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olsen 12/5/2012 | 3:14:26 PM
re: Bookham Readies More Cuts http://www.bookham.com/documen...
Bookedout 12/5/2012 | 3:14:35 PM
re: Bookham Readies More Cuts On a nice 3 week holiday, money in the bank, and the share price rising again .... the man doesn't know the meaning of short term pain.
DZED 12/5/2012 | 3:14:36 PM
re: Bookham Readies More Cuts Just dredged up and old email from 2003.
Looking back its pretty funny.

"Following the Q4 results, the new sales forecasts and the finalisation of the budgets I have had to review the situation regarding the pay review.

In order for us to work towards achieving our target of breakeven in Q4 2003, we need to not only reduce costs to the business but also to increase our productivity and sales revenue. In addition we need to reserve our cash level. Unfortunately this means that I can no longer agree to a full pay review in April.

However, I have agreed with my officer team to secure a small spend for individuals in the following categories: principally those currently paid significantly below the market or individuals who have taken a significant increase in responsibility since they last received a rise.

It is absolutely critical that we focus our cash where it is most needed and therefore I, together with each of the officers, will be approving each rise individually.

I appreciate this is a difficult message for you to hear right now, however it is critical that I make such decisions now for the long term future of Bookham and sometimes that means short term pain to get us there.

Giorgio Anania"
deauxfaux 12/5/2012 | 3:15:09 PM
re: Bookham Readies More Cuts Determining the true value of that inventory would be an interesting effort indeed.

Is it forgotten E&O, or is it valuable?

Vent 12/5/2012 | 3:15:16 PM
re: Bookham Readies More Cuts So where are we ?
Ottawa shuts amplifier design shifted to Paignton
Caswell shuts remaining packaging development goes to paignton and old 2-inch InP closing
(strange I always thought paignton would close but presumably bookham think it would be too difficult to move people from paignton to Caswell after all it is called the English Riviera )
Will this be enough ? to save 7M$ probably
Is it then a case of waiting until Georgio's pay off clause expires before Bonex becomes a reality
Or if they fail which bits would people want in a fire sale?
What 'good' products do bookham have that someone would pay good cash (or shares) for?

Vent
Bookedout 12/5/2012 | 3:15:16 PM
re: Bookham Readies More Cuts Some really nice tunable products based on chips from Caswell (long time coming!) plus some nice little revenue earners from the Zurich operations .... oh and I nearly forgot the $50M worth of inventory. Let's hope it does have some value and isn't just a bucketful of old fixed wavelength products which nobody wants ......
whyiswhy 12/5/2012 | 3:15:18 PM
re: Bookham Readies More Cuts BKHM BOD = crooks.

Financing their telecom infrastructure builds by getting Joe Schmuck and his granny to buy this loser.

Suckers!

As always, JMHO

-Why
Bookedout 12/5/2012 | 3:15:20 PM
re: Bookham Readies More Cuts It didn't affect him last time this happened. He took a holiday then as well ... that's consistency for you!
tapalroze 12/5/2012 | 3:15:20 PM
re: Bookham Readies More Cuts Cathi48,
Well, they say that they're shifting some of the Ottawa stuff to Paignton and some to China. Not sure exactly how much they will keep going, but it sounds like the Ottawa shutdown will make up the bulk of the $6-7 million quarterly savings they're aiming for - so I guess that not too much will be left...
Cathi48 12/5/2012 | 3:15:21 PM
re: Bookham Readies More Cuts Alcabash, you wrote, "All software and amplifier design activities for Nortel are cancelled."

Does that mean those design activities are being moved to another Bookham location or cancelled altogether?

Thanks.

Cathi
opticalinterest 12/5/2012 | 3:15:21 PM
re: Bookham Readies More Cuts
The important thing to know is how may this Ottawa shutdown and the major layoffs also in the UK impact Giorgio's three week holidays he has planned starting next week.

I sure hope there is no impact as it would be tragic to have this important rest period which he so dearly needs be disturbed with such events.
DZED 12/5/2012 | 3:15:21 PM
re: Bookham Readies More Cuts Its all a load of crap. EBITDA is meaningless.
I too don't understand how saving $6-7m/qtr is going to turn a $20m loss into a profit.
They might as well say:

"The meaningless figure we have invented which does not conform with generally accepted accounting practice is going to exceed another meaningless figure. The net meaning is nothing, we are still going to making a great fat loss."

