##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 29, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-30684
 BOOKHAM, INC.
  Delaware
    
    20-1303994(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)
 2584 Junction AvenueSan Jose, California
    
    95134(Address of Principal Executive Offices)
    
    (Zip Code)
 408-383-1400
  þ o
  o Large accelerated filer
    

þ Accelerated filer
    
    o Non-accelerated filer   
(Do not check if a smaller reporting company)
    

o Smaller reporting company
  o þ




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##### 



BOOKHAM, INC.
TABLE OF CONTENTS
 PART
I  Financial Information (Unaudited)Item 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets as of March 29, 2008 and June 30, 2007
    
    
    3Condensed Consolidated Statements of Operations for the three and nine months ended
March 29, 2008 and March 31, 2007
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine months ended March 29, 2008
and March 31, 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4. Controls and Procedures
    
    
    23PART II  Other InformationItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    35Item 6. Exhibits
    
    
    35Signatures
    
    
    36EXHIBIT 10.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 BOOKHAM,
INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and par value amounts)
(Unaudited)
 March 29, 2008
    
    
    June 30, 2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    39,363
    
    
    $
    36,631Short term investments
    
    
    14,066
    
    
    
    Restricted cash
    
    
    1,320
    
    
    
    6,079Accounts receivable, net
    
    
    45,620
    
    
    
    33,685Inventories
    
    
    58,615
    
    
    
    52,114Prepaid expenses and other current assets
    
    
    4,288
    
    
    
    9,121Total current assets
    
    
    163,272
    
    
    
    137,630Goodwill
    
    
    7,881
    
    
    
    7,881Other intangible assets, net
    
    
    8,179
    
    
    
    11,766Property and equipment, net
    
    
    34,133
    
    
    
    33,707Non-current deferred tax asset
    
    
    
    
    
    
    13,248Other non-current assets
    
    
    338
    
    
    
    294Total assets
    
    $
    213,803
    
    
    $
    204,526LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    20,453
    
    
    $
    21,101Bank loan payable
    
    
    2,000
    
    
    
    3,812Accrued expenses and other liabilities
    
    
    20,289
    
    
    
    22,704Current deferred tax liability
    
    
    
    
    
    
    13,248Total current liabilities
    
    
    42,742
    
    
    
    60,865Other long-term liabilities
    
    
    1,411
    
    
    
    1,908Deferred gain on sale-leaseback
    
    
    19,985
    
    
    
    20,786Total liabilities
    
    
    64,138
    
    
    
    83,559Commitments and contingencies (Note 9)Stockholders equity:Common stock:$.01 par value per share; 175,000,000 shares
authorized; 100,739,778 and 83,275,394 shares
issued and outstanding at March 29, 2008 and June
30, 2007, respectively
    
    
    1,007
    
    
    
    832Additional paid-in capital
    
    
    1,160,491
    
    
    
    1,114,391Accumulated other comprehensive income
    
    
    45,847
    
    
    
    42,444Accumulated deficit
    
    
    (1,057,680
    )
    
    
    (1,036,700
    )Total stockholders equity
    
    
    149,665
    
    
    
    120,967Total liabilities and stockholders equity
    
    $
    213,803
    
    
    $
    204,526
  3




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BOOKHAM,
INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedMarch 29, 2008
    
    
    March 31, 2007
    
    
    March 29, 2008
    
    
    March 31, 2007Revenues
    
    $
    59,703
    
    
    $
    41,845
    
    
    $
    172,941
    
    
    $
    125,415Revenues from related party
    
    
    
    
    
    
    3,144
    
    
    
    
    
    
    
    32,293Net revenues
    
    
    59,703
    
    
    
    44,989
    
    
    
    172,941
    
    
    
    157,708Costs of revenues
    
    
    46,320
    
    
    
    40,707
    
    
    
    133,787
    
    
    
    135,760Gross profit
    
    
    13,383
    
    
    
    4,282
    
    
    
    39,154
    
    
    
