US Investor Presentation
September 2003
Filed by New Focus, Inc. Pursuant to Rule 425
Under the Securities Act of 1933
And Deemed Filed Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: New Focus, Inc.
Commission File No.: 000-29811
Disclaimer
Any remarks that we may make about future expectations, plans and
prospects for Bookham constitute forward-looking statements for
purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from
those indicated by these forward-looking statements as a result of
various important factors, including those discussed in our Annual
Report on Form 20-F for the year ended December 31, 2002, as
amended, which is on file with the Securities and Exchange
Commission. Forward-looking statements represent Bookham’s
estimates as of the date made, and should not be relied upon as
representing Bookham’s estimates as of any subsequent date. While
Bookham may elect to update forward-looking statements in the future,
it disclaims any obligation to do so.
Bookham Overview
Key facts
Founded in 1988
1998: First commercial products (transceivers)
1998: Intel and Cisco invest in Bookham
April 2000: Traded on NASDAQ and London Stock Exchange (LSE)
Feb 2002: Acquired Marconi’s optical component business
Fab and actives; Became a player in tunable lasers and modulators
November 2002: Acquired Nortel Networks Optical Components
Acquired one of largest product lines in the industry
December 2002: Gained number 2 position worldwide in telecom optical
components
July 2003: Acquired Cierra Photonics
Opens up new market opportunities with thin film filters
August 2003: Completed integration/closure of former Nortel facilities
September 2003: proposed acquisition of New Focus and Ignis Optics
Current Bookham positioning
No. 2 in telecom optical components
Most comprehensive, end-to-end product portfolio of active
components and amplifiers
Strong, Blue Chip customer base
Strategic relationship (supply and R&D agreements) with
Nortel, the No. 1 optical systems vendor
Emerging, non-telecom optical business leveraging existing
Bookham technologies
Efficient, integrated manufacturing capability
Proven ability to acquire and consolidate (Nortel, Marconi,
Cierra) – additional value enhancing opportunities available
Strong competitive positioning vs. its competitors
Number 2 in telecom optical
components
Strategy: going forward
Leverage position of market leadership to gain share in
telecom
Secure revenue base (supply agreements)
Continue expansion into new tier 1 accounts
Make ex-NNOC products available to all other customers
Forward-integrate into subsystems (create barriers to entry)
Use technology depth to deliver differentiation in cost, space and power
consumption
Exploit consolidation opportunities to gain added scale
Develop non-telecom business
Continue growth of MMICs
Expand into related opportunities in industrial, military and aerospace
Expand into datacom
Implement competitive cost structure
Deliver on restructuring targets
Realize scale benefits (R&D, manufacturing)
Cash management
Continuing cost-reduction
Full product coverage
Transmit
DFB
Thermal Tunability
Electronic Tunability
Direct Mod
InP MZ
GaAs MZ
E/A
Transceiver
Transponder
Receive
Transmit
Mux
Node
Demux
Mux
TFF
Control
EVOA
Amplify
Amplifiers
980 pump
Photodiodes
GFF
OSC
Add/Drop
Skip
Filters
DeMux
TFF
Receivers
PINs
APDs
Transceivers
Transponders
Optical networking market
shares (sales Q2 2003)
Strong Blue Chip customer base
Source: Dell’Oro Sept 2003 & company estimate
Supply agreements with Nortel and
Marconi provide $109 million of
guaranteed revenues in 2003
Combined optical networking market
share of Nortel and Marconi at 23%,
up from 18% in Q3 2001
Huawei: a 10% customer for the first
time in Q2 2003
Expanding position with other Tier 1
customers
Strategic relationship with Nortel
and Marconi (supply contracts)
No. 1 market share in optical
systems
3 year supply agreement
Committed purchases by product
Minimum commitment
85% to 65% TxR
65% to 50% amplifiers
$20 million per quarter first 6
quarters
Part of acquisition Nov 02
Significant progress with Design-ins
Leading market share within
European countries
$45 million take or pay supply
contract as part of Feb 02
acquisition
$18 million commitment remaining
at 30th June 03
Non-Telco markets & products
Dedicated market group within Bookham to ensure focus
