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8-K - FORM 8-K - OPNEXT INCc04763e8vk.htm
Exhibit 99.1
Morgan Keegan Technology Conference August 11, 2010


 

2 Safe Harbor Statement / GAAP Reconciliation Copyright 2010 by Opnext, Inc. Statements made herein include forward-looking statements, including, but not limited to, those related to future revenues, growth of revenues, market position, acceptance of certain new products, management's expectations with respect to Opnext's initiatives, position for future growth, the general market outlook and the outlook for the industry. These statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Among other things: the general outlook for the future is based on preliminary estimates, assumptions and projections that management believes to be reasonable at this time, but are beyond management's control; and the market in which Opnext operates is volatile, implementation of operating strategies may not achieve the desired impact relative to changing market conditions and the success of these strategies will depend on the effective implementation of our strategies while minimizing organizational disruption. Other factors that could cause Opnext's future, including future financial position and results from operations, to differ from current expectations include: the impact of rapidly changing technologies; the impact of competition on product development and pricing; the success of Opnext's research and development efforts; the ability of Opnext to source critical parts and to react to changes in general industry and market conditions, including regulatory developments; expenses associated with litigation; rights to intellectual property; market trends and the adoption of industry standards; the ability of Opnext to realize the value from the acquisition of StrataLight Communications, Inc.; and consolidations within or affecting the optical modules and components industry. These factors are not intended to be an all-encompassing list of risks and uncertainties that may affect Opnext's business. Additional information regarding these and other factors can be found in Opnext's reports filed with the SEC, including under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Forward-Looking Statements" in Opnext's Annual Report on Form 10-K filed on June 14, 2010, as amended, as well as Opnext's press releases and other periodic filings with the SEC. In providing forward-looking statements, Opnext expressly disclaims any obligation to update these statements, publicly or otherwise, whether as a result of new information, future events or otherwise, except to comply with applicable federal and state securities laws. Certain data included in this presentation includes non-GAAP financial measures. Reconciliations of the non-GAAP financial measures for the quarters ended June 30, 2010 and 2009 and March 31, 2010 are included in Opnext's earnings release dated August 5, 2010, which is available on the Investor Relations section of the Opnext website at http://www.opnext.com.


 

3 Clarity Partners Hitachi, Ltd.Fiber Optic Component BU Hitachi, Ltd.Opto Device September 2000 October 2002 Pine PhotonicsPluggable Transceivers June 2003 Clarity and Hitachi unlocked the value of Hitachi's laser technology and business by creating a standalone, market-driven company History February 15, 2007 OPXT StrataLightTransmission Subsystems January 2009 July 2001 Copyright 2010 by Opnext, Inc.


 

Opnext Global Locations Opnext Global Locations Corporate Headquarters Americas Sales Pluggables Business Fremont, CA Subsystems BusinessLos Gatos, CA Global OperationsEatontown, NJ Europe SalesMunich, Germany Asia-Pacific SalesShanghai, PRC DevicesBusinessKomoro, Japan Japan SalesTokyo, Japan Modules BusinessTotsuka, Japan 4 Copyright 2010 by Opnext, Inc.


 

5 5 Regional Split * *Quarter End Q1 FY2011 Our Customers Copyright 2010 by Opnext, Inc.


 

6 A technology leader in 10G, 40G, & 100GFocused on the most attractive marketsDiversified customer base & broad product portfolio Investing in next generation products Opnext is a global leader in high speed optics for communications networks Value Proposition Copyright 2010 by Opnext, Inc.


 

7 Material Engineering InGaAlAs (InP) Laser Diodes DFB laser EA TOSA / ROSA Miniaturization Integration Subsystem Linecards 300-pin XFP X2 SFP+ XENPAK Optical expertise from lasers to subsystems provides the needed flexibility for system vendors Solutions for All Levels of Optical Networking Copyright 2010 by Opnext, Inc.


 

8 More than just communications Defense & Security Laser printing / MFP Laser Targeting Biomedical Light healing / DNA & Blood Analysis Commercial Applications Barcode Scanners Industrial Uses Distance Measurement Display Technologies Infrared / Night Vision Show Lasers Lasers forMini Projectors Heads-UpDisplay Laser Level Industrial & Commercial Products Copyright 2010 by Opnext, Inc.


