(BSNS WIRE)** The Numbers** Scroll down MRV Communications Inc. Announces First Quarter Results
MRV Communications Inc. Announces First Quarter Results
Business Editors
CHATSWORTH, Calif.--(BUSINESS WIRE)--April 26, 1999--MRV
Communications Inc. (Nasdaq: MRVC), a leading provider of high speed
optical network components and systems, today reported results for the
first quarter ended March 31, 1999.
Revenues for the March quarter were $70,116,000, a 15% increase
from $60,826,000 in the first quarter of 1998. Net loss for the first
quarter of 1999 was $909,000 compared to pro forma net income of
$7,339,000, excluding one-time charges related to the Xyplex
acquisition in the quarter ended March 31, 1998. Including the
one-time charges related to the acquisition of Xyplex, net loss in the
quarter ended March 31, 1998 was $30,221,000.
Basic and diluted loss per share for the first quarter of 1999
were $0.03 compared to pro forma basic earnings per share of $0.28 and
pro forma diluted earnings per share of $0.26 in the first quarter of
1998. Including one-time charges related to the Xyplex acquisition,
basic and diluted loss per share were $1.15 for the quarter ended
March 31, 1998.
Noam Lotan, President and CEO, commented: "We are satisfied with
the progress the company is making as well as the progress of the
three new ventures that we funded. MRV is now the only pure player in
the convergence of internetworking technologies. We are in a unique
position with our well-focused approach on LAN, WAN, optical networks,
and the Internet.
"Our core business, Lightwave Transmission, is very healthy. To
that effect we continue to invest in production capacity, additional
space and new talents.
"On April 6, MRV announced (under our NBase-Xyplex brand) the
first Linux Switch/Router ('OSR'). This is a high capacity machine
with a 40 Gbps switching fabric, capable of routing 26 million packets
per second, at layers 3 and 4. The OSR will support 10/100 Mbps
Ethernet, Gigabit Ethernet, ATM OC3 and ATM OC12 interfaces. In
addition to this impressive throughput, unique programmable processors
allow new features to be added without hardware upgrades. By using
integrated applications of the Linux Operating System, the OSR
provides smart network applications powered by Symmetric
Multiprocessing Performance ('SMP'). SMP provides faster route table
re-calculations and therefore faster recovery from route changes than
routers with a single processor. The OSR starts with two processors,
and will scale to 16. This is important, as other routers might not
have the horsepower to support future requirements for robust Internet
connectivity. Cisco for example, uses a single processor.
"The Linux Router is the first in the world, allowing programmers
to add or write new applications that will run on top of Linux OS, and
will control the router functionality. This brings a level of openness
and flexibility to the world of routing that proprietary (and closed)
operating systems do not have.
"The OSR was developed and will be manufactured in Israel. It will
be demonstrated for the first time at the upcoming NetWorld-InterOp
show in Las Vegas, with general availability in Q3."
Lotan continued: "MRV has funded three promising start-up
internetworking companies: New Access Communications, for Metro-Access
networks, Charlotte's Web Networks, for Carriers' Internet, and
HyperChannel, for e-commerce and Network Security.
"New Access is first to combine a commercially viable DWDM system
with data switching in a metropolitan ring. During the quarter, New
Access won the overall Best Product Achievement Award at the ComNet DC
trade show.
"Charlotte's Web's product is the next generation Terabit
Switch/Router for Internet backbone applications. It will seamlessly
integrate Cell and Packet based traffic, with a rich set of
Differentiated Services based on latest IETF definitions. Non-blocking
traffic flow starts at 128 Gbps, scaleable to multiple Terabits per
second. Packet forwarding starts at 200 million packets per second.
Competitive analysis shows Charlotte favorably competing on processing
speed and offering the highest port density per rack space. For
example, 256 Gigabit Ethernet or 64 ports of OC-48 can be supported in
a single 19-inch rack. Charlotte plans to exhibit for the first time at
the SuperComm show, the Telecom industry's most prominent annual
event, June 7 to 10.
"Our e-commerce startup is HyperChannel. Led by a former Cisco UK
executive, HyperChannel's mission is to build an electronic B to B
channel across Europe. This is accomplished through a proprietary
two-tier e-commerce, between end-users, resellers and distributors. By
collapsing the supply chain and automating the commodity aspect of a
two-tier transaction, resellers can focus on the more productive part
of their business, solving end users' problems. All this effort
facilitates the creation of on-line stores. HyperChannel to date has
performed beyond our expectations."
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 the SEC, specifically the most recent reports on
Forms 10K and 10Q/A, which identify important risk factors that could
cause actual results to differ from those contained in the
forward-looking statements, including potential fluctuations in
operating results, dependence on new product developments, rapid
technological and market changes, manufacturing risks, volatility of
the company's stock price, financial risk management and future
growth subject to risks.