Strategy is to deliver existing technology customised to alternative
markets that value it – spreading fixed manufacturing costs and R&D
know-how
Leverages increased revenue and cash from existing facilities with
minimal incremental investment
Key targets:
MMICs > military and aerospace – a current business (25 year heritage)
High power GaAs lasers > industrial – Q1 2004 start
Datacom where crossover with Telecom
TX/RX > military customers
High profit-margin business
Transaction with New Focus accelerates development of non
telecom optical business and reduces dependency on major telecom
customers
Non-telecom revenues in 2004 expected to be over 30% of total Bookham revenues
Kanata, Canada
R&D
Milton, UK
HQ
Paignton, UK
Main A&T
facility
240k sq ft
92k sq ft clean
room
Established
1970s
Zurich, Switzerland
980 Pump Laser Chip
Caswell, UK
Main GaAs
and InP fab
180k sq ft
37k sq ft clean
room
Established
1940s
Santa Rosa, US
TFF
Bookham facilities
Consolidation plans are delivering
50% reduction in Ops OHD spend while
supporting revenue growth
Programs ahead of plan: delivering savings faster
EDFA,
WaVe
Fibres,
ASOC,
E2
A&T,
CoT
Wafer
Fab
Amplifier facilities: 2 into 1, completed Q4 ‘02
Chip preparation from Caswell and Ottawa to Paignton, completed Q4 ‘02
Caswell A&T consolidated into Paignton, completed Q1 ‘03
Harlow speciality fiber activity, closed end Q1 ‘03
Poughkeepsie E2 manufacturing, closed end Q2 ‘03
ASOC engineering and manufacturing restructured Q1-Q2 ’03, closed Q3 ‘02
Completion of Ottawa fab consolidation, completed ahead of schedule, Q3 ‘03
Completed
OHD Spend
0%
20%
40%
60%
80%
100%
120%
2002
Q3
2002
Q4
2003
Q1
2003
Q2
2003
Q3
2003
Q4
2004
Q1
New Focus Overview
Key facts
1990
Founded around a mission to provide innovative photonics tools
1991
Achieved initial revenues with the introduction of high-speed
detectors, electro-optic modulators, and opto-mechanics
1990s
Grew business around key photonics products and technologies
1997
Entered the telecom components and test & measurement market
2000
Completed IPO and secondary offering raising over $550 million
2001
Acquired JCA Technology, a supplier of microwave RF amplifiers
2002
Sold passive optical component product line to Finisar and
network tunable laser technology to Intel
Today
Business focused on photonics tools and microwave RF amplifiers
for diversified non-telecom markets
Diversified Blue Chip customers
Several
Tier-1 defense
contractors
Other major semiconductor
capital equipment OEMs
Transaction summary
Strategic rationale
Expect to:
Provide substantial increase in cash reserves
Accelerate development of non-telecom optical business
Reduce dependency on major telecom customers
Provide additional low cost manufacturing capability through state-of-
the-art Chinese facility
Establish strong Bookham presence in Silicon Valley
Accelerate time to operating cash breakeven
Expected to accelerate development
of non-telecom optical business
New Focus is a leading provider of Photonics and Microwave Solutions to diversified markets
New Focus has a strong reputation for innovation, quality and customer service
New Focus has over 100 patents and applications and 20 industry awards for innovation
New Focus served markets are estimated at approximately $1 billion in 2003 (1)
Acquisition is consistent with previously announced non-telecom diversification strategy
(1) Source: Laser Focus World, Berenberg Bank, Medical Report, and Strategies Unlimited
Bookham
Bookham Pro forma
Telecom
94%
Non-Telecom
6%
Telecom
80%
Non-Telecom
20%
Q2 2003
In 2004, expect approximately 30% of revenues from non-telecom customers
Expected to reduce dependency
on major telecom customers
Nortel
62%
Marconi
10%
Huawei
10%
Others
18%
Bookham
Bookham Pro forma
Nortel
53%
Marconi
8.5%
Huawei
8.5%
Others
15%
New Focus Customers
15%
Q2 2003
New Focus facilities
Location: San Jose, CA
Size: 60k sq ft
Location: Shenzhen, China
Size: 247k sq ft
San Jose
Technical/business presence – important
asset for Bookham’s planned expansion
strategy
Two facilities: room for either expansion
or cost-reduction
China
State-of-the-art facility in Shenzhen Free
Trade Zone, close to Huawei and with
prime location overlooking Hong-Kong
(currently empty)
Financial Impact
Pro-forma income statement (in $US million)
1.
Excludes charges which generally have included restructuring costs
2.
