Welcome!

.NET Authors: Lori MacVittie, Sandi Mappic, Ivan Antsipau, JP Morgenthal, Yeshim Deniz

News Feed Item

MRV Reports Fourth Quarter and Full Year 2013 Results

MRV Communications (OTC: MRVC), a global leader in converged packet and optical solutions that empower the optical edge and network integration services for communications service providers, reported financial results for the three and twelve months ended December 31, 2013.

“We have been successfully executing on a strategic plan that has returned MRV to profitability while accelerating our investment in new product development to drive our future growth,” said David Stehlin, MRV's chief executive officer. “Our initiatives to streamline operations and improve efficiencies have created both a lower cost structure and an infrastructure capable of supporting robust growth. At the same time, we have been making disciplined and focused investments in new products to support our customers’ evolving needs and broaden our reach into significant target markets key to our long-term growth.

“Launching our OptiDriver™ optical transport platform exemplifies our strategy to take advantage of the metro network transformation and capture the fast growing optical edge market segment. In late 2013, we introduced OptiDriver, the industry’s most compact, flexible and power-efficient optical transport and in February 2014, we expanded the product line to cost-effectively address bandwidth challenges and optimize 100G networks. The OptiDriver has been very well received among our customer base including communications service providers, content delivery networks and cloud services providers.

“We are proud of MRV’s recent accomplishments. In 2014, we expect continued revenue seasonality; typically revenue is the slowest in the first quarter and the strongest in the fourth quarter. Looking ahead, we believe we are well positioned to foster growth as we deliver superior communications equipment and services in a market that continues to evolve toward high capacity, packet optical networking with increasing software control and service delivery.”

Fourth Quarter Results: Three months ended Dec. 31, 2013 compared to Dec. 31, 2012

  • Total revenue grew to $50.7 million, up 10% from $46.0 million in the prior year.
    • Network Equipment revenue was $25.9 million, up 15% compared to the prior year driven by wins in the Europe and Asia Pacific regions, partially offset by a decline in North America revenue due to the softness of the US telecommunications market.
    • Network Integration revenue was $24.9 million, up 6% compared to the prior year primarily due to favorable foreign currency rates.
  • Total gross margin was 32.8%, compared to 32.2% in the prior year.
    • Network Equipment gross margins were 50.6%, compared to 48.9% in the prior year, reflecting favorable product mix.
    • Network Integration gross margins were 14.2%, down from 16.6% in the prior year as the difficult economic conditions in Italy resulted in pricing pressures that translated into lower margins on product revenues.
    • Consolidated gross margin benefitted from a higher proportion of Network Equipment revenue in the overall product mix.
  • Total operating expenses were $16.5 million, decreasing from $17.6 million in the prior year.
    • Network Equipment operating expenses were $13.5 million, up from $10.3 million in the prior year, reflecting planned investments primarily in product development and engineering.
    • Network Integration operating expenses were $1.8 million, compared to $1.9 million in the prior year.
    • Corporate operating expenses were $1.2 million, down from $5.4 million in the prior year, due to the resolution of prior liabilities and to initiatives implemented to lower legal, consulting and accounting fees. The company expects to continue to benefit from the 2013 expense reduction.
  • Total operating income was $0.1 million. The $3.0 million improvement from the prior year reflects the growth in revenue and profitable operations in both Network Equipment and Network Integration and lower corporate overhead.

Year-to-date Results: Twelve months ended Dec. 31, 2013 compared to Dec. 31, 2012

  • Total revenue grew to $166.2 million in 2013, up 10% from $151.7 million in 2012, reflecting growth in both businesses as well as an elimination of $8.1 million in discontinued intersegment sales for the prior year. If 2012 revenue was adjusted to include discontinued operations, then the total 2013 revenue would be up 4% from the prior year.
    • Network Equipment revenue grew to $90.7 million in 2013, up $3.0 million from
      $87.7 million in 2012 including the aforementioned $8.1 million from sales of subsidiaries in the fourth quarter of 2012. The growth was driven by new and existing customers in North America, partially offset by declines in Asia-Pacific and Europe.
    • Network Integration revenue increased to $75.6 million in 2013, up of $3.2 million from $72.4 million in 2012, primarily due to favorable exchange rates and modest growth in services.
  • Total operating loss was $4.4 million in 2013, an improvement of $5.4 million when compared to $9.8 million in 2012. This reflects reductions in SG&A partially offset by the planned investments in Network Equipment product development and engineering.

