JANUARY 28, 2011 -- After achieving a GAAP net income of $0.4 million in the first quarter of fiscal 2011, Oclaro, Inc. (Nasdaq: OCLR) reported a GAAP net loss of $0.2 million for its second quarter of fiscal year 2011, which ended January 1, 2011. A revenue decline of $1 million was partially to blame.
However, the company reported a quarter-on-quarter improvement in gross margin in the second quarter. Second quarter GAAP gross margin was 30%, compared to 29% in the first quarter of fiscal 2011. Oclaro also forecasted revenue growth for the upcoming quarter.
Second quarter highlights included:
- Revenues of $120.3 million, compared to $121.3 million in the first quarter of fiscal 2011.
- Non-GAAP gross margin of 30%, compared to 29% in the first quarter.
- GAAP operating income of $1.6 million, compared to $5.0 million in the first quarter.
- Non-GAAP operating income of $6.6 million, or 5.5% of revenues, versus $7.7 million, or 6.3% of revenues, in the first quarter.
- Adjusted EBITDA of $10.1 million, compared to $10.9 million in the first quarter.
- Non-GAAP net income was $5.9 million, compared to $6.6 million in the first quarter.
- Cash, cash equivalents and restricted cash were $78.1 million as of January 1, 2011.
Despite the overall downward trend in the quarter, Oclaro President and CEO Alain Couder sounded an upbeat note. "We delivered to our key financial metrics in the December quarter as expected," he said. "The strategic tone and tenure of the recent annual allotment and pricing process with major customers was positive. Market conditions remain strong, and we are expecting revenue growth in the seasonally softer March quarter."
Couder said the company has revamped its structure to take advantage of new opportunities.
"We are entering a new phase following the integration of our past acquisitions. After successfully maintaining design momentum we are now focused on ramping new products across many of our key markets," Couder explained. "Consistent with those priorities, we have enhanced our organizational structure to simplify our customer interface and to strengthen our execution."
Oclaro has consolidated its divisions into two primary business units. Jim Haynes, formerly COO, is now president and general manager of the new Photonic Components business unit. Terry Unter, formerly executive vice president of the Transmission Systems Solutions division (and chief of Mintera, Oclaro’s most recent acquisition), becomes president and general manager of the new Optical Networks Solutions business unit.
The company also has added two senior executives to the management team. Gray Williams joins Oclaro as executive vice president, supply chain operations and quality, and Bob Quinn joins Oclaro as chief information officer.
With these changes in place, Oclaro expects a better showing -- at least as far as revenue is concerned -- in the third quarter of fiscal 2011, which ends April 2, 2011. The company forecasts revenues in the range of $123 million to $131 million; non-GAAP gross margin in the range of 27% to 31%; and adjusted EBITDA in the range of $6 million to $11 million.