MRV Achieves Record Revenue in Fourth Quarter and Fiscal Year-End 2006
PR Newswire - February 15, 2007 4:07 PM ET
MRV COMMUNICATIONS, INC. (Nasdaq: MRVC), today reported its results for the fourth quarter and year-ended December 31, 2006. The Company's results in accordance with US GAAP reflect the adoption on January 1, 2006 of SFAS 123R regarding the expensing of non-cash share-based compensation in 2006.
Revenue for the fourth quarter of 2006 was above guidance at $103 million, an increase of 13% over revenue of $91 million in the fourth quarter of 2005. GAAP net income for the fourth quarter of 2006 was $0.6 million or $0.00 per share, an improvement of $3.2 million when compared to a GAAP net loss of $2.6 million, or $(0.02) per share, for the fourth quarter of 2005. Non-GAAP net income for the fourth quarter of 2006, which excludes non-cash share-based compensation, was $1.6 million, or $0.01 per share, as compared with a non- GAAP net loss of $2.6 million, or $(0.02) per share, for the fourth quarter of 2005. Fourth quarter 2006 gross margin, operating income and net income were negatively impacted by a $0.9 million one time charge related to an inventory write-off for end-of-life products in the Company's optical components business.
Revenues for the entire year of 2006 were $356 million, up 26%, compared to revenues of $284 million for 2005. GAAP net loss for 2006 was $5.5 million, or $(0.05) per share, compared to a net loss of $16.3 million, or $(0.16) per share for 2005. Non-GAAP net loss for 2006 was $2.0 million, or $(0.02) per share, compared to a non-GAAP net loss of $16.1 million, or $(0.15) per share, for 2005.
"Our results for the fourth quarter and entire year of 2006 represent the highest quarterly and annual revenues in company history and our second consecutive quarter of profitability," commented Noam Lotan, President & CEO of MRV. "Revenue growth during the year was driven by our optical components business, which posted an 85% year-over-year increase in full year sales, and our internally developed networking equipment products which grew 17% on a full-year basis as a result of our expanded sales force. Looking forward, we are well positioned to take advantage of key emerging industry trends such as increased adoption of Metro Ethernet in North America and the need for carriers and MSOs to upgrade their networks in order to deliver triple play services to businesses and consumers in their homes."
Continuing, Mr. Lotan stated, "During 2006, through our optical components division, we continued to benefit from fiber-to-the-home deployments by Verizon and other telecommunication carriers. We recently shipped our 1 millionth BPON triplexer, which was a significant milestone. As fiber-to-the- home technology evolves, we remain the volume leader, having shipped over 100,000 GPON triplexers to date, primarily outside of the US, and we expect these shipments to accelerate as GPON deployments are launched in North America. To strengthen our position further in this market, we recently announced the proposed acquisition of Fiberxon, Inc. By combining Fiberxon with Luminent, our goal is to create one of the largest, most comprehensive manufacturers of optical transceivers for telecommunications networks. The integration of the two management teams is expected to strengthen the combined company. We expect that the combined company will have a strong fiber-to-the- home presence with EPON and GPON transceivers as well as add an established suite of products addressing the growing 10Gb/s transceivers market. The combined company is expected to address the objectives of our customers for a broader range of advanced solutions at competitive prices. It is also expected to increase customer diversification by giving us exposure to large Asian service providers."
Kevin Rubin, Chief Financial Officer of MRV, commented, "We were pleased to record another quarter of strong revenue growth as well as our second consecutive quarter of profitability. During the fourth quarter, we also successfully reduced our inventories and generated strong positive cash flow. Looking ahead, we believe our business trends remain positive despite moving into the first quarter, which historically has been seasonally soft due to our high concentration of revenue in Europe."
Operational Highlights
* The Company's network equipment (internally developed) fourth quarter
of 2006 revenue grew 19% year-over-year and continued to benefit from
Metro Ethernet sales in North America. Sales of the Company's Lambda
Driver and Fiber Driver product lines were particularly strong in the
fourth quarter of 2006 compared to the fourth quarter of 2005,
improving 226% and 52%, respectively.
* The Company's fourth quarter optical components revenue through
Luminent, grew quarterly 83% year-over-year and 13% sequentially.
Demand was primarily driven by sales of GPON and BPON ONT triplexer
solutions.
* The Company's network integration business in Europe enjoyed another
strong quarter posting solid gross margins of 26%, a 270 basis points
(2.7%) improvement from the third quarter of 2006.
First Quarter of 2007 Outlook
MRV currently estimates that revenues for the first quarter of 2007 will be in the range of $84 million to $87 million. Net loss per share is currently forecasted to be ($0.01) per share on a non-GAAP basis, which excludes the effect of SFAS No. 123R share-based compensation expense (which is forecasted to be approximately $0.01 per share). On a GAAP basis, net loss per share is currently forecasted to be approximately ($0.02) per share.
Other Information
MRV will host a conference call to discuss its fourth quarter and fiscal year-end of 2006 financial results today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). For parties in the United States and Canada, call 800-257-2101 to access the conference call. International parties can access the call at 303-262-2125. A financial presentation designed to guide participants through the call will also be available. MRV will offer its live audio broadcast of the conference call, along with the financial presentation, on the MRV Investor website at ir.mrv.com. For replay information, please visit the MRV Investor website. |
