JDS Uniphase Corp. today announced a massive restructuring program in which it will close several operations, vacate 25 buildings, and reduce employment by approximately 5,000 people or 20% of current levels.
"These actions are being taken in response to current business conditions in a market the Company continues to believe will experience substantial growth over the longer term," the company said in a released statement.
JDS Uniphase also reported sales for its third quarter ended March 31 of $920 million and pro forma net income of $160 million or 14 cents per diluted share.
Sales for the quarter were 1% below sales of $925 million for the quarter ended December 30, 2000 and 90% above pro formacombined sales of $485 million for the quarter ended March 31, 2000.
Sales for the nine months ended March 31, 2001 of $2.6 billion were 133% above pro forma combined sales for the comparable prior year nine-month period.
Pro forma combined sales for the prior year periods include the separately reported results of E-TEK Dynamics, Inc., which was acquired on June 30, 2000 in a transaction accounted for as a purchase. Sales for the quarter include SDL, Inc. sales subsequent to the acquisition date of SDL, which was acquired on February 13, 2001 in a transaction accounted for as a purchase, and exclude the sales after that date of the company's divested Zurich operations.
Including merger-related charges, reduction in the value of marketable equity securities, gain on the sale of a subsidiary, purchased intangibles amortization, payroll taxes on stock option exercises, stock compensation charges, and activity related to equity investments, the company reported losses of $1.3 billion or $1.13 per share for the quarter and $3.2 billion or $3.15 per share for the fiscal year to date.
On a pro forma basis, excluding those charges, the company earned $160 million or 14 cents per share for the quarter as compared to
the $208 million or 21 cents per share earned in the quarter ended December 30, 2000.
Pro forma net income for the nine months ended March 31, 2001 was $545 million or 51 cemts per share, an increase of 112% from
the $257 million or 28 cents per share earned in the comparable prior year period.
At March 31, 2001 the company had over $1 billion in cash. JDS Uniphase generated $133 million in cash from operations for the quarter and $289 million for the first nine months of the fiscal year.
While JDSU's third-quarter results met consensus estimates, the company has lowered its estimates for its fourth quarter. The company forecasts sales and pro forma earnings per share for its fourth quarter to be approximately $700 million and 5 cents, respectively, excluding restructuring charges. Analyst estimates were 13 cents a share.
As part of the restructuring program, the company said it is creating global centers for advanced product development. "These centers are intended to centralize product development teams with the critical mass necessary to develop future generations of products and fiberoptic technologies." The company will also benefit from savings resulting from elimination of overlapping development programs, it added.
JDS Uniphase said it will consolidate the manufacturing of several of its products from multiple sites into specific locations around the world.
"This process involves consolidating product lines, standardizing on global product designs, relocating products to operations designated as global centers of manufacturing excellence, including transferring additional products to China to take greater advantage of its strong optical expertise and favorable cost and tax environment," it said. The company didn't identify specific products that might be eliminated in the move.
JDS Uniphase also said it is aligning its sales organization to offer customers a single point of contact for all of their product requirements, and creating regional and technical centers to streamline customer interactions with product line managers. It is "also building on its successful information technology implementations to consolidate administrative functions to provide improved customer service and realize significant cost savings," according to the company.
In the fourth quarter of fiscal 2001, the company will record one time charges for these restructuring actions of between $375 million and $425 million. The company expects to save $250 million annually from the actions.
"The Company has limited visibility as to sales in future periods, and is not currently providing sales guidance for fiscal 2002," it said.
The company also did not allude to a potential takeover bid for Lucent's fiber optics cable business, which helped to squelch rumors that the company was likely to announce a bid for the Lucent unit during its morning conference call with analysts today.