Viavi Solutions and activist shareholder group Sandell Asset Management have been trading open letters about Viavi’s future.
During the former JDS Uniphase’s split into Viavi and Lumentum, communications and commercial optical products unit, Sandell, publicly urged the JDSU board to consider a sale of Lumentum rather than a spin-off and argued that the board wasn’t being aggressive enough in pursing value for shareholders.
Sandell’s most recent open letter laid out a number of similar arguments around shareholder value, including encouraging the sale of Viavi’s service enablement segment because it isn’t as profitable as the company’s network enablement business; and encouraging the company to hire new financial advisers and to consider more share repurchases and involvement from private equity companies.
Viavi recorded a net loss for fiscal 2016 of $67.5 million, due in large part to a write-down of $91.4 million related to the SE segment. That segment accounts for roughly 15% of Viavi’s revenue.
“It is our opinion, which is shared by many other shareholders, that the current Board has not demonstrated the requisite sense of urgency needed to address many of the issues that have been plaguing the Company,” Sandell said in the letter. Among other things, Sandell said it believes “there may be substantial private equity interest” in Viavi and that a transaction to take the company private could be one path, or Viavi could consider an “equity sponsor” or “preferred investment in the company” that would allow Viavi to remain a public company and/or “function as an acquisition vehicle.” Sandell previously protested the spin 0ff of the former JDSU’s Lumentum business, rather than the sale of that company. Viavi’s president and CEO, Oleg Kaykin, also responded to an open letter from activist shareholder Sandell Asset Management with an open letter of his own this week.
In his open letter to Sandell CEO Thomas Sandell, Khaykin pointed to Viavi’s revenue growth of about 4% and its non-generally accepted accounting principles financial numbers as evidence of improving performance and said that Viavi has been open about being in a “comprehensive strategy review of our current business … to position Viavi for continued profitable growth. As we look ahead to Fiscal 2017 and beyond, we plan to continue to reduce our business complexity, improve quality of our revenues, reduce costs and continue to grow our operating profit. Specifically, we have publicly identified the SE segment of our business as an area of intense management focus and are working in a methodical and responsible way to improve its financial performance, while preserving the value of the assets.”
Khaykin also wrote that “while we may disagree with your tactics and approach, we are aligned on a number of opportunities to further improve shareholder value. In fact, many of your recommendations are already in process and in-line with the themes we have been communicating to our investors and analysts through investor meetings and earnings calls.”
Viavi’s next analyst day is Sept. 15.
Viavi also launched an interference hunter this week that aims to trim the costs and time needed to locate sources of interference in wireless networks. The new InterferenceAdvisor is managed from a Wi-Fi-enabled Android tablet and has built-in accessories to reduce cabling. Viavi claims it is a “fully automated interference location solution” and can enable one engineer to do the task, even in urban environments. Automated features include directions and navigation, as well as voice prompts to direct technicians toward suspected interference sources.
In other test news this week:
– Aemulus and Peregrine Semiconductor are collaborating on a new tester for high-frequency, microwave bands. The two companies have worked together on previous test solutions, and the newest is expected to be integrated into Peregrine’s test infrastructure this fall with full implementation by spring, according to the two companies.
The Aemulus Amoeba AMB7600 will have peripheral modules that expand into the X, Ku and Ka bands; it currently is a testing solution for radio frequency front-end devices and will be upgraded to handle more complex testing, Aemulus and Peregrine said.
– ETS-Lindgren has been focusing on over-the-air testing in both cellular and Bluetooth. The company is using Anritsu’s MT8821C radio frequency tester with its EMQuest EMQ-100 antenna measurement software to enable OTA testing that runs the gamut from 2G to 2×2 multiple-input multiple-output and carrier aggregation with two-or three-component carriers.
ETS-Lindgren also is supporting LitePoint’s new Bluetooth Advanced Measurement Solution for measurements on Bluetooth low-energy devices. Litepoint said its offering is the first and only over-the-air radio frequency measurement system for Bluetooth LE devices, and the two companies claim that combined with ETS-Lindgren’s Antenna Measurement Systems, the solution is “the first commercial system capable of performing ‘true’ OTA TRP and TIS measurements on Bluetooth low energy devices without any cable connection to the EUT during the measurement.”
– Fluke Networks launched two new models of current leakage clamps, the 368 FC and 369 FC, which are focused on preventative maintenance to ensure that electrical current leakage doesn’t cause equipment downtime.
– Finland-based Verkotan test house said it has developed an OTA Global Positioning System for wearables that can deliver the pertinent data in a fraction of the typical test time, and brings real-world GPS performance testing of a device’s chipset, mechanics and antenna into a lab environment. According to Verkotan, the testing was developed with wearable companies along with the Centre for Wireless Communication at University of Oulu and VTT Technical Research Centre of Finland Ltd.
– National Instruments added a new module for mechatronics design to its NI Educational Laboratory Virtual Instrumentation Suite.
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