I received the annual report in yesterday's mail. Did not see anything that would account for yesterday's action though. A few thoughts, in no particular order:
1. The report is rather boring - they are demonstrating MRV's commitment to cost cutting with a very austere report. All black & white (but says color is on the website version), non-fancy paper, and encourages stockholders to vote by internet to save them money (I did).
2. SALARIES - I applaud the low salaries taken by MRV's Officers, but also worry about the dilution from options.
3. OPTIONS - If I am reading it right, the number of options granted to all employees for 2002 alone is over 3 Million, or about 3% of the total shares outstanding. A 3% dilution per year adds up, and that does not include the additional shares issued to raise cash. Options to management are about 12% of that total, reasonable IMO.
On the other hand, over 3 Million options were forfeited in 2002 due to the exercise price being higher than the stock price. Options outstanding at the end of the year have an average exercise price of $7.26. I also applaud management for not "re-pricing" the options like many other companies have done.
4. The annual report is for the year ended 12/31/02, so most of the information is almost a year old. Why does it take them so long to put the AR out?
5. Noam's "President's Letter", dated 11/10/03, had a few updates for 2003. He emphasized MRV's stronger balance sheet and that a "return to profitablity" is the #1 priority. "Our responsibility is to build a profitable company and deliver increased stockholder value over time."
6. Noam laid out 3 initiatives, including increasing the number of resellers of MRV products, increasing U.S. Government sales, and developing the MRV brand name.
BTW, I will not make the AM this year. I will be in Korea on business that week. I look forward to reading the reports of those who do go, and should see you next year! |
