Company Press Release
Uniphase Announces Third Quarter Results
Company Reports 105% Growth in Telecommunications Sales from Prior Year and Significant Progress in Pending Merger with JDS FITEL
SAN JOSE, Calif.--(BUSINESS WIRE)--April 26, 1999--Uniphase Corporation (Nasdaq:UNPH - news) today reported net sales for its third quarter ended March 31, 1999 were a record $74.5 million, up 55% from the $47.9 million reported in the same period of fiscal 1998. Net sales for the nine months ended March 31, 1999 were $195.7 million, 47% above the $133.4 million reported in the same period of the prior year. Sales of the Company's telecommunications and cable TV products for the third quarter of fiscal 1999 increased 105% over the same period of fiscal 1998 and were 26% higher than the second quarter ended December 31, 1998. Sales of telecommunications and cable TV products for the first nine months of 1999 were 80% above the comparable prior year period.
On a pro forma basis, excluding acquisition and divestiture related charges and the amortization of purchased intangible assets and goodwill, and as illustrated in the table below Uniphase had net income of $15.6 million or $0.36 per diluted share for the quarter ended March 31, 1999, an increase in net income of 65% from the $9.4 million or $0.25 per diluted share on a pro forma basis for the prior year's third quarter. Pro forma earnings per share for the quarter were $0.33 after deducting the amortization of purchased intangibles prior to the change in purchase price allocation for the Uniphase Netherlands acquisition described below and using the higher tax rate of the prior calendar quarter. The impact of excluded acquisition and divestiture costs is summarized in the Company's pro forma financial tables that follow in this release.
(in thousands, except per share amounts) Three months ended
March 31,
1999 1998
---- ----
Net sales $74,502 $47,922
Gross profit 38,231 24,739
Income from operations(1) 21,829 13,606
Income before income taxes 22,714 14,355
Net income $15,559 $9,421
Net income per diluted share $ 0.36 $ 0.25
Diluted weighted avg. shares outstanding 43,404 38,186
(1) Income from operations for the quarter ended March 31, 1999
excludes $500 resulting from a change in estimate of the costs
recorded in connection with the Ultrapointe asset sale in the quarter
ended December 31, 1998 and $3,905 of purchased intangibles
amortization. Income from operations for the quarter ended March 31,
1998 excludes $457 of purchased intangibles amortization.
Historical financial information has been restated to reflect the merger during the second quarter with Broadband Communications Products, Inc. (''BCP'') in a transaction accounted for as a pooling of interests. Results for the quarter and nine months ended March 31, 1999 include sales of Uniphase Netherlands, which was acquired on June 9, 1998 in a transaction accounted for as a purchase.
In light of the SEC's current interpretation of the accounting for acquired in-process research and development, during the third quarter Uniphase reviewed the accounting treatment used in connection with its prior acquisition of in-process research and development. This was conducted pursuant to SEC review of a registration statement filed during the third quarter in connection with the BCP merger. As a result and with the SEC's concurrence, Uniphase has reduced the in-process research and development one-time charge taken in connection with the acquisition of Uniphase Netherlands in the quarter ended June 30, 1998 from $93.0 million to $33.7 million and adjusted the amortization of related intangible assets for the first and second quarters of 1999. The change in purchase price allocation is estimated to result in approximately a 2% increase in total intangible assets the Company expects to report following its pending merger with JDS FITEL.
After giving effect to these adjustments and amortization of $1.8 million in previously recorded goodwill and other intangibles, Uniphase reported net income for the quarter of $12.8 million or $0.29 per diluted share on 43.4 million weighted average shares outstanding. Net income for the first nine months of fiscal 1999 was $23.3 million or $0.55 per diluted share as calculated on the same basis. Results for the quarter and first nine months of fiscal 1999 reflect a reduction in the Company's effective tax rate attributable to a significant increase in earnings in a foreign subsidiary, which has a significantly lower tax rate.
Uniphase also reported significant progress toward closing its pending merger with JDS FITEL. The waiting period under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended, has expired, and no further anti-trust approvals for the merger are required in the United States, Canada or elsewhere. The remaining regulatory activities consist of final clearances and approvals from the Securities and Exchange Commission and Canadian authorities under the Investment Canada Act. Based on progress to date, Uniphase expects the merger with JDS FITEL to close on or before June 30, 1999.
''We are anticipating the closing of our merger with JDS and the successful integration of our operations,'' said Kevin Kalkhoven, Chairman and Chief Executive Officer of Uniphase. ''We feel even more strongly today about the benefits that this combination can provide to the customers and businesses of both companies.''
Jozef Straus, JDS FITEL President and Chief Executive Officer added, ''We at JDS FITEL are very excited about the merger and we look forward to joining forces with Uniphase to pursue emerging opportunities in this very dynamic industry. The planning for the integration is progressing well and we will be fully positioned to implement our plans immediately following the merger.''