Represents earnings before interest, taxes, depreciation and amortisation and excluding charges
N.B Translated solely for the convenience of the reader at the rate of $1.62 = £1
Anticipated next steps
Announced restructurings
Bookham
- Ottawa fab closure
- Other Bookham cost
reductions
New Focus
- Q3 staff reductions
Anticipated synergies of
G&A consolidation of New
Focus
Anticipated growth
through market share
gains and expansion of
non-telecom revenues
Q2 2003
Bookham
New Focus
Combined
Revenue
$34.1
$6.3
$40.4
Cost of Sales
(1)
39.2
5.2
44.4
Gross Profit (Loss)
(1)
(5.2)
1.1
(4.0)
R&D
(1)
13.2
2.4
15.6
SG&A
(1)
10.7
4.7
15.4
Operating Income (Loss)
(1)
(29.0)
(5.9)
(35.0)
Operating Cash Flow
(2)
(23.4)
(4.7)
(28.1)
Financial impact
Summary balance sheet (in $US million)
(1) New Focus cash figure is post distribution of $140m (and potential proceeds from New Focus option
exercises) but excludes deal costs estimated at $12.1 m.
N.B. Translated solely for the convenience of the reader at the rate of $1.62 = £1
Pro-forma 30 June 2003
Bookham
New Focus (1)
Combined
Cash & short term investments
$114.7
$117.0
$231.7
Accounts Receivable
24.0
2.6
26.6
Inventory
26.9
3.4
30.3
Net Current Assets
173.9
126.4
300.3
Long-Term Liabilities
(54.6)
(12.1)
(66.7)
Net Assets
181.9
150.3
332.2
Comparable companies valuations
Outlook
Q3 03 revenue projection: $34 million to $39 million
Gross margin expected to improve by 10% or more
Exceptional charges projection: $23 million to $26 million
Q3 03 cash burn projection (including exceptionals):
$32 million to $37 million
Summary
Strong market position: #2 in telecom, which would be
balanced outside of telecom
Strong and expanding telecom customer base
(NT/MONI/Huawei), which would be significantly de-risked
Strong revenue base (supply agreements)
Strong product line-up
Strong manufacturing base; proposed transaction would add
low-cost manufacturing site
Operational execution
Deep management expertise
Strong financial position
Record of consolidation and successful integration
Additional Information And Where To Find It
Bookham Technology, Inc. plans to file a Registration Statement on Form F-4 with the Securities and Exchange Commission in connection with the merger transaction involving Bookham Technology and New Focus and this Registration Statement on Form F-4 will contain a joint proxy statement/prospectus that Bookham Technology and New Focus, Inc. intend to file in connection with the merger transaction. Investors and security holders are urged to read this filing when it becomes available because it will contain important information about the merger. Investors and security holders may obtain free copies of these documents (when they are available) and other documents filed with the Securities and Exchange Commission at the Securities and Exchange Commission’s web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the Securities and Exchange Commission by Bookham Technology by contacting Bookham Technology Investor Relations at + 44 (0) 1235 837000. Investors and security holders may obtain free copies of the documents filed with the Securities and Exchange Commission by New Focus, Inc. by contacting New Focus Investor Relations at (408) 919 5384.
Bookham Technology and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of New Focus in connection with the merger. Information regarding the special interests of these directors and executive officers in the merger will be included in the proxy statement/prospectus of Bookham Technology and New Focus described above. Additional information regarding the directors and executive officers of Bookham Technology is also included in Bookham Technology’s Annual Report on Form 20-F, which was initially filed with the Securities and Exchange Commission on March 19, 2003, as amended by the Annual Report on Form 20-F/A filed with the Securities and Exchange Commission on September 10, 2003. This document is available free of charge at the Securities and Exchange Commission’s web site at www.sec.gov and from Bookham Technology by contacting Bookham Technology Investor Relations at + 44 (0) 1235 837000.
New Focus and its directors and executive officers also may be deemed to be participants in the solicitation of proxies from the stockholders of New Focus in connection with the merger. Information regarding the special interests of these directors and executive officers in the reorganization transaction described herein will be included in the proxy statement/prospectus of Bookham Technology and New Focus described above. Additional information regarding these directors and executive officers is also included in New Focus’s proxy statement for its 2003 Annual Meeting of Stockholders, which was filed with the Securities and Exchange Commission on or about April 11, 2003. This document is available free of charge at the Securities and Exchange Commission’s web site at www.sec.gov and from New Focus by contacting New Focus Investor Relations at (408) 919 5384.