BCD Semiconductor (BCDS)
Inconsistent quarterly profit results
|
Quarterly results |
June 2009 |
Sep-09 |
Dec 2009 |
March 2010 |
June 2010 |
Sept, 2010 |
|
Revenues ($mm) |
$37 |
$43 |
$43 |
$40 |
$46 |
$47 |
|
Gross margin % of rev |
23% |
28% |
34% |
32% |
33% |
30% |
|
Net income (loss) |
-$3 |
$0 |
$1 |
$0 |
$3 |
$0.8 |
|
Net income % of rev |
-7% |
0% |
2% |
0% |
6% |
2% |
|
Adjusted EBITDA margin |
5% |
9% |
15% |
11% |
16% |
9% |
|
Priced at a P/E premium compared to Finisar (FNSR). Price-to-sales & price-to-book values are at a discount compared to Finisar & JDS Uniphase (JDSU) |
|
Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
Gross |
|
annualizing Sept 3 mos |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
Margin % |
|
NeoPhotonic (NPTN) |
$230 |
1.3 |
62 |
1.5 |
1.5 |
30% |
|
Finisar (FNSR) |
$2,420 |
2.8 |
27 |
5.7 |
6.0 |
34% |
|
JDS Uniphase (JDSU) |
$3,680 |
2.4 |
-268 |
4.0 |
7.1 |
43% |
|
BUSINESS |
|
. Designer and manufacturer of Photonic Integrated Circuit (PIC)-based modules and subsystems for bandwidth-intensive, high-speed communications networks.
. Products enable high-speed transmission rates and efficient allocation of bandwidth over optical networks with high quality and low costs. |
|
GROWTH DRIVERS |
|
. The rapid growth of bandwidth-intensive content, including HD and 3D video, music, social networking, video conferencing and other multimedia, is driving the demand for high-bandwidth products.
. The demand for bandwidth capacity is further intensified by the proliferation of network-attached devices, such as smartphones, laptops, netbooks, PCs, e-readers, televisions and gaming devices, that are enabling consumers to access bandwidth-intensive content anytime and anywhere over fixed and wireless networks, including 3G, and increasingly, LTE networks. |
|
TECHNOLOGY |
|
. Utilizes a set of proprietary design elements that provide optical functionality on a silicon chip. PIC devices integrate many more functional elements than discretely packaged components, enabling increased functionality in a small form factor while reducing packaging and interconnection costs.
. The cost advantages of PIC-based components are driven by the economics of semiconductor wafer mass manufacturing, where the marginal cost of producing an incremental chip is much less than that of a discrete component. |
|
Utilizes proprietary design tools and design-for-manufacturing techniques to closely align design process with precision nanoscale, vertically integrated manufacturing and testing capabilities. |
|
CUSTOMERS |
|
Sells products to the leading network equipment vendors globally, including ADVA AG Optical Networking Ltd., Alcatel-Lucent SA, Ciena Corporation (including its recent acquisition of Nortel’s Metro Ethernet Networks business), Cisco Systems, Inc., FiberHome Technologies Group, ECI Telecom Ltd., Telefonaktiebolaget LM Ericsson, Fujitsu Limited, Harmonic, Inc., Huawei Technologies Co., Ltd., Mitsubishi Electric Corporation, NEC Corporation, Nokia Siemens Networks B.V. and ZTE Corporation. |
|
LOCATIONS |
|
Research and development and wafer fabrication facilities in Silicon Valley, California which are closely aligned with research and development and manufacturing facilities in Shenzhen, China. |
|
COMPETITION |
|
. Principal competitors include Finisar Corporation, JDS Uniphase Corporation, NTT Electronics Corporation, Source Photonics, Inc. and Sumitomo Electric Device Innovations.
. Also faces competition from some customers who evaluate NPTN’s capabilities against the merits of manufacturing products internally. |
|
EMPLOYEES: 2,990 |
|
ACQUISITIONS |
|
• In March 2003, acquired Lightwave Microsystems Corporation, a developer and fabricator of photonic integrated circuits
• In March 2006, completed the acquisition of Photon Technology Co., Ltd. (now named NeoPhotonics (China) Co., Ltd.), a manufacturer of active optoelectronics, transceivers and modules;
• In June 2006, acquired Lightconnect, Inc., which expanded our product portfolio by adding a line of micro-electromechanical systems based optical components and modules;
• In June 2006, acquired OpTun, Inc., a developer of ROADM technology;
• In August 2006, completed an acquisition of BeamExpress, Inc., an integrator of active indium phosphide telecommunications devices in parallel optics high-speed transceivers
• In November 2006, acquired Paxera Corporation, a developer of tunable technology for dynamically reconfigurable networks
• In February 2008, acquired certain assets and intellectual property from Mitsubishi Electric Corporation relating to the manufacture of high-speed transceivers. |
|
USE OF PROCEEDS |
|
$63m from sale of 7mm shares |
|
For working capital and general corporate purposes |
|
NeoPhotonic (NPTN) |
NPTN, C+, 6.5 |
|
|
|
|
Post IPO shares: 23mm |
|
Semiconductors |
|
|
|
|
|
|
|
San Jose, CA |
2007 |
2008 |
2009 |
Sept9mos09 |
Sept9mos10 |
IPO Mkt |
|
Revenues ($mm) |
$96 |
$134 |
$155 |
$112 |
$133 |
Cap (mm) |
|
Gross margin % |
13% |
18% |
26% |
23% |
32% |
$230 |
|
Net income (loss) |
-$41 |
-$28 |
-$7 |
-$8 |
$3 |
@$10 |
|
Net income % of rev |
-43% |
-21% |
-5% |
-7% |
2% |
|
|
Adjusted EBITDA margin |
-23% |
-6% |
7% |
4% |
12% |
|
|
Quarterly results |
June 2009 |
Sep-09 |
Dec 2009 |
March 2010 |
June 2010 |
Sept, 2010 |
|
Revenues ($mm) |
$37 |
$43 |
$43 |
$40 |
$46 |
$47 |
|
Gross margin % of rev |
23% |
28% |
34% |
32% |
33% |
30% |
|
Net income (loss) |
-$3 |
$0 |
$1 |
$0 |
$3 |
$0.8 |
|
Net income % of rev |
-7% |
0% |
2% |
0% |
6% |
2% |
|
Adjusted EBITDA margin |
5% |
9% |
15% |
11% |
16% |
9% |
|
Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
% offered |
|
annualizing Sept 9 mos |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
in IPO |
|
NeoPhotonic (NPTN) |
$230 |
1.3 |
62 |
1.5 |
1.5 |
30% |
|
SCORECARD |
|
Mgt |
Market |
Market Do- |
Proprie- |
Total |
|
1-5, 5 is high |
|
|
Growth |
mination |
tary |
rating |
|
20 is perfect |
|
1.5 |
2 |
2 |
1 |
6.5 |
|
COMPARE |
|
|
|
|
|
|
|
Valuation Ratios |
IPO Mrkt |
Price / |
Price / |
Price / |
Price / |
Gross |
|
annualizing Sept 3 mos |
Cap (mm) |
Sales |
Earnings |
BookValue |
TangibleBV |
Margin % |
|
NeoPhotonic (NPTN) |
$230 |
1.3 |
62 |
1.5 |
1.5 |
30% |
|
Finisar (FNSR) |
$2,420 |
2.8 |
27 |
5.7 |
6.0 |
34% |
|
JDS Uniphase (JDSU) |
$3,680 |
2.4 |
-268 |
4.0 |
7.1 |
43% |
|