Uniphase Corporation is an optoelectronics company that designs, develops, manufactures and markets fiber optic telecommunications components, modules and lasers. The Company's telecommunications products include semiconductor lasers, high-speed external modulators, transmitters, fiber Bragg gratings and optical modules for fiber optic networks in the telecommunications and cable television industries. The Company's laser division produces laser subsystems for a broad range of OEM applications, including biotechnology, industrial process control and measurement, graphics and printing, and semiconductor equipment.
Uniphase employs approximately 1,300 people worldwide and is headquartered in San Jose, Calif. Its stock is traded on the Nasdaq National Market under the symbol UNPH. The Uniphase website address is www.uniphase.com.
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These statements may be identified by their use of forward-looking terminology such as ''believes,'' ''expects,'' ''may,'' ''should,'' ''would,'' ''will,'' ''intends,'' ''plans,'' ''estimates,'' ''anticipates'' and similar words. Such forward-looking statements include, but are not limited to, statements regarding the expectations, intentions or strategies of Uniphase or JDS FITEL, possible benefits to Uniphase or JDS FITEL as a result of the proposed transaction described above, the likelihood that such transaction will be successfully completed, and the timing of such completion. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected. Risks and uncertainties that could cause actual results to differ materially from such forward-looking statements, include, but are not limited to the impact on operating results of purchase accounting treatment, the speed of integration of the two businesses, variability and uncertainty of quarterly operating results, difficulty in manufacturing Uniphase's and JDS FITEL's products, transaction risks such as unanticipated regulatory or other problems in completing the JDS FITEL merger, customer concentration, impact of continued industry competitive pressures, success of strategic initiatives, continued industry consolidation, conflicting patents and intellectual property rights of third parties and other factors discussed from time to time in reports filed by Uniphase with the Securities and Exchange Commission. The forward-looking statements contained in this news release are made as of the date hereof and Uniphase assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ materially from those projected in the forward-looking statements.
UNIPHASE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three months ended Nine months ended
March 31, March 31,
1999 1998 1999 1998
---- ---- ---- ----
Net sales $ 74,502 $ 47,922 $195,694 $133,423
Cost of sales 36,271 23,183 98,707 66,945
-------- -------- -------- --------
Gross profit 38,231 24,739 96,987 66,478
Operating expenses
Research and development 7,326 4,050 18,774 10,418
Selling, general, and
administrative 9,076 7,083 24,539 21,293
Amortization of purchased
intangibles 3,905 457 11,807 1,349
Merger costs -- -- 5,877 --
Loss on sale of product line 500 -- 882 --
Acquired in-process research
and development -- -- -- 6,568
-------- -------- -------- --------
Total operating expenses 20,807 11,590 61,879 39,628
-------- -------- -------- --------
Income from operations 17,424 13,149 35,108 26,850
Interest and other income,
net 885 749 2,648 2,271
-------- -------- -------- --------
Income before income taxes 18,309 13,898 37,756 29,121
Income tax expense 5,539 4,635 14,437 12,028
-------- -------- -------- --------
Net income $ 12,770 $ 9,263 $ 23,319 $ 17,093
======== ======== ======== ========
Net income per share $ 0.32 $ 0.26 $ 0.59 $ 0.49
======== ======== ======== ========
Net income per share -
diluted basis $ 0.29 $ 0.24 $ 0.55 $ 0.45
======== ======== ======== ========
Number of weighted avg.
shares outstanding 40,038 35,489 39,556 35,139
Number of weighted avg.
shares and equivalents 43,404 38,186 42,659 37,828
Note: As a result of a change in the purchase price allocation for the
Uniphase Netherlands acquisition, Uniphase's net income for the first
quarter ended September 30, 1998 was adjusted to $8,148 or $0.19 per
diluted share and net income for the second quarter ended December 31,
1998 was adjusted to $2,401 or $0.06 per diluted share.
UNIPHASE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, June 30,
1999 1998
---- ----
Current assets: (unaudited)
Cash, cash equivalents and short-term
investments $113,094 $95,356
Accounts receivable, less allowances
for doubtful accounts 51,773 41,922
Inventories 26,680 22,137
Prepaid expenses and other current assets 10,358 9,180
------ -----
Total current assets 201,905 168,595
Property, plant, and equipment, net 79,800 57,191
Intangibles and other assets 101,167 107,085
------- -------
TOTAL ASSETS $382,872 $332,871
======== ========
Current liabilities:
Accounts payable $19,566 $15,784
Accrued payroll and related expenses 8,443 7,793
Income taxes payable 269 7,697
Other accrued expenses 11,650 15,893
------ ------
Total current liabilities 39,928 47,167
Other non-current liabilities 7,629 5,666
Stockholders' equity:
Common stock 40 39
Additional paid-in capital 340,655 307,447
Accumulated deficit and other stockholders'
equity (5,380) (27,448)
------- -------
Total stockholders' equity 335,315 280,038
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $382,872 $332,871
======== ========
Note: Intangibles and other assets at June 30, 1998 have been adjusted
to reflect a change in the purchase price allocation for the Uniphase
Netherlands acquisition.
