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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Kent Rattey who wrote (232)	4/26/1999 8:34:00 PM
From: Roger Brown	Respond to of 24042

A combined brief analysis: By overlaying both firm's last reported quarters, one can get a better sense of what the next quarter will be for UNPH shareholders as the merger should be closed by June 30th. This includes converting JDS 2/28 Canadian$ into US$ at 1CA$=.68US$ (last reported quote on Yahoo Finance). The firm will be ~ 50% Uniphase and 50% JDS, thus the below numbers are purely combining each firm's Income Statements. The percents are percent of sales. Net Sales 157.9 Million US$ COGS 76.2 48.2% Gross Proft 81.7 51.8% R&D 14.0 8.9% SG&A 18.3 11.6% Other Income 2.2 1.4% Income 51.6 32.7% Taxes 17.8 11.3% Net Income 33.8 21.4% The firm is growing at a combined 82.3% (109.6% JDS, 55% UNPH). Net income as a percent of sales is solid at 21% (which might bump up some post merger). The quarterly sequential growth rate that supports 82.3% is 16.2%, thus our net income at the same tax rates might well be $39.3 Million next quarter, and then pro-forma from there. At $121.375, the firm has a market cap of $4.855 Billion (Double that with JDS and get $9.71 Billion for JDS Uniphase). Annualized Net Income for the past Q is 33.8*4=$135.2 Million. Shareholders of the combined firm are paying approximately 72 times annualized earnings (9.71/.1352). 72 times annualized earnings for a firm growing 82%. Sure I might have missed some stuff off the balance sheet, yet I did notice that R&D was not capitalized (expect for purchased R&D which is different) which is very conservative (ie, not aggressive) accounting.

To: Kent Rattey who wrote (232)	4/26/1999 8:41:00 PM
From: Curtis E. Bemis	Read Replies (1) \| Respond to of 24042

Snippets from the CC- Fascinating, upbeat CC. I scribbled notes and here a a few things of interest to me- Four areas of business- 1. Long haul terrestrial--WDM and growth in Europe is strong 2. Undersea/submarine- mentioned LVLT 3. Cable TV-WDM-strong growth-mentioned TCI/ATT 4. Metro uses are up and coming--2001 will be very strong In product space, to address the above-- UNPH is only supplier of the 980nm and 1480nm pump lasers, done at Zurich facility. Zurich is max'd and running at capacity. Ramping production from 50K units to 150K units per year. Alcatel is a 10% UNPH customer. Strong demand for 980nm pump lasers for EDFA. Source lasers at 1310 address the cable TV growth--TCI/ATT as example. UNPH have 30% market share in this area. OC-192 (10 Gbps) modulators, lasers and "wavelockers"-- Used for long haul terrestial communications. Distance up to 600km. UNPH is only supplier. One large telecomm mfgr (unidentified) purchases 9-14K units, laser, modulator, wavelocker. Will combine with JDS to deliver ADM capability. Projects 15% growth for Q4; 37 to 38 cents, plus 3 cents for not accounting for in-process R&D as per new SEC rules. Projects 50% growth for year 2000. Very impressive-- I suggest a listen to CC (if for nothing else, to correct my scribble notes)