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(JDSU) (TSX: JDU)
Fourth Quarter
-- GAAP Revenue and Non-GAAP Revenue of $439.3 million
-- GAAP Gross margin of 41.6%; Non-GAAP Gross margin of 45.0%
-- GAAP EPS of $(0.10); Non-GAAP EPS of $0.15
Fiscal 2012
-- GAAP Revenue of $1,682.1 million; Non-GAAP Revenue of $1,682.7 million
-- GAAP Gross margin of 42.2%; Non-GAAP Gross margin of 46.1%
-- GAAP EPS of $(0.25); Non-GAAP EPS of $0.59
JDSU (JDSU) (TSX: JDU) today reported results for its fourth
fiscal quarter and year ended June 30, 2012.
On a GAAP basis, net revenue for the fourth fiscal quarter of 2012
was $439.3 million and net loss was $(24.3) million, or $(0.10) per
share. This compares to net revenue of $409.2 million and net loss of
$(17.4) million, or $ (0.08) per share for the prior quarter, and net
revenue of $471.8 million and net income of $9.3 million, or $0.04
per share for the fourth fiscal quarter of 2011. The GAAP net loss
for the fourth fiscal quarter is inclusive of a $23.7 million
impairment charge of certain long-lived assets and $10.5 million of
insurance proceeds associated with the Thailand flood.
For fiscal 2012, net revenue of $1,682.1 million decreased 6.8% from
$1,804.5 million for fiscal 2011. The net loss for fiscal 2012 of
$(57.7) million, or $(0.25) per share, compared to a net income of
$71.6 million, or $0.31 per share, for fiscal 2011.
On a non-GAAP basis, net revenue for the fourth fiscal quarter of
2012 was $439.3 million and net income was $35.3 million or $0.15 per
share. This compares to non-GAAP net revenue of $409.2 million and
net income of $25.3 million, or $ 0.11 per share for the prior
quarter, and non-GAAP net revenue of $472.3 million and net income of
$53.9 million or $0.23 per share for the fourth fiscal quarter of
2011.
For fiscal 2012 non-GAAP net revenue of $1,682.7 million decreased
7.4% from $1,816.2 million for fiscal 2011. The non-GAAP net income
for fiscal 2012 of $137.3 million, or $0.59 per share, compared to a
non-GAAP net income of $216.7 million, or $0.93 per share, for fiscal
2011.
"JDSU’s execution on its strategic priorities is leading to market
share gains and financial leverage despite challenging economic
conditions," said Tom Waechter, JDSU’s President and Chief Executive
Officer. "Our focus on innovation and operational excellence
accelerated in fiscal 2012 and we look forward to advancing our
target business model in fiscal 2013."
Financial Overview - Fourth Fiscal Quarter Ended June 30, 2012
All numbers in this section are non-GAAP unless stated otherwise.
-- Net revenue of $439.3 million increased 7.4% compared to the prior
quarter and decreased 7.0% compared to the fourth quarter of fiscal
2011.
-- Gross margin was 45.0% compared to 45.5% in the prior quarter and
46.7% in the fourth quarter of fiscal 2011.
-- Operating margin was 8.7% compared to 7.3% in the prior quarter and
12.3% in the fourth quarter of fiscal 2011.
-- Communications Test and Measurement revenue of $196.2 million
increased by 10.3% compared to the prior quarter and decreased 7.1%
compared to the fourth quarter of fiscal 2011. Revenue from this
segment represented 44.7% of total net revenue.
-- Communications and Commercial Optical Products revenue of $185.0
million increased 6.9% compared to the prior quarter and decreased
8.6% compared to the fourth quarter of fiscal 2011. Revenue from this
segment represented 42.1% of total net revenue.
-- Optical Communications revenue of $155.4 million increased 8.5%
compared to the prior quarter and decreased 10.9% compared to the
fourth quarter of fiscal 2011.
-- Commercial Lasers revenue of $29.6 million decreased 1.0% compared
to the prior quarter and increased 6.5% compared to the fourth
quarter of fiscal 2011.
