JDS UNIPHASE CORP /CA/
425, 2000-07-10
SEMICONDUCTORS & RELATED DEVICES
Previous: JDS UNIPHASE CORP /CA/, 425, 2000-07-10
Next: FRANKLIN REAL ESTATE SECURITIES TRUST, N-30D, 2000-07-10



<PAGE>   1
Filed by JDS Uniphase Corporation
Pursuant to Rule 425 under the Securities Act of 1933, as amended, and deemed
filed pursuant to Rule 14a-12 of the Securities and Exchange Act of 1934, as
amended
Commission File No.: 0-22874
Subject Company:  JDS Uniphase Corporation and SDL, Inc.

TM:
Good morning everyone and thank you for joining us to discuss a momentous
occasion in the telecommunications equipment market. As you know, JDS Uniphase
and SDL have agreed to merge in a $41 billion dollar transaction. We are very
enthusiastic about what this means for our customers, the industry and our
employees and shareholders. I'm joined by JDS Uniphase Co-Chairman and CEO Jozef
Straus and SDL Chairman, President and CEO Don Scifres. Both of them will be
sharing their thoughts on the transaction, then I will take you through some of
the numbers. But first, the safe harbor language before we begin:

I would like to remind everyone on the call that some of the statements we will
make and the discussions we will have will relate to the future operations,
finances, business and prospects of our companies. These statements and
discussions, to the extent they do not relate solely to historical matters,
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements may be, but are not always, identified by the use of
words such as "believes," "intends," "strategies," "goals," "expects,"
"anticipates," and other words indicating future events or actions. In
particular, any statements or discussion on this call relative to the likelihood
and timing of closing, the obtaining of governmental consents and approvals and
shareholder consents, the expected benefits of the merger, the expected
accretive impact of the proposed transaction, and the ability of the combined
company to successfully develop and supply products after the merger, are all
forward-looking statements and should be understood as such.

All forward looking statements that you may hear involve risks and uncertainties
that could cause actual results to differ materially from those stated or
discussed on this call. Some, but not all, of these risks and uncertainties are
discussed from time to time in the press releases and securities filings of both
companies

Page 1 of 8

<PAGE>   2

with the SEC, particularly the "Risk Factor" section of our Form S-3
registration statement that we filed with respect to the Canadian securities
that we issued in the ETEK acquisition. The forward looking statements on this
call are made as of the date hereof, and neither company assumes any obligation
to update the reasons why actual results could differ from those projected in
the forward looking statements.

Now I will turn the call over to Jozef Straus.


JS:
I am thrilled to be talking to you this morning about such exciting news. It is
indeed an honor to be here with Don Scifres one of the leaders of the industry
and know that we will be working side by side from now on. I am so excited to
join together these two companies with their world class customers, employees
and products!

Before discussing the many benefits of the merger that we see, I'd like to add a
personal note to this transaction. I have known Don Scifres for years. In fact,
Don interviewed me for a job in 1979 and I turned it down. I don't know who was
happier in the "lost" years, but finally we will be working together!

SDL's products are some of the best and well recognized in the industry, we
should know as JDS Uniphase has been using them in our own products! Beyond
SDL's existing product line, they are also working with newer technology
platforms .

Now, let's get down to why this transaction makes sense for the industry, our
customers, our employees, and our stockholders.

Page 2 of 8

<PAGE>   3

By now we all know that the Internet is taking over the world and what that
means about the need for bandwidth. Optical is clearly the only solution and our
customers who are building tomorrow's systems need higher levels of integration
and more complex products every day. And they need more of them sooner.

We are already building modules that integrate several components on a single
board but we are not building enough and we are not keeping up with the demand
for new designs that include even more functions and true integration.

This merger addresses all of these areas - including a wide range of
technologies needed for tomorrow's products: micro-optics, electronics, lithium
niobate, gallium arsenide, MEMS ...., the list could go on an on.

