Our industry continues to be affected by declining carrier capital spending and a weak overall economic environment, and we have adapted to these circumstances by dramatically reengineering our Company through our Global Realignment Program, said Jozef Straus, Co-Chairman, President and CEO. To date, we have reduced our annual expense rate by over $600 million, standardized on global product platforms, eliminated manufacturing redundancies, maintained our strong financial position and redirected our research and development program to focus on the most promising applications. These improvements have allowed us to increase the level of collaborative engineering we can offer our customers for the development of next generation systems. We believe these next generation systems will be part of a future industry recovery and that we are well positioned to help our company and our customers return to growth.
JDS Uniphase’s Global Realignment Program continues on schedule.
The estimated total cost of this program remains $900-950 million of which $778 million was recorded through the end of the first quarter. The charges recorded in the first quarter included $278 million in restructuring and related charges, of which $243 million was reported as restructuring charges, $26 million was charged to cost of goods sold, and $9million was charged to operating expenses. Included in the total costs of the Global Realignment Program are charges for obsolete inventory write-downs related to product platform consolidation, accelerated depreciation, and moving and employee costs related to the phasing out of certain facilities and equipment.
To date, the program has reduced the Company’s annual expense rate by over $600 million from the level at the commencement of the Global Realignment Program. The Company’s projected annual savings rate upon completion of the Global Realignment Program is $800 million, $100 million more than the Company’s original target. The Company has closed seventeen sites to improve manufacturing efficiencies and reduce costs. In total, the Company expects to reduce its facilities by two million square feet.
No reduction in the carrying value of the Company’s long-lived assets for the quarter was recorded as a result of this assessment. The Company recorded a $42 million reduction in long-lived assets pursuant to actions taken under its Global Realignment Program as well as amortization for the period.
The Company reported a loss of $1.2 billion or $0.93 per share for the quarter ended September 29, 2001. On a pro forma basis, excluding reduction of goodwill and other long-lived assets, reduction in fair value of investments, purchased intangibles amortization, payroll taxes on stock option exercises, stock compensation charges, and activity related to equity method investments, the Company reported a loss of $260 million or $0.20 per share for the quarter ended September 29, 2001. These results reflect the costs of the Global Realignment Program and charges for the write-down of obsolete inventory related to the Company’s new product development programs.
SOURCE: COMPANY PRESS RELEASE