-- Advanced Optical Technologies revenue of $58.1 million decreased less
than 1% compared to the prior quarter and decreased 1% compared to the
fourth quarter of fiscal 2011. Revenue from this segment represented
13.2% of total net revenue.
-- Americas’ customers represented 54% of total net revenue for the
quarter. EMEA and Asia-Pacific customers represented 22% and 24%,
respectively, of total net revenue for the quarter.
-- The Company held $752.7 million in total cash and investments and
generated $38.0 million of cash from operations for the quarter ended
June 30, 2012.
Business Outlook
For the first quarter of fiscal 2013, ending September 29, 2012, the
Company expects non-GAAP net revenue to be in the range of $415 -
$435 million.
Conference Call
The Company will discuss these results and other related matters at
2:00 p.m. Pacific Time on August 14, 2012 in a live webcast, which
will also be archived for replay on the Company’s website at
www.jdsu.com/investors. The Company will post and distribute slides
outlining the Company’s latest financial results concurrent with this
earnings press release. These slides are supplementary and will not
be discussed during the earnings call. They will be posted on
www.jdsu.com/investors under the "Financial Information" section.
This press release is being furnished as a Current Report on Form 8-K
with the Securities and Exchange Commission, and will be available at
www.sec.gov.
About JDSU
JDSU (JDSU) (TSX: JDU) innovates and collaborates with
customers to build and operate the highest-performing and
highest-value networks in the world. Our diverse technology portfolio
also fights counterfeiting and enables high-powered commercial lasers
for a range of applications. Learn more about JDSU at www.jdsu.com
and follow us on JDSU Perspectives, Twitter, Facebook and YouTube.
Forward-Looking Statements
This press release contains, and the discussions in our subsequent
conference call will contain, 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: (i)
any anticipation or guidance as to future financial performance,
including future revenue, gross margin, operating expense, operating
margin, cash flow, market share and other financial metrics, and the
impact and duration of certain market conditions; and (ii) the
Company’s beliefs regarding the purpose, usefulness and efficacy of
non-GAAP results and the measures and items the Company includes in
the same, as well as any benefits to investors the Company believes
its non-GAAP measures provide. These forward-looking statements
involve risks and uncertainties that could cause actual results to
differ materially from those projected. In particular, the Company’s
ability to predict future financial performance continues to be
difficult due to, among other things: (a) continuing general limited
visibility across many of our product lines, as well as the migration
to vendor managed inventory programs; (b) quarter-over-quarter
product mix fluctuations, which can materially impact profitability
measures due to the broad gross margin range across our portfolio;
(c) consolidation of our customer base, which, in the shorter term
limits demand visibility, and in the longer term, could reduce our
business potential; (d) continued decline of average selling prices
across our businesses; (e) notable seasonality and a significant
level of in-quarter book-and-ship business experience by our
Communications Test and Measurement business; (f) various product and
manufacturing transfers, site consolidations and product
discontinuances in which we are currently engaged, that have caused
and may cause short term disruptions; (g) the ability of our
suppliers and contract manufacturers to meet production and delivery
requirements to our forecasted demand; and (h) inherent uncertainty
related to global markets and the effect of such markets on demand
for our products.
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 fiscal year ended July
2, 2011 filed with the Securities and Exchange Commission. The
forward-looking statements contained in this news release are made as
of the date hereof and the Company does not assume any obligation to
update the reasons why actual results could differ materially from
those projected in the forward-looking statements.
The following financial tables are presented in accordance with GAAP,
unless otherwise specified.
