Bookham, Inc. (Nasdaq: BKHM), a leading provider of optical components, modules and subsystems, announced financial results for its third quarter of fiscal 2007, ended March 31, 2007. Revenue for the third quarter of fiscal 2007 was $45.0 million, compared with $56.3 million in the second quarter of fiscal 2007, and $53.4 million in the third quarter of fiscal 2006. Revenue from customers other than Nortel was $41.9 million, essentially flat with the prior quarter and up approximately 43 percent compared with the third quarter of fiscal 2006.
Under generally accepted accounting principles (GAAP), gross margin in the third quarter was 10 percent compared with GAAP gross margin of 15 percent in the second quarter and 11 percent in the same period a year ago.
Third quarter GAAP net loss was $24.3 million, or a net loss of $0.35 per share. This compares with a GAAP net loss of $21.3 million, or $0.31 per share, in the second quarter and a GAAP net loss of $48.0 million, or $0.90 per share, in the third quarter of fiscal 2006. Third quarter fiscal 2006 GAAP net loss included a charge of $18.6 million associated with the retirement of the Company’s long-term debt and a $7.2 million charge for settlement of litigation.
Bookham provides certain supplemental non-GAAP financial measures, including non-GAAP net loss excluding non-cash stock and option-based compensation, charges such as impairment and restructuring, litigation settlement/recovery, early debt extinguishment, and acquired in-process research and development, along with a measure of Adjusted EBITDA, that also excludes these charges, plus the impact of taxes, net interest income/expense, depreciation and amortization, and net foreign currency translation gain/loss, to provide investors with the opportunity to use the same financial metrics as management to evaluate the Company’s performance. Bookham also believes these non-GAAP measures enhance the comparability and transparency of results for the period. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.
Third quarter non-GAAP net loss, which excludes non-cash stock and option-based compensation of $1.3 million, was $18.7 million, or a net loss of $0.27 per share. This compares with a non-GAAP net loss of $18.1 million, or a net loss of $0.26 per share in the second quarter.
A reconciliation table of GAAP to non-GAAP measures is included in the financial tables section of this release and further discussion of these measures is also included later in this release. Adjusted EBITDA in the third quarter was negative $14.1 million, compared with an Adjusted EBITDA of negative $10.4 million in the prior quarter and negative $10.7 million in the same period a year ago.
Cash, cash equivalents and restricted cash at the end of the third quarter were $61.7 million, compared with $51.5 million at the end of the second quarter. Third quarter cash balances include $26.9 million of net proceeds from the private placement completed in March 2007.
“We continued to make good progress diversifying our customer base with revenue from customers other than Nortel increasing 43 percent over the same period a year ago,” said Dr. Peter Bordui, chairman of the board and interim president and CEO of Bookham, Inc. “In addition, sales from several recently introduced products continue to ramp, which we expect to translate into additional revenue growth in the second half of calendar 2007.”
“We recently strengthened our financial position by raising approximately $27 million through a private placement of our common stock in March,” said Steve Abely, chief financial officer of Bookham, Inc. “Our cost reduction plans remain on track to achieve additional quarterly savings of $9 million to $10 million from December 2006 levels by the end of the September 2007 quarter. We expect these savings, along with expected improvement in our revenue during the second half of 2007, to translate into improving financial results throughout the remainder of the calendar year.”
Outlook and Guidance
“For the fourth quarter, we forecast our revenue will be essentially flat due mainly to ongoing inventory reduction programs with some of our top customers,” said Dr. Bordui. “Nevertheless, we expect sequential improvements in our gross margin and Adjusted EBITDA due to additional savings from our ongoing cost reduction actions.”
The following forecasts are based on current expectations. These statements are forward looking, and actual results may differ materially. Please see the Safe Harbor statement in this release for a description of certain important risk factors that could cause actual results to differ, and refer to Bookham’s annual and quarterly reports on file with the Securities and Exchange Commission (SEC) for a more complete description of the risks. Furthermore, our outlook excludes items that may be required by GAAP such as restructuring and related costs, acquisition or disposal related costs, impairments of goodwill and other long-lived assets for which the likelihood and amounts are not determinable at this time, extraordinary items, as well as the expensing of stock options and restricted stock grants under SFAS 123R.
For the fourth quarter of fiscal 2007, ending June 30, 2007, excluding restructuring and other non-recurring charges, the Company expects:
- Revenue in the range of $43 million to $47 million
- Non-GAAP gross margin to be between 12 percent and 16 percent
- Adjusted EBITDA of approximately negative $8 million to negative $12 million
A replay of the conference call will be available through May 10, 2007. To access the replay, dial 1-973-341-3080. The conference code for the replay is 8701485.
Bookham, Inc. is a global leader in the design, manufacture and marketing of optical components, modules and subsystems. The company’s optical components, modules and subsystems are used in various applications and industries, including telecommunications, data communications, aerospace, industrial and military. Since 2002, the company has acquired the optical components businesses from Nortel Networks and Marconi, as well as Ignis Optics, Inc., the business of Cierra Photonics Inc., New Focus, Inc., Onetta, Inc., and Avalon Photonics. The company has manufacturing facilities in the UK, US, Canada, China and Switzerland; and offices in the US, UK, Canada, France and Italy and employs approximately 2000 people worldwide.
Bookham and all other Bookham, Inc. product names and slogans are trademarks or registered trademarks of Bookham, Inc. in the USA or other countries.