The stock ticker formerly known as J(ust) D(on't) S(ell) U(s) continues its revival as 'Internet Revolution 2: The Mobile Strikes Back' is bringing back a lot of the 1999 names. JDS Uniphase - the poster child for NASDAQ excess in 1999 - reported a stellar quarter with raised guidance, and the stock has gained nearly 25%. I first mentioned the name on the site almost a year ago around $11 [Mar 1, 2010: Fantastic Action in Small and Mid Cap Networking Space] and again a month after [Apr 6, 2010: Just Don't Sell Us Continues Lazarus Like Move] near $13.
This is the highest the stock has traded since 2006, and anyone who has held from the top in 1999 is probably only down 86% after this move up.
Permalink: [619] Top Stocks To Buy - The Stock Formerly Known as 'Just Don't Sell Us' Soars on Earnings
JDSU is taking other optical networking names such as Finisar (FNSR) and Ciena (CIEN) right up with it.
JDSU came in at $0.29 v expectation of $0.19 EPS, and revenue jumped 38% to $473.5M vs expectation of $438.6M. Gross margin jumped nicely to 48.8% versus the year ago 44.6%, and quarter ago 47.4%.
* Test and measurement product revenue was up 27% from Q1, and up 30%, year over year. Communications and optical products revenue was 14% from Q1 and up 70% from the prior-year period.
Guidance change vs analysts $420.8M.
* For the third quarter of fiscal 2011, ending April 2, 2011, the Company expects non-GAAP net revenue to be in the range of $440 to $460 million.
MILPITAS, CA--(Marketwire - 02/03/11) - JDSU (NASDAQ:JDSU - News) (TSX:JDU - News) today reported results for its second fiscal quarter ended January 1, 2011.
On a GAAP basis, net revenue for the second fiscal quarter of 2011 was $473.5 million and net income was $23.6 million, or $0.10 per share. This compares to net revenue of $405.2 million and net income of $0.1 million, or break-even earnings per share for the prior quarter, and net revenue of $342.9 million and net loss of $(19.5) million, or $(0.09) per share for the second fiscal quarter of 2010.
On a non-GAAP basis, net revenue for the second fiscal quarter of 2011 was $477.2 million and net income was $67.0 million or $0.29 per share. This compares to non-GAAP net revenue of $411.3 million and net income of $44.8 million, or $0.20 per share for the prior quarter, and non-GAAP net revenue of $343.8 million and net income of $26.6 million or $0.12 per share for the second fiscal quarter of 2010.
"In fiscal Q2 JDSU reported record revenues, gross margin and operating margin, which exceeded our operating model target," said Tom Waechter, JDSU's President and Chief Executive Officer. "This is an exciting time for JDSU. Our market drivers are strong, our innovation engine and pipeline for new products is robust, and we continue to increase our operating leverage."
Financial Overview - Second Fiscal Quarter Ended January 1, 2011
All numbers in this section are non-GAAP unless stated otherwise.
-- Net revenue of $477.2 million increased 16.0% compared to the prior
quarter and increased 38.8% compared to the second quarter of
fiscal 2010.
-- Gross margin was 48.8% compared to 47.4% in the prior quarter and
44.6% in the second quarter of fiscal 2010.
-- Operating margin was 15.3% compared to 10.8% in the prior quarter
and 8.2% in the second quarter of fiscal 2010.
-- Communications Test and Measurement revenue of $231.4 million
increased by 26.6% compared to the prior quarter and increased
30.8% compared to the second quarter of fiscal 2010. Revenue from
this segment represented 48.5% of total net revenue.
-- Communications and Commercial Optical Products revenue of $191.1
million increased 13.8% compared to the prior quarter and increased
70.2% compared to the second quarter of fiscal 2010. Revenue from
this segment represented 40.0% of total net revenue.
- Optical Communications revenue of $168.4 million increased 17.8%
compared to the prior quarter and increased 76.2% compared to
the second quarter of fiscal 2010.
- Commercial Lasers revenue of $22.7 million decreased 9.2%
compared to the prior quarter and increased 35.9% compared to
the second quarter of fiscal 2010.
-- Advanced Optical Technologies revenue of $54.7 million decreased
9.6% compared to the prior quarter and remained flat compared to the
second quarter of fiscal 2010. Revenue from this segment represented
11.5% of total net revenue.
-- Americas' customers represented 51% of total net revenue for the
quarter. EMEA and Asia-Pacific customers represented 26% and 23%,
respectively, of total net revenue.
-- The Company held $ 655.3 million in total cash and generated $60.7
million of cash from operations for the quarter ended January 1,
2011.
