Viavi Solutions Inc. · NASDAQ:VIAV
Viavi Solutions — JDS Uniphase — Investor Presentation (November 2003)
44 slides from Viavi Solutions's investor presentation, Nov 20, 2003
Slide 1: JDS Uniphase
| JDS Uniphase 4 a :
Slide 2: Forward-looking statements
Were statements in this presentation consti te fc f ements within the meaning of Section 27A of the S 934. _ those dealing specifically with historical matters and any stat make about the conduct of our business or finances up to thi: include any information provided on future business operati guida
Slide 3: Non-GAAP financial measures
@ presentation includes non-GAAP financial i These non-GAAP financial measures complement the consolidated financial statements presented in accordance However, these non-GAAP financial measures are not intended t ; ‘supercede or replace the Company's GAAP results. A detailed reconciliation of histo
Slide 4: Agenda
Agenda ¥ Fe omising market * JDS Uniphase well-positioned for gr ® Focus on fundamentals - Transition - Deliberate choices - Improving financials - Revenue stabilizing y : - Losses decreasing P - Driving toward] profitability, = ae 4) «| JDS Uniphase oe
Slide 5: You will probably use JDS Uniphase products today and not even know it
You will probably use 25 JDS Uniphase produets today and not even know it al © =) SDS Uniphase a pane
Slide 6: You will probably use JDS Uniphase products today and not even know it
You will probably use 25 JDS Uniphase products today and not even know it When you use the telephone, access the Internet, enjoy omeltheater, use the newyS20,oill you are likely using optical technology, from JDS Uniphase a a 7 | JDS Uniphase
Slide 7: We are specialists in applying the science of light
Be hase LS ~ a < "2 We are specialists in applying the science of light to dramatic __ transitions in communications technology and visual experience. “) D5 Uniphase =
Slide 8: A Picture and a Thousand Words
Pic AND a Thousand Words Trends: ¥ Narrowband to broadband \ Audio to visual \ : experiences \ JD: iniphase
Slide 9: The Transition Toward Visual
The Transition Toward Visual a A picture and a thousand words vs : Speaking Method Telephone Text Digital mage Digital Video Transfer time 7.5 minutes seconds seconds Real-time Amount of data 3.6 MB (@ 64 Kb/s) 10 KB 100 KB-1MB 1-10 Mb/s y =) ps Uniphase
Slide 10: The Transition Toward Visual
The Transition Toward Visual ™ Sales of camera-phones projected to reach 150 million units by 2005 %& 30 million users in Japan ™ Web-based photo sharing has registered tenfold month over month growth rates \i Source: October 2003 Future Image, Inc. y ) =) JDS Uniphase
Slide 11: The Transition Toward Visual
The Transition Toward Visual Total Worldwide Data Transfers for Online Gaming Source: In-Stat/MDR March 2003. y x r) JDS Uniphase =
Slide 12: The Transition Toward Visual
The Transition Toward Visual Source: IDC March 2003
Slide 13: Organization
rganization “DS Unite ie Communications = Thin Film Products Subsystem Products Commercial Lasers Transmission Products. Optical Pigments Component Products Coated Optics =! JDS Uniphase
Slide 14: Fiberoptic Communications
Fiberoptic Communications Stibsystem Products: The broadest portfolio of products in the industry “Transuiission Products _ Component Products _ Components, modules and sulbsystems for Telecom, Datacom and CATV Transmission » Mux/Demux + Add/Drop + Amplification + Switching + Optical Monitoring y =)
Slide 15: Fiberoptic Communications: Today and Tomorrow
tic Communications Today Tomorrow Instrumentation, é : Network Ready Grcuit packs, smart | Subsystem Products Products, amplifiers, modules, customer- card-level products elitist, syassiths — Telecom and datacom Intelligent modules, Transmission Products modules, CATV & cost-reduced, smaller special
Slide 16: Fiberoptic Network Status
Fiberdptic Network Status | Long Haul Submarine —— (50S Uniphase ty
Slide 17: JDS Uniphase offerings across network segments
oer — , a Submarine ‘Access Enterprise Storage ITP 7 EE a a a Pf Transponcer | (ae Ge ee en ee ee eee ee Le me | |_OAComponents J | a ee HEE 15 Uniphase Offerings No JDS Uniphase Offerings JDS Uniphase
Slide 18: Technology Convergence
Technology Convergence Telecom Offers Datacom Offers Higher data rates orm factor pluggable F cost, higher volumes Hot Swappability SONET compliance y =) JDS Uniphase
Slide 19: Organization
rganization “IDs pu * ms 2 Communications = Thin Film Products Subsystem Products Commercial Lasers Transmission Products. Optical Pigments Component Products Coated Optics =! JDS Uniphase
Slide 20: Thin Film Products
Thin Film Products Applying optical technology to serve a diverse set of growing markets rors Biomedical/ Environmental ‘Aerospace/ Security/ Instrumentation Defense Display Authentication Decorative =) ps Uniphase
Slide 21: Commercial Lasers, Optical Pigments and Coated Optics
sre Coated Optics Today Solid-state, gas, fiber and diode lasers used in biotechnology, biohazard detection, graphics and imaging, semiconductor, and materials processing Light interference pigments for color shifting characteristics used in security products & decorative surface treatments. Optical
Slide 22: Business Growth
fi ph Business Growth »Nertical Opportunities Customer-Specific Integration Light Engines} Circuit Packs Test &N Mirt “Transmission: Tunables Optics Modules) “Core Optical » Optical ‘Adjacencies ‘and Components | Datacom \ \ \ \ \ Horizontal Opportunities Horizontal Opportunities Distribution + Inte
Slide 23: Focus on Fundamentals
Focus on Fundamentals Piransition proceeding smoothly =a — * Deliberate choices about financial and operati @ * Stabilizing revenue, net loss decreasi ® Profitability and ae AMMO, SOsisoninig for gy eat Wi ie * Achieved reason tumultuous enviro “S! JDS Uniphase =
Slide 24: Company Transition
Company Transition Avseries of deliberate choices... Organizational Clarity Operational Intent One independent chairman Market driven Customer driven One leader tp / One headquarters Reacting to market decline “ey Poised for market stabilization Amalgamation of companies ‘ay New young company, clear
Slide 25: Market Condition
Market Condition larket size has decreased * Consolidation, concentrated base * Cash flow slower, cycle time longer + Procurement-oriented + Volumes up, ASPs declining + Gross margin tension Bundled, volume contracts, improve quality Increase efficiency, reduce COGS Customer-base expansion Increase
Slide 26: Market Condition
‘Market Condition + Regional + Parts of the network * Time required to purge + Inventories are aging technologies +b wth inventory + Adapt to variations acre + Shift from LH core to edge | + Reduce lead times * Develop new tech to reduce costs.