"When we say 'we' we mean 'you the shareholders' will be making a great fat loss.
When we say 'we' meaning 'ourselves the execs' we will be coining it big time as we have managed to appoint a supine board who rubber stamps every cash theft wheeze we can dream up."

Tapalroze, I have no idea how Anania calculates the bonus he pays himself (I am CEO, my performance is crap - I must have bonus, you mere cubicle monkeys working hard and delivering the goods on time and on budget you can do without cost of living increase for the next two years).

As for the exec team payoff, I can't remember exactly, its somewhere in the SEC filings, maybe a previous post, you can trawl through and add it up.

Roughly speaking to ditch the execs would cost several million dollars in severance, plus their two year rolling contract salary, plus compensation for any unused share options, plus any stock they hold (which is a lot, they just gave themselves a pile of stock), plus no doubt wads of cash to go quietly.
Say ballpark $5m to ditch the current incompetent exec team. I guess Avanex choked on that.

Really the board should just fire them for incompetence and graft, but they are deep in Anania's pocket so its not going to happen.

The BOD are selling off stock too BTW.
DZED 12/5/2012 | 3:15:21 PM
re: Bookham Readies More Cuts Don't worry yourself, Giorgio certainly doesn't fret about anyone other than himself.

Indeed he fits the mould of the narcissistic corporate psychopath pretty much perfectly.
alcabash 12/5/2012 | 3:15:22 PM
re: Bookham Readies More Cuts Office in Canada is closed and Bookham is laying off all employees.
All software and amplifier design activities for Nortel are cancelled.
deauxfaux 12/5/2012 | 3:15:23 PM
re: Bookham Readies More Cuts When you can't make your first nickel of profit in 18 years while burning $1,000,000,000. the public needs the appropriate warnings

BKHM is so toxic to investors that they should be required to have warning signs on their stock certificates like cigarettes. WARNING, YOUR THE COMPTROLLER GENERAL HAS DETERMINED THAT BKHM STOCK IS HAZARDOUS TO YOUR NET WORTH.

That or they could put up a sign (like the old McDonalds that said "over 1 billion served") with the appropriate warning "OVER $1,000,000,000 BURNED"

The best long term solution is for Georgio to run for political office, as he could teach any of the "Teflon Pols" a thing or two about escaping accountability, and Governments have a lot more cash than BKHM. Conceivably, this is one way to solve the trade imbalance with CHINA, but the Chinese would never put up with it.

Perhaps France?
twill009 12/5/2012 | 3:15:24 PM
re: Bookham Readies More Cuts To make matters worse, what management said was "adjusted EBITDA quarterly breakeven level" would be $55-57 million. "Adjusted" basically means excluding anything they want from the number -- i.e., non-GAAP, pro forma. Executive stock compensation is one such expense.

Why not just say "profits before any expenses?" It would be a lot simpler.

Sick. Oughtta be a law. Or rather, somebody should enforce existing laws. Where is Elliot Spitzer when you need him?
deauxfaux 12/5/2012 | 3:15:24 PM
re: Bookham Readies More Cuts "Bonex"....absolutely brilliant
deauxfaux 12/5/2012 | 3:15:24 PM
re: Bookham Readies More Cuts Hmmmmm company started in 1988 and never a single profitable quarter, much less a quarter with positive cash flow. The land of "one time charges" that flow every quarter, and an agreement with NT that has stuffed them so full of parts that they can't take any more (~45% to 26% last quarter to 5-10% next quarter).

But since the shareholders don't seem to mind any of this and have always have been willing to open their checkbooks when Georgio's travelling circus fleeces wall street every 12-18 months

Life is good for Georgio....2M in exec bonuses paid, about to go on a 3 week vacation...not a care in the world.



opticalinterest 12/5/2012 | 3:15:25 PM
re: Bookham Readies More Cuts Giorgio is going on vacation for three weeks starting on Monday. Right after such an awful performance.
Leading by example?
paolo.franzoi 12/5/2012 | 3:15:25 PM
re: Bookham Readies More Cuts
I think you should take a step back from EBITA for a second. Is Bookham generating or losing cash? That is the number 1 issue by a long shot. They have been burning cash for so long, that it has threatened their survival. Once you are generating cash, then the business can live. EBIDTA and worse yet EPS are affected by that black art of accounting rules. Cash is real.

seven
Bookedout 12/5/2012 | 3:15:25 PM
re: Bookham Readies More Cuts Losing the execs would save at least 2m a per Q, judging from other posts ... I'm guessing this is the "stock based compensation included in the following:". So, at least 10% of the savings needed achieved through losing 0.1% of the workforce .. good deal!
tapalroze 12/5/2012 | 3:15:26 PM
re: Bookham Readies More Cuts Yeah, IF they do manage to knock $6-7 million off each quarter's cost line AND we don't take any restructuring charges/bonuses etc into account then - yup - they do get to some kind of break even.

