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News

1 May 2007

 

Oplink grows revenues 20%; agrees to acquire majority stake in OCP

For its fiscal third-quarter 2007 (to 1 April), Oplink Communications Inc of Fremont, CA, USA has reported revenues of $27.6m, up 20% on the prior quarter and 89% on a year ago. Calculated in accordance with accounting principles generally accepted in the US (GAAP), net income has risen from $1.0m a year ago then $3.1m the prior quarter to $4.3m. Via its design facilities at its headquarters in Fremont and low-cost manufacturing at its facilities in Zhuhai and Shanghai, China, Oplink produces photonic components, modules, and subsystems for optical networking applications, including laser chips from GigaComm Corp in Hsinchu, Taiwan (acquired last August) for applications such as fiber-to-the-home (FTTH) components.

“We had good activity with Tellabs, Huawei, and Ericsson in the quarter and increased our revenue contribution from Nortel,” says president and CEO Joe Liu. “We continue to experience demand for our ROADM [reconfigurable optical add/drop multiplexing] solutions as well as strong interest in metro, core and edge products for global projects. We have also focused on expanding our revenue sources to broader systems-level solutions.”

Oplink forecasts fiscal fourth-quarter revenue up about 10% sequentially.

“We are committed to further enhancing our product portfolio, quality, efficiency and competitive position in order to better serve our customers and shareholders,” says Liu. “Although we see only modest spending increases in the coming quarter, we remain optimistic about our business outlook and are poised to benefit from next wave of major carrier spending,” he concludes.

*Oplink acquiring majority stake in OCP

In addition, Japan-based laser maker Furukawa Electric Co Ltd has agreed to sell its 58.2% stake in Optical Communication Products Inc (OCP) of Woodland Hills, CA, USA to Oplink for $99m ( $84m in cash plus $15m in stock). Oplink has also offered to acquire the remaining outstanding shares. The closing is expected in Oplink’s fiscal fourth quarter (to end-June).

OCP was founded in 1991 with funding from Furukawa , and designs and manufactures components and subsystems for the passive optical network (PON) fiber-to-the-home (FTTH), local-area, metropolitan-area, and storage-area networking markets. Product lines include optical transceivers, transponders, transmitters, receivers, and dense wavelength and coarse wavelength division multiplexing (DWDM and CWDM) solutions.

For its fiscal Q1/2007 (to end-December 2006), OCP reported an operating loss of $5.8m on revenue of $17m (down 11% on the previous quarter and 4.1% year-on-year). However, it is already planning to move manufacturing to China to cut costs.

The acquisition of OCP is expected to broaden Oplink’s product portfolio and significantly expand its addressable market. The combination of OCP’s expertise in active optical components and subsystems and Oplink’s strength in passive components and subsystems will create a solution set for metro and access applications, says Oplink. “As the market leader in providing components and subsystems for the access market, which is an important and growing market with telecom and datacom customers, OCP is a natural complement to Oplink’s metro solutions strength,” says Liu.

A special committee of OCP's board, consisting of its three independent directors, is evaluating Oplink's proposal. “The Special Committee is focused on enhancing shareholder value and will be evaluating Oplink's proposal to ensure that it is in the best interests of our minority shareholders,” says the committee’s chairman Hobart Birmingham.

Visit: http://www.oplink.com