Slide 27: Work with customers
Fe M Work w/ customers: inventory Me e' WK RFP/Design win activity
Slide 28: Customer-Focused Culture
er-Focused Culture i. In everything we do, first ask, f “\Nhat Is best for the customer?” E * Compensation tied to customer Satisfaction and product quality 3 fi - & Continue a design-win focus / ™ Create value our customers cannot find elsewhere ™ Create customer“critical account” intensity
Slide 29: Operational Excellence
& ~~ ry Pre ." Excellence—Focus on . m, headquarters consolidated MA ‘Chairman position consolidated AW, -® Leadership consolidated * Revised options plan and| executive compe: 4 “ Shedding excesses rd * Centralization of corporate functions
Slide 30: Operational Excellence: Focus on governance
& = te Aa Pre ." Excellence—Focus on 0 governance __ Independence — Chairman, Board, Committees Strong ethics policy ___ Glarity and transparency * Stakeholder-aligned| compensation practices. New stockholder-approved equity plan , Eliminates “evergreen” plan sel Introduces performance requirements
Slide 31: Realignment Program
fF fe) ealignment Program Weesins and Consolidating janufacturing Operations As SA Reducing Global Workfo! Apr-01 Dec-01 Jul-02 Jun-03 Sep-03 Feb-01 Jun-01 Jan-02 Jul-O2 Dec-02 Jun-03 Sep-03
Slide 32: Realignment Program
ealignment Program To Come”
Slide 33: Quarterly Revenue
Quarterly Revenue 300 eal Pf dh 250 =" = October 23th 2003 Guidance for Dec-03 $140M-150M 200 ee 150 Communications 100 ay Thin Film Products Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 =) ps Uniphase
Slide 34: Quarterly Bookings
EE ‘tefly Bookings a) Ilions Sep-02 Dec-02 Mar-03 Jun-03 Sep-03
Slide 35: Operating Income/Loss (GAAP)
ii and Operating Imcome/Loss (GAAP). “l we: ene PIL 200 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03
Slide 36: Gross Margin and Operating Expenses (GAAP)
ka and Operating Experises (GAAP) d llions 250% 200% 150% 100% 50% 0% -50% Sep-02 Dec-02 Mar-03 Jun-03 Sep-03
Slide 37: EBITDA
ire" EBITDA J ; ys 7 ep-02 Dec-02 f o
Slide 38: Comparative Cash Balances
f Comparative Cash Balances : “Millions d R. 1800 = JDS Uniphase Includes _| Convertible Proceeds . 1600 1400 1200 1000 800 WE JDS Uniphase f= Competitors and Others | @ ibs Uniphase
Slide 39: Quarterly GAAP Loss/Revenue
Qua rly GAAP Loss/Revenue " R Comparative Quarterly GAAP Loss/Revenue fr - JDS Uniphase Wl JDS Uniphase jr Competitors and Others | a a
Slide 40: Revenue Guidance Accuracy
i's Accuracy ) Revenue Guidance Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Sep-02 Dec-02_— Mar-03 Jun-03 Sep-03
Slide 41: Driving Toward Profitability
D rived ward Profitability for quarterly revenues of: - $200M by December 2003 __-$170M by June 2004 / * Completion of Global Realignment Program * Opportunities for further improvement * Focus on cash and return oniinvested Capital - Divest unnecessary assets - Convertible debt offering - Reduce an
Slide 42: Focus on Cash and ROIC
Focusion Cash and ROIC QIFY04 $1,160 Days Sales A/R 65 days (10) days Inventory Turns 6.2 turns 0.4 turns
Slide 43: Summary
Sum ary niphase strategically position dh << wing market opportunities ; adh * Transition completed
Slide 44: An investment in JDS Uniphase
dA An arent in JDS Uniphase = ian investment in the technology of light bs ae Is an investment in an increasingly networked world ™& Is an investment in the value of enriched visual and visual+audio for learning, communication, business, and - entertainment ©) = 5DS Uniphase f ug