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 |