Liquidity at Dec. 31, 2013

During the fourth quarter, MRV repurchased 116,000 shares for $1.2 million, bringing the year-to-date buyback total to 389,000 shares for $3.9 million. Cash and cash equivalents plus restricted time deposits were $27.8 million, compared to $40.8 million at December 31, 2012. The decrease reflects $3.9 million in stock repurchases; $3.6 million for capital expenditures; a net $7.5 million increase in accounts receivable and other assets related to the move away from factoring of certain accounts receivables in Italy to lower financing costs; $1.1 million pay down in debt. These decreases in cash were partially offset by a $3.1 million increase in accounts payable and other changes in working capital.

Conference Call Information:

MRV Communications' fourth quarter 2013 financial results conference call is scheduled to take place on March 17, 2014 at 4:30 p.m. ET. The live audio webcast will be accessible at www.mrv-corporate.com in the Investor Relations section. For access via telephone, please dial 877-359-9508, and for international calls dial 224-357-2393 approximately 10 minutes prior to the start of the conference. The conference ID is 81829805#. The conference call will also be broadcast live at www.mrv.com where it will be available for replay for 90 days. In addition, a replay will be available via telephone for three business days, beginning three hours after the call. To listen to the replay, in the U.S. please dial 855-859-2056, and internationally dial 404-537-3406. The access code is 81829805#.

About MRV Communications

MRV Communications is a global leader in converged packet and optical solutions that empower the optical edge and network integration services for [leading] communications service providers. For more than two decades, the most demanding service providers, Fortune 1000 companies and governments worldwide have trusted MRV to provide best-in-class solutions and services for their mission-critical networks. We help our customers overcome the challenge of orchestrating the ever-increasing need for capacity while improving service delivery and lowering network costs for critical applications such as cloud connectivity, high-capacity business services, mobile backhaul and data center connectivity. For more information please visit www.mrv.com.

Forward Looking Statements

This press release may contain statements regarding future financial and operating results of MRV, management's assessment of business trends, and other statements about management's future expectations, beliefs, goals, plans or prospects and those of the market segments in which MRV is engaged that are based on management's current expectations, estimates, forecasts and projections about MRV and its consolidated businesses and the respective market segments in which MRV's businesses operate, in addition to management's assumptions. Statements in this press release regarding MRV's future financial and operating results, which are not statements of historical facts, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as "expects," "anticipates," "envisions," "estimates," "targets," "intends," "plans," "believes," "seeks," "should," "could," "forecasts," "projects," variations of such words and similar expressions, are intended to identify such forward-looking statements which are not statements of historical facts. These forward-looking statements are not guarantees of future performance nor guarantees that the events anticipated will occur or expected conditions will remain the same or improve. These statements involve certain risks, uncertainties and assumptions, the likelihood of which are difficult to assess and may not occur, including risks that each of its business segments may not make the expected progress in its respective market, or that management's long-term strategy may not achieve the expected results. Therefore, actual outcomes, performance and results may differ from what is expressed or forecast in such forward-looking statements, and such differences may vary materially from current expectations.

For further information regarding risks and uncertainties associated with MRV's businesses, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of MRV's SEC filings, including, but not limited to, its quarterly reports on Form 10-Q for the quarters ended September 30, 2013, June 30, 2013, and March 31, 2013 and annual report on Form 10-K for the year ended December 31, 2013, copies of which may be obtained by contacting MRV's investor relations department or by visiting MRV's website at http://www.mrv-corporate.com or the SEC's EDGAR website at http://www.sec.gov.

All information in this release is as of March 17, 2014 unless otherwise stated. MRV undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in MRV's expectations.