Business Outlook
For the third quarter of fiscal 2011, ending April 2, 2011, the Company expects non-GAAP net revenue to be in the range of $440 to $460 million.
Conference Call
The Company will discuss these results and other related matters at 2:00 p.m. Pacific Time on February 3, 2011 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 will now be available prior to management's presentation in order to provide the investment community with additional time for review and analysis. 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 (NASDAQ:JDSU - News) (TSX:JDU - News) enables broadband and optical innovation in the communications, commercial and consumer markets. JDSU is a leading provider of communications test and measurement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers. JDSU is also a leading provider of innovative optical solutions for medical/environmental instrumentation, semiconductor processing, display, brand authentication, aerospace and defense, and decorative applications. More information is available at www.jdsu.com.
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, EBITDA, cash flow and other financial metrics; 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 exacerbated by the current credit and financial market uncertainty, 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) average selling prices continue to decline across our businesses; (e) our Communications Test and Measurement business is notable for seasonality and a significant level of in-quarter book-and-ship business, further limiting our forecasting abilities; (f) we are currently engaged in various product and manufacturing transfers, site consolidations and product discontinuances, which has caused and may cause short term disruptions; and (g) the ability of our suppliers and contract manufacturers to meet production and delivery requirements to our forecasted demand.
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 3, 2010 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 Six Months Ended
---------------- ----------------
January January January January
1, 2011 2, 2010 1, 2011 2, 2010
------- ------- ------- -------
Net revenue $ 473.5 $ 342.9 $ 878.7 $ 640.7
Cost of sales 245.6 192.2 463.4 360.6
Amortization of acquired technologies 14.1 12.5 28.2 24.8
------- ------- ------- -------
Gross profit 213.8 138.2 387.1 255.3
------- ------- ------- -------
Operating expenses:
Research and development 60.2 41.5 116.6 81.3
Selling, general and administrative 109.5 95.2 216.7 187.9
Amortization of other intangibles 8.0 6.5 16.6 13.5
Restructuring and related charges 2.5 8.0 2.8 13.1
------- ------- ------- -------
Total operating expenses 180.2 151.2 352.7 295.8
------- ------- ------- -------
Income (loss) from operations 33.6 (13.0) 34.4 (40.5)
Interest and other income (expense), net 1.6 1.6 5.1 5.0
Interest expense (6.4) (6.3) (12.7) (12.2)
Gain on sale of investments - - - -
------- ------- ------- -------
Income (loss) from continuing
operations before income taxes 28.8 (17.7) 26.8 (47.7)
Provision of income taxes 5.2 1.7 3.1 2.4
------- ------- ------- -------
Income (loss) from continuing
operations, net of tax 23.6 (19.4) 23.7 (50.1)
Loss from discontinued operations, net
of tax - (0.1) - (1.3)
------- ------- ------- -------
Net income (loss) $ 23.6 $ (19.5) $ 23.7 $ (51.4)
======= ======= ======= =======
Basic net income (loss) per share from:
Continuing operations $ 0.11 $ (0.09) $ 0.11 $ (0.23)
Discontinued operations - - - (0.01)
------- ------- ------- -------
Net income (loss) $ 0.11 $ (0.09) $ 0.11 $ (0.24)
======= ======= ======= =======
Diluted net income (loss) per share
from:
Continuing operations $ 0.10 $ (0.09) $ 0.10 $ (0.23)
Discontinued operations - - - (0.01)
------- ------- ------- -------
Net income (loss) $ 0.10 $ (0.09) $ 0.10 $ (0.24)
======= ======= ======= =======
Shares used in per share calculation:
Basic 222.9 218.3 222.4 217.9
Diluted 229.1 218.3 228.2 217.9
JDS UNIPHASE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited) (audited)
January 1, July 3,
2011 2010
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 408.6 $ 340.2
Short-term investments 212.3 227.4
Restricted cash 34.4 32.5
Accounts receivable, net 339.2 271.8
Inventories, net 145.1 125.7
Prepayments and other current assets 72.6 77.0
---------- ----------
Total current assets 1,212.2 1,074.6
---------- ----------
Property, plant and equipment, net 214.6 183.0
Goodwill 66.4 66.0
Intangible assets, net 316.4 357.4
Long-term investments 4.8 5.1
Other non-current assets 16.3 17.5
---------- ----------
Total assets $ 1,830.7 $ 1,703.6
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 147.3 $ 137.4
Accrued payroll and related expenses 81.9 62.9