-SELECTED FINANCIAL DATA-
JDS UNIPHASE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
-------------------- --------------------
June 30, July 2, June 30, July 2,
2012 2011 2012 2011
--------- --------- --------- ---------
Net revenue $ 439.3 $ 471.8 $ 1,682.1 $ 1,804.5
Cost of sales 241.8 253.3 913.5 956.7
Amortization of acquired
technologies 14.8 14.4 58.6 56.9
Impairment of acquired developed
technologies - - - -
--------- --------- --------- ---------
Gross profit 182.7 204.1 710.0 790.9
--------- --------- --------- ---------
Operating expenses:
Research and development 64.3 62.7 246.0 239.9
Selling, general and
administrative 107.4 109.7 429.0 437.1
Amortization of other
intangibles 7.3 7.6 28.9 32.2
Impairment of goodwill - - - -
Loss on disposal and
impairment of long-lived
assets 23.9 1.3 24.8 1.5
Restructuring and related
charges 5.0 4.4 12.5 14.8
--------- --------- --------- ---------
Total operating expenses 207.9 185.7 741.2 725.5
--------- --------- --------- ---------
Loss (income) from operations (25.2) 18.4 (31.2) 65.4
Interest and other income
(expense), net 10.3 0.4 11.2 2.2
Interest expense (7.2) (6.5) (27.3) (25.4)
Impairment of investments - - - -
Gain on sale of investments, net 0.3 - 1.6 3.4
--------- --------- --------- ---------
Loss (income) before income
taxes (21.8) 12.3 (45.7) 45.6
Provision for (benefit from)
income taxes 2.5 3.0 12.0 (26.0)
--------- --------- --------- ---------
Net (loss) income $ (24.3) $ 9.3 $ (57.7) $ 71.6
========= ========= ========= =========
Net loss (income) per share
from:
Basic $ (0.10) $ 0.04 $ (0.25) $ 0.32
Diluted $ (0.10) $ 0.04 $ (0.25) $ 0.31
Shares used in per share
calculation:
Basic 231.7 227.2 230.0 224.4
Diluted 231.7 235.7 230.0 232.6
JDS UNIPHASE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)
June 30, July 2,
2012 2011
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 401.1 $ 395.4
Short-term investments 320.5 297.4
Restricted cash 31.1 35.9
Accounts receivable, net 305.8 334.0
Inventories, net 175.4 171.2
Refundable income taxes - -
Prepayments and other current assets 77.4 70.2
--------- ---------
Total current assets 1,311.3 1,304.1
--------- ---------
Property, plant and equipment, net 253.0 248.9
Deferred income taxes - -
Goodwill 68.7 67.4
Intangible assets, net 178.9 275.4
Long-term investments 1.3 2.9
Other non-current assets 46.9 52.0
--------- ---------
Total assets $ 1,860.1 $ 1,950.7
========= =========
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 117.6 $ 145.4
Short-term debt 292.8 -
Accrued payroll and related expenses 68.6 76.7
Income taxes payable 23.7 21.5
Deferred revenue 93.6 83.5
Accrued expenses 37.0 50.5
Other current liabilities 36.4 41.0
--------- ---------
Total current liabilities 669.7 418.6
--------- ---------
Long-term debt - 285.8
Other non-current liabilities 152.7 180.9
Total stockholders’ equity 1,037.7 1,065.4
--------- ---------
Total liabilities and stockholders’ equity $ 1,860.1 $ 1,950.7
========= =========
JDS UNIPHASE CORPORATION
REPORTABLE SEGMENT INFORMATION
(in millions, unaudited)
Three Months Ended Twelve Months Ended
-------------------- --------------------
June 30, July 2, June 30, July 2,
2012 2011 2012 2011
--------- --------- --------- ---------
Net revenue:
Communications Test and
Measurement $ 196.2 $ 211.3 $ 755.4 $ 814.7
Communications and Commercial
Optical Products 185.0 202.3 701.6 770.8
Advanced Optical Technologies 58.1 58.7 225.7 230.7
Deferred revenue related to
purchase accounting
adjustment 0.0 (0.5) (0.6) (11.7)
--------- --------- --------- ---------
Net revenue $ 439.3 $ 471.8 $ 1,682.1 $ 1,804.5
========= ========= ========= =========
Operating income (loss):
Communications Test and
Measurement $ 26.1 $ 30.4 $ 98.3 $ 119.4
Communications and Commercial
Optical Products 15.7 32.2 72.0 130.0
Advanced Optical Technologies 19.4 20.0 72.7 77.7
Corporate (23.0) (24.4) (89.3) (96.4)
--------- --------- --------- ---------
Total segment operating
income 38.2 58.2 153.7 230.7
--------- --------- --------- ---------
Unallocated amounts:
Stock based compensation (11.5) (11.5) (49.1) (41.4)
Acquisition-related charges
and amortization of
intangibles (21.2) (22.5) (87.2) (100.9)
Impairment of goodwill - - - -
(Loss) on disposal and
impairment of long-lived
assets (23.9) (1.3) (24.8) (1.5)
Restructuring and related
charges (5.0) (4.4) (12.5) (14.8)
Realignment and other
charges (1.8) (0.1) (11.3) (6.7)
Interest and other income
(expense), net 10.4 0.4 11.3 2.2
