, but will decline relative to the pro forma combined results for the December quarter. As customers continue to adjust inventory levels in response to the slower industry growth now expected for this year, we will most likely see a sequential decline in net revenue between the first and second quarters. In light of these new revenue expectations, we will modify the rate of growth in our spending levels. Importantly, we will continue to fully fund key product development programs that are critical to the long-term success of New Focus. With sizable cash resources and pending new product introductions, we believe that New Focus remains well positioned to exploit the long-term secular growth potential of the fiber optics industry,'' said Ken Westrick, president and chief executive officer of New Focus, Inc. The company will slow the rate of production in its U.S. and China factories to bring production in line with the lower unit demand now anticipated for the first half of 2001. To accomplish this goal, the company will immediately furlough approximately 260 direct production employees currently in training at its operations in Shenzhen, China. The company will further lower production output through the adjustment of work schedules at its China manufacturing facilities. The company will also immediately reduce its U.S. workforce by approximately 70 people, predominantly direct labor employees. Prior to these workforce reductions, the company's operations in China employed approximately 1,200 people, while the company's U.S. operations employed approximately 900 people. The company will continue to hire selectively in the engineering, sales and marketing, and administrative functions. ``On the manufacturing side, our action plan will allow us to lower production output during the first half of 2001 while retaining upside flexibility for the second half of the year. We will complete facility construction projects that are currently underway but will not add production equipment in these new facilities until demand merits. The production slowdown, however, will negatively impact gross margins during the first half of 2001 because fixed costs will not decrease with the decline in unit volumes. On the development side, we will continue to hire engineering talent for key product development projects such as our tunable laser for network applications. We firmly believe that our strategy of driving select products for next-generation optical networks to #1 market share will support strong growth at New Focus after the current industry correction cycle runs its course,'' said Westrick. Conference Call: The company will host a conference call at 4:30 p.m. EST today to review recent developments in its business. Interested parties may access the live conference call via telephone or the Internet. Telephone: U.S. callers 800-810-0924 No Passcode International callers 913-981-4900 No Passcode Internet: Live webcast at http: //www.newfocus.com/investor.html