    21,948Operating expenses:Research and development
    
    
    7,570
    
    
    
    10,853
    
    
    
    24,430
    
    
    
    33,871Selling, general and administrative
    
    
    11,765
    
    
    
    12,043
    
    
    
    36,130
    
    
    
    36,983Amortization of intangible assets
    
    
    667
    
    
    
    2,170
    
    
    
    4,017
    
    
    
    6,928Restructuring and severance charges
    
    
    672
    
    
    
    4,273
    
    
    
    2,451
    
    
    
    8,475Legal settlements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    490Impairment of other long-lived assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,901(Gain)/loss on sale of property and equipment and
other long-lived assets
    
    
    (596
    )
    
    
    6
    
    
    
    (2,312
    )
    
    
    (824
    )Total operating expenses
    
    
    20,078
    
    
    
    29,345
    
    
    
    64,716
    
    
    
    87,824Operating loss
    
    
    (6,695
    )
    
    
    (25,063
    )
    
    
    (25,562
    )
    
    
    (65,876
    )Other income/(expense):Interest income
    
    
    414
    
    
    
    277
    
    
    
    1,160
    
    
    
    699Interest expense
    
    
    (97
    )
    
    
    (164
    )
    
    
    (484
    )
    
    
    (270
    )Gain/(loss) on foreign exchange
    
    
    995
    
    
    
    664
    
    
    
    3,315
    
    
    
    (3,031
    )Total other income/(expense)
    
    
    1,312
    
    
    
    777
    
    
    
    3,991
    
    
    
    (2,602
    )Loss before income taxes
    
    
    (5,383
    )
    
    
    (24,286
    )
    
    
    (21,571
    )
    
    
    (68,478
    )Income tax (benefit)/provision
    
    
    17
    
    
    
    37
    
    
    
    (30
    )
    
    
    83Net loss
    
    $
    (5,400
    )
    
    $
    (24,323
    )
    
    $
    (21,541
    )
    
    $
    (68,561
    )Net loss per share:Net loss per share (basic and diluted)
    
    $
    (0.05
    )
    
    $
    (0.35
    )
    
    $
    (0.24
    )
    
    $
    (1.03
    )Weighted average shares of common stock outstanding
(basic and diluted)
    
    
    99,316
    
    
    
    70,077
    
    
    
    90,955
    
    
    
    66,297
  4




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BOOKHAM, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
 Nine Months EndedMarch 29, 2008
    
    
    March 31, 2007Cash flows used in operating activities:Net loss
    
    $
    (21,541
    )
    
    $
    (68,561
    )Adjustments to reconcile net loss to net cash used in operating
activities:Depreciation and amortization
    
    
    13,249
    
    
    
    17,797Stock-based compensation
    
    
    5,643
    
    
    
    5,145Impairment of long-lived assets
    
    
    
    
    
    
    1,901Gain on sale of property, equipment and other long-lived
assets
    
    
    (2,312
    )
    
    
    (836
    )Amortization of deferred gain on sale leaseback
    
    
    (801
    )
    
    
    (868
    )Changes in current assets and liabilities, net of effects of
acquisitions:Accounts receivable, net
    
    
    (11,229
    )
    
    
    4,769Inventories
    
    
    (1,407
    )
    
    
    5,934Prepaid expenses and other current assets
    
    
    5,241
    
    
    
    4,400Accounts payable
    
    
    (1,663
    )
    
    
    (3,828
    )Accrued expenses and other liabilities
    
    
    (3,736
    )
    
    
    (11,762
    )Net cash used in operating activities
    
    
    (18,556
    )
    
    
    (45,909
    )Cash flows provided by investing activities:Purchases of property and equipment
    
    
    (7,459
    )
    
    
    (5,861
    )Proceeds from sale of property, equipment and other long-lived
assets
    
    
    2,713
    
    
    
    3,174Purchases of available for sale securities and investments
    
    
    (14,066
    )
    
    
    Proceeds from sale of land held for resale
    
    
    
    
    
