Enabling Broadband & Optical Innovation

Transcription

1 Enabling Broadband & Optical Innovation Kevin Kennedy, Chief Executive Officer Agenda: Strategy and industry trends Markets we serve Financial highlights Business model opportunity

2 Safe Harbor Statement Certain statements in this presentation constitute forward-looking statements within the meaning of Section 27A of the Securities Act of Forward-looking statements are all statements made by us, other than those dealing specifically with historical matters and any statements we make about the conduct of our business or finances up to this moment. All other statements made by us are forward-looking statements which include any information provided on future business operations and guidance regarding our future financial performance. Actual results may differ materially from those projected in the forward-looking statements. Factors that could cause actual results to materially differ from those in the forward-looking statements are discussed in the Company s Securities and Exchange Commission Filings, particularly the risk factors section of our form 10-K for the quarter ended June 30, This presentation includes Non-GAAP financial measures where indicated. These non-gaap financial measures complement the Company s consolidated financial statements presented in accordance with GAAP. However, these non-gaap financial measures are not intended to supercede or replace the Company s GAAP results. A detailed reconciliation of historical GAAP results to the historical non-gaap results is provided in the Non-GAAP Condensed Consolidated Statement of Operations schedule to our news release announcing the financial results of the second quarter of fiscal A discussion of the GAAP measures excluded from the forward-looking non-gaap measures is provided in the Business Outlook paragraph of the news release. The news release is located in the Investor Relations section of our web site at 2

3 JDSU Strategy Execute as a Company comprised of a portfolio of businesses with a focus on optical and broadband innovation. Enable customers innovation in broadband and optical markets Shape product portfolio: profitability followed by revenue growth Diversify our customer base and product portfolio Focus on best-in-class operating metrics 3

4 Strategy Aligned with Macro Industry Trends Dominance of consumer communications driving growth in network 1980s-1990 s: Client-Server Computing, B2B focus : Video and social (peer-to-peer) networking growth Ubiquity of bandwidth-intense applications (distance & capacity) Convergence of wireline & wireless delivery; deeper optics penetration Dispersion of devices, sessions, content sources; increased RAN density/connectivity, SONET retreat Network equipment manufacturers and carriers respond to provide quality of customer experience JDSUs products and services are aligned to support industry trends 4

5 Enabling Broadband & Optical Innovation Optical Communications Communications T&M Commercial and Consumer Market Segments Total Market Size (Annual)* Annual Growth Rate* JDSU Revenue (Annual)* JDSU Market Position* $3.9B $2.6B $2.0B 5-15% 6-12% 5-10% $500M $600M $250M #1 #1-3 #1-3 Markets Telecom, Datacom, Undersea, LH, Metro, FTTx Telecom/Cable Access, Metro, Core & Home Networking Biotech, Semicon., Defense, Currency, Security, Decor Sample Customers Alcatel-Lucent, Ciena, Cisco, Huawei, Nortel, NSN, Fujitsu Bellsouth, British Telecom, China Telecom, Comcast, Telmex, Verizon Applied Biosystems, HP, Governments, Nike, Pfizer, SICPA, Sony * Sources: Ovum-RHK, Prime Data, Frost & Sullivan, Infonetics Research, Optics Coating: A Strategic Business Report, January 2005, and internal analysis 5

6 Q4 Non-GAAP Highlights Fourth quarter revenue of $351 million up over 10% Y/Y Book-to-bill ratio for the entire company was greater than ONE Book-to-bill ratio for the optical communications business greater than ONE Free Cash Flow positive for second quarter in a row 6

7 FY07 Non-GAAP Highlights FY2007 FY2006 Revenue $ billions $1.4B $1.2B +16% Gross Margin % revenue 37.7% 35.0% +$108 M EBITDA $ millions $72.9 $17.2 +$55.7 M Earnings Per Share $ $0.29 $(0.12) +$0.41 Net Income $ millions $64.1 $(23.8) +$87.9M Operating Margin by Markets % revenue Optical Communications -1.6% -6.3% Comm. Test & Measurement +14.7% +14.4% Advanced Optical Technologies +30.9% +22.2% Commercial Lasers +4.4% +0.0% FY2007 revenue grew by 16% compared with FY2006 All four constituent business segments grew revenues in FY2007 7

8 Key Quarterly Trends - Non-GAAP Revenue ($ Millions) Gross Margin (% Revenue) % % % Jun-06 Sep-06 Dec-06 Mar-07 Jun % Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Operating Expenses (% Revenue) Diluted Earnings Per Share 60.0% $0.16 $ % $0.12 $0.10 $ % $0.06 $ % $0.02 $0.00 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 ($0.02) Jun-06 Sep-06 Dec-06 Mar-07 June-07 8

9 Historical EBITDA to Revenue* *Adjusted EBITDA / non-gaap revenue 15% 10% 5% 0% -5% -10% -15% -20% Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 FY05: (9.9%) FY06: 1.4% FY07: 5.2% 2007 EBITDA highest in 5 years 9

10 Areas of Focus Business Model Near-Term Near-Term Longer Longer Term Term GM GM 40% 40% GM GM 43%-47% 43%-47% OpEx OpEx 35%-38% 35%-38% OpEx OpEx 33%-36% 33%-36% Op Op Margins Margins 2%-5% 2%-5% Op Op Margins Margins > 10% 10% Continue to to be be Free Cash Flow Positive OpComm: Drive rev growth, improve mix, CommTest: Mix: sales of organic products internal lean initiatives, value engineering; vs. resell and increase sales to NA network Impact: GM improvement by double-digit operators of more fully configured units; percentage of rev internal lean initiatives.; value engineering; Impact: GM improvement to 57%-61% AOT: Loading our legacy applications in concert with adding new business to our UCP, driving greater volume and utilization, lean manufacturing. Impact: GM improvement of 1-2 points. Lasers: Increase volumes, lean manufacturing initiatives, recent price increases on some gas lasers. Impact: GM improvement by double-digit percentage of revenue. 10