Income taxes payable 22.9 19.8
Deferred revenue 64.9 45.3
Accrued expenses 59.4 47.7
Other current liabilities 37.6 37.8
---------- ----------
Total current liabilities 414.0 350.9
---------- ----------
Long-term debt 276.3 267.1
Other non-current liabilities 183.2 176.9
Total stockholders' equity 957.2 908.7
---------- ----------
Total liabilities and stockholders' equity $ 1,830.7 $ 1,703.6
---------- ----------
JDS UNIPHASE CORPORATION
REPORTABLE SEGMENT INFORMATION
(in millions)
(unaudited)
Three Months Ended Six Months Ended
------------------ ------------------
January January January January
1, 2011 2, 2010 1, 2011 2, 2010
-------- -------- -------- --------
Net revenue:
Communications Test and
Measurement $ 231.4 $ 176.9 $ 414.2 $ 320.3
Communications and Commercial
Optical Products 191.1 112.3 359.1 213.4
Advanced Optical Technologies 54.7 54.6 115.2 108.7
Deferred revenue related to
purchase accounting adjustment (3.7) (0.9) (9.8) (1.7)
-------- -------- -------- --------
Net revenue $ 473.5 $ 342.9 $ 878.7 $ 640.7
======== ======== ======== ========
Operating income (loss):
Communications Test and
Measurement $ 44.8 $ 31.5 $ 66.4 $ 49.5
Communications and Commercial
Optical Products 34.0 3.2 58.2 1.7
Advanced Optical Technologies 17.7 19.6 39.8 40.2
Corporate (23.4) (26.2) (46.9) (53.1)
-------- -------- -------- --------
Total segment operating income 73.1 28.1 117.5 38.3
Unallocated amounts:
Stock-based compensation (10.0) (12.0) (19.0) (23.1)
Acquisition-related charges and
amortization of intangibles (25.9) (19.9) (54.7) (40.0)
Loss on disposal of long-lived
assets - (0.5) - (1.0)
Restructuring and related charges (2.5) (8.0) (2.8) (13.1)
Realignment and other charges (1.1) (0.7) (6.6) (1.6)
Interest and other income 1.6 1.6 5.1 5.0
Interest expense (6.4) (6.3) (12.7) (12.2)
-------- -------- -------- --------
Income (Loss) from continuing
operations before income taxes $ 28.8 $ (17.7) $ 26.8 $ (47.7)
-------- -------- -------- --------
Use of Non-GAAP (Adjusted) Financial Measures
The Company provides non-GAAP net revenue, non-GAAP net income (loss), non-GAAP net income (loss) per share, EBITDA and adjusted EBITDA 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 goods sold, 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 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, (v) other non-recurring charges comprising mainly of one-time acquisition, integration and other costs. The Company excludes these items, for the purposes of calculating non-GAAP net income (loss), non-GAAP net income (loss) per share and adjusted EBITDA, when it evaluates the continuing operational performance of the Company. 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.
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. This item is grouped under Interest and other income (expense), net. The Company excludes these items, for the purposes of calculating non-GAAP net income (loss), non-GAAP net income (loss) per share, EBITDA and adjusted EBITDA, when it evaluates the continuing operational performance of the Company. The Company believes this GAAP measure is not indicative of the Company's core operating 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 goods sold and operating expense, related to the various acquisitions it has made. Management excludes these items, for the purposes of calculating non-GAAP net income (loss), non-GAAP net income (loss) per share, EBITDA and adjusted EBITDA, when it evaluates the continuing operational performance of the Company. 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 cost of goods sold and operating expenses and performance.
Non cash interest expense: 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 this item, for the purposes of calculating non-GAAP net income (loss) and non-GAAP net income (loss) per share, is useful to investors. The Company describes the impact of this guidance, in its fiscal 2010 annual report on Form 10-K. The Company believes this GAAP measure is not indicative of its core operating performance.
Interest, taxes, depreciation, amortization, and other adjustments: The Company's calculation of EBITDA excludes interest, taxes, depreciation, and amortization. The Company's calculation of Adjusted EBITDA also excludes items that are not part of its "core operating performance" which are described in detail in the aforementioned paragraphs. Management believes adjusted EBITDA is indicative of the Company's core operational cash flow.
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 GAAP measure most directly comparable to adjusted EBITDA is income (loss) from operations. The Company believes that these GAAP measures alone are not indicative of its core operating expenses and performance.
