OCLARO, INC. CEO Interview: ALAIN COUDER

• On 11:48 am EDT, Wednesday August 26, 2009

67 WALL STREET, New York - August 26, 2009 - The Wall Street Transcript has just published its Semiconductors, Semiconductor Equipment, and Software Report offering a timely review of the sector to serious investors and industry executives. This 103 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: DRAM Industry Reorganization -- Semiconductor Supply Chain Status -- Netbook Growth -- LCD TV Growth -- NAND Pricing and Demand -- Micro-Electro-Mechanical Systems (MEMS) Demand Cycle -- Ultra Low Voltage Processors -- Semiconductor Inventory Aging and Type -- Processor Power Developments

Companies include: Intel (INTC); Micron Technology (MU); Microsemi (MSCC); STEC, Inc. (STEC); National Semiconductor (NSM); Texas Instruments (TXN); Taiwan Semiconductor Manufacturing (TSM); ON Semiconductor (ONNN); Intersil (ISIL); Linear Technology Corporation (LLTC); Monolithic Power Systems (MPWR);Advanced Photonix (API); Waytronx Inc. (WYNX); LTX-Credence (LTXC); Mattson Technology Inc. (MTSN); Oclaro, Inc. (OCLR); Silicon Laboratories (SLAB); Microchip Technology, Inc. (MCHP); Cohu, Inc. (COHU); FSI International, Inc. (FSII); Jaco Electronics (JACO); Cadence Design Systems (CDNS); Synopsys (SNPS); Mentor Graphics (MENT); Magma Design Automation (LAVA)

In the following brief excerpt from the 103 page report, Mr. Alain Couder, CEO of Oclaro Inc., discusses the outlook for the sector and for investors.

TWST: Let's start with a description of your primary business and main products.

Mr. Couder: First of all, we are an optical components company. As a result of the transactions we did this year, the merger of Bookham and Avanex, and the swap of assets with Newport, we are now positioned number one or number two in the two markets we serve. We serve the telecommunications market with components for the long-haul and metro market. And there we are number one or number two together with JDS Uniphase at about the same level. Beyond JDSU there is no one close in terms of product portfolio for this market. The second market is merchant laser diodes for the industrial market, and here we are focused on three submarkets. The first is material processing, such as cutting, engraving and hardening of materials for mechanical applications. The second is high-end printing. The third market is medical applications, such as laser-based tools for eye surgery and cosmetics. For cosmetics, there are large opportunities for applications such as hair removal and wrinkle reduction as devices move from the doctor's office to the home, which will obviously drive much larger volumes. The size of our revenue in those two markets is quite different. We have about 85% to 90% of our revenue in the telecom, long-haul and metro market, and 10% to 15% of our revenue in other areas concentrated in the merchant laser diode market. The idea of being number one or number two is that it gives you the critical mass to make sure you invest adequately in R&D versus your competition, and to be able to stay ahead of competition in terms of innovation. In high-tech markets, innovation drives gross margin, and ease of doing business drives revenue and growth. So we are focusing on that. Another area where we are unique is that we are vertically integrated. By vertically integrated we mean that we can build internally all the elements and components necessary to manufacture our modules and subsystems.

TWST: You completed a major merger in April. How is that going?

Mr. Couder: The transition is going very well from our customers' viewpoint. I visited many customers in the past two months, and we have been able to avoid any disruption to our customers, which is a very important point in a merger. But also it's going well for our employees.One thing we did was to choose a new name for the company. We renamed the company Oclaro for optical and clarity. This new name has been well accepted by our customers, but what is great is that instead of one company being acquired by the other one, which is always a bad feeling, the two teams are aligning behind a new adventure. The fact that Oclaro can be a tier-1 company and one of the leading providers in the optical industry means we can be a market setter and all those kinds of things.

TWST: I know you also recently announced your fourth-quarter results. What were the highlights for you of the fourth quarter?

Mr. Couder: I think the first thing is that we are back to growth. March was a low quarter in terms of revenue, and revenue was up for the first time since the downturn of the market. That is clearly good news, and as we announced in our guidance, we expect our revenue will be up again in the September quarter. This is also a very positive thing. The other thing which was positive is that we were able to get some of the synergies together very quickly, and therefore our gross margin ended up better than expected. Also, we were adjusted EBITDA positive, which was not obvious after doing all those transactions. We are cautious about our future guidance because this gross margin was achieved with some elements which are exceptional due to the transaction. But this does give us good confidence that we can deliver improved gross margin in the future and drive the cost model we have discussed for the June 2010 quarter. These were exciting results given they were the first quarter after the merger.

TWST: Tell us about your background.

Mr. Couder: I started at IBM doing telecommunications research. In fact, interestingly enough, I was working on the same modulation technique. I recall that it was trying to go from 4.6 kilobit to 9.6 kilobit, and now we are trying to go to 40G. During the time I've been working, we have multiplied by 10 million the speed on a twisted pair, which is now a fiber. I worked for IBM for some time and then moved to HP in communications again. I initially was the General Manager of one of the divisions in France, and then I moved to California and was in charge of all software for UNIX workstations. Then I went back to France for personal reasons, where I participated in the turnaround and the IPO of Groupe Bull. After seven years, I was too far from technology, so I came back to California and I've been here now for 12 years. Since returning, I was the Chief Operating Officer for Agilent at one point in time, and I was managing what is now Avago Technologies, which at the time was part of Agilent.

TWST: Thank you. (LMR)

ALAIN COUDER President and CEO Oclaro, Inc.2584 Junction Ave. San Jose, CA 95134 (408) 383-1400 www.oclaro.com ir@oclaro.com

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 103 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

For Information on subscribing to The Wall Street Transcript, please call 800/246-7673

Buzz up!