MRV Communications is a world class leader in high-speed
optical network components and systems. Its products integrate
switching, routing, remote access, and fiber-optic transmission to
enhance the performance of LANs and WANs and telecommunications
networks. MRV's fiber-optic transmission components send voice, data
and video to carriers and residential networks. Through its
NBase-Xyplex brand, the company provides network enhancement solutions
that accelerate the deployment and improve the performance of complex
data networks.
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MRV COMMUNICATIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, Dec. 31,
1999 1998
(unaudited) (audited)
ASSETS
CURRENT ASSETS:
Cash & cash equivalents $ 21,742 $ 20,692
Short-term investments 26,395 30,493
Accounts receivable, net of
reserves of $8,561 in
1999 and $8,489 in 1998 57,975 54,596
Inventories 48,007 47,467
Deferred income taxes 5,004 5,035
Other current assets 4,709 5,508
Total current assets 163,832 163,791
PROPERTY AND EQUIPMENT - At cost,
net of depreciation
and amortization 19,496 19,357
OTHER ASSETS:
Goodwill 25,955 26,666
Investments,
principally U.S. Treasuries 100,905 100,138
Deferred income taxes 5,827 5,661
Loan financing costs and other 4,717 4,579
$ 320,732 $ 320,192
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of
financing lease obligations $ 127 $ 185
Accounts payable 35,503 29,757
Accrued liabilities 12,484 13,606
Accrued restructuring costs -- 82
Deferred revenue 3,022 4,398
Income taxes payable 91 445
Total current liabilities 51,227 48,473
LONG-TERM LIABILITIES
Convertible notes 90,000 90,000
Capital lease obligations,
net of current portion 1,105 1,400
Deferred income taxes 360 48
Other long-term liabilities 1,927 2,869
Total long term liabilities 93,392 94,317
MINORITY INTERESTS 2,976 2,973
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value:
1,000 shares authorized
no shares outstanding -- --
Common stock, $0.0034 par value:
80,000 shares authorized and
26,672 shares outstanding in 1999
and 26,639 shares outstanding
in 1998 88 88
Additional paid-in capital 180,834 180,656
Treasury Stock (133) (133)
Retained earnings (deficit) (6,380) (5,471)
Cumulative translation adjustments (1,272) (711)
Total stockholders' equity 173,137 174,429
$ 320,732 $ 320,192
MRV COMMUNICATIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
March 31, March 31,
1999 1998
(Unaudited) (Unaudited)
REVENUES, net $ 70,116 $ 60,826
COSTS AND EXPENSES:
Cost of goods sold 46,366 34,005
Research and development
expenses 8,465 5,243
Selling, general and
administrative expenses 15,845 11,600
Purchased technology in progress -- 20,633
Restructuring costs -- 23,194
Operating (loss) income (560) (33,849)
Interest expense related
to convertible notes 1,125 --
Other income (expense), net 1,403 684
Provision (credit) for income
taxes 627 (3,168)
Minority interests -- 224
NET INCOME (LOSS) $ (909) $(30,221)
NET INCOME (LOSS) PER SHARE - BASIC $ (0.03) $ (1.15)
NET INCOME (LOSS) PER SHARE - DILUTED $ (0.03) $ (1.15)
SHARES USED IN PER -
SHARE CALCULATION - BASIC 26,650 26,387
SHARES USED IN PER -
SHARE CALCULATION - DILUTED 26,650 26,387
MRV COMMUNICATIONS INC.
The following represents the historical statements of operations
adjusted for purchased technology in progress and restructuring costs.
PRO FORMA STATEMENTS OF OPERATIONS (excluding non-recurring items)
(In thousands, except per share data)
Three Months Ended
March 31, March 31,
1999 1998
(Unaudited) (Unaudited)
REVENUES, net $ 70,116 $ 60,826
COSTS AND EXPENSES:
Cost of goods sold 46,366 34,005
Research and development
expenses 8,465 5,243
Selling, general and
administrative expenses 15,845 11,600
Operating (loss) income (560) 9,978
Interest expense related
to convertible notes 1,125 --
Other income (expense), net 1,403 684
Provision (credit) for income taxes 627 3,099
Minority interests -- 224
NET INCOME (LOSS) $ (909) $ 7,339
NET INCOME (LOSS) PER SHARE - BASIC $ (0.03) $ 0.28
NET INCOME (LOSS) PER SHARE - DILUTED $ (0.03) $ 0.26
SHARES USED IN PER -
SHARE CALCULATION - BASIC 26,650 26,387
SHARES USED IN PER -
SHARE CALCULATION - DILUTED 26,650 28,582
NOTE: PRO FORMA STATEMENTS ABOVE EXCLUDE THE FOLLOWING
Purchased technology in progress - 20,633
Restructuring costs - 23,194
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--30--LES/la* KWP/la TJJ/la
CONTACT: MRV Communications Inc., Chatsworth
Diana Hayden, 818/886-6782
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED TELECOMMUNICATIONS
EARNINGS
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