(BSNS WIRE) MRV Reports Year and Fourth-Quarter Results
MRV Reports Year and Fourth-Quarter Results
Business Editors
CHATSWORTH, Calif.--(BUSINESS WIRE)--Feb. 16, 1999--MRV
Communications Inc. (Nasdaq:MRVC) today reported its year-end and
fourth-quarter results for the period ending Dec. 31, 1998.
Net sales for the fourth quarter were a record $74,833,000,
compared with $48,400,000 for the same period last year, an increase
of 55 percent. Pro forma loss, which excludes extraordinary and other
items, was $2,347,000 or $0.09 per diluted share, compared with net
income of $7,111,000 or $0.25 per diluted share for the fourth quarter
of 1997.
Net sales for the year ended December 1998 were $264,075,000,
compared with $165,471,000 for 1997, an increase of 60 percent. Pro
forma net income for 1998, which excluded extraordinary and other
items, was $14,869,000 or $0.53 per diluted share, compared with net
income of $22,585,000 or $0.88 per diluted share for 1997.
Actual net income for the fourth quarter, including extraordinary
and one time items, was $239,000 or $0.01 per diluted share compared
with net income of $7,111,000 or $0.25 per diluted share for the
fourth quarter of 1997.
Actual loss for the year, including the extraordinary and one
time items, was $20,106,000 or $0.76 per diluted share compared with
net income of $22,585,000 or $0.88 per diluted share for 1997.
Noam Lotan, president and chief executive officer, commented:
"While the fourth quarter presented extraordinary challenges it
appears that we are emerging from a period of sustained downward
pressure on margins. Prices on networking products, while continuing
to decline, are finding a more stable environment which could lead to
improvements.
"However, during the next two quarters such improvements are not
anticipated to be significant. Essential to improving margins will be
the following:
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-- Successful market acceptance of a new suite of networking devices
with advanced feature sets and improved cost structures.
Principal among these are new desktop and workgroup switching
products, the Accelerouter introduced at the ComNet show in
January, and the Fiber Driver introduced in the fourth quarter.
-- Enhancement of our manufacturing capabilities, especially with
regard to the optical components business where we have incurred
higher than normal production costs in the face of a surprisingly
strong ramp up in orders."
*T
Lotan continued: "As our optical component business continues to
grow, MRV becomes one of the most vertically integrated optical
networking companies in the market. Ultimately our success will depend
on our ability to transmit, route, and manage light moving through a
fiber optic network."
Although MRV reported its first, second, and third quarter
results of 1998 in accordance with established accounting practice and
valuations of acquired purchased technology in progress provided by
independent valuators, these valuations have been reconsidered in
light of very recent Securities and Exchange Commission guidance
regarding valuation methodology.
Based on this new valuation methodology, the value of the
purchased technology in progress related to the Xyplex acquisition was
reduced to $20,633,000 and the amount of intangible assets was
increased by $9,938,000.
This release may contain projections or other forward-looking
statements regarding future events or the future financial performance
of the company that involve risks and uncertainties. Readers are
cautioned that these statements are only predictions and may differ
materially from actual future events or results. Readers are referred
to the documents filed by MRV with the SEC, specifically the most
recent reports on Form 10-K and 10-Q which will be amended for all
1998 quarters, and which identify important risk factors that could
cause actual results to differ from those contained in the
forward-looking statements, including risks associated with dependence
on new product offerings, competition, patents, intellectual property
and licensing, future growth, rapid technological and market change,
manufacturing and sourcing risks, international operations, volatility
of stock price, financial risk management, and potential volatility in
operating results, among others.