And hats off to them if they do achieve that, but it seems unlikely to me that a few office reshuffles and switching some development stuff out of Ottawa will get them anywhere near before the current pile of cash runs out.

Another thing I don't get is this - why didn't they do this latest restructuring last year (or earlier)? Then we could have just been talking about an EBITDA breakeven (or close to) for Q2. Or am I missing something?
FunkyMunky 12/5/2012 | 3:15:26 PM
re: Bookham Readies More Cuts Assume that 130 people get made redundant.

At an average salary of $60K/year thats $7.8M in annual savings but ther is the redundancy costs to factor in. If these are 6 weeks salary (I don't know what the minimum is in the UK and US/Canada) that's $900K in one hit plus reorganisation costs.

Where does the additional $20M in savings come from?

FM
What else needs to be factored in.
jmunn 12/5/2012 | 3:15:26 PM
re: Bookham Readies More Cuts Is this what happens when NT is your revenue engine? Who really deserves to wear the cement galoshes?
FunkyMunky 12/5/2012 | 3:15:26 PM
re: Bookham Readies More Cuts But you also have to allow for the costs of the restructuring in terms of redundancy payments and further reorganisation/movement of product and development to China. Its a race Bookham cannot win.

Also how are they going to lose enough people to close the gap on $20M of losses when they are not anticipating any uplift in sales?

The bows are just beginning to slip below the waves and the execs are taking the only lifeboats.

FM
FunkyMunky 12/5/2012 | 3:15:26 PM
re: Bookham Readies More Cuts Given that the Execs have been offloading the stock at any opportunity in recent times surely there is a case for investigation as to what information they had available to them and when?

With the stock tanking by 20% today there has to be some element of concern in this area.

FM
Pete Baldwin 12/5/2012 | 3:15:27 PM
re: Bookham Readies More Cuts Bookham is saying their EBIDTA breakeven point, after the latest restructuring, will be $55-57 million in revenues.

Assuming the March quarter really is an aberration, then they're right at the cusp of that level, right? Right?

Just playing devil's advocate here. Somehow, I don't think it's going to cheer anybody up...
Brightspark 12/5/2012 | 3:15:28 PM
re: Bookham Readies More Cuts Also - as I missed the conf. call with the analysis, and most probably most of the UK work force, did anyone question Annia why he himself was off-load his shares in his own company that was to turn the corner, bounce of the bottom, rise like a Phoenix from the ashes, in the next two quarters?
tapalroze 12/5/2012 | 3:15:28 PM
re: Bookham Readies More Cuts So apparently they're consolidating the Caswell chip fab by clearing out the old 2-inch InP line and squeezing the remaining workforce into fewer buildings. But not by outsourcing epitaxy or any other processing steps. Can't quite see how that's going to save much of the $6-7 mil per qtr, but then I guess that's why I'm not a chief [insert expletive] officer...

I'm getting the words "Titanic" and "deckchairs".

DZED, how on earth do the execs get bonuses for this? Share price has crashed, sales heading south, margins likewise....what are the bonuses based on, air miles? Carbon offset points?

Any idea what Giorgio Banana's pay-off demand was?
DZED 12/5/2012 | 3:15:29 PM
re: Bookham Readies More Cuts Revenues down
Gross margin down (with all production now in China, geez..)
Losses up
Exec bonuses up (a cool $2m this quarter alone)
Exec and non-exec directors dumping the stock as fast as they can

But don't panic! In two quarters it'll be dandy!
Haven't we heard this 'two quarters' thing for the last 28 quarters?

And no chance of the Bonex merger, scuppered according to other posts in part because Avanex wouldn't swallow Anania's payoff.
The whole company goes down for Giorgios ego.

Pity the poor souls still working there.
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