The days of a system on a chip have always seemed to be very far away but with
this merger, I think we just condensed the time frame once again.

An example - take a look at the amplifier market which according to RHK is
growing over 50% annually. In just the last twelve months, we have gone from a
market that was primarily using high power erbium doped fiber amplifiers to one
where the demand for Raman amplification and low-power amplets is beginning to
take off. We intend to provide the best in class amplifiers in all three areas
addressing long haul, ultra long haul and short haul applications. And our
technical teams will be embarking on development of next-generation
amplification which we believe will be incorporated into many aspects of all
optical networks for low loss routing and switching.

As a scientist, I get very excited about the technical team being brought
together and the capabilities that we are building on the module level but my
friend Jay Abbe is here to remind me that production volumes are equally
important. He and SDL's COO, Greg Dougherty, have been studying both companies'
capacity

Page 3 of 8

<PAGE>   4

issues to determine whether or not more product can come out of the companies
once they're joined and the answer is yes.

While both companies are capacity constrained, the bottlenecks are unique. We
believe that by re-allocating resources - particularly equipment, space and
automation advancements, we can produce more products that are in short supply.
Of course, this does not mean that we can slow our capacity additions - the
combined company will be continuing to add capacity as the metro and access
markets begin to heat up even more.

(PAUSE)

Now, I'd like to make a few comments about our integration activities. As you no
doubt know, JDS Uniphase has made several acquisitions over the past year, and
we have been working hard to realize their maximum potential through
integration. Our integration philosophy is actually quite straightforward We:

o  Focus on actions that drive value for our customers,
o  Capitalize on new opportunities, and
o  Execute against the transaction rationale

In particular we focus on building a very strong integrated management team.
Most of our acquisitions come with strong entrepreneurial leaders who have
achieved great success in running their independent businesses. We are very
proud that we have been able to fuse this team into a cohesive, focused,
management team for our company as a whole. In general terms our integration
approach is action and customer oriented and focused around ensuring we remain
agile and flexible as we grow into a larger integrated company.

In conclusion, this combination means an expanded amplifier and integrated
module strategy, faster time to market with new products, a world class
technical team, and the continued fight against capacity constraints. Shortly
I'd like to turn

Page 4 of 8

<PAGE>   5

the call over to Don but before I do that..... I'm excited to announce that Don
will be joining our Board as Co-Chairman and Jay Abbe will also be joining our
Board. Organizationally, Don will continue to lead SDL and I will look forward
to his valuable input as a member of our executive management team.

Don....

DS:
I am equally excited about this merger as we bring together 2 of the most
successful companies in the industry. I might start with a story. I have known
Jozef for over 20 years and in 1980 I tried to hire him. Jozef was an expert in
packaging and what is now known as passives. We had early actives capability.
It's a shame it took us 20 years to bring together our skills in actives and
passives - but I think we'll be able to move the industry forward more rapidly
as a result.

My vision is that this merger will create a better partner for our customers.
Our complementary skills in actives and passives will be able to create more
advanced products for next-generation optical networks.

These complementary skills sets are expected to speed the introduction of low
cost amplets, advanced module level transmitters and receivers, and leading edge
mux, demux and switching products.

I'm also looking forward to taking our joint broadened technology tool kit and
creating a truly integrated optical circuit on a wafer. This has been my goal
for over 30 years and this merger should help enable this dream to come true.

Finally I anticipate that our joint manufacturing capabilities which have
different manufacturing bottlenecks or limitations will be able to turn out more
products for our customers.

Page 5 of 8

<PAGE>   6

They clearly need faster delivery and higher volumes in this booming market.

In short, I believe that jointly we're creating a better partner for our
customers, and I'm thrilled to be able to do this with such a great team and
compatible culture at JDS Uniphase

With that, let me turn it back over to Tony.

