MRV Announces Second-Quarter
Results and the Acquisition of AstroTerra Corp.
Unification of Optical Wireless Activities to Take Place
Under Newly Formed Optical Access Inc.
CHATSWORTH, Calif.--July 27, 2000--MRV Communications Inc.
(Nasdaq:MRVC) today announced closing the acquisition of AstroTerra
Corp., a pioneer in the development of free-space optical wireless
technology.
This acquisition, together with the acquisition of JOLT, announced
earlier this year, propels Optical Access Inc. into a premier position
as the leading supplier of optical wireless solutions.
Newly formed Optical Access Inc. develops, manufactures and
markets optical wireless systems that enable a fundamental shift in
the design of the access network. The company's products create an
unconstrained optically meshed networks with intelligent switching,
provisioning and aggregation Features.
Together with its WDM fiber solutions, Optical Access eliminates
the bottleneck between the user's premises and the backbone network.
This allows a provider to bypass the incumbent carrier's copper access
network, to quickly and cost-effectively establish enhanced high-speed
broadband services.
The Optical Access solutions enable faster deployment and
increased bandwidth over competing solutions. The company's switched
meshed architecture and redundant features provide service
availability in all weather conditions.
AstroTerra was founded in 1992 and quickly established itself as
the recognized leader in the high-speed optical wireless
communications field. The company's strong intellectual property
includes patented technology that uses multiple transmit apertures to
avoid atmospheric scintillation fade. This allows wireless optical
transmission up to 5 kilometers.
In partnership with Lucent Technologies, AstroTerra was the first
to demonstrate a working laser communication system capable of
transferring data at rates of 2.5 Gbps over a range of 2.4 kilometers.
AstroTerra's new TerraLink Fusion systems combine an optical
communication link with an automatic radio frequency back-up to
provide 100 percent wireless availability, even in the worst weather
conditions.
AstroTerra has shown great success in developing high-speed
satellite laser communications technology, most notably with the
Ballistic Missile Defense Organization and U.S. Army Space and Missile
Defense Command.
The Space Technology Research Vehicle -2 (STRV-2) is the first
satellite-to-ground experiment capable of transmitting information at
Gigabit speeds over a distance of two thousand kilometers.
Dr. Eric Korevaar, president of AstroTerra, commented: "We are
very excited to join forces with an innovative, forward-thinking
company like MRV Communications. Combining our expertise in optical
wireless technology with the comprehensive solution that Optical
Access offers represents a strong step forward in bringing ultra
high-speed wireless solutions to the last-mile telecommunications
arena."
Noam Lotan, president and chief executive officer of MRV,
commented: "Acquiring AstroTerra Corp. establishes Optical Access as
the leader in optical wireless technology. This technology is poised
to make a strong impact on the last mile broadband access. Wireless
access is cheaper and faster to install than fiber and can deliver the
high bandwidth that users require.
"With our robust product line, the experience of thousands of
optical wireless installations, and substantial ownership of
intellectual property, MRV stands to capitalize on the emerging
opportunities in this field. We intend to file for an Initial Public
Offering of Optical Access within 90 days."
Separately, MRV announced closing the acquisitions of Optronics
International Corp. ("OIC") and Quantum Optech Inc. ("QOI"), now part
of Luminent Inc.
Organizational Changes in Management
The following changes took place in the management of Luminent.
Dr. William R. Spivey, former president of the Network Products group
of Lucent Technologies, was appointed president, chief executive
officer and director of Luminent.
Eric Blachno, former managing director of Research and a financial
analyst for PMG, was appointed vice president of Finance and chief
financial officer of Luminent.
Khalid (Ken) Ahmad resigned his position as general manager of
Luminent and in so doing, is no longer an officer at MRV.
Dr. Mark Heimbuch was appointed vice president and chief
technology officer of Luminent.
In addition, Dan Avida, former chairman and CEO of Electronics for
Imaging, Richard S. Hill, chairman and CEO of Novellus Systems and
Amos Wilnai, chairman of MMC Networks, joined the newly formed board
of directors of Luminent.