UNIPHASE CORPORATION
PRO FORMA STATEMENTS OF OPERATIONS
IMPACT OF ACQUISITION AND DIVESTITURE
RELATED CHARGES ON REPORTED NET INCOME
(in thousands, except per share data)
(unaudited)
Three months ended March 31, 1999
Pro Forma
As reported Adjustments Pro Forma
Net sales $74,502 $ -- $74,502
Cost of sales 36,271 -- 36,271
------ -- ------
Gross profit 38,231 -- 38,231
Total operating expenses(2) 20,807 (4,405) 16,402
------ ------ ------
Income from operations 17,424 4,405 21,829
Interest and other income, net 885 -- 885
------ ----- ------
Income before income taxes 18,309 4,405 22,714
Income tax expense(2) 5,539 1,616 7,155
----- ----- ------
Net income $12,770 $2,789 $15,559
======= ======= =======
Net income per share $ 0.32 $ 0.39
====== ======
Net income per share -
diluted basis $ 0.29 $ 0.36
====== ======
Number of weighted avg. shares
outstanding 40,038 40,038
Number of weighted avg. shares and
equivalents 43,404 43,404
Three months ended March 31, 1998
Pro Forma
As reported Adjustments Pro Forma
Net sales $47,922 $ -- $47,922
Cost of sales 23,183 -- 23,183
------ -- ------
Gross profit 24,739 -- 24,739
Total operating expenses(2) 11,590 (457) 11,133
------ ---- ------
Income from operations 13,149 457 13,606
Interest and other income, net 749 -- 749
------ -- ---
Income before income taxes 13,898 457 14,355
Income tax expense(2) 4,635 299 4,934
----- --- -----
Net income $9,263 $ 158 $9,421
====== ===== ======
Net income per share $ 0.26 $ 0.27
====== ======
Net income per share - diluted basis $ 0.24 $ 0.25
====== ======
Number of weighted avg. shares
outstanding 35,489 35,489
Number of weighted avg. shares and
equivalents 38,186 38,186
(2) The pro forma adjustments reflect the exclusion of acquisition and
divestiture related charges including amortization of purchased
intangibles and a change in estimate of the costs recorded upon the
sale of Ultrapointe assets in the quarter ended December 31, 1998. The
pro-forma adjustments also reflect the impact of acquisition and
divestiture related charges on income tax expense.
UNIPHASE CORPORATION
PRO FORMA STATEMENTS OF OPERATIONS
IMPACT OF ACQUISITION AND DIVESTITURE
RELATED CHARGES ON REPORTED NET INCOME
(in thousands, except per share data)
(unaudited)
Nine months ended March 31, 1999
Pro Forma
As reported Adjustments Pro Forma
Net sales $195,694 $ -- $195,694
Cost of sales(3) 98,707 (1,595) 97,112
------ ------ ------
Gross profit 96,987 1,595 98,582
Total operating expenses(3) 61,879 (18,566) 43,313
------ ------- ------
Income from operations 35,108 20,161 55,269
Interest and other income, net 2,648 -- 2,648
------ ----- ------
Income before income taxes 37,756 20,161 57,917
Income tax expense(3) 14,437 3,807 18,244
------ ----- ------
Net income $23,319 $16,354 $ 39,673
======= ======= ========
Net income per share $ 0.59 $ 1.00
======= ======
Net income per share - diluted
basis $ 0.55 $ 0.93
======= ======
Number of weighted avg. shares
outstanding 39,556 39,556
Number of weighted avg. shares and
equivalents 42,659 42,659
Nine months ended March 31, 1998
Pro Forma
As reported Adjustments Pro Forma
Net sales $133,423 $ -- $133,423
Cost of sales 66,945 -- 66,945
------ -- ------
Gross profit 66,478 -- 66,478
Total operating expenses(3) 39,628 (7,917) 31,711
------ ------- ------
Income from operations 26,850 7,917 34,767
Interest and other income, net 2,271 -- 2,271
------ -- -----
Income before income taxes 29,121 7,917 37,038
Income tax expense(3) 12,028 642 12,670
------ --- ------
Net income $17,093 $ 7,275 $24,368
======= ======= =======
Net income per share $ 0.49 $ 0.69
======= =======
Net income per share - diluted
basis $ 0.45 $ 0.64
======= =======
Number of weighted avg. shares
outstanding 35,139 35,139
Number of weighted avg. shares
and equivalents 37,828 37,828
(3) The pro forma adjustments reflect the exclusion of acquisition
and divestiture related charges for amortization of purchased
intangibles, acquired in-process research and development, merger
costs, and the costs and expenses associated with the sale of a
product line. The pro-forma adjustments also reflect the impact of
acquisition-related charges on income tax expense.
--------------------------------------------------------------------------------
Contact:
Uniphase Corporation
Kevin N. Kalkhoven or Anthony R. Muller, 408/434-1800
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