The following tables reconcile preliminary 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 Six Months Ended
--------------------------- -----------------------------
January 1, January 2, January 1, January 2,
2011 2010 2011 2010
------------ -------------- ------------- --------------
Net Net Net Net
income Diluted income Diluted income Diluted income Diluted
(loss) EPS (loss) EPS (loss) EPS (loss) EPS
----- ----- ------ ------ ------ ----- ------ ------
GAAP measures $23.6 $0.10 $(19.5) $(0.09) $ 23.7 $0.10 $(51.4) $(0.24)
Items
reconciling
GAAP net
income & EPS to
Non-GAAP net
income & EPS:
Related to net
revenues:
Deferral of
revenues
related
purchase
accounting 3.7 0.02 0.9 - 9.8 0.04 1.7 0.01
Related to cost
of sales:
Stock-based
compensation
expenses 1.1 - 1.4 0.01 2.4 0.01 2.5 0.01
Other
non-recurring
charges 0.2 - 0.4 - 0.5 - 0.5 -
Amortization
of acquired
developed
technologies 14.1 0.06 12.5 0.06 28.2 0.13 24.8 0.11
----- ----- ------ ------ ------ ----- ------ ------
Total related
to gross
profit 19.1 0.08 15.2 0.07 40.9 0.18 29.5 0.13
----- ----- ------ ------ ------ ----- ------ ------
Related to
operating
expenses:
Research and
development:
Stock-based
compensation
expenses 2.1 0.01 2.4 0.01 3.9 0.02 4.6 0.02
Other
non-recurring
charges - - - - 0.2 - - -
Selling,
general and
administrative:
Stock-based
compensation
expenses 6.8 0.03 8.2 0.04 12.7 0.06 16.0 0.07
Other
non-recurring
charges 1.0 - 0.3 - 6.0 0.03 1.1 0.01
Amortization
of intangibles 8.0 0.04 6.5 0.03 16.6 0.07 13.5 0.06
Loss on
disposal of
long-lived
assets - - 0.5 - - - 1.0 0.01
Restructuring
and related
charges 2.5 0.01 8.0 0.04 2.8 0.01 13.1 0.06
----- ----- ------ ------ ------ ----- ------ ------
Total related
to operating
expenses 20.4 0.09 25.9 0.12 42.2 0.19 49.3 0.23
----- ----- ------ ------ ------ ----- ------ ------
Interest and
other income (0.8) - 0.7 - (4.2) (0.02) (1.5) (0.01)
Non-cash
interest
expense 4.7 0.02 4.2 0.02 9.2 0.04 8.4 0.04
Discontinued
operations - - 0.1 - - - 1.3 0.01
----- ----- ------ ------ ------ ----- ------ ------
Total related
to net income
& EPS 43.4 0.19 46.1 0.21 88.1 0.39 87.0 0.40
----- ----- ------ ------ ------ ----- ------ ------
Non-GAAP
measures $67.0 $0.29 $ 26.6 $ 0.12 $111.8 $0.49 $ 35.6 $ 0.16
===== ===== ====== ====== ====== ===== ====== ======
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 Six Months Ended
------------------- -------------------
January January January January
1, 2011 2, 2010 1, 2011 2, 2010
--------- --------- --------- ---------
GAAP net revenue $ 473.5 $ 342.9 $ 878.7 $ 640.7
Deferral of revenues related to
purchase accounting adjustment 3.7 0.9 9.8 1.7
--------- --------- --------- ---------
Non-GAAP net revenue $ 477.2 $ 343.8 $ 888.5 $ 642.4
========= ========= ========= =========
Note: Certain totals may not add due to rounding
JDS UNIPHASE CORPORATION
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
(in millions, unaudited)
Three Months Ended Six Months Ended
------------------ ------------------
January January January January
1, 2011 2, 2010 1, 2011 2, 2010
-------- -------- -------- --------
GAAP net income (loss) $ 23.6 $ (19.5) $ 23.7 $ (51.4)
Interest and other income (1.6) (1.6) (5.1) (5.0)
Interest expense 6.4 6.3 12.7 12.2
Provision for income taxes 5.2 1.7 3.1 2.4
Depreciation 16.1 14.5 30.9 29.9
Amortization 22.1 19.0 44.8 38.3
-------- -------- -------- --------
EBITDA 71.8 20.4 110.1 26.4
-------- -------- -------- --------
Costs related to restructuring
and related charges 2.5 8.0 2.8 13.1
Costs related to stock based
compensation expense 10.0 12.0 19.0 23.1
Costs related to purchase
accounting adjustment 3.7 0.9 9.9 1.7
Costs related to other
non-recurring activities 1.2 0.7 6.6 1.6
Loss on disposal of long-lived
assets - 0.5 - 1.0
Discontinued operations - 0.1 - 1.3
-------- -------- -------- --------
Adjusted EBITDA $ 89.2 $ 42.6 $ 148.4 $ 68.2
======== ======== ======== ========
Note: Certain totals may not add due to rounding