The following changes in management took place at MRV and its
subsidiaries. At iTouch Communications, Philippe Szwarc was appointed
CEO, Mary Jane Gruninger was appointed executive vice president of
Research and Development and Engineering and Francois-Henri Worm,
founder of CES, was appointed chief technology officer. Ofer Iny, vice
president of Engineering at Zuma Networks, is no longer an officer of
MRV. In addition, Guy Avidan will head Optical Access Inc.
Financials
Revenues for the quarter were $73,935,000, up from $73,251,000 in
the second quarter of 1999. Including non-recurring charges, net loss
for the second quarter of 2000, was $27,750,000 compared with net
income of $525,000 in the quarter ended June 30, 1999.
Including non-recurring charges, basic and diluted loss per share
for the second quarter of 2000 were 44 cents compared with basic and
diluted earnings per share of 1 cent in the second quarter of 1999.
Excluding non-recurring charges, basic and diluted earnings per share
for the second quarter of 2000 were 2 cents, compared with basic
earnings per share of 8 cents and diluted earnings per share of 7
cents in the second quarter of 1999.
Revenues for the six months ended June 30, 2000, were
$139,007,000, compared with $143,367,000 for the corresponding
six-month period in 1999. Including non-recurring charges, net loss
for the six months ended June 30, 2000, was $33,614,000 compared with
a net loss of $384,000 for the corresponding period in 1999.
Excluding non-recurring charges, net income for the six months
ended June 30, 2000 was $1,502,000, compared with net income of
$6,488,000 for the corresponding period in 1999. Including
non-recurring charges, basic and diluted losses per share for the six
months ended June 30, 2000, were 56 cents compared with basic and
diluted losses per share of 1 cent, for the six months ended June 30,
1999.
Excluding non-recurring charges, basic earnings per share were 3
cents and diluted earnings per share were 2 cents for the six months
ended June 30, 2000, compared with basic and diluted earnings per
share of 12 cents, for the six months ended June 30, 1999.
All historical amounts reflected in these financial results have
been adjusted for the two-for-one stock split that took place in May
2000.
About MRV Communications
MRV Communications is a world-class leader in optical network
components and systems. The company has leveraged its early leadership
in fiber optic transmission into a well-focused range of solutions,
integrating switching, routing, access servers and optical
transmission systems.
As the Internet evolves into a single global communication
network, MRV has launched the development of new technologies to drive
the next-generation infrastructures. Such developments encompass
optical access systems, subscribers' management systems and
Linux-based solutions.
MRV has initiated and funded cutting-edge start-up companies
including Zaffire (formerly known as New Access Communications),
Charlotte's Networks, Hyperchannel, Zuma Networks and most recently
RedC Optical Networks. MRV's Web site is located at
mrv.com.
This release may contain forward-looking statements that involve
risks and uncertainties. These statements may differ materially from
actual future events or results. Readers are referred to the documents
filed by MRV with the Securities and Exchange Commission, specifically
the most recent reports on Forms 10K and 10Q, which identify important
risk factors that could cause actual results to differ from those
contained in the forward-looking statements, including potential
fluctuations in operating results, dependence on new product
developments, rapid technological and market changes, manufacturing
risks, volatility of the company's stock price, financial risk
management and future growth subject to risks. The announcement of
the anticipated filing of any registration statements contained herein
does not constitute an offer of any securities for sale.
