I've wondered about the recent strength in JDS Fitel's stock, and have tried to tie it to Lucent's comments about the need for optical fiber networks and the fact their factories are working at full capacity. For anyone who's held the stock for a long time, this will be old information, but for newer shareholders, like myelf, you may find the following of interest:
1) 1995 press release mentions "AT&T Fitel":
lucent.com
MORRISTOWN, N.J. -- AT&T Network Systems today announced that it has reached the half-way mark on its global fiber and cable manufacturing expansion plan begun in 1991. By 1997, AT&T will have a five-fold increase in production capability.
"We attribute the rate of our expansion to growth experienced by our customers worldwide. Many domestic and international markets that were beginning to take shape only a few years ago are now enjoying unprecedented growth," said Luther Boggs, product management director, for the AT&T's optical fiber and cable business unit.
An integrated supplier of fiber and cable, AT&T is expanding its global manufacturing capabilities in all regions by investing over $300 million over the next few years.
In North America, alone, fiber and cable manufacturing capability is being increased at the AT&T's Norcross, Ga. plant and at two joint ventures, AT&T Litespec, Raleigh, N.C. and at AT&T Fitel, Carrolton, Ga.
2) 1996 press release reveals Lucent's new status:
lucent.com
MORRISTOWN, N.J. -- Lucent Technologies (NYSE: LU) has been awarded a $35 million contract to provide WorldCom Inc. (Nasdaq-NNM: WCOM) with TrueWave™ Single-Mode Optical Fiber and fiber optic cable for deployment in the company's nationwide long distance network. . . .
FITEL, a Lucent Technologies manufacturing joint venture based in Carrollton, Ga., will manufacture and supply the loose-tube fiber cable for the projects.
Fitel Lucent Technologies is a leading manufacturer of fiber optic cable, serving customers across the globe -- in more than 40 different countries -- from its headquarters in North America.
Our customers include many of the world's telephone companies, alternate access providers, long distance carriers, electric utilities, municipalities, government entities, CATV and private networks.
We manufacture "loose tube" fiber optic cable - proven cable that meets the test of time, that can withstand the rigors of installation, and can deliver the performance demanded by the world's growing communications networks. We also offer a complete line of fiber optic cable apparatus - from patchcords and pigtails to pre-connectorized cable and customized termination services.
Fitel Lucent Technologies is a joint venture company of Lucent Technologies and The Furukawa Electric Company, Ltd. - two of the world's technology leaders in fiber optic cable and telecommunications.
Lucent Technologies holds 51 percent ownership of Fitel Lucent Technologies and is the global systems and technologies company formed by AT&T during its restructuring in 1996. Furukawa Electric holds 49 percent ownership of Fitel Lucent Technologies and is a leading international manufacturer of power wire and cable, optical fiber and cable, nonferrous metals and other related technology products. 206.191.59.28 Electric launched the FITEL fiber optic cable manufacturing operation in Carrollton, Georgia USA, in 1986. "FITEL" stands for Furukawa International Telecommunications. . . .
3) Lucent Microelectronics and Furukawa:
lucent.com
4) Lucent PDF file with reference to JDS Fitel:
lucent.com
5) Affiliates and subsidiaries of Furukawa:
furukawa.co.jp
œNorth America
United States
Furukawa Electric North America Inc. (FENA)
Fitel Lucent Technologies (FLT)
United Technologies Furukawa Corporation (UTF)
International Components Technology Corporation (ICTC)
FEMCO Magnet Wire Corporation (FEMCO)
Furukawa Electric Technologies Inc.(FET)
Finet Technologies Inc. (FiNet)
Canada
Fitel Photomatrix Inc. (FMX)
JDS Fitel Inc. (JDS)
Philips-Fitel Inc. (PFI)
[Long list of others]
6) Furukawa holds majority interest in JDS Fitel:
206.191.59.28
The Furukawa Electric Co., Ltd
JDS FITEL is the exclusive distributor of Furukawa's FITEL line of products in North America and Europe. Since 1990, Furukawa has been JDS FITEL's largest shareholder. Furukawa is one of Japan's largest producers of fiberoptic cable and installation equipment.
