New Focus Lowers Guidance
Noting a widespread softening in the U.S. economy and the telecommunications industry, New Focus lowered guidance for its fiscal 2001 net revenue to $170-190 million. Previous revenue guidance for fiscal 2001, released in conjunction with the company's fourth quarter earnings press release on January 30, 2001, was $240 million. For fiscal year 2000 New Focus reported net revenue of $80.4 million.
"While our business will continue to demonstrate strong year-over-year growth, recent order cancellations and push-outs have changed our revenue outlook for fiscal 2001. First quarter 2001 net revenue will be up relative to our reported fourth quarter net revenue of $33.9 million, but will decline relative to the pro forma combined results for the December quarter. As customers continue to adjust inventory levels in response to the slower industry growth now expected for this year, we will most likely see a sequential decline in net revenue between the first and second quarters. In light of these new revenue expectations, we will modify the rate of growth in our spending levels. Importantly, we will continue to fully fund key product development programs that are critical to the long-term success of New Focus. With sizable cash resources and pending new product introductions, we believe that New Focus remains well positioned to exploit the long-term secular growth potential of the fiber optics industry," said Ken Westrick, president and chief executive officer of New Focus, Inc.
The company will slow the rate of production in its U.S. and China factories to bring production in line with the lower unit demand now anticipated for the first half of 2001. To accomplish this goal, the company will immediately furlough approximately 260 direct production employees currently in training at its operations in Shenzhen, China. The company will further lower production output through the adjustment of work schedules at its China manufacturing facilities. The company will also immediately reduce its U.S. workforce by approximately 70 people, predominantly direct labor employees. Prior to these workforce reductions, the company's operations in China employed approximately 1,200 people, while the company's U.S. operations employed approximately 900 people. The company will continue to hire selectively in the engineering, sales and marketing, and administrative functions.