Dear Mr Pink:
I am pretty impressed with your thread.
Upon your advice, I looked at the cash flow statement. Certainly
the acquisition charge is good room to manipulate the
earnings. When do you think MRVC will start dropping?
At the same time, you can make an argument that taking
a big charge is a conservative method, right? But what
is it exactly that makes you feel the MRVC's accounting
is suspicious? BTW, when I saw their plant, I was
pretty impressed that is why it is amazing to me that
if the company is fudging its books, it is doing all the
right things to make an investor feel comfortable (they
work hard till saturdays, management pay themselves no
salary and only on options, good products although i am
not sure if they have as much lead as they used to)
Thanks, in advance, I am finally learning something about
analysing financial statements from you.
-------- I have attached a copy of the cash flow statement ---
to make it easy for you to explain some weird items... thanks
in advance, your altruism is much appreciated ....
<TT>
MRV COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED IN THOUSANDS)
Three Months Ended
------------------------
March 31, March 31,
1998 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) (40,021) 4,343
Adjustments to reconcile net income
(loss) to net cash used in operating activities:
Depreciation and amortization 1,213 347
Interest related to convertible debentures and acquisition -- 408
Purchased technology in progress 30,571 --
Minority interests' share of income 224 10
Changes in assets and liabilities, net
of effects from acquisitions
Decrease (increase) in:
Accounts receivable 8,681 (4,575)
Inventories 6,124 (2,769)
Deferred income taxes (4,406) 34
Other assets 1,241 513
Increase (decrease) in:
Accounts payable (19,482) 5,529
Accrued liabilities (3,842) (646)
Accrued restructuring 16,474 (788)
Income taxes payable (3,917) 138
Deferred revenue 382 (679)
Accrued severance pay (475) (25)
------- -------
Net cash (used in) provided by operating activities (7,233) 1,840
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (4,028) (215)
Purchases of investments -- (13,918)
Proceeds from sale of investments 48,717 7,033
Cash used in acquisitions, net of cash received (41,936) --
------- -------
Net cash provided by (used in) investing activities 2,753 (7,100)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock 248 2,118
Repurchase of common stock -- (4,230)
Principal payments on capital lease obligations (58) (111)
------- -------
Net cash provided by (used in) financing activities 190 (2,223)
------- -------
EFFECT OF EXCHANGE RATE CHANGES
ON CASH AND CASH EQUIVALENTS (61) --
------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,351) (7,483)
CASH AND CASH EQUIVALENTS,
beginning of period 19,428 14,641
------- -------
CASH AND CASH EQUIVALENTS,
end of period 15,077 7,158
======= =======
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