It looks like they beat estimates of a loss of ll cents for the Q.
The rest of the report looks terrible though. Gross margins were
down. SG&A as a percentage of sales were up. This seems to
indicate they have some fixed cost they can not go below
without affecting their business operations. They have been
pretty good in the past at controlling cost. They did continue to
invest in R&D though which is good. Accounts receivable for the
year were essentially flat so the credit worthiness of their
customers did not change.
The conference call will determine the direction tommorrow.
I think it will depend on what the outlook for spending
by the Cable companies will be going forward.
***************************************************
Thursday May 28, 4:59 pm Eastern Time
Company Press Release
Ortel Reports Year-End Results
ALHAMBRA, Calif.--(BUSINESS WIRE)--May 28, 1998--Ortel Corp. (Nasdaq:ORTL -
news) Thursday reported financial results for its fiscal year and fourth quarter ended April 30,
1998.
For the 1998 fiscal year, revenues totaled $76.9 million, with net income of $2.7 million, or 22
cents per diluted share. This compares with revenues in fiscal 1997 of $82.6 million, and net
income of $8.3 million, or 66 cents per diluted share.
Net income for both years includes a gain of $915,000, or 5 cents per share net of tax, related to
an intellectual property dispute. The settlement called for three equal payments in each fiscal
fourth quarter, the final payment of which was received in the fourth quarter of fiscal 1998.
For the three months ended April 30, 1998, revenues totaled $16.3 million, resulting in a net loss
of $1.0 million, or 9 cents per diluted share. Revenues for the fourth quarter a year ago were
$21.5 million and net income equaled $2.3 million, or l8 cents per diluted share.
Revenues from the sale of broadband fiber-optic products were 61 percent of total revenues for
the 1998 fiscal year and 63 percent for the fourth quarter, and represented a decrease in
revenues of 26 percent and 27 percent over the prior year and fourth quarter, respectively.
Wireless, satellite communications and other product sales totaled $30.0 million for the year and
$6.0 million for the fourth quarter, representing an increase of 55 percent year over year and a
decrease of 18 percent from the fourth quarter a year ago.
International sales for the year of $38.0 million rose 29 percent over fiscal 1997. In the fiscal
1998 fourth quarter, however, international sales totaled $6.9 million, a 29 percent decrease from
the corresponding prior-year period.
''Ortel's results in fiscal 1998 principally reflected softness in our broadband business
domestically and the effects late in the year of the Asian economic crisis. We enter the new year
with signs of an upturn in our core business in the U.S.,'' said Wim H. J. Selders, president and
chief executive officer.
''We are enthusiastic about our new broadband product introductions. Since April, we have
experienced increased order rates reflecting investments by cable operators in their networks to
take advantage of opportunities they see in high-speed Internet access, cable telephony and
interactivity.''
The company has adopted Statement of Financial Accounting Standards No. 128 (SFAS No.
128), which replaces the presentation of primary and fully diluted earnings per share with basic
and diluted earnings per share. All prior periods' earnings per share calculations have been
restated in accordance with SFAS No. 128.
Ortel designs, manufactures and supplies advanced solutions to original equipment manufacturers
for the transmission of video, voice and data.
The company applies its core technology strengths in semiconductor optoelectronics, fiber-optic
transmission and radio frequency electronics to enhance capacity, improve quality and lower
costs for broadband cable television networks, as well as for telecom, satellite and wireless.
The company has headquarters in Alhambra, and international operations in Stockholm, Sweden;
Munich, Germany; Paris; and Shenzhen, China. For more information on the company and its
products, call 800/362-3891 or visit Ortel's Web site at www.ortel.com.
This news release contains forward-looking statements regarding Ortel's results of operations or
financial condition. Factors that could cause actual results to differ materially include changes in
the capital spending of CATV operators, changes in customer order patterns, introductions of
new products by competitors, and other risks identified from time to time in the company's
Securities and Exchange Commission filings.
NOTE TO EDITORS: Visit Ortel's investor relations site at hnt.com.
