Monday April 27, 8:32 am Eastern Time
Company Press Release
MRV Communications, Inc. Announces Record First Quarter Results
Revenues up sequentially more than 25%
Operating Income before Charges up sequentially more than 27%
CHATSWORTH, Calif.--(BUSINESS WIRE)--April 27, 1998--MRV Communications, (NASDAQ:MRVC - news) a leading provider of high
speed optical networks announced today record revenues and profit before acquisition related non-recurring charges for the first quarter, ended
March 31, 1998.
Revenues for the March quarter increased to a record $60,828,000, a 71% increase from $35,564,000 in the first quarter of 1997, and a
sequential increase of 26%. Operating income before non-recurring acquisition related charges in the quarter was $10,116,000 a 47% increase
over the prior year, and a 27% sequential increase from the previous quarter. In connection with the acquisition of Xyplex, a one-time charge for
in-process technology of $30,571,000 was recorded and, in addition, along with this acquisition, the company adopted a restructuring plan and
incurred a non-recurring charge of $23,194,000 therewith. The loss including these charges was $43,649,000 for the quarter ended March 31,
1998.
Excluding charges related to the Xyplex acquisition, which closed January 30, 1998, net income for the quarter increased 57% to $7,477,000
from net income of $4,751,000 in the first quarter of 1997. Diluted quarterly operating earnings per share, before acquisition related
non-recurring charges, rose from $.19 in 1997 to $.26 in 1998, on a higher number of shares. Including acquisition related non-recurring charges,
net loss for the current quarter was $40,021,000 compared to net income of $4,343,000 in the year ago period. With these charges Diluted net
loss per share for the current quarter was $1.52 versus earnings per share of $0.18 for the quarter ended March 31, 1997.
The Xyplex acquisition provided MRV with WAN and remote access technology, as well as a stronger sales, customer support and engineering
infrastructure. The addition of the Xyplex organization however also increased the operating costs of the company and decreased Other Income
therefore affecting earnings per share. The synergy of the reorganized entities provides the opportunity to return to an operating cost structure
more in line with the company's history.
Deferred Revenues during the quarter increased by over $4,000,000 to $4,320,000 from $293,000 in the prior quarter. This increase is primarily
due to maintenance contract revenues, which will be recognized over time, reflecting a higher level of customer service capabilities.
Noam Lotan, President and CEO commented: ''We are pleased with the results of the first quarter, which reflect a strong product line, uniquely
addressing corporate requirements for network convergence of voice and data, as well as benefits from a stronger sales and customer support
organization. In addition, our quarterly results reflect improvements in Gross Margins, DSO's and inventory turns.''
Lotan continued: ''As we look to the future, we believe that demand for data networking products will continue to be strong in areas that MRV
has unique expertise in. Last week, we announced a new Network Edge server, which helps reduce telecommunications costs by using the
Internet, without compromising security. In addition, with our products, remote users can benefit from sending telephone traffic over IP networks,
utilizing secure Internet links. Our award winning Gigabit Switching technology has the potential to redefine the new backbone of the Internet. Our
proven track record in converged networks, combining data, voice and Cable TV over fiber optic cable to residential networks along with our
recent acquisition of Xyplex gives us a strong position in this important market.''
This release may contain forward looking statements that involve risks and uncertainties. These statements may differ materially from actual future
events or results. Readers are referred to the documents filed by MRV with SEC, specifically the most recent reports on Form 10K, 10Q and
S3, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including
potential fluctuations in quarterly results, dependence on new product development, rapid technological and market change, manufacturing risks,
volatility of stock price, financial risk management and future growth subject to risks.
About MRV Communications Inc.