 

9 IP Traffic Growth, 2009-2014 1 ExaByte = 1018 Bytes = 100,000 Libraries of Congress Global IP traffic is expected to more than quadruple from 2009 to 2014Internet video is now over one-third of all consumer Internet trafficMobile data traffic is expected to double every year through 2014 Source: Cisco Visual Networking Index June 2010 34% CAGR Copyright 2010 by Opnext, Inc.


 

10 Total Optical Component Market 10% CAGR $3,224 $3,615 $3,607 $4,890 '10-'1319% CAGR '10-'1313% CAGR $4,199 $3,223 Legacy, FTTx,Transport, Passives Discretes Total Optical Component Spending ($mm) $5,590 Note: Market data based on Ovum Jul'09 Report, Ovum Feb'10 Forecast, Ovum May'10 Update and LightCounting Mar'10 Forecast 16% CAGR Copyright 2010 by Opnext, Inc. Addressable


 

11 Addressing a Large and Growing Market (^10Gbit/s) Note: Market data based on Ovum Jul'09 Report, Ovum Feb'10 Forecast, Ovum May'10 Update and LightCounting Mar'10 Forecast 16% CAGR $1,033 $970 $1,179 10G, 40G, 100G Spending ($mm) $1,829 22% CAGR '10-'1339% CAGR '10-'1313% CAGR $873 $1,487 $2,165 Copyright 2010 by Opnext, Inc.


 

12 The Broadest 40G and 100G Offering 40G and 100G Subsystem 40G and 100G Muxponder 40G and 100G Transponder 40G SFF and LFF 40G DPSK 40G Optical PMDC 40 GbE CFP MSA 10km and 40 km 40G DQPSK 100 GbE CFP MSA 10km (LR4) and 40km 100G OTU4 CFP MSA 40G and 100G EA-TOSA 40G and 100G PIN-ROSA 100G Coherent 100G Mux 100G Coherent Receiver 40G Coherent Subsystems Line-sideModules ClientModules Components Copyright 2010 by Opnext, Inc.


 

13 Many Challenges ... and Opportunities Business Challenges Market for 40G + 100G: 2009 = $280mm growing at >39% CAGR to 2013 *Mix Uncertain: 40G vs. 100G; Modulation Scheme Splits; Merchant vs. Captive Proprietary Linecards vs. Industry MSAs R&D Investment Model Technical Challenges Industry paradigm shifting: Direct Detection ^ Coherent Detection Thermal Management Photonic Integration: Delivers supply chain stability, improved manufacturability & cost Alphabet Soup of Modulations Many single sourced optical components w/ high cost structure Single ModulationPM-QPSK Early Optical MSA ecosystemMultiple Suppliers 40G Lesson 100G Plan Gen 1 = Packet over SONETGen 2 = Ethernet Gen 1 = Ethernet *Source: Ovum 2010 Forecast; Copyright 2010 by Opnext, Inc.


 

Opnext View: 40G/100G Coherent Market System Vendor DWDM Revenue Share$6,948B2QCY09 - 1QCY10 About 1/3 of the system DWDM market is pursuing internal coherent programs for 40/100G DWDMAbout 2/3 of the system DWDM market is accessible to Opnext and module vendors ALUCienaCisco Accessible to Opnext & Module Vendors Opnext Estimated Coherent Module Market Based on Ovum WAN Optical Component Forecast, Feb-2010 & Ovum Inaugural 40G Component Forecast, Mar-2010 Ovum forecasting 40/100G DWDM market to grow at 36% CAGR from 2010 to 2014Module market expected to grow faster as early adopters shift to module based designs Copyright 2010 by Opnext, Inc. 14


 

15 15 Revenue Trends 26% CAGR Copyright 2010 by Opnext, Inc. Note: StrataLight Communications, Inc. acquired on January 9, 2009


 

16 16 Financial Highlights * Reconciliations of the non-GAAP financial measures are included in the Company's earnings release dated Aug 5, 2010, which is available on the Investor Relations section of the Opnext website at www.opnext.com. ** ** * Copyright 2010 by Opnext, Inc.


 

Financial Position (in thousands) Copyright 2010 by Opnext, Inc. (Unaudited) (Unaudited) Cash & Equivalents less Short-term Loans Payable = $84.2 million at June 30, 2010 17


 

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