Optical components

Bookham Slips Again

Another round of punishment hit Bookham Inc. (Nasdaq: BKHM; London: BHM) stock this morning as the company missed earnings estimates by a wide margin.

For its fourth quarter, which ended July 1, Bookham reported net losses of $27 million, 47 cents per share, on revenues of $55 million, compared with losses of $48 million, 90 cents per share, on revenues of $53.4 million the previous quarter.

For its fourth quarter a year ago, Bookham reported losses of $39 million, $1.16 per share, on revenues of $61 million.

Fourth-quarter non-GAAP losses of 37 cents per share were substantially worse than the analysts' estimate of 29 cents, as tallied by Thomson Financial . By midday, Bookham stock was trading down 34 cents (12.7 percent) at $2.33.

Most tech stocks are down since March, and optical stocks have been hit particularly hard after getting hyped early in the year; Bookham peaked at $10.36 during the spring, for example. But on a conference call with analysts this morning, Bookham officials stressed that they're still seeing the increased demand that was pumping up optical hopes. (See Bookham Basks in 'Cramer Effect' and Smiles Abound at OFC/NFOEC.)

"The optical components market continues to strengthen," Anania said on the call. "We see a lot of demand for new products -- particularly tunable lasers, but also new amps, pumps, and various actives and subsystems."

Bookham continues to walk a thin line when it comes to cash. The company's cash and equivalents totaled $43.3 million ending the fourth quarter, down from $66.9 million the previous quarter.

But the company still has some financial moves up its sleeve. This morning, Bookham announced a $25 million credit facility with Wells Fargo Foothill. (See Bookham Gets Credit.)

Bookham intends to get "back to operating cash-flow break-even over the next few quarters," CFO Steve Abely said on the call. Bookham has made some creative maneuvers during the past year to get there, including land sales and odd but cash-raising deals. (See Bookham Sells Land , Bookham Refinances, and Bookham Bags $11.9M.)

Bookham is continuing to balance its customer base, lowering its dependence on lead customer Nortel Networks Ltd. . Nortel accounted for 34 percent of sales in the fourth quarter, down from 45 percent the previous quarter. Huawei Technologies Co. Ltd. represented more than 10 percent of sales, and Cisco Systems Inc. (Nasdaq: CSCO) was "just short" of the 10 percent mark, Anania said.

For its first quarter, which ends in September, Bookham is predicting revenues of $55 million to $58 million, right on the money with analysts' consensus forecast of $56.6 million.

— Craig Matsumoto, Senior Editor, Light Reading

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austin_powers 12/5/2012 | 3:45:46 AM
re: Bookham Slips Again Yummy. Yummy.

A tasty $7.6586 per share. Sweeeeeeeeeet.

Chief Executive Officer 60,000 Direct Sale at $7.6586 per share. $459,516

Chief Financial Officer 36,600 Direct Sale at $7.5965 per share. $278,031
austin_powers 12/5/2012 | 3:45:46 AM
re: Bookham Slips Again Here's an idea:

Cal-Maine Foods Inc. (CALM) NASDAQ

That would be a good merger candidate in my opinion. They have exactly the same market cap value as Bookham as of Friday so it would be easy to get shareholder approval.

The only differences to Bookham are that they have a quarterly growth of 28 percent, they're profitable, customers like them, and they have a strong management team.

Here's some background on the company:

Cal-Maine Foods, Inc. engages in the production, grading, packaging, marketing, and distribution of shell eggs in the United States. The company also produces and markets specialty shell eggs under Egg-LandGÇÖs Best and Farmhouse brand names. These include reduced cholesterol, cage free, and organic eggs. Cal-Maine Foods was incorporated in 1969 and is headquartered in Jackson, Mississippi.
austin_powers 12/5/2012 | 3:45:46 AM
re: Bookham Slips Again "Bookham Slips Again".

You have to be kidding me.
This company is a complete wreck. I don't see how investors can trust a word coming out of this lot. Stand-by for yet another highly dilutive financing and a whole range of excuses as to why the numbers have not been met.

DZED 12/5/2012 | 3:45:45 AM
re: Bookham Slips Again The questions remain.

Why did the board of directors decide to gift millions of dollars in stock to the execs?

The execs were hardly under-motivated with their whopping perfomance bonuses, retention bonuses and pay rises, all of which apparently undeserved given the hopeless state of the company.

The were no conditions, no performance targets to meet, nothing.

Was it some strange compensation for being inable to profit from their options, which were all underwater due to the inept performance of the exec team? Isn't this the point of options?

And is it not a strange coincidence the stock was massively pumped just when Anania and Abely needed to offload their shares? Even more coincidence that since dumping their stock Anania and Abely significantly revised all their forecasts?

Surely this ones simple enough for the SEC.
10 Give self free stock
20 Issue optimistic and unrealistic forecasts
30 Pump stock via helpful journos
40 Dump stock at inflated price
50 Issue revised forecasts
60 Goto 10

(Sorry about the BASIC joke)
deauxfaux 12/5/2012 | 3:45:44 AM
re: Bookham Slips Again Revenue up a teensy bit, margins down, NT down as a percentate of revenue. Hmmmmm

Conclusion: Without the NT orders for obsolete products, there simply isn't enough margin in the product mix to support even dream of profitability.

BKHM can't compete

DZED 12/5/2012 | 3:45:44 AM
re: Bookham Slips Again Is it likely Bookham can 'fix things'?
Execution has been third rate so far.

With R+D now slashed right through the bone, effectively they've lost limbs, where is the future?

They can't make any more acquisitions, and have so ineptly managed those they have made eg Ignis there would seem to be little point in any case.

The execs are doing nicely but the future for Bookham seems bleak, unless they can be acquired, Anania and Abely fired and a competent team put in place.
litton_devices 12/5/2012 | 3:45:40 AM
re: Bookham Slips Again The cash situation looks delicate this quarter.

It also looks like the credit line comes with many conditions that are not so straightforward.

The credit line is based on a revolving credit line and availability is based on 80 percent of eligible accounts receivable. The agreement is guaranteed by the company's assets in the event of default. It also looks like the company's ability to access the facility is subject to the performance of certain post-closing conditions.

The company will need to go out and do another offering in the coming quarter or very soon.
DZED 12/5/2012 | 3:45:37 AM
re: Bookham Slips Again Dodgy loans from the Cayman Islands, buying up aircraft leasing companies, expensive short term credit, huge wads of cash finding their way into the execs pockets, just what are these jokers up to?

And why is the board allowing it?
Stevery 12/5/2012 | 3:45:37 AM
re: Bookham Slips Again > And why is the board allowing it?

The board would be well-advised to investigate their insurance policy, because there are an increasing number of pissed-off shareholders. (Take a look at D&O in order to address the PO'd, as it were.)
Vent 12/5/2012 | 3:45:37 AM
re: Bookham Slips Again Deauxfaux
Who is the conpany
''shipping integrated Si products are just down the street from Kotura.'' ?

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