 

MRV Communications, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

                 

Three Months Ended

December 31,

Year Ended

December 31,

               
2013 2012 2013 2012
 
(unaudited)     (unaudited)      

 

     
 
Product revenue $ 37,356 $ 32,462 $ 118,911 $ 106,447
Service revenue   13,380     13,492     47,290     45,214  
Revenue $ 50,736 $ 45,954 $ 166,201 $ 151,661
Cost of goods sold   34,116     31,167     108,208     96,509  
Gross profit 16,620 14,787 57,993 55,152
 
Operating expenses:
Product development and engineering 5,652 4,233 19,381 15,344
Selling, general and administrative 10,840 13,391 42,993 48,599
Impairment of goodwill   -     -     -     1,056  
Total operating expenses   16,492     17,624     62,374     64,999  
Operating income (loss) 128 (2,837 ) (4,381 ) (9,847 )
 
Interest Expense (112 ) (150 ) (526 ) (601 )
Gain from settlement of deferred consideration obligation - - - 2,314
Other income (loss), net   (190 )   (117 )   (407 )   (54 )
Income (loss) from continuing operations before taxes (174 ) (3,104 ) (5,314 ) (8,188 )
       
Provision (benefit) for income taxes   1,075     1,077     1,508     (1,013 )
Net income (loss) of continuing operations (1,249

)

(4,181 ) (6,822 ) (7,175 )
 
Income (loss) from discontinued operations, net of income taxes of $0 in 2013 and $4,588 in 2012   -     10,675     -     12,839  
Net income (loss)   (1,249 )   6,494     (6,822 )   5,664  
 
Net income (loss) per share - basic:
From continuing operations: $ (0.17 ) $ (0.54 ) $ (0.91 ) $ (0.92 )
From discontinued operations: $ -   $ 1.38   $ -   $ 1.64  
Net income (loss) per share - basic (1) $ (0.17 ) $ 0.84 $ (0.91 ) $ 0.72
 
Net income (loss) per share - diluted:
From continuing operations: $ (0.17 ) $ (0.54 ) $ (0.91 ) $ (0.92 )
From discontinued operations: $ -   $ 1.38   $ -   $ 1.64  
Net income (loss) per share - diluted (1) $ (0.17 ) $ 0.84 $ (0.91 ) $ 0.72
 
Weighted average number of shares:
Basic 7,443 7,760 7,484 7,813
Diluted 7,443 7,760 7,484 7,817

________________________________________
(1) Amounts may not add due to rounding.

           
 

MRV Communications, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except par values)

 
December 31, December 31,
  2013     2012  
Assets

 

Current assets:
Cash and cash equivalents $ 27,591 $ 40,609
Restricted time deposits 249 240
Accounts receivable, net 49,990 32,237
Other receivables 8,220 18,287
Inventories 22,981 22,444
Income taxes receivable 1,256
Deferred income taxes 1,219 1,145
Other current assets   5,664     4,629  
Total current assets 117,170 119,591
Property and equipment, net 5,555 3,735
Deferred income taxes, net of current portion 3,694 3,711
Intangibles, net 873 400
Other assets   655     1,128  
Total assets $ 127,947   $ 128,565  
 
Liabilities and stockholders' equity
Current liabilities:
Short-term debt $ 4,320 $ 5,267
Deferred consideration payable 233 233
Accounts payable 23,991 20,478
Accrued liabilities 19,463 16,652
Deferred revenue 10,557 7,290
Other current liabilities   357     560  
Total current liabilities 58,921 50,480
Other long-term liabilities 5,236 5,184
Commitments and contingencies
 
Stockholders' equity:
Issued — 8,143 shares in 2013 and 8,061 shares in 2012
Outstanding — 7,286 shares in 2013 and 7,594 shares in 2012 270 270
Additional paid-in capital 1,281,883 1,281,170
Accumulated deficit (1,208,337 ) (1,201,515 )
Treasury stock — 856 shares in 2013 and 467 shares in 2012 (10,412 ) (6,528 )
Accumulated other comprehensive income   386     (496 )
Total stockholders' equity   63,790     72,901  
Total liabilities and stockholders' equity $ 127,947   $ 128,565  
 
         
 

MRV Communications, Inc.