Interest expense (7.2) (6.5) (27.3) (25.4)
Gain on sale of investments,
net 0.3 - 1.6 3.4
Impairment of investments - - - -
--------- --------- --------- ---------
(Loss) gain before income
taxes $ (21.7) $ 12.3 $ (45.6) $ 45.6
========= ========= ========= =========
Use of Non-GAAP (Adjusted) Financial Measures
The Company provides non-GAAP net revenue, non-GAAP net income (loss)
and non-GAAP net income (loss) per share financial measures as
supplemental information regarding the Company’s operational
performance. The Company evaluates Company-wide segment performance
using, among other things, the measures disclosed in this release for
the purposes of evaluating the Company’s historical and prospective
financial performance, as well as its performance relative to its
competitors. Specifically, management uses these items to further its
own understanding of the Company’s core operating performance. The
Company believes its "core operating performance" represents the
Company’s performance in the ordinary, ongoing and customary course
of its operations. Accordingly, management excludes from "core
operating performance" those items, such as those relating to
restructuring, investing, stock-based compensation expense and
non-cash activities that management does not believe are reflective
of such ordinary, ongoing and customary course activities.
The Company believes that providing this information to its
investors, in addition to the GAAP presentation, allows investors to
see Company results "through the eyes" of management. The Company
further believes that providing this information allows Company
investors to both better understand the Company’s financial
performance and, importantly, to evaluate the efficacy of the
methodology and information used by management to evaluate and
measure such performance.
The non-GAAP adjustments described in this release have historically
been excluded by the Company from its non-GAAP measures. The non-GAAP
adjustments, and the basis for excluding them, are outlined below.
Revenue from acquisition related deferred revenue: The Company
excludes the fair value adjustment to acquisition related deferred
revenue when calculating non-GAAP revenue. The Company believes that
the non-GAAP revenue provides useful information for the investors as
they review for underlying trends in the business and facilitate the
investors’ comparisons of the Company’s revenue performance with
prior and future periods and to the Company’s peers.
Cost of sales, costs of research and development and costs of
selling, general and administrative: The Company has incurred
periodic expenses, included in its GAAP presentation of gross margin
and operating expenses that may include (i) additional depreciation
from changes in estimated useful life and the write-down of certain
property and equipment that has been identified for disposal but
remained in use until the date of disposal, (ii) workforce related
charges such as severance, retention bonuses and employee relocation
costs related to a formal restructuring plan, (iii) costs for
facilities not required for ongoing operations, and costs related to
the relocation of certain equipment from these facilities and/or
contract manufacturer facilities, (iv) stock-based compensation under
authoritative guidance, and (v) other non-recurring charges
comprising mainly of updates for environmental obligation reserves,
one-time acquisition, integration, litigation contingency and other
costs. The Company excludes these items for the purposes of
calculating non-GAAP net income (loss) and non-GAAP net income (loss)
per share. The Company believes that the impact of these items does
not reflect expected future gross profits or operating expenses nor
does the Company believe that they provide a meaningful evaluation of
current versus past core operational performance.
Amortization of intangibles from acquisitions: The Company records
amortization expense related to intangibles. These expenses are
included in its GAAP presentation of cost of sales and operating
expense, related to the various acquisitions it has made. The Company
excludes these items for the purposes of calculating non-GAAP net
income (loss) and non-GAAP net income (loss) per share. The Company
believes that eliminating this expense from operating income is
useful to investors because it believes the GAAP measure, alone, is
not indicative of its "core operating performance" on cost of sales
and operating expenses.
