Oclaro, Inc. (OCLR)

Oclaro and Opnext Merger Conference Call

March 26, 2012 05:00 pm ET


Jim Fanucchi - Summit IR Group

Alain Couder - Chairman & CEO, Oclaro

Harry Bosco - Chairman & CEO, Opnext

Jerry Turin - CFO, Oclaro

Bob Nobile - CFO, Opnext


Patrick Newton - Stifel Nicolaus

Ehud Gelblum - Morgan Stanley

Subu Subrahmanyan- Juda Group

Hamed Khorsand - BWS Financial

William Stein - Credit Suisse



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Good afternoon and welcome to the joint conference call announcing the proposed merger of Oclaro Inc and Opnext Inc. At this time, I would like to turn the call over to Mr. Jim Fanucchi of the Summit IR Group. Please go ahead, Mr. Fanucchi.

Jim Fanucchi

Welcome everyone to the Oclaro and Opnext proposed merger conference call and webcast. Please note that the slides accompanying today’s presentation are available in the Investor Relations section of each company's websites. And as a reminder, this conference call is being recorded for replay purposes.

During the course of this conference call webcast, we will be making a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to statements about Oclaro and Opnext and the proposed combination that the companies jointly announced earlier today; potential synergies and cost savings of such combination and the timing thereof; future financial and operating results; quarterly synergies; the combined company's plans, objectives, expectations and intentions with respect to future operations, products and services.

Such forward-looking statements are based on the current beliefs and expectations of Oclaro’s and Opnext management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally are beyond the control of Oclaro and Opnext. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors. Further information about the risks inherent in these forward-looking statements is contained in the joint investor presentation that was filed with the SEC today and the most recent Form 10-Q and most recent Form 10-K and other periodic reports filed by Oclaro and Opnext with the SEC.

Neither Oclaro, nor Opnext assumes any obligation or intent to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition during this call we may be referring to non-GAAP financial measures. With respect to any of these non-GAAP measures directly comparable generally accepted accounting principles measures are set forth in a reconciliation of GAAP to non-GAAP measures and included in the accompanying presentation which is available in the investor section of each company's website.

We would also like to clarify now that Oclaro and Opnext will not be providing an update nor will we answer questions relating to the current quarter’s results. In connection with the proposed combination, Oclaro intends to file documents with the SEC, including a registration statement on Form S-4 containing a joint proxy statement and perspectives. Investors and security holders are urged to read carefully the joint proxy statement perspectives, when it is filed with the SEC and other documents filed by either company with the SEC relating to the proposed combination when they are filed because they will contain important information.

Our speakers today are Alain Couder, Chairman and CEO of Oclaro and Harry Bosco, Chairman and CEO of Opnext; Jerry Turin, Chief Financial Officer of Oclaro and Bob Nobile, Chief Financial Officer of Opnext will also be available during the question-and-answer session. I would now like to turn the call over to Alain.

Alain Couder

Okay, I would like just to introduce this merger. This is a very exciting day for us and I would like to turn to Harry to make all the thought processes in the production as he has many, many years of experience with the industry and can give you even more color than I could.

Harry Bosco

Okay, thank you Alain and good afternoon. From a historical revenue perspective, the merged company that we have now will be number two in the industry. But you have to really look underneath that and see the merged company in more detail. The combination, truly unique with its world-class customer, product and technology base.

Before we start talking about the combined company, let me summarize the key points about the transaction. This is a stock for stock tax-free exchange at a fixed exchange ratio of 0.42. The implied pro forma ownership is 42% for Opnext shareholders and 58% for Oclaro shareholders. Alain, the current CEO and Chairman of Oclaro will be the CEO and Chairman of the new company.

I will join the board of Oclaro along with three other Board Directors from Opnext. The size of the board will be ten and the closing is expected in three to six months depending on the regulatory and shareholder approvals.

Now Alain and I want to share with you why we are so excited about this merger and unique opportunities the new company has the service customers while generating value for the shareholders and opportunities for our employees. Starting out the number one; our products and customers overlap is very minimal and the two companies will lend itself to a smooth, efficient integration once the closing occurs.

The broad portfolio of components and modules will allow us to take advantage of more vertical integration needed to differentiate our products, reduce our costs and offer more comprehensive solutions to our customers. The extensive customer base includes a leading global optical equipment providers in both the telecom and datacom space. Although Oclaro and Opnext share some of the same large customers, the products sold to them are quite different. In the future there is a real opportunity to be a preferred supplier to our customers that has a full complement of products, which includes most of the critical building blocks for an end-to-end optical network.

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