/FROM PR NEWSWIRE SAN FRANCISCO 415-543-7800/ [STK] JDSU JDU. [IN] CPR TLS [SU] ERN ERP CCA TO BUSINESS AND TECHNOLOGY EDITORS:
JDS Uniphase First Quarter Results
OTTAWA, and SAN JOSE, Calif., Oct. 25 /PRNewswire/ -- JDS Uniphase Corporation (NASDAQ:JDSU; Toronto: JDU) today reported sales for its first quarter ended September 29, 2001 of $329 million. Sales for the quarter were 45% below sales of $601 million reported for the quarter ended June 30, 2001. The Company had earlier announced that sales for the quarter would be approximately $325 million.
"Our industry continues to be affected by declining carrier capital spending and a weak overall economic environment, and we have adapted to these circumstances by dramatically re-engineering our Company through our Global Realignment Program," said Jozef Straus, Co-Chairman, President and CEO. "To date, we have reduced our annual expense rate by over $600 million, standardized on global product platforms, eliminated manufacturing redundancies, maintained our strong financial position and redirected our research and development program to focus on the most promising applications. These improvements have allowed us to increase the level of collaborative engineering we can offer our customers for the development of next generation systems. We believe these next generation systems will be part of a future industry recovery and that we are well positioned to help our company and our customers return to growth."
Global Realignment Program
JDS Uniphase's Global Realignment Program continues on schedule.
-- The estimated total cost of this program remains $900-950 million of which $778 million was recorded through the end of the first quarter. The charges recorded in the first quarter included $278 million in restructuring and related charges, of which $243 million was reported as restructuring charges, $26 million was charged to cost of goods sold, and $9 million was charged to operating expenses. Included in the total costs of the Global Realignment Program are charges for obsolete inventory write-downs related to product platform consolidation, accelerated depreciation, and moving and employee costs related to the phasing out of certain facilities and equipment.
-- To date, the program has reduced the Company's annual expense rate by over $600 million from the level at the commencement of the Global Realignment Program. The Company's projected annual savings rate upon completion of the Global Realignment Program is $800 million, $100 million more than the Company's original target. The Company has closed seventeen sites to improve manufacturing efficiencies and reduce costs. In total, the Company expects to reduce its facilities by two million square feet.
-- The Company's employment is currently just below 13,000, the announced target under the Global Realignment Program.
In addition to charges associated with the Global Realignment Program, the Company recorded charges of approximately $62 million for the write-down of inventory, primarily for inventory being rendered obsolete by the Company's new product programs.
Intangible Assets
The Company evaluated the carrying value of certain long-lived assets, consisting primarily of goodwill, pursuant to Generally Accepted Accounting Principles (GAAP). No reduction in the carrying value of the Company's long-lived assets for the quarter was recorded as a result of this assessment. The Company recorded a $42 million reduction in long-lived assets pursuant to actions taken under its Global Realignment Program as well as amortization for the period.
Financial Results
The Company reported a loss of $1.2 billion or $0.93 per share for the quarter ended September 29, 2001. On a pro forma basis, excluding reduction of goodwill and other long-lived assets, reduction in fair value of investments, purchased intangibles amortization, payroll taxes on stock option exercises, stock compensation charges, and activity related to equity method investments, the Company reported a loss of $260 million or $0.20 per share for the quarter ended September 29, 2001. These results reflect the costs of the Global Realignment Program and charges for the write-down of obsolete inventory related to the Company's new product development programs. The impact of the pro forma adjustments listed above is summarized in the Company's pro forma financial tables that follow in this release.
Editors' Note
Please note that analyst estimates for the September quarter typically exclude the restructuring and other costs associated with the JDS Uniphase Global Realignment Program. The pro forma amounts shown below do not exclude such costs. This information should be noted in any comparison between results for the quarter and First Call and I/B/E/S consensus analyst estimates of a loss of $0.03 per share for the quarter.
The following table summarizes the Company's pro forma results for the quarter:
(in millions, except
per share amounts) Three months ended
Sept. 29, Sept. 30,
2001 2000
Net sales $329 $786
Gross profit (loss) $(6) $401
Income (loss) from operations $(409) $255
Income (loss) before income taxes $(394) $268
Net income (loss) $(260) $177
Net income (loss) per diluted share $(0.20) $0.18
Diluted weighted average shares outstanding 1,323 1,011
Pro forma results for the quarter ended September 29, 2001 exclude a $42.0 million reduction of goodwill and other long-lived assets; $443.3 million of purchased intangibles amortization; $106.5 million of reduction in fair value of investments; $23.8 million of non-cash stock compensation; $0.5 million of payroll taxes on stock option exercises; and $19.3 million in activity related to investments accounted for under the equity method of accounting. Pro forma results for the quarter ended September 30, 2000 exclude the $48.6 million effect on gross profit of the purchase accounting increase in the value of E-TEK inventory at June 30, 2000; $8.9 million of acquired in-process research and development charges; $1,107.4 million of purchased intangibles amortization; $34.9 million of payroll taxes on stock option exercises; and $41.2 million of income related to investments accounted for under the equity method of accounting.