Segmented Operating Data

(In thousands, except par values)

 
Three Months Ended

December 31,

Year Ended

December 31,

 
  2013         2012     2013         2012  
 
Revenue
Network Equipment $ 25,859 $ 22,479 $ 90,711 $ 87,727
Network Integration   24,935     23,529     75,636     72,421  
Before intersegment adjustments   50,794     46,008     166,347     160,148  
Intersegment adjustments   (58 )   (54 )   (146 )   (8,487 )
Total $ 50,736   $ 45,954   $ 166,201   $ 151,661  
 
 
Gross Profit
Network Equipment $ 13,079 $ 10,983 $ 47,069 $ 43,325
Network Integration   3,539     3,909     10,917     11,832  
Before intersegment adjustments   16,618     14,892     57,986     55,157  
Intersegment adjustments   2     (105 )   7     (5 )
Total $ 16,620   $ 14,787   $ 57,993   $ 55,152  
 
 
Operating Expenses
Network Equipment $ 13,450 $ 10,282 $ 48,768 $ 42,228
Network Integration   1,811     1,904     6,297     7,318  
Before intersegment adjustments   15,261     12,186     55,065     49,546  
Intersegment adjustments   1,231     5,438     7,309     15,453  
Total $ 16,492   $ 17,624   $ 62,374   $ 64,999  
 
Operating Income
Network Equipment ($371 ) $ 700 ($1,699 ) $ 1,096
Network Integration   1,729     2,005     4,620     4,514  
Before intersegment adjustments   1,358     2,705     2,921     5,610  
Intersegment adjustments   (1,230 )   (5,542 )   (7,302 )   (15,457 )
Total $ 128     ($2,837 )   ($4,381 )   ($9,847 )

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, will describe how to revoluti...
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at Internet of @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, will discuss how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money! Speaker Bio: Esmeralda Swartz, CMO of MetraTech, has spent 16 years as a marketing, product management, and busin...
Samsung VP Jacopo Lenzi, who headed the company's recent SmartThings acquisition under the auspices of Samsung's Open Innovaction Center (OIC), answered a few questions we had about the deal. This interview was in conjunction with our interview with SmartThings CEO Alex Hawkinson. IoT Journal: SmartThings was developed in an open, standards-agnostic platform, and will now be part of Samsung's Open Innovation Center. Can you elaborate on your commitment to keep the platform open? Jacopo Lenzi: Samsung recognizes that true, accelerated innovation cannot be driven from one source, but requires a...
SYS-CON Events announced today that Red Hat, the world's leading provider of open source solutions, will exhibit at Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Red Hat is the world's leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies. Red Hat also offers award-winning support, training, and consulting services. As the connective hub in a global network of enterprises, partners, a...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at Internet of @ThingsExpo, Robin Raymond, Chief Architect at Hookflash Inc., will walk through the shifting landscape of traditional telephone a...
SYS-CON Events announced today that Matrix.org has been named “Silver Sponsor” of Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Matrix is an ambitious new open standard for open, distributed, real-time communication over IP. It defines a new approach for interoperable Instant Messaging and VoIP based on pragmatic HTTP APIs and WebRTC, and provides open source reference implementations to showcase and bootstrap the new standard. Our focus is on simplicity, security, and supporting the fullest feature set.
BSQUARE is a global leader of embedded software solutions. We enable smart connected systems at the device level and beyond that millions use every day and provide actionable data solutions for the growing Internet of Things (IoT) market. We empower our world-class customers with our products, services and solutions to achieve innovation and success. For more information, visit www.bsquare.com.
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic • Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it’s a mix of architectural style...
SYS-CON Events announced today that SOA Software, an API management leader, will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. SOA Software is a leading provider of API Management and SOA Governance products that equip business to deliver APIs and SOA together to drive their company to meet its business strategy quickly and effectively. SOA Software’s technology helps businesses to accelerate their digital channels with APIs, drive partner adoption, monetize their assets, and achieve a...
From a software development perspective IoT is about programming "things," about connecting them with each other or integrating them with existing applications. In his session at @ThingsExpo, Yakov Fain, co-founder of Farata Systems and SuranceBay, will show you how small IoT-enabled devices from multiple manufacturers can be integrated into the workflow of an enterprise application. This is a practical demo of building a framework and components in HTML/Java/Mobile technologies to serve as a platform that can integrate new devices as they become available on the market.
SYS-CON Events announced today that Utimaco will exhibit at SYS-CON's 15th International Cloud Expo®, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Utimaco is a leading manufacturer of hardware based security solutions that provide the root of trust to keep cryptographic keys safe, secure critical digital infrastructures and protect high value data assets. Only Utimaco delivers a general-purpose hardware security module (HSM) as a customizable platform to easily integrate into existing software solutions, embed business logic and build s...
Connected devices are changing the way we go about our everyday life, from wearables to driverless cars, to smart grids and entire industries revolutionizing business opportunities through smart objects, capable of two-way communication. But what happens when objects are given an IP-address, and we rely on that connection, sometimes with our lives? How do we secure those vast data infrastructures and safe-keep the privacy of sensitive information? This session will outline how each and every connected device can uphold a core root of trust via a unique cryptographic signature – a “bir...
Internet of @ThingsExpo Silicon Valley announced on Thursday its first 12 all-star speakers and sessions for its upcoming event, which will take place November 4-6, 2014, at the Santa Clara Convention Center in California. @ThingsExpo, the first and largest IoT event in the world, debuted at the Javits Center in New York City in June 10-12, 2014 with over 6,000 delegates attending the conference. Among the first 12 announced world class speakers, IBM will present two highly popular IoT sessions, which will take place November 4-6, 2014 at the Santa Clara Convention Center in Santa Clara, Calif...
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at Internet of @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, will discuss how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.