ORTEL CORP.
Consolidated Statements of Income
($ in thousands except per share data)
Three Months Ended Twelve Months Ended
April 30, April 30,
1998 1997 1998 1997
Revenues $16,302 $21,461 $76,870 $82,554
Cost of revenues 10,300 11,215 45,011 42,846
Gross profit 6,002 10,246 31,859 39,708
Operating expenses:
Research and
development 3,744 3,749 13,567 13,333
Sales and marketing 3,112 3,268 10,537 10,605
General and
administrative 1,725 1,307 6,157 5,968
Total operating
expenses 8,581 8,324 30,261 29,906
Operating income
(loss) (2,579) 1,922 1,598 9,802
Interest income, net 287 349 1,278 1,458
Other non-operating
income 764 963 584 743
Income (loss) before
income taxes (1,528) 3,234 3,460 12,003
Provision for income
taxes (benefit) (488) 941 723 3,688
Net income (loss) $ (1,040) $ 2,293 $ 2,737 $ 8,315
Basic net income
per share $(0.09) $0.20 $0.24 $0.73
Diluted net income
per share $(0.09) $0.18 $0.22 $0.66
Weighted shares
outstanding - basic 11,707 11,503 11,634 11,463
Weighted shares
outstanding -
diluted 12,415 12,400 12,639 12,604
Weighted shares
outstanding used in
computation of
diluted earnings
per share 11,707 12,400 12,639 12,604
As a percent of
revenues:
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of revenues 63.2 52.3 58.6 51.9
Gross profit 36.8 47.7 41.4 48.1
Research and
development 23.0 17.4 17.6 16.1
Sales and marketing 19.1 15.2 13.7 12.9
General and
administrative 10.5 6.1 8.0 7.2
Total operating
expenses 52.6 38.7 39.3 36.2
Operating income
(loss) (15.8) 9.0 2.1 11.9
Interest income, net 1.8 1.6 1.7 1.8
Other non-operating
income 4.6 4.5 .7 .9
Income (loss) before
income taxes (9.4) 15.1 4.5 14.6
Provision for
income taxes (benefit) (3.0) 4.4 .9 4.5
Net income (loss) (6.4)% 10.7% 3.6% 10.1%
Products:
Broadband 63.1% 65.7% 61.0% 76.6%
Wireless and other 36.9 34.3 39.0 23.4
Total 100.0% 100.0% 100.0% 100.0%
Geographic Coverage:
Domestic 57.4% 54.7% 50.6% 64.3%
International 42.6 45.3 49.4 35.7
Total 100.0% 100.0% 100.0% 100.0%
-0-
ORTEL CORP.
Consolidated Balance Sheets
($ thousands)
April 30,
1998 1997
----------------------- --------------------
Assets:
Cash and short-term investments $28,668 $34,562
Accounts receivable 13,049 13,762
Other receivables 861 1,276
Inventories 11,198 13,960
Income taxes receivable 530 -
Other current assets 4,056 3,441
Total current assets 58,362 67,001
Property, equipment and
improvements, net 20,042 18,057
Intangible assets 2,581 2,901
Other assets 8,802 3,037
Total assets $89,787 $90,996
Liabilities & Stockholders' Equity:
Accounts payable $ 3,685 $ 5,574
Accrued liabilities 5,437 7,091
Income taxes payable 172 1,399
Total current liabilities 9,294 14,064
Deferred income 400 395
Deferred income taxes 1,044 1,409
Minority interest 265 245
Stockholders' equity:
Common stock 12 11
Paid-in capital 51,323 50,160
Retained earnings 27,449 24,712
Total stockholders' equity 78,784 74,883
Total Liabilities and
Stockholders' Equity $89,787 $90,996
Contact:
Ortel Corp.
Patricia Menchaca, 626/293-3643
pmenchac@ortel.com (e-mail)
or
Pondel Parsons & Wilkinson
Cecilia A. Wilkinson, 310/207-9300
investor@pondel.com (e-mail) |