Financial Condition
The Company's financial condition remained strong with $1.6 billion in cash, money market and other highly liquid securities at September 29, 2001. The Company reported $66 million in cash flow from operations for the quarter.
Guidance
The Company anticipates sales for the second quarter will be approximately ten to fifteen per cent below the first quarter as the downturn in the Company's markets continues. The Company anticipates that pro forma gross margins for the second quarter will be in the range of 32% to 34% of sales because of low capacity utilization and the effects of operating leverage and the Company expects to report a pro forma loss of $0.01 to $0.02 for this period, excluding charges under the Global Realignment Program. The Company is not providing guidance for subsequent periods.
Company management will discuss these results at 4:30 PM Eastern Time on October 25, 2001 in a live webcast, which will also be archived for replay, on the JDS Uniphase website at www.jdsuniphase.com under Investor Relations / Webcasts & Presentations.
JDS Uniphase is a high technology company that designs, develops, manufactures and sells a comprehensive range of products for high-performance fiberoptic communications applications. These products are deployed by system manufacturers worldwide to develop advanced optical networks for the telecommunications and cable television industries. JDS Uniphase Corporation is traded on the NASDAQ National Market under the symbol JDSU and the exchangeable shares of JDS Uniphase Canada Ltd. are traded on The Toronto Stock Exchange under the symbol JDU. More information on JDS Uniphase is available at www.jdsuniphase.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include (a) any statements or implications regarding the Company's ability to remain competitive and a leader in its industry, and the future prospects and growth of the Company, the industry and the economy in general; (b) statements regarding the current industry downturn, the extent and duration thereof and the extent and sufficiency of the Company's response thereto; (c) statements regarding the expected level and timing of benefits to the Company from its Global Realignment Program and the expected cost thereof, including (i) the extent and timing of projected cost reductions and their impact on the Company's financial performance, and (ii) expected reductions in manufacturing capacity and employees; (d) statements regarding the Company's ability to engage in collaborative engineering with its customers; (e) statements regarding the development of next generation systems, the Company's participation in such development, and the contribution of such systems to any industry recovery; (f) any statement or implication regarding the Company's products, the demand therefor and any benefits expected therefrom; and (g) any anticipation or guidance as to future financial performance, including, without limitation, (i) expected sales levels for the second quarter, and (ii) expected pro forma gross margins and net loss for the second quarter. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, including, without limitation, the following: (1) the Company's ongoing integration and restructuring efforts, including, among other things, the Global Realignment Program, may not be successful in achieving their expected benefits, may be insufficient to align the Company's operations with customer demand and the changes affecting its industry, or may be more costly or extensive than currently anticipated; (2) due to the current economic slowdown, in general, and setbacks in customers' businesses, in particular, the Company's ability to predict financial performance for future periods is far more difficult than in previous periods; and (3) ongoing efforts to reduce product costs through, among other things, automation, improved manufacturing processes and product rationalization may be unsuccessful.
For more information on these and other risks affecting the Company's business, please refer to the "Risk Factors" Section included in the Company's Annual Report on Form 10-K for the year ended June 30, 2001. The forward- looking statements contained in this news release are made as of the date hereof and JDS Uniphase Corporation does not assume any obligation to update the reasons why actual results could differ materially from those projected in the forward-looking statements.
JDS UNIPHASE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share data)
(unaudited)
Three months ended
Sept. 29, Sept. 30,
2001 2000
Net sales $328.6 $786.5
Cost of sales 343.3 436.7
Gross profit (14.7) 349.8
Operating expenses:
Research and development 69.2 62.4
Selling, general and administrative 106.3 116.2
Amortization of purchased intangibles 443.3 1,107.4
Acquired in-process research and
development -- 8.9
Reduction of goodwill and other
long-lived assets 42.0 --
Restructuring charges 243.0 --
Total operating expenses 903.8 1,294.9
Loss from operations (918.5) (945.1)
Interest income, net 15.1 13.6
Activity related to equity method
investments (19.3) (41.2)
Reduction in fair value of investments (106.5) --
Loss before income taxes (1,029.2) (972.7)
Income tax expense 195.2 43.9
Net loss $(1,224.4) $(1,016.6)
Net loss per share $(0.93) $(1.07)
