Operating loss will be $15-$15.5 million versus guidance of $11 million

January 26, 2001

2 Min Read

Bookham Technology plc (LSE: BHM, Nasdaq: BKHM) today announced that following the successful completion of two acquisitions, it was updating previous financial targets and providing preliminary financial highlights for the fourth quarter of 2000. The guidance is based on preliminary financials, which could be modified as the accounts are finalised.

In commenting on the quarter, Giorgio Anania, Bookham Technology's President, indicated that he anticipated revenues and gross margin would be in line with previous guidance and with analysts' expectations of £11 million revenue and 15% negative gross margin.

Anania noted that operating losses for the quarter were likely to be approximately £15-15.5 million, versus guidance of £11 million. This number reflects approximately £1.5 to £2 million attributable to write-offs associated with the previously announced acquisition in December 2000 of a new production facility in Maryland. The write-offs relate to expenditures incurred in connection with plans for alternative production sites that will be revised, and investment in MIS systems that will be rendered unnecessary due to the acquisition of the Maryland facility. Anania noted that while he anticipated the acquisition of the Maryland facility would result in higher operating costs over the next few quarters, it would also significantly reduce the company's requirement for capital expenditures over the course of 2001 and beyond. More precise information about Bookham Technology's 2001 capital expenditure will be provided on February 14, 2001.

In addition, net profits were affected to a similar extent by a change in the company's expected product mix towards the next-generation of DWDM products. Lower sales of its mini-DIL products, principally due to a reduction in orders for this product from Nortel Networks as a result of their evolution to a different product mix, was counter balanced by an increase in shipments of DWDM products, which increased to over 30% of total revenues. As a consequence of this change in product mix, expenses were higher in the quarter, as the DWDM products were introduced into the marketplace on an accelerated basis, while unallocated costs were incurred as a result of the slowdown in mini-DIL orders.

Bookham Technology's results for the fourth quarter remain subject to the completion of the year end audit and any resulting adjustments, and will be discussed in greater detail during the company's conference call regarding definitive year end results scheduled for February 14, 2001.

http://www.bookham.com

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