9/6....STLW Announces Record First Quarter Results
CHICAGO, Sept. 6 /PRNewswire/ -- Stratos Lightwave, Inc., (Nasdaq: STLW - news) a leading supplier of optical subsystems and optical components for high data rate networking, data storage, and telecommunications applications for local area networks (LANs) storage area networks (SANs) metropolitan area networks (MANs) wide area networks (WANs) and central office networking in the telecommunications markets, today announced financial results for its first fiscal quarter ended July 31, 2000. The company reported record sales for both its optical subsystems and optical components and record profits for the period. The first quarter represents the company's first reporting period since the completion of its initial public offering on June 27, 2000.
Financial Results
Net sales increased by 78% to $25.9 million from $14.6 million for the first quarter of fiscal 2000, and 12% sequentially from $23.2 million for the fourth quarter ended April 30, 2000. Our total sales order backlog increased 88% to $47.0 million as of July 31, 2000 from $25.0 million as of April 30, 2000. License fees and royalties declined to $409,000 from $800,000 in last year's first quarter, but increased 137% sequentially from $172,000 last quarter.
Net Income reached a record $2.0 million, or $0.04 per share, an increase of 38% from $1.5 million or $0.03 per share for the same period last year, and 86% from $1.1 million, or $0.02 per share for the fourth quarter of fiscal 2000.
Discussion of Financial Results
Our growth in optical subsystems continues to be driven by increasing demand in the Gigabit Ethernet, Fibre Channel, and Metro markets for our embedded and pluggable tranceivers, in a variety of wavelengths and form factors. We also posted increases in orders and shipments for our optical components products, resulting from the refocus of our Fiber Optics Products group in Chicago toward more complex, highly engineered OEM product programs including optical backplane connectors and single mode cable assemblies.
Total gross profit for the period increased 10% sequentially from the fourth quarter. As a percentage of net sales, gross margin was 32.9%, down slightly from 33.4% in the fourth quarter. We continue to experience dilution of our gross margin from our investments in Bandwidth Semiconductor and Stratos Lightwave -- Florida; however, they are making progress in accordance with our expectations. Operating expenses declined slightly to 25.7% with sales and marketing expenses declining as a percentage of net sales. In addition, we earned $917,000 in net interest on the proceeds of our offering. Our estimated effective tax rate was 36.3%, down from 37.6% in the fourth quarter of fiscal 2000, and 38.1% in the first quarter last year.
Results of our Initial Public Offering
We sold 10,062,500 shares of common stock, including underwriters' exercise of their overallocation option, through an initial public offering at $21 per share, resulting in net proceeds of approximately $195.0 million, after related expenses. Uses of proceeds to date include general corporate purposes, a payment of $3.0 million to Rockledge Microelectronics, Inc. (formerly Polycore Technologies, Inc.) for additional purchase price of our Stratos Lightwave -- Florida subsidiary, that was contingent on the completion of our IPO, repayment of $2.7 million in advances from a Methode subsidiary, and $333,000 for repayment of a note assumed in our acquisition of Stratos Ltd.
Business Outlook
Demand is continuing across all of our product lines, including both optical subsystems and optical components. Based on incoming orders, our order backlog, and our ramp up of expanded manufacturing capacity, we believe that the company is poised to experience continued growth.
We are rapidly moving forward with our previously announced ramp up of production capacity at our Chicago Optoelectronics and Fiber Optics groups facilities. We are on track with our plan to increase the unit capacity of our transceiver production lines by 50% by the end of October, and will continue to ramp to a 100% total increase in unit capacity by the end of calendar 2000. Work on our newly acquired Fiber Optic components manufacturing facility has already commenced and we expect to begin to ramp operations there during September.
Conference Call
Stratos, in conjunction with its First Quarter Sales and Earnings Release, will conduct a conference call, led by its President and Chief Executive Officer James W. McGinley, on Thursday, September 7 at 8 a.m. CST. To participate, call 888-222-2994. A replay of the call will be available for 7 days, beginning at 12 p.m. CST, September 7. To hear the replay, call 800-938-1593, CODE No. 121268. Please contact Michael T. Perkins, Manager of Investor Relations, for further information.
Forward-Looking Statements
This press release contains predictions, estimates and other forward- looking statements regarding anticipated revenue growth, customer orders, manufacturing capacity and financial performance. All forward-looking statements in this press release are based on information available to the company as of the date hereof, and we assume no obligation to update any such forward-looking statement. Forward-looking statements are subject to risks and uncertainties and actual results may differ materially from any future performance suggested. Risk factors that may affect the company's performance are listed in the company's S-1 registration statement for its initial public offering on file with the Securities and Exchange Commission.
About Stratos Lightwave
Stratos Lightwave, Inc. (Nasdaq: STLW - news) develops, manufactures and sells optical subsystems and components for high data rate networking, data storage, and telecommunications applications. These optical subsystems are used in local area networks (LANs), storage area networks (SANs), metropolitan area networks (MANs), wide area networks (WANs), and central office networking in the telecommunications market. The company also designs, manufactures, and sells a full line of optical components and cable assemblies for use in these networks. Stratos Lightwave, Inc. is a subsidiary of Methode Electronics, Inc.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
STRATOS LIGHTWAVE, INC. AND SUBSIDIARIES
July 31, April 30,
2000 2000
ASSETS (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $189,451 $537
Accounts receivable - net 18,911 12,127
Inventories 13,909 11,172
Current deferred income taxes 1,166 1,166
Prepaid expenses 259 201
TOTAL CURRENT ASSETS 223,696 25,203
PROPERTY, PLANT AND EQUIPMENT 43,722 38,377
Less allowance for depreciation 14,629 13,442
29,093 24,935
GOODWILL - net 13,337 10,563
OTHER ASSETS 474 436
266,600 61,137
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts and notes payable 10,587 4,389
Other current liabilities 5,306 3,067
15,893 7,456
OTHER LIABILITIES
Deferred Income Taxes 689 719
Minority Interest 293
SHAREHOLDERS' EQUITY
Common Stock 641 540
Paid in capital 247,212 52,422
Retained earnings 1,940
Other shareholders' equity (68)
249,725 52,962
266,600 61,137
STRATOS LIGHTWAVE, INC. AND SUBSIDIARIES
(In thousands, except per share amounts)
Three Months Ended July 31,
2000 1999
REVENUE:
Net sales $25,916 $14,567
License fees and royalties 409 800
Total 26,325 15,367
COSTS AND EXPENSES:
Cost of products sold 17,377 9,049
Research and development 2,782 1,466
Sales and marketing 1,928 1,377
General and administrative 1,950 1,081
Total costs and expenses 24,037 12,973
Income from operations 2,288 2,394
Interest income, net 917 - 0 -
Income before income taxes 3,205 2,394
Provision for income taxes 1,164 913
NET INCOME $2,041 $1,481
Basic and diluted earnings
per Common Share $0.04 $0.03
Weighted average number of Common Shares
outstanding:
Basic 57,602,724 54,029,807
Diluted 57,972,712 54,029,807
SOURCE: Stratos Lightwave, Inc |