Number of weighted average shares
outstanding 1,322.7 946.6
JDS UNIPHASE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
Sept. 29, June 30,
2001 2001
(unaudited)
Current assets:
Cash, cash equivalents and short-term
investments $1,754.0 $1,812.2
Accounts receivable, less allowances
for doubtful accounts 260.8 477.6
Inventories 232.1 287.6
Prepaid assets and other current
assets 585.2 458.9
Total current assets 2,832.1 3,036.3
Property, plant, and equipment, net 976.8 1,173.0
Deferred income taxes 398.1 806.3
Goodwill and other intangible assets 6,564.2 7,045.6
Long-term investments 136.7 169.0
Other assets 20.5 15.2
TOTAL ASSETS $10,928.4 $12,245.4
Current liabilities:
Accounts payable $94.4 $190.6
Accrued payroll and related expenses 103.5 133.0
Income taxes payable 31.6 30.6
Deferred income taxes 28.2 63.0
Restructuring accrual 161.2 105.2
Other current liabilities 343.1 326.1
Total current liabilities 762.0 848.5
Deferred income taxes 618.8 672.4
Other non-current liabilities 4.5 5.2
Long-term debt 10.7 12.8
Stockholders' equity:
Common stock and additional paid-in
capital 68,018.3 67,955.3
Accumulated deficit and other
stockholders' equity (58,485.9) (57,248.8)
Total stockholders' equity 9,532.4 10,706.5
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $10,928.4 $12,245.4
JDS UNIPHASE CORPORATION
OPERATING SEGMENT INFORMATION
(in millions)
(unaudited)
Sept. 29, Sept. 30,
2001 2000
Thin Film Products and
Instrumentation:
Shipments $88.9 $128.2
Intersegment sales (5.1) (39.7)
Net sales to external customers 83.8 88.5
Operating income (18.0) 58.7
Transmission and Network Components
Shipments 242.8 698.0
Intersegment sales -- --
Net sales to external customers 242.8 698.0
Operating income (323.8) 215.0
Net sales by reportable segments 326.6 786.5
All other net sales 2.0 --
328.6 786.5
Operating income by reportable
segment (341.8) 273.7
All other operating income (67.1) (18.9)
Unallocated amounts:
Acquisition related charges and
payroll tax on stock option
exercises (509.6) (1,199.8)
Reduction in fair value of
investments (106.5) --
Activity related to equity method
investments (19.3) (41.2)
Interest and other income, net 15.1 13.6
Loss before income taxes $(1,029.2) $(972.6)
JDS UNIPHASE CORPORATION
PRO FORMA STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
Three months ended September 29, 2001
Pro Forma
As Reported Adjustments Pro Forma*
Net sales $328.6 $-- $328.6
Cost of sales 343.3 (8.7) 334.6
Gross profit (14.7) 8.7 (6.0)
Operating expenses:
Research and development 69.2 (4.9) 64.3
Selling, general
and administrative 106.3 (10.7) 95.6
Purchased intangibles
amortization and
in-process R&D 443.3 (443.3) --
Reduction of goodwill and
other long-lived assets 42.0 (42.0) --
Restructuring charges 243.0 -- 243.0
Total operating expenses 903.8 (500.9) 402.9
Loss from operations (918.5) 509.6 (408.9)
Interest income, net 15.1 -- 15.1
Activity related to
equity method investments (19.3) 19.3 --
Reduction in fair value
of investments (106.5) 106.5 --
Loss before income taxes (1,029.2) 635.4 (393.8)
Income tax expense (benefit) 195.2 (329.0) (133.8)
Net loss $(1,224.4) $964.4 $(260.0)
Net loss per share $(0.93) $(0.20)
Net loss per share,
diluted basis $(0.93) $(0.20)
Number of weighted
average shares outstanding 1,322.7 1,322.7
Number of weighted
average shares and
equivalents 1,322.7 1,322.7
Three months ended September 30, 2000
As Pro Forma
Reported Adjustments Pro Forma*
Net sales $786.5 $-- $786.5
Cost of sales 436.7 (51.5) 385.2
Gross profit 349.8 51.5 401.3
Total operating expenses 1,294.9 (1,148.3) 146.6
Income (loss) from operations (945.1) 1,199.8 254.7
Interest and other income, net (27.6) 41.2 13.6
Income (loss) before
income taxes (972.7) 1,241.0 268.3
Income tax expense 43.9 47.3 91.2
Net income (loss) $(1,016.6) $1,193.7 $177.1
Net income per share $0.19
Net income per share,
diluted basis $0.18
Number of weighted average
shares outstanding 946.6
Number of weighted average
shares and equivalents 1,011.4
* Pro forma results for the quarter ended September 29, 2001 exclude a $42.0 million reduction of goodwill and long lived assets; $443.3 million of purchased intangibles amortization; $106.5 million of reduction in fair value of investments; $23.8 million of non-cash stock compensation; $0.5 million of payroll taxes on stock option exercises; and $19.3 million in activity related to investments accounted for under the equity method of accounting. Pro forma results for the quarter ended September 30, 2000 exclude the $48.6 million effect on gross profit of the purchase accounting increase in the value of E-TEK inventory at June 30, 2000; $8.9 million of acquired in-process research and development charges; $1,107.4 million of purchased intangibles amortization; $34.9 million of payroll taxes on stock option exercises; and $41.2 million of income related to investments accounted for under the equity method of accounting.
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SOURCE JDS Uniphase Corporation
-0- 10/25/2001
/CONTACT: Anthony R. Muller, Executive Vice President and CFO, 408-434-1800, or Alison Reynders, Director, Investor Relations, 408-428-6078, both of JDS Uniphase Corporation/
/Web site: jdsunph.com
Companies or Securities discussed in this article:
Symbol Name
NASDAQ:JDSU JDS Uniphase Corporation (NM) |
