Lay-offs ahead at Bookham UK

Bookham, Inc., a provider of optical components, modules and subsystems, today announced financial results for its second quarter of fiscal 2007, ended December 30, 2006. Revenue in the second quarter of fiscal 2007 was $56.3 million, compared with $56.4 million in the first quarter of fiscal 2007 and $60.7 million in the second quarter of fiscal 2006. Revenue from customers other than Nortel was $41.8 million, unchanged from the prior quarter and approximately 58 percent higher than the second quarter of fiscal 2006. Revenue from Nortel in the second quarter was $14.5 million, essentially flat with the first quarter and down from $34.3 million, which included $13.8 million of last-time buy revenue, in the same quarter a year ago. “For several quarters we have discussed that our sales to Nortel would decline significantly in the March quarter, due mainly to the completion of the guaranteed purchase agreement at the end of December. Based on current forecasts, we believe revenue from Nortel will account for between 5 and 10 percent of our total March quarter revenue, compared with 26 percent in the second quarter, resulting from a higher than previously expected inventory build-up and the completion of the purchase agreement," said Dr. Giorgio Anania, president and CEO of Bookham Inc. “At the same time, we expect modest sequential growth in our non-Nortel revenue in the third quarter because of normal seasonality and some inventory draw-down at selected customers. While non- Nortel revenue continues to grow, the anticipated increase will not make up for the expected decline in Nortel sales in the March quarter. “Given these recent developments, we are immediately undertaking an aggressive overhead cost reduction plan, which when fully implemented is designed to save an additional $6 million to $7 million per quarter in the September 2007 quarter. The savings will come mainly from reductions in our workforce, consolidation at our UK semiconductor operation, and shifting more development activities to China," said Dr. Anania. “By taking these additional actions, we believe our Adjusted EBITDA quarterly breakeven level can be achieved at a quarterly revenue level of approximately $55 million to $57 million.