MRV Communications is a leading manufacturer and marketer of
optical networks systems and components. MRV's products integrate
switching, routing, remote access and fiber optic transmission
systems. The company designs, manufactures and sells two groups of
products: (i) computer networking products, primarily Ethernet local
area network ("LAN") routing switches, wide area network ("WAN") and
remote access devices and related equipment and (ii) fiber optic
components for the transmission of voice, video and data across
enterprise, telecommunications and cable TV networks. The company's
advanced networking solutions greatly enhance the functionality of
LANs and WANs by reducing network congestion while allowing end users
to preserve their legacy investments in pre-existing networks and
providing cost-effective migration paths to next generation
technologies such as Gigabit Ethernet, remote access and voice over
IP. The company's fiber optic components incorporate proprietary
technology which delivers high performance under demanding
environmental conditions.
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*T
MRV COMMUNICATIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Dec. 31, Dec. 31,
1998 1997
(Audited) (Audited)
ASSETS
Cash & cash equivalents $ 20,692 $ 19,428
Short-term investments 30,493 36,413
Accounts receivable, net of reserves
of $8,489 in 1998 and $4,252 in 1997 54,596 47,258
Inventories 47,467 41,689
Deferred income taxes 5,035 2,280
Other current assets 5,508 7,248
Total current assets 163,791 154,316
PROPERTY AND EQUIPMENT -- At cost,
net of depreciation and amortization 19,357 8,183
OTHER ASSETS:
Intangibles, including goodwill 26,666 5,077
Investments 100,138 62,382
Deferred income taxes 5,661 6,231
Loan financing costs and other 4,579 47
$320,192 $236,236
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of financing
lease obligations $ 185 $ 111
Accounts payable 29,757 30,439
Accrued liabilities 13,606 8,429
Accrued restructuring costs 82 --
Deferred revenue 4,398 293
Income taxes payable 445 3,485
Total current liabilities 48,473 42,757
LONG-TERM LIABILITIES
Convertible debentures 90,000 --
Capital lease obligations,
net of current portion 1,400 788
Deferred income taxes 48 --
Other long-term liabilities 2,869 2,065
Total long term liabilities 94,317 2,853
MINORITY INTERESTS 2,973 657
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value:
outstanding -- --
Common stock, $0.0034 par value:
80,000 shares authorized and
26,639 shares outstanding in 1998
and 26,360 shares outstanding in 1997 88 88
Additional paid-in capital 180,656 175,874
Treasury Stock (133) --
Retained earnings (deficit) (5,471) 14,635
Cumulative translation adjustments (711) (628)
Total stockholders' equity 174,429 189,969
$320,192 $236,236
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MRV COMMUNICATIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended Three Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1997 1998 1997
(Audited) (Audited) (Unaudited) (Unaudited)
REVENUES, net $264,075 $165,471 $ 74,883 $ 48,400
COSTS AND EXPENSES:
Cost of goods sold 162,284 94,709 53,186 27,843
Writedown of
discontinued
products 3,101 -- 3,101 --
Research and
development
expenses 25,817 13,093 8,480 3,999
Selling,
general and
administrative
expenses 56,753 27,365 16,978 8,620
Purchased
technology in
progress 20,633 -- -- --
Restructuring
costs 15,671 -- (7,523) --
Operating income
(loss) (20,184) 30,304 661 7,938
Interest expense
related to
convertible
notes 2,480 843 1,110 416
Other income
(expense), net 6,819 2,744 3,537 2,284
Provision for
income taxes 5,707 9,474 4,665 2,634
Minority interests 1,345 146 975 61
NET INCOME
(LOSS) BEFORE
EXTRAORDINARY ITEM (22,897) 22,585 (2,552) 7,111
EXTRAORDINARY ITEM
Gain on repurchase
of convertible
notes, net of tax 2,791 -- 2,791 --
NET INCOME (LOSS) $(20,106) $ 22,585 $ 239 $ 7,111
NET INCOME (LOSS)
PER SHARE -- BASIC
ITEM $ (0.86) $ 0.95 $ (0.10) $ 0.27
NET INCOME (LOSS)
PER SHARE -- DILUTED
ITEM $ (0.86) $ 0.88 $ (0.08) $ 0.25
NET INCOME (LOSS)
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