    
    9,402Transfer (to)/from restricted cash
    
    
    4,875
    
    
    
    (624
    )Cash flows provided/(used) by investing activities
    
    
    (13,937
    )
    
    
    6,091Cash flows provided by financing activities:Amount paid to repurchase shares from former officer
    
    
    (2
    )
    
    
    Proceeds from issuance of common stock, net
    
    
    40,787
    
    
    
    55,423Repayment bank loan payable
    
    
    (1,812
    )
    
    
    Repayment of other loans
    
    
    (28
    )
    
    
    (39
    )Net cash provided by financing activities
    
    
    38,945
    
    
    
    55,384Effect of exchange rate on cash
    
    
    (3,720
    )
    
    
    2,150Net increase in cash and cash equivalents
    
    
    2,732
    
    
    
    17,716Cash and cash equivalents at beginning of period
    
    
    36,631
    
    
    
    37,750Cash and cash equivalents at end of period
    
    $
    39,363
    
    
    $
    55,466Supplemental disclosures of cash flow information:Cash paid for interest
    
    $
    120
    
    
    $
    1Cash paid for income taxes
    
    $
    51
    
    
    $
    78
  5




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##### Table of Contents



BOOKHAM,
INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
 Note 1. Nature of Business
  Note 2. Basis of Preparation
     Note 3. Stockholders Equity and Stock-Based Compensation Expense
    6




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Three Months Ended
    
    Nine Months EndedMarch 29, 2008
    
    March 31, 2007
    
    March 29, 2008
    
    March 31, 2007Expected life
    
    4.5 years
    
    4.5 years
    
    4.5 years
    
    4.5 yearsRisk-free interest rate
    
    2.32% to 3.18%
    
    4.51% to 4.85%
    
    2.32% to 4.89%
    
    4.51% to 5.12%Volatility
    
    
    73%

    
    
    83%

    
    73% to 79%
    
    83% to 85%Dividend yield
    
    
    0.00%

    
    
    0.00%    
    
    0.00%    
    
    0.00%
  Three Months Ended
    
    
    Nine Months EndedMarch 29, 2008
    
    
    March 31, 2007
    
    
    March 29, 2008
    
    
    March 31, 2007(In thousands)
    
    
    (In thousands)Costs of revenues
    
    $
    380
    
    
    $
    478
    
    
    $
    1,703
    
    
    $
    1,660Research and development
    
    
    243
    
    
    
    260
    
    
    
    1,337
    
    
    
    1,168Selling, general and administrative
    
    
    611
    
    
    
    557
    
    
    
    2,603
    
    
    
    2,317Total
    
    $
    1,234
    
    
    $
    1,295
    
    
    $
    5,643
    
    
    $
    5,145
 Note 4. Comprehensive Loss
  Three Months Ended
    
    
    Nine Months EndedMarch 29, 2008
    
    
    March 31, 2007
    
    
    March 29, 2008
    
    
    March 31, 2007(In thousands)Net loss
    
    $
    (5,400
    )
    
    $
    (24,323
    )
    
    $
    (21,541
    )
    
    $
    (68,561
    )Other comprehensive income/(loss):Unrealized gain/(loss) on currency instruments
designated as hedges
    
    
    (74
    )
    
    
    (197
    )
    
    
    (296
    )
    
    
    (148
    )Unrealized gain/loss on short-term investments
    
    
    14
    
    
    
    
    
    
    
    14
    
    
    
    Foreign currency translation adjustments
    
    
    3,123
    
    
    
    (41
    )
    
    
    3,685
    
    
    
    6,446Comprehensive loss
    
    $
    (2,337
    )
    
    $
    (24,561
    )
    
    $
    (18,138
    )
    
    $
    (62,263
    )
 Note 5. Earnings per Share
 
 Note 6. Inventories
  March 29, 2008
    
    
    June 30, 2007(In thousands)Raw materials
    
    $
    21,933
    
    
    $
    20,238Work in process
    
    
    21,095
    
    
    
    18,489Finished goods
    
    
    15,587
    
    
    
