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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Dennis R. Duke who wrote (12390)	3/9/1999 11:38:00 PM
From: Sector Investor	Respond to of 42804

A bit ago I posted on Revenue vs R&D and SG&A growth trends for 1998. I went back to see what previous years looked like. Revenue growth always exceeded or tracked with growth in combined R&D and SG&A, except for 1998. It also shows that their investment in R&D and SG&A slipped in 1997, which has a lagging effect on future revenue. This clearly shows the huge bet MRVC is making on it's future. Now MRVC management has historically been very careful to keep growing in an orderly fashion, but in 1998 they opened their purse strings wide relative to revenue growth. Since I don't think they are irresponsible, they must really think they are going after a huge opportunity in the Carrier markets. MRVC Growth Trends 1994 1995 1996 1997 1998 Annual Revenue Growth% 136% 124% 127% 86% 60% Annual R&D Growth% 94% 89% 103% 60% 97% Annual SG&A Growth% 108% 160% 106% 95% 107% Combined R&D + SG&A % 101% 128% 105% 82% 104%

To: Dennis R. Duke who wrote (12390)	3/9/1999 11:59:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 42804

<<Getting this uncertainty out of the way should help the stock, I hope.>> Well, it should do at least three things: 1) Remove worries for longs about the SEC coming down on them for aggressive accounting - and a crutch that shorts can use in the future. They stated in the CC that this restatement was voluntary, and that they have NOT been contacted by the SEC to date. 2) This puts them back in the black on a CUMULATIVE Net Income basis over the life of the company. Before, shorts were making a big deal that they were negative overall because of the large Xyplex charge, (which was reduced by almost $10 Million in these restatements). 3) Since they reduced each quarter by a penny, it also will make future quarters compare more favorably. So yes, it should help the stock long term.