206.191.59.28
1996
The company obtains ISO 9001 and 9002 certification. Common shares of JDS FITEL are issued for the first time, at $12.00 Cdn, on The Toronto Stock Exchange. Furukawa Electric Co., Ltd. retains about 55 percent ownership. The company establishes an office in New Jersey, USA, to conduct additional research and development. The company incorporates a subsidiary, VitroCom Inc., to acquire the assets and operations of Vitro Dynamics Inc. Also in New Jersey, VitroCom manufactures precision glass components and the acquisition secures the supply of material critical to JDS FITEL.
206.191.59.28
Mar-26-96
Nepean, Ontario (JDS) - JDS FITEL Inc. announced today that it has completed its initial public and secondary offering of 7,805,000 common shares of the Company at $12.00 per share. The $93,660,000 offering is comprised of a $46.2 million treasury offering and a $47.46 million secondary offering. After this offering, The Furukawa Electric Co., Ltd. of Japan retains a majority interest in JDS FITEL of about 55%. The offering's Underwriters have been granted an over-allotment option to acquire up to an additional 780,500 common shares for $12.00 per share.
7) JDS Fitel acquires Fitel-Photomatrix, giving Furukawa larger position in co:
jdsfitel.com
Sept-3-98
Nepean, Ontario (TSE:JDS) - JDS FITEL Inc. announced today that it acquired the remaining 32% equity interest in FITEL-Photomatrix (Canada) Inc. for a total purchase price of $13.6 million. The consideration for the purchase was $12.6 million in cash and 43,475 JDS FITEL common shares.
This latest transaction follows JDS FITEL's previously announced purchase of a 68% equity interest in FITEL-Photomatrix on May 29, 1998. JDS FITEL now holds 100% of the issued and outstanding shares of FITEL-Photomatrix.
The acquisition strengthens JDS FITEL's capabilities in electronics, software and packaging needed to accelerate the development of network interface reporting features for optical components and modules used in wavelength division multiplexing (WDM) and optical networking applications.
The earlier press release:
May-31-98
Nepean, Ontario (TSE:JDS) - JDS FITEL Inc. announced today that it acquired a 68% equity interest in FITEL-Photomatrix (Canada) Inc. from The Furukawa Electric Co., Ltd. for $20.4 million on May 29, 1998. The consideration for the purchase was 743,420 JDS FITEL common shares.
Founded in 1988, FITEL-Photomatrix designs and manufactures a range of products focused on telecommunications and installation support applications for local carrier networks. The portfolio includes wavelength transponders, low capacity wavelength division multiplexing (WDM) channel concentrators, ISDN multiplexers, and products designed for transmission path protection in fibers using optical switching.
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Since JDS Fitel doesn't announce its contracts, it's hard to find out how much business flows between it and Lucent, but I believe it's safe to say they're well-positioned through Furukawa.
Further proof of the sector strength, besides Lucent's factories working to capacity, is the current expansion to JDS Fitel's campus:
jdsfitel.com
Jan-8-98
Nepean, Ontario (TSE:JDS) - JDS FITEL Inc. announced today that it has completed the purchase of 54 acres of land in the South Merivale Business Park in Nepean, Ontario for approximately $4.7 million. The Company intends to construct a campus facility on the land to accommodate future expansion plans.
The initial phase of the development will consist of a 257,000 sq. ft. R&D, manufacturing and office facility. Construction of the initial phase is scheduled for completion in August 1998. In addition to the purchased land, JDS FITEL has an option to purchase up to an additional 53 acres of land in the South Merivale Business Park for possible future development.
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I don't think we need any of this proof of industry strength to validate our position, but I do think there are many who are just now finding out about photonics --- at the recent AEA conference here in San Diego I spoke with more than a few fund managers who were complete neophytes.--- and this week's analyst conference hosted by CS First Boston and another by Cowen and Co seem to have been catalysts.
At any rate, I don't think this week's strength can be tied to the Corning announcement as much as to the heightened awareness of the industry brought about by these conferences and specifically by McGinn's positive comments.
Incidentally, why doesn't JDS announce contracts? I find this puzzling. If they were traded on a US exchange, wouldn't they be required to based on their being material information?
Just curious.
Later --
Pat
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