    13,387Total
    
    $
    58,615
    
    
    $
    52,114
 7




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Note 7. Accrued Expenses and Other Liabilities
  March 29, 2008
    
    
    June 30, 2007(In thousands)Trade creditor accruals
    
    $
    4,717
    
    
    $
    4,324Compensation and benefits related accruals
    
    
    5,938
    
    
    
    5,212Warranty accrual
    
    
    2,717
    
    
    
    2,569Other accruals
    
    
    5,291
    
    
    
    7,886Current portion of restructuring accrual
    
    
    1,626
    
    
    
    2,713Total
    
    $
    20,289
    
    
    $
    22,704
 Note 8. Credit Agreement
    Note 9. Commitments and Contingencies
 Guarantees
  
    
    In connection with the sale by New Focus, Inc. of its passive
component line to Finisar, Inc., New Focus agreed to indemnify Finisar
for claims related to the intellectual property sold to Finisar. This
obligation expires in May 2009 and has no limitation on maximum
liability. In connection with the sale by New Focus of its tunable
laser technology to Intel Corporation, New Focus agreed to indemnify
Intel against losses for certain intellectual property claims. This
obligation expires in May 2008 and has a maximum limitation on
liability of $7.0 million. The Company does not currently expect to
pay out any amounts in respect of these obligations; therefore, no
accrual has been made in the accompanying financial statements.
    
    The Company indemnifies its directors and certain employees as
permitted by law, and has entered into indemnification agreements with
each of its directors and senior officers. The Company has not recorded a
liability associated with these obligations as the Company
historically has not incurred any costs associated with such
obligations. Costs associated with such obligations may, in certain
circumstances, be mitigated, in whole or in part, by insurance
coverage that the Company maintains.
 8




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##### Table of Contents




    
    The Company is also bound by indemnification obligations under various
contracts that it enters into in the normal course of business, such
as guarantees or letters of credit issued by its commercial banks in
favor of several of its suppliers and indemnification obligations in
favor of customers in respect of liabilities they may incur as a
result of any infringement of a third partys intellectual property
rights by the Companys products. The Company has not historically
paid out any amounts related to these obligations and currently does
not expect to do so in the future; therefore, no accrual has been made
for these obligations in the accompanying financial statements.
 Provision for warranties
  Nine Months EndedMarch 29, 2008
    
    
    March 31, 2007(In thousands)Warranty provision at beginning of period
    
    $
    2,569
    
    
    $
    3,429Warranties issued
    
    
    1,768
    
    
    
    1,316Warranties utilized
    
    
    (1,151
    )
    
    
    (1,614
    )Warranties expired, and other changes in liability
    
    
    (551
    )
    
    
    (461
    )Foreign currency translation
    
    
    82
    
    
    
    251Warranty provision at end of period
    
    $
    2,717
    
    
    $
    2,921
 Litigation
    
 9




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Note 10. Restructuring and Severance
  Accruedrestructuring costs
    
    
    Amounts charged
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accruedat December 29,
    
    
    to restructuring
    
    
    
    
    
    
    Amounts paid or
    
    
    
    
    
    
    restructuring costs(In thousands)
    
    2007
    
    
    costs and other
    
    
    Amounts reversed
    
    
    written-off
    
    
    Adjustments
    
    
    at March 29, 2008Lease cancellations and commitments
    
    $
    2,488
    
    
    $
    605
    
    
    $
    
    
    
    $
    (716
    )
    
    $
    
    
    
    $
    2,377Asset impairment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Termination payments to employees and related costs
    
    
    671
    
    
    
    67
    
    
    
    
    
    
    
    (322
    )
    
    
    (10
    )
    
    
    406Total accrued restructuring
    
    
    3,159
    
    
    $
    672
    
    
    $
    
    
    
    $
    (1,038
    )
    
    $
    (10
    )
    
    
    2,783Less non-current accrued restructuring charges
    
    
    (1,293
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,157
    )Accrued restructuring charges included within accrued expenses and
other liabilities
    
    $
    1,866
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,626
  Accrued
    
    
    Amounts charged
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accruedrestructuring costs
    
    
    to restructuring
    
    
    
    
    
    
    Amounts paid or
    
    
    
    
    
    
    restructuring costs(In thousands)
    
    at June 30, 2007
    
    
    costs and other
    
    
    Amounts reversed
    
    
    written-off
    
    
    Adjustments
    
    
    at March 29, 2008Lease cancellations and commitments
    
    $
    3,845
    
    
    $
    1,141
    
    
    $
    (20
    )
    
    $
    (2,601
    )
    
    $
    12
    
    
    $
    2,377Asset impairment
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    (35
    )
    
    
    
    
    
    
    Termination payments to employees and related costs
    
    
    546
    
    
    
    1,331
    
    
    
    (36
    )
    
    
    (1,472
    )
    
    
    37
    
    
    
    406Total accrued restructuring
    
    
    4,391
    
    
    $
    2,507
    
    
    $
    (56
    )
    
    $
    (4,108
    )
    
    $
    49
    
    
    
    2,783Less non-current accrued restructuring charges
    
    
    (1,678
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,157
    )Accrued restructuring charges included within accrued expenses and
other liabilities
    
    $
    2,713
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,626
  10




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Note 11. Accounting for Uncertainty in Income Taxes
     Note 12. Segments of an Enterprise and Related Information
  11




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For the Three Months Ended
    
    
    For the Nine Months EndedMarch 29,
    
    
    March 31,
    
    
    March 29,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)
    
    
    (In thousands)Revenues:Optics
    
    $
    50,978
    
    
    $
    36,735
    
    
    $
    148,483
    
    
    $
    134,673Research and industrial
    
    
    8,725
    
    
    
    8,254
    
    
    
    24,458
    
    
    
    23,035Consolidated revenues
    
    $
    59,703
    
    
    $
    44,989
    
    
    $
    172,941
    
    
    $
    157,708Net loss:Optics
    
    $
    (5,786
    )
    
    $
    (24,553
    )
    
    $
    (22,111
    )
    
    $
    (67,898
    )Research and industrial
    
    
    386
    
    
    
    230
    
    
    
    570
    
    
    
    (663
    )Consolidated net loss
    
    $
    (5,400
    )
    
    $
    (24,323
    )
    
    $
    (21,541
    )
    
    $
    (68,561
    )
 Note 13. Significant Related Party Transactions and Significant Customer Revenues
   Note 14. Recent Accounting Pronouncements
     12




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13




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
    Critical Accounting Policies
   Recent Accounting Pronouncements
  14




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
  Results of Operations
 Revenues
 For Three Months Ended
    
    
    For Nine Months Ended%
    
    
    
    
    
    
    
    
    
    
    %$ Millions
    
    March 29, 2008
    
    
    March 31, 2007
    
    
    Change
    
    
    March 29, 2008
    
    
    March 31, 2007
    
    
    ChangeNet revenues
    
    $
    59.7
    
    
    $
    45.0
    
    
    
    33
    %
    
    $
    172.9
    
    
    $
    157.7
    
    
    
    10
    %
   15




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##### Table of Contents



Cost of Revenues
 For Three Months Ended
    
    
    For Nine Months Ended%
    
    
    
    
    
    
    
    
    
    
    %$ Millions
    
    March 29, 2008
    
    
    March 31, 2007
    
    
    Change
    
    
    March 29, 2008
    
    
    March 31, 2007
    
    
    ChangeCost of revenues
    
    $
    46.3
    
    
    $
    40.7
    
    
    
    14
    %
    
    $
    133.8
    
    
    $
    135.8
    
    
    
    (1
    %)
   Gross Profit
 Three Months Ended
    
    Nine Months Ended$ Millions
    
    March 29, 2008
    
    March 31, 2007
    
    March 29, 2008
    
    March 31, 2007Gross profit
    
    $
    13.4
    
    
    $
    4.3
    
    
    $
    39.2
    
    
    $
    21.9Gross margin rate
    
    
    22
    %
    
    
    10
    %
    
    
    23
    %
    
    
    14
    %
   Research and Development Expenses
 Three Months Ended
    
    Nine Months Ended%
    
    
    
    
    
    
    
    
    
    %$ Millions
    
    March 29, 2008
    
    March 31, 2007
    
    Change
    
    March 29, 2008
    
    March 31, 2007
    
    ChangeResearch and development expenses
    
    $
    7.6
    
    
    $
    10.9
    
    
    
    (30
    %)
    
    $
    24.4
    
    
    $
    33.9
    
    
    
    (28
    %)As a percentage of net revenues
    
    
    13
    %
    
    
    24
    %
    
    
    
    
    
    
    14
    %
    
    
    21
    %
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Selling, General and Administrative Expenses
 Three Months Ended
    
    Nine Months Ended%
    
    
    
    
    
    
    
    
    
    %$ Millions
    
    March 29, 2008
    
    March 31, 2007
    
    Change
    
    March 29, 2008
    
    March 31, 2007
    
    ChangeSelling, general and administrative expenses
    
    $
    11.8
    
    
    $
    12.0
    
    
    
    (2
    %)
    
    $
    36.1
    
    
    $
    37.0
    
    
    
    (2
    %)As a percentage of net revenues
    
    
    20
    %
    
    
    27
    %
    
    
    
    
    
    
    21
    %
    
    
    23
    %
   Amortization of Intangible Assets
 Three Months Ended
    
    Nine Months Ended$ Millions
    
    March 29, 2008
    
    March 31, 2007
    
    March 29, 2008
    
    March 31, 2007Amortization of intangible assets
    
    $
    0.7
    
    
    $
    2.2
    
    
    $
    4.0
    
    
    $
    6.9As a percentage of net revenues
    
    
    1
    %
    
    
    5
    %
    
    
    2
    %
    
    
    4
    %
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Restructuring and Severance Charges
 Three Months Ended
    
    
    Nine Months Ended$ Millions
    
    March 29, 2008
    
    
    March 31, 2007
    
    
    March 29, 2008
    
    
    March 31, 2007Lease cancellation and commitments
    
    $
    0.6
    
    
    $
    0.1
    
    
    $
    1.2
    
    
    $
    0.8Termination payments to employees and related costs
    
    
    0.1
    
    
    
    4.2
    
    
    
    1.3
    
    
    
    7.7Total
    
    $
    0.7
    
    
    $
    4.3
    
    
    $
    2.5
    
    
    $
    8.5
    Legal Settlements
 Three Months Ended
    
    Nine Months Ended$ Millions
    
    March 29, 2008
    
    March 31, 2007
    
    March 29, 2008
    
    March 31, 2007Legal settlements
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.5
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Impairment of Other Long-Lived Assets
 Three Months Ended
    
    Nine Months Ended$ Millions
    
    March 29, 2008
    
    March 31, 2007
    
    March 29, 2008
    
    March 31, 2007Impairment of long-lived assets
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1.9
  Other Income/(Expense), Net
 Three Months Ended
    
    Nine Months Ended$ Millions
    
    March 29, 2008
    
    March 31, 2007
    
    March 29, 2008
    
    March 31, 2007Other income/(expense), net
    
    $
    1.3
    
    
    $
    0.8
    
    
    $
    4.0
    
    
    $
    (2.6
    )
  Income Tax Provision/(Benefit)
 Three Months Ended
    
    Nine Months Ended$ Millions
    
    March 29, 2008
    
    March 31, 2007
    
    March 29, 2008
    
    March 31, 2007Income tax provision/(benefit)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  Liquidity, Capital Resources and Contractual Obligations
 Liquidity and Capital Resources
     Operating activities
 Nine Months EndedMarch 29, 2008
    
    
    March 31, 2007$ Millions
    
    (Unaudited)
    
    
    (Unaudited)Net loss
    
    $
    (21.5
    )
    
    $
    (68.6
    )Non-cash accounting items:Depreciation and amortization
    
    
    13.2
    
    
    
    17.8Stock-based compensation
    
    
    5.6
    
    
    
    5.1Impairment of long-lived assets
    
    
    
    
    
    
    1.9Gain on sale of property and equipment
    
    
    (2.3
    )
    
    
    (0.8
    )Amortization of deferred gain on sale leaseback
    
    
    (0.8
    )
    
    
    (0.9
    )Total non-cash accounting charges
    
    
    15.7
    
    
    
    23.1Changes in operating assets and liabilities, net
    
    
    (12.8
    )
    
    
    (0.4
    )Net cash used in operating activities
    
    $
    (18.6
    )
    
    $
    (45.9
    )
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Investing activities
   Financing activities
    Sources of Cash
  20




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Credit Facility
      Future Cash Requirements
   Risk ManagementForeign Currency Risk
  21




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Contractual Obligations
  Off-Balance Sheet Arrangements
    
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Foreign currency
  22




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Item 4 . Controls and Procedures
   
 PART II OTHER INFORMATION
 
 Item 1. Legal Proceedings
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Item 1A. Risk Factors
 Investing in our securities involves a high degree of risk. You should carefully consider the
risks and uncertainties described below in addition to the other information included or
incorporated by reference in this Quarterly Report on Form 10-Q . If any of the following risks
actually occurs, our business, financial condition or results of operations would likely suffer. In
that case, the trading price of our common stock could fall.
 Risks Related to Our Business
 We have a history of large operating losses and we may not be able to achieve profitability in the
future.
   We may not be able to maintain positive gross margins.
  Our success will depend on our ability to anticipate and respond to evolving technologies and
customer requirements.
  The market for optical components continues to be characterized by excess capacity and intense
price competition which has had, and will continue to have, a material adverse effect on our
results of operations.
  We depend on a limited number of customers for a significant percentage of our revenues.
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We and our customers depend upon a limited number of major telecommunications carriers.
  We typically do not enter into long-term contracts with our customers and our customers may
decrease, cancel or delay their buying levels at any time with little or no advance notice to us.
  As a result of our global operations, our business is subject to currency fluctuations that have
adversely affected our results of operations in recent quarters and may continue to do so in the
future.
   We are increasing manufacturing operations in China, which exposes us to risks inherent in doing
business in China.
  
    
    qualify our manufacturing lines and the products we produce in Shenzhen, as required by our customers;
    
    attract qualified personnel to operate our Shenzhen facility; and
    
    retain employees at our Shenzhen facility.
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Fluctuations in operating results could adversely affect the market price of our common stock.
   We may incur additional significant restructuring charges that will adversely affect our results of
operations.
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Our results of operations may suffer if we do not effectively manage our inventory, and we may
incur inventory-related charges.
  Bookham Technology plc may not be able to utilize tax losses and other tax attributes against the
receivables that arise as a result of its transaction with Deutsche Bank.
  Our products are complex and may take longer to develop than anticipated and we may not recognize
revenues from new products until after long field testing and customer acceptance periods.
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If our customers do not qualify our manufacturing lines or the manufacturing lines of our
subcontractors for volume shipments, our operating results could suffer.
  Delays, disruptions or quality control problems in manufacturing could result in delays in product
shipments to customers and could adversely affect our business.
  We may experience low manufacturing yields.
  We depend on a limited number of suppliers who could disrupt our business if they stopped,
decreased or delayed shipments.
  Our intellectual property rights may not be adequately protected.
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Our products may infringe the intellectual property rights of others which could result in
expensive litigation or require us to obtain a license to use the technology from third parties, or
we may be prohibited from selling certain products in the future.
  If we fail to obtain the right to use the intellectual property rights of others necessary to
operate our business, our ability to succeed will be adversely affected.
  The markets in which we operate are highly competitive, which could result in lost sales and lower
revenues.
  
    
    respond to new technologies or technical standards;
    
    react to changing customer requirements and expectations;
    
    devote needed resources to the development, production, promotion and sale of products; and
    
    deliver competitive products at lower prices.
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We generate a significant portion of our revenues internationally and therefore are subject to
additional risks associated with the extent of our international operations.
  
    
    currency fluctuations, which could result in increased operating expenses and reduced revenues;
    
    greater difficulty in accounts receivable collection and longer collection periods;
    
    difficulty in enforcing or adequately protecting our intellectual property;
    
    foreign taxes;
    
    political, legal and economic instability in foreign markets; and
    
    foreign regulations.
  Our business will be adversely affected if we cannot manage the significant changes in the number
of our employees and the size of our operations.
  We may be faced with product liability claims.
  If we fail to attract and retain key personnel, our business could suffer.
   Our business and future operating results may be adversely affected by events outside of our
control.
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We may not be able to raise capital when desired on favorable terms, or at all, or without dilution
to our stockholders.
    Risks Related to Regulatory Compliance and Litigation
 If we fail to maintain an effective system of internal controls, we may not be able to accurately
report our financial results, which may cause stockholders to lose confidence in the accuracy of
our financial statements.
  Our business involves the use of hazardous materials, and we are subject to environmental and
import/export laws and regulations that may expose us to liability and increase our costs.
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Litigation regarding Bookham Technology plcs and New Focus initial public offering and follow-on
offering and any other litigation in which we become involved, including as a result of
acquisitions on the arrangements we have with suppliers and customers, may substantially increase
our costs and harm our business.
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Some anti-takeover provisions contained in our charter and under Delaware laws could hinder a
takeover attempt.
   Risks Related to Our Common Stock
 A variety of factors could cause the trading price of our common stock to be volatile or decline.
  
    
    fluctuations in our results of operations;
    
    changes in our business, operations or prospects;
    
    hiring or departure of key personnel;
    
    new contractual relationships with key suppliers or customers by us or our competitors;
    
    proposed acquisitions by us or our competitors;
    
    financial results that fail to meet public market analysts expectations and changes in
stock market analysts recommendations regarding us, other optical technology companies or
the telecommunication industry in general;
    
    future sales of common stock, or securities convertible into or exercisable for common stock;
    
    adverse judgments or settlements obligating us to pay damages;
    
    acts of war, terrorism, or natural disasters;
    
    industry, domestic and international market and economic conditions;
    
    low trading volume in our stock;
    
    developments relating to patents or property rights; and
    
    government regulatory changes.
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We may incur significant costs from class action litigation due to our expected stock volatility.
  Because we do not intend to pay dividends, stockholders will benefit from an investment in our
common stock only if it appreciates in value.
  We can issue shares of preferred stock that may adversely affect your rights as a stockholder of
our common stock.
  
    
    adversely affect the voting power of the holders of our common stock;
    
    make it more difficult for a third party to gain control of us;
    
    discourage bids for our common stock at a premium;
    
    limit or eliminate any payments that the holders of our common stock could expect to receive upon our liquidation; or
    
    otherwise adversely affect the market price of our common stock.
  
 Item 4. Submission of Matters to a Vote of Security Holders .
  
 Item 6. Exhibits
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SIGNATURES
  BOOKHAM, INC.May 5, 2008
    By:
    /s/ Stephen AbelyStephen AbelyChief Financial Officer (Principal
Financial and Accounting Officer) 36




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EXHIBIT INDEX
 DOUG AND KATE TO COMMENT ON ANY OTHER EXHIBITS NEEDED.
 ExhibitNumber
    
    Description of Exhibit10.1
    
    Form of Executive Severance and Retention Agreement between the Registrant and its Executive Officers.31.1
    
    Rule 13a-14(a)/15(d)-14(a) Certification of Chief Executive Officer.31.2
    
    Rule 13a-14(a)/15(d)-14(a) Certification of Chief Financial Officer.32.1
    
    Section 1350 Certification of Chief Executive Officer.32.2
    
    Section 1350 Certification of Chief Financial Officer.
 37