MRV Communications Inc. is a leading provider of high-speed optical networks integrating switching, routing, remote access and fiber optic
transmission systems that enhance the performance of existing telecommunications networks. The Company's advanced networking solutions
enhance the functionality of LANs and WANs by reducing network congestion and provide cost-effective migration paths to next generation
Converged Networks with technologies such as Gigabit Ethernet, Remote Access and Voice over IP. The Company's fiber optic transmission
products deliver voice, data and video traffic, under demanding environmental conditions, to carriers, enterprise customers and residential
networks.
For more information, contact: Investor Relations at MRV Communications, Inc. (818) 886-MRVC
MRV COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
March 31, December 31,
1998 1997
(unaudited) (audited)
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 15,077 $ 19,428
Short-term investments 24,948 36,413
Accounts receivable, net of reserves
of $5,125 in 1998 and $4,252 in 1997 59,472 47,258
Inventories 44,604 41,689
Deferred income taxes 7,334 2,280
Other current assets 7,969 7,248
Total current assets 159,404 154,316
PROPERTY AND EQUIPMENT -- At cost,
net of depreciation and amortization 20,480 8,183
OTHER ASSETS:
Investments 25,130 62,382
Goodwill 21,038 5,077
Deferred income taxes 6,112 6,231
Other 83 47
$ 232,247 $ 236,236
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of financing
lease obligations $ 140 $ 111
Accounts payable 28,594 30,439
Accrued liabilities 18,430 5,668
Accrued restructuring costs 16,474 2,761
Deferred revenue 4,320 293
Income taxes payable 1,623 3,484
Total current liabilities 69,581 42,756
LONG-TERM LIABILITIES
Capital lease obligations; net of
current portion 795 788
Deferred income taxes 422 --
Other long-term liabilities 1,715 2,065
FINANCING LEASE OBLIGATIONS
Total long term liabilities 2,932 2,853
MINORITY INTERESTS 2,617 657
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value;
1,000,000 shares authorized no
shares outstanding -- --
Common stock, $0.0034 par value;
40,000,000 shares authorized and
26,426 shares outstanding in 1998
and 26,360 shares outstanding in
1997 88 88
Additional paid-in capital 183,122 175,874
(Deficit) retained earnings (25,385) 14,636
Cumulative translation adjustments (708) (628)
Total stockholders' equity 157,117 189,970
$232,247 236,236
MRV COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
March 31, March 31,
1998 1997
(Unaudited) (Unaudited)
REVENUES, net $ 60,826 $ 35,564
COSTS AND EXPENSES:
Cost of goods sold 34,005 20,176
Research and development
expenses 5,243 2,748
Selling, general and
administrative expenses 11,462 5,775
Purchased technology in progress 30,571 --
Restructuring costs 23,194 --
Operating (loss) income (43,649) 6,865
Interest expense related to
convertible debentures and
acquisition -- 408
Other income (expense), net 684 (166)
(Credit) provision for
income taxes (3,168) 1,938
Minority interests 224 10
NET (LOSS) INCOME $ (40,021) $ 4,343
NET (LOSS) INCOME PER SHARE -
BASIC $ (1.52) $ 0.20
NET (LOSS) INCOME PER SHARE -
DILUTED $ (1.52) $ 0.18
SHARES USED IN PER - SHARE
CALCULATION - BASIC 26,387 22,188
SHARES USED IN PER - SHARE
CALCULATION - DILUTED 26,387 24,795
SELECTED PRO FORMA INFORMATION (prior to non-recurring charges)
Three Months Ended
March 31, March 31,
1998 1997
(Unaudited) (Unaudited)
OPERATING INCOME $ 10,116 $ 6,865
NET INCOME $ 7,477 $ 4,751
NET INCOME PER SHARE - BASIC $ 0.28 $ 0.21
NET INCOME PER SHARE - DILUTED $ 0.26 $ 0.19
SHARES USED IN PER - SHARE
CALCULATION - BASIC 26,387 22,188
SHARES USED IN PER - SHARE
CALCULATION - DILUTED 28,582 24,795
Contact:
MRV Communications, Inc.
Investor Relations, 818/886-MRVC |
