JDS Uniphase Corp. (JDSU, Financial) filed Quarterly Report for the period ended 2009-03-28.
JDSU enables broadband and optical innovation in the communications commercial and consumer markets. JDSU is a leading provider of communications test and measurement solutions and optical products for telecommunications service providers cable operators and network equipment manufacturers. JDSU is also a leading provider of innovative optical solutions for medial/environmental instrumentation semiconductor processing display brand authentication aerospace and defense and decorative applications. JDS Uniphase Corp. has a market cap of $1.09 billion; its shares were traded at around $5.09 with a P/E ratio of 169.7 and P/S ratio of 0.7.
Under the second step of the SFAS 142 analysis, the implied fair value of goodwill requires valuation of a reporting units tangible and intangible assets and liabilities in a manner similar to the allocation of purchase price in a business combination. If the carrying value of a reporting units goodwill exceeds its implied fair value, goodwill is deemed impaired and is written down to the extent of the difference. As a result, the Company impaired the value of its goodwill by approximately $692 million, which was recorded as a charge in the second quarter of fiscal 2009. This charge was an estimate subject to finalization of the second step pro-forma valuation for CommTest and ASG, which, due to the timing and complexity of the valuation calculations required, was not complete as of the date of the filing of the Form 10-Q for the quarter ended December 27, 2008. For CommTest and ASG, the second step goodwill impairment test estimate assumed the carrying value of assets approximated their fair value. With regard to CommTest reporting unit, the estimate of the goodwill impairment charge of $398 million approximated the difference between the reporting units fair value and its carrying value. With regard to ASG reporting unit, the estimate of the goodwill impairment charge of $40 million approximated the full amount of the goodwill associated with this reporting unit.
In the third quarter of fiscal year 2009, we completed the second step of the SFAS 142 analysis, which was started in the second quarter of fiscal year 2009, on CommTest and ASG reporting units. We recorded an additional impairment charge of $45.0 million for a total impairment of $736.9 million related to the SFAS 142 analysis started in the second quarter of fiscal year 2009. The additional impairment charge of $45.0 million consisted of $48.2 million with regard to CommTest reporting unit offset by an adjustment of $3.2 million with regard to ASG reporting unit.
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JDSU enables broadband and optical innovation in the communications commercial and consumer markets. JDSU is a leading provider of communications test and measurement solutions and optical products for telecommunications service providers cable operators and network equipment manufacturers. JDSU is also a leading provider of innovative optical solutions for medial/environmental instrumentation semiconductor processing display brand authentication aerospace and defense and decorative applications. JDS Uniphase Corp. has a market cap of $1.09 billion; its shares were traded at around $5.09 with a P/E ratio of 169.7 and P/S ratio of 0.7.
Highlight of Business Operations:
Statements contained in this Quarterly Report on Form 10-Q which are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. A forward-looking statement may contain words such as anticipates that, believes, can impact, continue to, estimates, expects to, intends, may, plans, potential, projects, to be, will be, will continue to be, continuing, ongoing, or the negative thereof or other comparable terminology regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements include statements regarding: our expectations related to the impact of recent accounting pronouncements on our consolidated financial statements; our expectation related to lease expenses through fiscal 2018; our belief that the Companys current process for writing down inventory appropriately balances the risk in the marketplace with a fair representation of the realizable value of the Companys inventory; our expectation that the zero coupon convertible notes will be retired within one year; our plan to continue to take advantage of opportunities to further reduce costs through targeted, customer-driven restructuring events; our expectation that payments related to severance and benefits will be paid off by the third fiscal quarter of 2010; our expectation to recognize $23.2 million of unrecognized stock-based compensation cost related to stock options over an estimated amortization period of 2.4 years; our expectation to amortize $0.5 million of unrecognized stock-based compensation cost related to our ESPP through the first quarter of fiscal 2009; our expectation to amortize $52.7 million of unrecognized stock-based compensation cost related to Full Value Awards over an estimated amortization period of 2.2 years; our expectation that the Company will not have to contribute to defined benefit plans in fiscal 2009; our expectation to incur cash outlays of approximately $4.6 million related to our defined benefit pension plan in fiscal 2009; our belief that the ultimate outcome of the Texas tax audit will not have a material adverse effect on our financial position, cash flows or overall trends in results in operations; our expectation that the Companys potential tax liability related to a Texas franchise tax audit will be from $0.0 million to $37.0 million, plus interest and penalties; managements belief that the that resolving claims against the Company, individually or in the aggregate, will not have a material adverse impact on its financial position, results of operations or statement of cash flows; our expectation that we will continue to encounter a number of industry and market structural risks and uncertainties that will limit our business climate and market visibility; our expectation that risks related to manufacturing transitions of our North American assembly manufacturing program will continue and are expected to diminish over the next several quarters; our expectation that the introduction of new product programs and introductions will continue to incur higher start-up costs and increased yield and product quality risk among other issues; our belief that investment in research and development (R&D) is critical to attaining our strategic objectives; our continued efforts to reduce total operating spending; our intention to continue to address our selling, general and administrative (SG&A) expenses and reduce these expenses as and when opportunities arise; our expectations regarding future SG&A expenses; our expectation that none of the non-core SG&A expenses will have a material adverse impact on our financial condition; restructuring estimates related to sublease income or lease settlements; our assumptions related to pension and postretirement benefits; our belief that our assumptions related to discount rate movements in connection with calculating benefit costs is conservative; our estimates related to post-acquisition investment in research and development and the projected completion date of post-acquisition research and development; our belief that our existing cash balances and investments will be sufficient to meet our liquidity and capital spending requirements at least through the next 12 months; and our expectation that gains and losses on derivatives will be offset by re-measurement gains and losses on the foreign currency dominated assets and liabilities.Under the second step of the SFAS 142 analysis, the implied fair value of goodwill requires valuation of a reporting units tangible and intangible assets and liabilities in a manner similar to the allocation of purchase price in a business combination. If the carrying value of a reporting units goodwill exceeds its implied fair value, goodwill is deemed impaired and is written down to the extent of the difference. As a result, the Company impaired the value of its goodwill by approximately $692 million, which was recorded as a charge in the second quarter of fiscal 2009. This charge was an estimate subject to finalization of the second step pro-forma valuation for CommTest and ASG, which, due to the timing and complexity of the valuation calculations required, was not complete as of the date of the filing of the Form 10-Q for the quarter ended December 27, 2008. For CommTest and ASG, the second step goodwill impairment test estimate assumed the carrying value of assets approximated their fair value. With regard to CommTest reporting unit, the estimate of the goodwill impairment charge of $398 million approximated the difference between the reporting units fair value and its carrying value. With regard to ASG reporting unit, the estimate of the goodwill impairment charge of $40 million approximated the full amount of the goodwill associated with this reporting unit.
In the third quarter of fiscal year 2009, we completed the second step of the SFAS 142 analysis, which was started in the second quarter of fiscal year 2009, on CommTest and ASG reporting units. We recorded an additional impairment charge of $45.0 million for a total impairment of $736.9 million related to the SFAS 142 analysis started in the second quarter of fiscal year 2009. The additional impairment charge of $45.0 million consisted of $48.2 million with regard to CommTest reporting unit offset by an adjustment of $3.2 million with regard to ASG reporting unit.
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