MRV COMMUNICATIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
June 30, Dec. 31,
2000 1999
(unaudited) (audited)
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 45,207 $ 34,330
Short-term investments 3,427 10,141
Accounts receivable 63,555 60,637
Inventories (Including Contract
in Progress of $1,682 in 2000) 49,616 35,392
Refundable Income Taxes -- 3,216
Deferred income taxes 7,663 6,907
Other current assets 5,872 6,336
Total current assets 175,340 156,959
PROPERTY AND EQUIPMENT - At cost,
net of depreciation and amortization 48,497 19,600
OTHER ASSETS:
Goodwill & Intangibles 321,764 27,214
Deferred compensation 40,795 --
U.S. Treasury notes 95,014 97,704
Investments in Partner Companies 29,969 4,232
Deferred income taxes 6,827 5,324
Loan financing costs and other 6,655 3,500
$724,861 $314,533
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of financing
lease obligations $ 1,097 $ 198
Accounts payable 33,485 33,455
Accrued liabilities 21,744 15,403
Short-term debt 78,801 --
Deferred revenue 1,293 1,478
Income taxes payable 714 --
Total current liabilities 137,134 50,534
LONG-TERM LIABILITIES
Convertible debentures 90,000 90,000
Capital lease obligations,
net of current portion 1,589 1,481
Deferred income taxes 1,213 281
Other long-term liabilities 10,152 2,647
Total long-term liabilities 102,954 94,409
MINORITY INTERESTS 2,599 2,775
STOCKHOLDERS' EQUITY: 482,174 166,815
$724,861 $314,533
MRV COMMUNICATIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Six Months Three Months
Ended, Ended
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES, net $139,007 $143,367 $ 73,935 $ 73,251
COSTS AND EXPENSES:
Cost of goods sold 88,529 93,961 45,793 47,595
Research and
development expenses 13,367 12,098 7,307 5,969
Research and
development expenses
of consolidated
development
stage enterprises 13,282 4,939 7,451 2,603
Selling, general and
administrative
expenses 41,481 29,804 26,467 14,750
Amortization of
goodwill and
intangibles from
acquisitions 13,069 1,933 12,055 1,142
Operating (loss)
income (30,721) 632 (25,138) 1,192
Interest expense related
to convertible notes 2,803 2,250 1,678 1,125
Other income, net (a) 1,125 2,660 488 1,257
Provision for income
taxes 883 1,409 1,377 782
Minority interests 332 17 45 17
NET INCOME (LOSS) $(33,614) $ (384) $(27,750) $ 525
NET INCOME (LOSS)
PER SHARE - BASIC $ (0.56) $ (0.01) $ (0.44) $ 0.01
NET INCOME (LOSS)
PER SHARE - DILUTED $ (0.56) $ (0.01) $ (0.44) $ 0.01
SHARES USED IN PER -
SHARE CALCULATION
- BASIC 59,839 53,358 62,754 53,472
SHARES USED IN PER -
SHARE CALCULATION
- DILUTED 59,839 53,358 62,754 57,621
(a) Includes cost of unconsolidated development stage enterprises of
$1,437 and $951 for the six- and three months ended June 30, 2000.
SUPPLEMENTAL PRO FORMA INFORMATION (Unaudited)
AMORTIZATION OF
INTANGIBLES FROM
ACQUISITIONS, net
of tax effects 13,069 1,933 12,055 1,142
DEFERRED COMPENSATION
EXPENSE, net of tax
effects 7,328 -- 7,328 --
DEVELOPMENT STAGE
ENTERPRISES, net of
tax effects 14,719 4,939 9,565 2,603
NET INCOME BEFORE
AMORTIZATION OF
ACQUISITION INTANGIBLES
AND RECOGNIZED
DEVELOPMENT STAGE
ENTERPRISE COSTS $ 1,502 $ 6,488 $ 1,198 $ 4,270
EARNINGS PER SHARE
BEFORE AMORTIZATION
OF ACQUISITION
INTANGIBLES AND
RECOGNIZED
DEVELOPMENT STAGE
ENTERPRISE COSTS
- BASIC $ 0.03 $ 0.12 $ 0.02 $ 0.08
EARNINGS PER SHARE
BEFORE AMORTIZATION
OF ACQUISITION
INTANGIBLES AND
RECOGNIZED
DEVELOPMENT STAGE
ENTERPRISE COSTS
- DILUTED $ 0.02 $ 0.12 $ 0.02 $ 0.07
SHARES USED IN PER -
SHARE CALCULATION
- BASIC 59,839 53,358 62,754 53,472
SHARES USED IN PER -
SHARE CALCULATION
- DILUTED 66,767 56,391 68,925 58,326
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CONTACT: MRV Communications Inc.
Diana Hayden, 818/886-6782 (investor relations)
diana@mrv.com |