Impairment of long-lived assets: The Company incurs costs, included
in its GAAP presentation of operating expense, related to the
impairment of long-lived assets in accordance with authoritative
guidance. These adjustments typically occur when the financial
performance of the business utilizing the affected assets falls below
the carrying value of the long lived assets. Accordingly, the related
asset value impairments are non-recurring and generally
unpredictable. The Company believes that eliminating this item, for
the purposes of calculating non-GAAP net income (loss) and non-GAAP
net income (loss) per share, is useful to investors. We believe this
non-GAAP adjustment will assist investors to compare current versus
past performance. The Company’s historical adjustments to the
carrying value of certain of its assets under authoritative guidance,
as well as the methodology used by the Company in assessing the same,
are more particularly described in its annual report on Form 10-K.
Other income and non cash interest expense: From time to time, the
Company may receive proceeds for various insurance claims which are
included under Interest and other income (expense), net. The Company
incurs non-cash interest expense accounted for under the
authoritative guidance on convertible debt instruments, which
requires to separately account for the liability (debt) and equity
(conversion option) components of such instruments. The Company
believes that eliminating these items for the purposes of calculating
non-GAAP net income (loss) and non-GAAP net income (loss) per share,
is useful to investors. The Company believes this GAAP measure is not
indicative of its "core operating performance".
Gain or loss on sale of available for-sale investments and impairment
of investments: The Company has sold investments or adjusted the
value of investments from time to time based on market conditions.
The Company’s activities in this respect are included in the
Company’s GAAP presentation of net income (loss) and net income
(loss) per share. The Company’s core business does not include making
financial investments in third parties, and such investments do not
constitute a material portion of the Company’s assets. Moreover, the
amount and timing of gains and losses and adjustments to the value of
investments are unpredictable. Consequently, the Company believes
that gains or losses on these sales and adjustments to the value of
investments are not related to the ongoing core business and
operating performance of the Company. Impairment of investments is
included under Interest and other income (expense), net. The Company
excludes these items for the purposes of calculating non-GAAP net
income (loss) and non-GAAP net income (loss) per share. The Company
believes this GAAP measure is not indicative of the Company’s "core
operating performance".
In fiscal 2011, the Company included a tax benefit related to a
release of deferred tax valuation allowance for a foreign
jurisdiction. The Company excluded this item for the purposes of
calculating non-GAAP net income and non-GAAP net income per share.
The Company believes this GAAP measure does not provide a meaningful
evaluation of current versus past "core operational performance".
Non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles in the
United States. The GAAP measure most directly comparable to non-GAAP
net income (loss) is net income (loss). The GAAP measure most
directly comparable to non-GAAP net income (loss) per share is net
income (loss) per share. The Company believes that these GAAP
measures alone are not indicative of its core operating expenses and
performance.
The following tables reconcile GAAP measures to non-GAAP measures:
JDS UNIPHASE CORPORATION
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in millions, except per share data)
(unaudited)
Three Months Ended
---------------------------------------------
June 30, July 2,
2012 2011
---------------------- ---------------------
Net income Diluted Net income Diluted
(loss) EPS (loss) EPS
---------- ---------- ---------- ----------
GAAP measures $ (24.3) $ (0.10) $ 9.3 $ 0.04
Items reconciling GAAP net
income and EPS to non-GAAP
net income and EPS:
Related to net revenues:
Deferral of revenues
