Everyone, after typing my last post, I thought it would be about time to get this matter straightened out in part. I put a call in to the MRVC IR department and asked a few brief questions. As usual the person I spoke with was very helpful. Needless to say I am grateful for his time and I really hope they continue to welcome our calls as they have been. Also, I am not a speed writer, but I do try to keep the conversation written as fact. I hope I do MRVC right when posting on the boards.
Q.Regarding the Barrons letter. Collectively on both boards (Silicon/Fools), most of the posters have been outraged by the incredible lack of research the author of the article I sent you earlier in the week gave to MRVC. A lot of us have E-mailed and phoned our complaints to Barron's. Is there any chance that you, or a representitive from MRV could get in contact with Barron's to straighten out the incorrect information they published. Especially regarding the two parts of MRVC being a "fiber-op cable manufacturer" and " a telemarketing firm?"
A.It really isnt our policy to try and stop these kinds of articles. You have been in contact with them?
(resonse)Yes. I believe we have had quite a number of E-mail and phone call messages to Barrons.
A.I will try my best to get in contact with Barron's tommorrow.
(resonse)Our board members will appreciate that greatly.
Q.We have had talk about a negative/positive cash flow for MRVC....
A.If you are referring to our cash burn rate, yes we do have a cash burn rate.
Q.Negative cash flow/cash burn.... I think we are on the same page. Why does MRV have a negative cash flow?
A.As we are growing at an exceptional rate, we have to increase our inventories, and it takes cash to do that. The more we grow the more cash it takes to raise our inventories.
Q.Can you see the cash level increasing.
A.We would like to see a higher level. Since we have grown at a pace faster than we predicted it would have been very difficult to have a high cash balance now.
Q.The recent acquisition of Fibronics left MRV in need of cash. Why did you go with a private placement versus a public offering?
A.In order to complete the deal in a timely manner, we felt our best course was to go with private placement.
Q.So it was mainly do to a time factor?
A.Yes. This will allow the transaction to be completed far more timely than a public offering.
Yes MRV has a cash burn rate(or whatever we wish to call it). In my opinion I would rather see MRV continue to grow versus staying stagnant and having an abundance of cash. Yes, MRV went to the private placement arena for cash. It was simply a matter of timliness. Yes, we are seeing the management respond to misinformation by Barron's. This, in large part, is due to all of us on the boards. We have defended MRV, and now the management recognizes this and is going out to generally unchartered territory, and defending the investors. I hope this will clear up some questions for us.
Regards,
Sam |
