FiberCore Reports Fourth Quarter and Year End 2001 Results
CHARLTON, Mass., April 1 /PRNewswire-FirstCall/ -- FiberCore, Inc. (Nasdaq: FBCE - news), a leading manufacturer and global supplier of optical fiber and preform for the telecommunication and data communications markets, today announced results for the fourth quarter and year ended December 31, 2001.
For 2001, sales increased by 42% to $52.4 million from $36.9 million in 2000. The prior year period includes only seven months of sales from Xtal. Excluding Xtal, the increase in sales for the period was 33%. Net income for 2001 was $0.5 million, or $0.01 per share, compared to a net loss of $2.7 million, or $0.05 per share in 2000. Included in the prior year period are non-cash, interest charges of $5.4 million, or $0.11 per share.
Gross profit for the year was $16.3 million, or 31% of sales, in 2001 as compared to $11.8 million, or 32% of sales, in 2000. The gross margin was 40% during the first six months of 2001 and subsequently declined to an average of 14% in the second half of the year as the effects of the industry slowdown were felt both in reduced shipments and lower prices. At $5.4 million, operating income was essentially the same as in 2000, but showed a decline as a percent of sales from 14% to 10%. Net income was negatively impacted by higher interest expenses associated with the Company's expansion program and by a high effective tax rate. This high effective tax rate is due to the inability of the Company to offset foreign income and related taxes against U.S. losses and related tax benefits at this time.
Sales in the fourth quarter of 2001 decreased by 33% to $9.2 million from $13.9 million in the year ago period, but increased by 5% over third quarter levels despite declining prices. Sales were negatively impacted at the Company's Xtal FiberCore Brasil S.A. facility during the last 6 months of 2001 by a breach of contract situation with one of its larger South American customers, as well as by a downturn in the overall South American market. The Company was able to offset some of the reduction in sales through increased exports during the quarter. Sales revenue for FiberCore Jena (``FCJ'') declined by 10% compared to the same period in 2000, although volume shipments increased by 11%.
The Company reported a net loss of $3.3 million, or $0.05 per diluted share, in the fourth quarter of 2001. This compares to a net profit of approximately $2.3 million, or $0.04 per diluted share, in the year ago quarter.
Gross profit in the quarter was a negative $0.6 million, compared to a gross profit of $5.5 million, or 40% of sales, in the year ago period. FiberCore's gross margin was severely impacted by continuing price declines in single-mode fiber as well as by lower production levels as the Company reduced inventories during the period.
R&D spending decreased by 16% to $665,000 in the fourth quarter from $796,000 in the prior year period. However, the Company continued its investment in the development of its recently patented Plasma Outside Vapor Deposition (POVD) process as well as other manufacturing initiatives, all intended to reduce production costs.
Dr. Aslami, President and CEO commented, ``The second half of 2001, and the fourth quarter in particular, was difficult for FiberCore as we were no longer able to escape the softness that has been prevalent throughout our industry for most of 2001. With the sudden reduction in capital expenditures by the telecom carriers and the related high levels of inventory being maintained by the major fiber and cable manufacturers, we experienced declines in both demand and pricing during the quarter, particularly in our single-mode fiber business in South America. This, along with the customer situation in South America, led to increased inventories and temporary reductions in production during the third quarter at Xtal. We have since been able to reduce our inventories, but due to pricing pressures have chosen to operate at reduced production levels in Brazil. To offset some of the decline in the single mode business, we have been shifting more production into multi-mode fiber. We anticipate that to the extent this trend continues, a higher percentage of our revenue will be attributable to multi-mode fiber in 2002.''
``At December 31, 2001, our backlog was $292 million, up from $190 million at year-end 2000. Approximately $48 million of this is scheduled for shipment in 2002, although this is subject to change depending on business conditions and new orders booked during 2002. The reduction in the backlog from $350 million at the end of the third quarter resulted from fourth quarter shipments made as well as re-pricing, as provided for in our contractual agreements. During this difficult period, our customers have not cancelled any contracts, although we have worked with them on rescheduling shipments to better suit their requirements. We believe that this lack of cancellations is due to our strong customer relationships and that our customers continue to recognize the importance of having an independent fiber supplier to their long-term growth,'' added Dr. Aslami.
``As the industry works to better equalize supply and demand, prices should begin to stabilize in the coming months. While lower fiber prices will continue to impact 2002 at the gross margin level, this will be partially offset by our continued investment in technology and manufacturing process improvements. Despite the current industry slowdown, we remain bullish on the long term growth in the industry and continue to anticipate strong growth in the future for FiberCore,'' concluded Dr. Aslami.
FiberCore, Inc. develops, manufactures and markets single-mode and multimode optical fiber preforms and optical fiber for the telecommunications and data communications markets. In addition to its standard multimode and single-mode fiber, FiberCore also offers various grades of fiber for use in laser-based systems up to 10 gigabits/sec, to help guarantee high bandwidths and to suit the needs of Feeder Loop (also known as Metropolitan Area Network), Fiber-to-the Curb, Fiber-to-the Home and Fiber-to-the Desk applications. Manufacturing facilities are presently located in Jena, Germany and Campinas, Brazil.
For more information about the company, its products, or shareholder information please visit our Website at: www.FiberCoreUSA.com or contact us at: Phone - 508-248-3900 or by FAX - 508-248-5588 or E-Mail: sales@FiberCoreUSA.com; investor_relations@FiberCoreUSA.com
Except for the historical matters discussed above, the statements in this press release are forward looking and are made pursuant to the ``safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995. They are based on the Company's current expectations and are subject to a number of risks and uncertainties. Actual results may differ materially from those projected as a result of certain general economic and business conditions; loss of market share through competition; introduction of competing products by other companies; changes in industry capacity; pressure on prices from competition or from purchasers of the Company's products; availability of qualified personnel; the delivery of an ability to commission new equipment as scheduled; ability to obtain required financing; dependence on a limited number of raw material suppliers; the loss or reduced creditworthiness of any significant customers; and other factors detailed from time to time in the Company's filings with the Securities and Exchange Commission. |