SUNNYVALE, Calif., Oct. 20, 2014 /PRNewswire/ -- Spansion Inc. (NYSE: CODE), a global leader in embedded systems, today added 96 new products to the Spansion® FM4 Family of flexible microcontrollers (MCUs). Based on the ARM® Cortex®-M4F core, the new MCUs boast a 200 MHz operating frequency and support a diverse set of on-chip peripherals for enhanced human machine interfaces (HMIs) and machine-to-machine (M2M) communications. The rich set of periphera...

SYS-CON Events announced today that Aria Systems, the recurring revenue expert, has been named "Bronze Sponsor" of SYS-CON's 15th International Cloud Expo®, which will take place on November 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Aria Systems helps leading businesses connect their customers with the products and services they love. Industry leaders like Pitney Bowes, Experian, AAA NCNU, VMware, HootSuite and many others choose Aria to power their recurring revenue business and deliver exceptional experiences to their customers.
The Internet of Things (IoT) is going to require a new way of thinking and of developing software for speed, security and innovation. This requires IT leaders to balance business as usual while anticipating for the next market and technology trends. Cloud provides the right IT asset portfolio to help today’s IT leaders manage the old and prepare for the new. Today the cloud conversation is evolving from private and public to hybrid. This session will provide use cases and insights to reinforce the value of the network in helping organizations to maximize their company’s cloud experience.
The Internet of Things (IoT) is making everything it touches smarter – smart devices, smart cars and smart cities. And lucky us, we’re just beginning to reap the benefits as we work toward a networked society. However, this technology-driven innovation is impacting more than just individuals. The IoT has an environmental impact as well, which brings us to the theme of this month’s #IoTuesday Twitter chat. The ability to remove inefficiencies through connected objects is driving change throughout every sector, including waste management. BigBelly Solar, located just outside of Boston, is trans...
SYS-CON Events announced today that Matrix.org has been named “Silver Sponsor” of Internet of @ThingsExpo, which will take place on November 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA. Matrix is an ambitious new open standard for open, distributed, real-time communication over IP. It defines a new approach for interoperable Instant Messaging and VoIP based on pragmatic HTTP APIs and WebRTC, and provides open source reference implementations to showcase and bootstrap the new standard. Our focus is on simplicity, security, and supporting the fullest feature set.