MP:
The transaction is subject to the obtaining of stockholder approval of both
companies and customary regulatory approvals. On the regulatory side, we will
file our joint proxy statement with the SEC for approval of our registration
statement for the shares and options to be issued in the transaction. We also
need to comply with the Hart Scott Rodino Antitrust Improvements Act as was the
case when we acquired E-TEK and merged Uniphase and JDS Fitel in 1999.

We have entered into this transaction based on our belief that the combination
of these two companies will benefit the customers of each company and the
markets we serve based on a number of factors that have been discussed during
this call. As was the case with E-TEK, we will fully cooperate with the
Department of Justice in its review of this transaction. That process was very
constructive in the context of the E-TEK transaction and we achieved the right
result with the DOJ through such cooperation. As in E-TEK, we are optimistic
that we will obtain the required approvals regarding our merger with SDL. We are
very committed to successful completion of this important merger and will work
with the DOJ towards that end.

Prior to closing, we will update the public by press release as to any material
developments in the regulatory process. Other than such public announcements, we
will not be providing any interim information to the investing public regarding

Page 6 of 8

<PAGE>   7

the approval process and will not be commenting outside of these press releases
on our progress on these matters.

Now I will turn the call back to Tony Muller.

TM:
First, let me review the key elements of the merger.

o   3.8 shares of JDS Uniphase common will be exchanged for each share of SDL
    common in a tax-free exchange

o   there are no collars

o   the transaction will be accounted for as a purchase

o   the merger is subject the approval of stockholders' of both companies and
    customary regulatory approval

o   we anticipate closing the merger by the end of December

Now let me review the financial impact of this merger. The pro forma consensus
estimates for the recently completed June quarter for JDSU, E-TEK and SDL add up
to sales at a $2.7 billion annual run rate. Further, the preliminary results for
the quarter for each of these three companies is for sales and income to be
higher than investment community estimates, and you will learn of these results
later in the month when we announce results. Our businesses remain strong.
Further, as a result of this merger we see additional sales growth
opportunities, including EDFA and Raman amplifier sales, faster startup and ramp
of packaging operations, and additional modulator capacity. And further, we
expect even greater sales enhancement opportunities as our development teams
combine the technologies and capabilities of our companies to provide the
advanced modules of the future. In summary, based on our understanding and
expectations for our businesses, we believe this merger will be accretive for
our stockholders after the close.

Page 7 of 8

<PAGE>   8

The companies will be on a road show for much of this week, and investors who
would like to attend the meetings should contact their sales representative at
Banc of America Securities or CIBC World Markets.

Let me turn it back to Jozef for a brief summary and then we will take some
questions.

JS
This is truly an outstanding day for JDS Uniphase and SDL - and I just want to
reiterate that our vision is that we will have the technology depth, product
breadth, manufacturing and financial strength, and people to be the leading -
and fastest growing provider of next-generation components and modules for
optical networking. The keys to achieving this vision is having access to the
enabling technologies, close partnering with our customers and execution,
execution, execution.

Tony....


TM
We would now like to open the call to questions. Because the financial markets
will soon open, we ask that members of the press please hold their questions
until we have had the opportunity to answer questions from the financial
community.

You are urged to read the proxy statement/prospectus to be included in JDS
Uniphase Corporation's Registration Statement on Form S-4 in connection with the
transaction to be filed with the SEC when it is available because the proxy
statement/prospectus and the Registration Statement on Form S-4 will contain
important information. You can get copies of the proxy statement/prospectus and
the Registration Statement on Form S-4, and any other relevant documents, for
free at the SEC's web site and copies of our reports, proxy statements and other
information regarding us filed with the SEC are available free from us. Requests
for documents relating to us should be directed to JDS Uniphase Corporation, 163
Baypointe Parkway, San Jose, California, 95134 Attention: Investor Relations
(408) 434-1800. Requests for documents relating to SDL, Inc. should be directed
to SDL, Inc., 80 Rose Orchard Way, San Jose, California 95134 Attention:
Investor Relations (408) 943-4343.

Page 8 of 8


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission