JDSU sees sales dip despite security pigments take-up

JDS Uniphase has seen continued uptake of its SPARK optically variable magnetic pigment product by central banks, with 43 countries and regions now using the technology in their banknotes including the EU.

Sales in the Optical Security and Performance Products (OSP) unit which covers the SPARK technology and other products such as security threads have slipped a little of later, however, mainly because of a decision by JDSU to exit certain product categories outside the security area.

Fourth-quarter sales were down 5 per cent to $49m out of total group sales up 4 per cent to $421m. For the full-year ended July 31, 2013, sales in the OSP division were flat at $206m, in line with the previous fiscal year.

The OSP section "exceeded revenue guidance", said JDSU's chief executive Thomas Waechter, despite exiting certain thin-film coatings categories with sales of around $6m a quarter.

The division will be made leaner with a 28 per cent reduction in headcount and a 33 per cent reduction in manufacturing footprint by the end of 2013, he added.

OSP's operating margin is currently in the vicinity of 35 per cent, still around three times that of its other product categories (which include optical communications equipment and lasers) but down from nearly 50 per cent at peak.

Security pigment sales were down but this was a result of "customer inventory rebalancing" which was predicted in the firm's third-quarter results, according to Waechter.

JDSU claims to be the number one company in the world in anti-counterfeiting pigments, a market it values at an estimated $2.9bn and growing at around 5 per cent a year. The company's SPARK and threads products address a segment valued at around $450m.