Bookham, Avanex Form Oclaro
SAN JOSE, Calif., April 27 – Bookham Inc. and Avanex Corp. announced Monday that they have closed their merger. The newly combined company, Oclaro Inc., is now the fourth-largest provider of optical components and subsystems to the fiber optics market and one of the largest providers to the long-haul and metro markets.
Oclaro also announced a net loss of $13.3 million by Bookham Inc. for the third quarter of fiscal 2009, which ended March 28.
The companies said they created Oclaro by combining the words “optical” and “clarity.” The company’s stock is now trading on the Nasdaq Global Market with the stock symbol OCLR.
Oclaro headquarters will be in San Jose, with management consisting of executives and board members from both organizations. Bookham CEO Alain Couder will be president and CEO of Oclaro. Bookham’s chief operating officer, Jim Haynes, will be Oclaro’s COO, and Bookham’s chief financial officer, Jerry Turin, will be Oclaro’s CFO.
The company’s organization is structured around three operating units: Transmission (10- and 40-G optical components, transponders and tunable transceivers), Regeneration and Optical Routing (amplification, dispersion, wavelength routing), and Advanced Photonic Solutions (high-power lasers and VCSELs, photonics tools and filters). Executive vice presidents of the units are: Transmission, Adrian Meldrum; Regeneration and Optical Routing, Richard Smart; and Advanced Photonics Solutions, Yves LeMaitre. Oclaro has 2500 employees at 13 sites.
“The closing of this merger is a significant milestone in our quest to be a predominant force in the fiber optics industry,” Couder said. “By uniting the best components expertise of Bookham with the modules and subsystems best expertise of Avanex, Oclaro has the necessary products and technologies under one roof to become a market setter in the future of the fiber optic market.”
Oclaro’s strategy is to expand into markets including industrial, defense, life sciences, semiconductor and scientific.
“The completion of this transaction is a big step forward for the optical components industry, and one we believe will produce a company capable of thriving in a rapidly consolidating industry,” said Andrew Schmitt, directing analyst of optical at Infonetics Research. “The combined product portfolios and customer bases of Bookham and Avanex should see Oclaro positioned as one of the market leaders in metro and long-haul networks, with combined revenues placing the company firmly in the tier 1 bracket.”
"The combined in-house and outsourced manufacturing operations are expected to give Oclaro significant production flexibility, which in turn is expected to drive gross margin improvement,” Couder said. “Overall, Oclaro is a well-capitalized, liquid company. With substantial combined cash and no outstanding debt, Oclaro has a strong balance sheet from day one.”
Oclaro currently expects to generate at least $7 million of quarterly cost savings by the end of the fourth full-quarter-post close, which at that time would represent approximately $28 million, or more, annually.
Revenue for the third quarter was $47 million, down slightly from the second quarter’s $50.2 million and down more than 20 percent from the year-ago quarter’s $59.7 million.
For the third quarter of 2009, the company posted a net loss of $13.3 million, or 13 cents a share, compared with a net loss of $6.5 million, or 6 cents a share, for the second quarter and a loss of $5.4 million one year ago. The $13.3 million loss includes $4 million in impairment charges and $3.7 million related to settlement of its legal case with JDS Uniphase Corp. (JDSU), the company said.
On April 10, Bookham reached a license and settlement agreement with JDSU. Bookham had alleged that three US patents held by JDSU and related to tunable laser products are invalid, while JDSU claimed that Bookham had infringed its patents. Under the settlement, Bookham agreed to pay JDSU $3 million in two installments, one on April 15 of this year and the other April 15, 2010. The companies also will refrain from instituting any further patent litigation against each other for four years. Bookham also will pay JDSU a royalty of up to $1 million a year for up to five years for licensing the patents.
“Despite the lower third-quarter revenues that were driven by the economic downturn, we held our adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] close to break-even,” Couder said in a statement Monday. “We continued to execute throughout our business as we positioned ourselves towards achieving our goal of profitability. ... We expect the merger with Avanex Corporation, which closed today, to further accelerate our progress towards profitability.”
The company said results for the fourth quarter, which ends June 27 and will include full-quarter results from Bookham and Avanex results from April 28 through June 27, are expected to include revenue in the range of $67 million to $75 million. Adjusted EBITDA is expected to be in a range from negative $5 million to break-even.
For more information, visit: www.oclaro.com
- 1. With respect to radiation, a device used to attenuate particular wavelengths or frequencies while passing others with relatively no change. 2. See digital filter.
- optical component
- One or more optical elements – typically cemented together - in an optical system that are treated as a single group; e.g., a beamsplitter, or a cemented doublet or triplet.
- The technology of generating and harnessing light and other forms of radiant energy whose quantum unit is the photon. The science includes light emission, transmission, deflection, amplification and detection by optical components and instruments, lasers and other light sources, fiber optics, electro-optical instrumentation, related hardware and electronics, and sophisticated systems. The range of applications of photonics extends from energy generation to detection to communications and...
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