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JDS Uniphase Corp (CA) JDSU
Q1 2012 Earnings Call Transcript

Transcript Call Date 11/01/2011

Operator: Good day, ladies and gentlemen, and welcome to the First Quarter 2012 JDS Uniphase Corporation's Earnings Conference Call. My name is Aaron and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today's conference. As a reminder, this conference is being recorded for replay purposes.

I will now turn the presentation over to your host for today conference, Ms. Michelle Schwartz, Senior Director of Investor Relations. Please proceed ma'am.

Michelle Levine Schwartz - IR: Thank you, operator, and welcome to JDSU's fiscal 2012 first quarter financial results conference call. Joining me on the call today are Tom Waechter, Chief Executive Officer; and Dave Vellequette, Chief Financial Officer.

I'd like to remind you that this call will include forward-looking statements about the future financial performance of the Company. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. We encourage you to look at the Company's most recent filings with the SEC, particularly the risk factors section of our Annual Report on Form 10-K filed on August 30, 2011. The forward-looking statements, including guidance provided during this call are valid only as of today's date, and JDSU undertakes no obligation to update these statements as we move through the quarter.

Please note that all numbers are non-GAAP unless otherwise stated. A detailed reconciliation of these non-GAAP results to our GAAP results, as well as a discussion of their usefulness and limitation is included in today's news release announcing our results, which is available on our website at www.jdsu.com.

As a reminder, the quarterly earnings press release, supplementary slides and historical financial tables are posted at www.jdsu.com/investors under the Financial Information section. Finally, and as a reminder, this call is being recorded and will be available for replay from the Investor section of our website.

I would now like to turn the call over to Tom.

Thomas Waechter - President and CEO: Thank you, Michelle and good afternoon everyone. JDSU delivered first quarter revenue of $421.1 million at the high end of our guidance range.

Gross margins for the quarter improved from the prior quarter, despite lower revenues. Operating expenses declined by over $9 million due to stringent cost controls resulting in an operating margin of 10.9% which exceeded our guidance range.

In fiscal Q1 new product revenue remained strong with 67% of Optical Communications revenue and 56% of CommTest revenue being generated from products less than two years old. Additionally, our financial strength continued to provide us with necessary capital to fund our robust new product pipeline as cash generated operations totaled $22.9 million.

On our last call I highlighted that we expect some short-term revenue volatility due to uncertainty in the macro environment and that Optical customers were reducing their on-hand inventory level. I would like to provide an update on these topics as well as some clarity on the impact of the recent flooding in Thailand.

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