- Revenues are expected to be in the range of $43 to $47 million.
- Non-GAAP gross margin excluding stock compensation are expected to be in the range of approximately 12% to 16%.
- Adjusted EBITDA are expected to be approximately negative $8 to negative $12 million.

Based on the positive trends in the business and industry, over the second half of calendar 2007, revenue should be up 10% sequentially in the September quarter with further growth in the December quarter. In addition, approximately 80% of the $9 to $10 million in cost savings is expected to be realized by the end of the September quarter. These cost savings along with improving revenue should also positively impact the gross margin and adjusted EBITDA results.

In the March quarter, the company recorded $4.6 million in restructuring charges.

The company currently estimates the remaining restructuring charges to be approximately $2.5 to $3.5 million spread over the next three quarters. Once these plans are implemented, the company forecasts that the breakeven level on an adjusted EBITDA basis will decline to $56 to $58 million in quarterly revenues from approximately $65 million. Further, the company expects that the breakeven level will be achieved at gross margins between 23% and 25%.

The quarterly operating expense level is expected to decline to around $16 to $17 million per quarter excluding amortization costs, with R&D costs of $6.5 to $7 million and SG&A accounting for the remaining $9.5 to $10 million.

Tax spending relating to the restructuring programs was $4.2 million in the March quarter. The management estimates the remaining cash spending relating to all restructuring plans to be $11.5 to $12.5 million, $9 to $10 million of which will be incurred through the end of December. This spending includes approximately $4 million in restructured lease payments for the remainder of 2007.

During the third quarter, the company strengthened its financial position by raising approximately $27 million in March to a private placement of approximately 13.6 million shares of its common stock and warrants to purchase 4.1 million shares of common stock. Along with these new funds, Bookham continues to maintain the $25 million line of credit secured in September 2006.

Over the past three months, the company has executed on several important activities. These include initiating a new cost reduction program, completing a private placement of the common stock and continuing new product introductions.

During the previous conference call Bookham announced a new cost reduction program that was expected to be completed by September quarter.

This, in combination with the company’s previous plans, is expected to reduce the overheads by $9 to $10 million with respect to the overall levels the company had in the December 2006 quarter. The company is on track to hit these targets on schedule.

During the last two months, Bookham has reached several milestones including finalizing the reorganization of its casual facility, launching the transfer of additional R&D functions to the Shenzhen facility in ramping down the auto operations.

On March 26th, the company announced the completion of the private placement of its common stock.

The transaction will raise $27 million and provide Bookham with additional resources to fund the upfront expenses associated with the cost reduction plans. In addition, the company’s stronger financial position gives Bookham further leverage to invest in some of the technologies is expected to be important revenue drivers over the next several quarters.

In the March quarter Bookham added new iTLA customers and continues to have additional customers evaluating the product.

In addition, the company began deliveries of its tunable transmitter assembly, which includes in the same package both indium phosphide laser and indium phosphide modulator. The company is currently shipping to one Tier 1 customer and in discussion with several others.

Over the past few years, the company has put efforts to increase sales to other customers.

These efforts have translated into solid revenue growth especially over the last 12 months. While sales to customers other than Nortel were relatively flat sequentially, revenue from this group is up 43% over the prior year. The gains are being driven by several factors including introduction of new products and the company’s ability to expand the business with several Tier 1 customers.

The company’s three largest customers in the latest quarter were Cisco, Huawei, and Nortel. Cisco accounted for 11% of total revenue and Huawei just under 10%. The company is engaged in numerous new product introductions with all three of these customers that will position Bookham well of the second half of the year.

During the quarter, the company was able to increase revenue from several other Tier 1 companies.

As a point of reference, revenue from customers that are in the remainder of Bookham’s top 10 grew 46% sequentially. Growth within this group came from not only from additional sales of the 24-pin compound transceivers, integrated tunable laser assembly and 980 nanometer pumps.