11 October 2002 -- Finisar Corp is to sell certain assets and transfer certain liabilities of its Sensors Unlimited subsidiary for USD6.1m to a new company formed by Sensors Unlimited's current management group. Finisar will retain a minority interest in the new company.
Finisar has also undertaken a further reduction in its US workforce and the closure of a facility to reduce its operating expenses and improve its cash flow.
Finisar will retain ownership of all of Sensors' intellectual property and will transfer all manufacturing and development activities for PIN diodes and avalanche photodiodes (APDs) to other facilities within Finisar. The new company will license intellectual property associated with the development of cameras and photodiode arrays for military and industrial spectroscopy applications. It will assume the name "Sensors Unlimited" and continue to operate at its existing facility in Princeton, NJ, USA. It will also assume the obligations associated with the equipment and facilities located there.
Gregory H Olsen, the current Sensors Unlimited president and an officer and director of Finisar, is president of the new company. He will resign his position with Finisar and its subsidiary.
"We purchased Sensors Unlimited in October 2000 with a goal to leverage their know-how in processing III-V semiconductor materials to develop and produce key components for use in our fibre-optic communication products," said Jerry Rawls, Finisar's CEO. "We achieved that goal, as Sensors has produced high-speed PINs and APDs that have been designed into our transceiver products.
"The Sensors management will be free to pursue other applications outside fibre-optic communications," added Rawls.
"The original business of Sensors was based on InGaAs photodiode arrays, cameras, and sensing, mostly for spectroscopy in industrial and military applications," said Olsen. "This transaction will allow us to return to our roots and refocus on our core strengths?We look forward to having Finisar as an investor."
Finisar will record a loss of about USD39m on the sale of these assets and the transfer of associated liabilities. Most of this loss is a non-cash writedown of the net asset value of Sensors Unlimited. About USD34m is related to a writedown of developed technology from the original acquisition of Sensors Unlimited in October 2000. An additional non-cash charge of USD2m will be recorded as a result of the release of additional shares of Finisar common stock currently held in escrow pending the accomplishment of certain milestones defined by the original acquisition. The transaction will result in a net cash infusion of USD6.1m to Finisar while enabling it to avoid certain future obligations.
Finisar has also announced a further reduction in its US workforce and the closure of a facility in Hayward, California, incurring a restructuring charge of about USD5m.
Together with the transfer of assets to the management group of Sensors Unlimited, Finisar will have reduced its US workforce by over 30% since the start of 2002. Management believes that these actions will enable Finisar to operate at cashflow break-even with revenues of about USD55m per quarter.