related to purchase
accounting - - 0.5 -
Related to cost of sales:
Stock-based compensation
expenses 2.3 0.01 1.4 0.01
Other non-recurring
charges (2.1) (0.01) 0.1 -
Amortization of acquired
developed technologies 14.8 0.06 14.4 0.06
---------- ---------- ---------- ----------
Total related to gross
profit 15.0 0.06 16.4 0.07
---------- ---------- ---------- ----------
Related to operating
expenses:
Research and development:
Stock-based
compensation expenses 2.8 0.01 2.4 0.01
Other non-recurring
charges - - - -
Selling, general and
administrative:
Stock-based
compensation expenses 6.5 0.03 7.7 0.04
Other non-recurring
charges 2.9 0.01 - -
Amortization of
intangibles 7.3 0.03 7.6 0.03
Impairment of goodwill - - - -
Loss on disposal and
impairment of long-lived
assets 23.9 0.11 1.3 -
Restructuring and related
charges 5.0 0.02 4.4 0.02
---------- ---------- ---------- ----------
Total related to operating
expenses 48.4 0.21 23.4 0.10
---------- ---------- ---------- ----------
Interest and other income
(expense), net (8.6) (0.04) - -
Non-cash interest expense 5.1 0.02 4.8 0.02
(Gain) on sale of
investments, net (0.3) - - -
Impairment of investments - - - -
Benefit for income taxes - - - -
Discontinued operations - - - -
---------- ---------- ---------- ----------
Total related to net income
& EPS 59.6 0.25 44.6 0.19
---------- ---------- ---------- ----------
Non-GAAP measures $ 35.3 $ 0.15 $ 53.9 $ 0.23
========== ========== ========== ==========
Twelve Months Ended
----------------------------------------------
June 30, July 2,
2012 2011
---------------------- ----------------------
Net income Diluted Net income Diluted
(loss) EPS (loss) EPS
---------- ---------- ---------- ----------
GAAP measures $ (57.7) $ (0.25) $ 71.6 $ 0.31
Items reconciling GAAP net
income and EPS to non-GAAP
net income and EPS:
Related to net revenues:
Deferral of revenues
related to purchase
accounting 0.6 - 11.7 0.05
Related to cost of sales:
Stock-based compensation
expenses 7.8 0.03 5.4 0.02
Other non-recurring
charges (0.9) - 0.5 -
Amortization of acquired
developed technologies 58.6 0.25 56.9 0.25
---------- ---------- ---------- ----------
Total related to gross
profit 66.1 0.28 74.5 0.32
---------- ---------- ---------- ----------
Related to operating
expenses:
Research and development:
Stock-based
compensation expenses 11.6 0.05 8.7 0.04
Other non-recurring
charges - - 0.2 -
Selling, general and
administrative:
Stock-based
compensation expenses 29.7 0.13 27.3 0.12
Other non-recurring
charges 11.3 0.05 6.1 0.03
Amortization of
intangibles 28.9 0.12 32.2 0.14
Impairment of goodwill - - - -
Loss on disposal and
impairment of long-lived
assets 24.8 0.11 1.5 -
Restructuring and related
charges 12.5 0.05 14.8 0.06
---------- ---------- ---------- ----------
Total related to operating
expenses 118.8 0.51 90.8 0.38
---------- ---------- ---------- ----------
Interest and other income
(expense), net (8.3) (0.04) (0.7) -
Non-cash interest expense 20.0 0.09 18.8 0.09
(Gain) on sale of
investments, net (1.6) - (3.4) (0.02)
Impairment of investments - - - -
Benefit for income taxes - - (34.9) (0.15)
Discontinued operations - - - -
---------- ---------- ---------- ----------
Total related to net income
& EPS 195.0 0.84 145.1 0.62
---------- ---------- ---------- ----------
Non-GAAP measures $ 137.3 $ 0.59 $ 216.7 $ 0.93
========== ========== ========== ==========
Note: Certain totals may not add due to rounding
JDS UNIPHASE CORPORATION
RECONCILIATION OF GAAP NET REVENUE TO NON-GAAP NET REVENUE
(in millions, unaudited)
Three Months Ended Twelve Months Ended
------------------- -------------------
June 30, July 2, June 30, July 2,
2012 2011 2012 2011
--------- --------- --------- ---------
GAAP net revenue $ 439.3 $ 471.8 $ 1,682.1 $ 1,804.5
Deferral of revenues related to
purchase accounting adjustment - 0.5 0.6 11.7
--------- --------- --------- ---------
Non-GAAP net revenue $ 439.3 $ 472.3 $ 1,682.7 $ 1,816.2
========= ========= ========= =========
Contact Information
Investors:
Cherryl Valenzuela
408-546-4521
cherryl.valenzuela@jdsu.com
Press:
Jim Monroe
240-404-1922
jim.monroe@jdsu.com
SOURCE: JDSU
mailto:cherryl.valenzuela@jdsu.com
mailto:jim.monroe@jdsu.com
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