I have gone over the numbers that Oclaro has been touting.
They claim $10M in "synergy" savings - usual nonsense, if you go back and compare OCLR (Dec '12) + OPXT (Dec '12) then its true. SG&A+R&D is lower by little less than $10M.
However, the bottom line has been shattered by taking over OPXT. Even with the "synergy savings" their expenses have gone up by $20M while gross profit has only gone up by $10M.
You may have noticed that OCLR tried to sneak in new breakeven Qtr revenue of $175 - $180. This was $175 last qtr.
Now lets get real here - OCLR has historically been a 20% margin company. OPXT was a 15% margin company. Lets buy into the bull that OCLR+OPXT can eventually get back to 20% gross margin.
Now lets do the math - OCLR needs about $50M gross profit to breakeven (R&D+SG&A+interest expense). Pick your poison -
OCLR can reach $50M breakeven point by -
Rev: $250M, Gross Margin: 20%
Rev: $180M, Gross Margin: 28%
Both these scenarios look improbable for Oclaro. So get used to reality - OCLR will continue burning cash till they run out of it.
Change of plans - stay as far away as possible from OCLR, only takeover rumors will lead to some spikes but the general trend is down down down.
Once BKHM always BKHM by just another name. They need to get rid of management, especially the Frog at the helm. He is a two-faced Frenchman at the boardroom wetbar while the company burns.
Sentiment: Strong Sell
the trend for you is to leave this board now, no one cares what you have to say