CHATSWORTH, California,
Aug. 2, 2017 /PRNewswire/ --MRV
Communications (NASDAQ: MRVC), a provider of innovative network
solutions for service providers, data center operators and
enterprises, reported financial results for the three- and
six-months ended June 30, 2017.
Financial Reporting
The Company uses certain non-GAAP financial measures and a
reconciliation of the non-GAAP measures to GAAP measures is
provided in the attached table.
Second Quarter 2017 Results
- Revenue was $19.7 million,
compared to $21.6 million in Q2'16
and $21.2 million in Q1'17,
reflecting lower European and North American product revenue
slightly offset by increased service revenue.
- GAAP gross margin was 51.5%, compared to 46.7% in Q2'16 and
50.6% in Q1'17. Non-GAAP gross margin was 51.6%, compared to
48.3% in Q2'16 and 50.6% in Q1'17. The increase was primarily due
to greater service revenue at higher margins as well as the impact
of geographic and product mix.
- GAAP operating expenses were $12.1
million, compared to $12.1
million in Q2'16 and $11.5
million in Q1'17. Non-GAAP operating expenses were
$10.5 million, compared to
$11.8 million in Q2'16 and
$10.9 million in Q1'17.
- GAAP operating loss was $1.9
million, compared to $2.1
million in Q2'16 and $0.8
million in Q1'17. Non-GAAP operating loss was to
$0.3 million, compared to
$1.3 million in Q2'16 and
$0.2 million in Q1'17.
- GAAP net loss increased to $2.1
million, or $0.31 per share,
compared to $2.0 million, or
$0.29 per share, in Q2'16 and
$1.0 million, or $0.15 per share, in Q1'17.
- Non-GAAP net loss was $0.4
million, or $0.07 per share,
compared to $1.3 million, or
$0.19 per share, in Q2'16 and
$0.5 million, or $0.08 per share, in Q1'17.
Six-months Ended June 30, 2017
Results as compared to Six-months Ended June
30, 2016 Results
- Revenue was $40.9 million,
compared to $40.5 million.
- GAAP gross margin was 51.0%, compared to 49.1%. Non-GAAP
gross margin was 51.1%, compared to 50.1%.
- GAAP net loss was $3.1 million,
or $0.46 per share, compared to
$5.9 million, or $0.84 per share.
- Non-GAAP net loss improved to $1.0
million, or $0.14 per share,
from $4.8 million, or $0.68 per share.
Due to the pending merger, management will not conduct a
conference call.
The Offer and Merger
On July 2, 2017, MRV
Communications entered into an Agreement and Plan of Merger (as it
may be amended or supplemented from time to time, the "Merger
Agreement"), among MRV, ADVA NA Holdings, Inc., a Delaware corporation ("Parent"), and Golden
Acquisition Corporation, a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"). The Merger Agreement provides
that Merger Sub commence a cash tender offer (the "Offer") to
purchase all of the issued and outstanding shares of MRV common
stock at a price per share equal to $10.00. Following completion of the Offer, Merger
Sub will merge with and into the Company (the "Merger"), with MRV
continuing as the surviving corporation and as a wholly owned
subsidiary of Parent.
On July 17, 2017, pursuant to the
Merger Agreement, the Offer was commenced and is scheduled to
expire at midnight on August 11,
2017, unless extended. The completion of the Offer is
conditional upon, among other things, the tender of at least a
majority of the MRV's common stock then outstanding. Additional
information regarding the Offer and the Merger, including the
conditions to their consummation, may be found in the Schedule
14D-9 (as amended) filed on July 17,
2017 by the Company with the U.S. Securities and Exchange
Commission (the "SEC") and the Schedule TO (as amended) filed on
July 17, 2017 with the SEC by ADVA
Optical Networking SE, Parent and Merger Sub.
About MRV Communications
MRV Communications (NASDAQ: MRVC) enables service providers,
data center operators and enterprises to make their networks
smarter, faster and easier to operate. MRV's end-to-end
portfolio includes innovative packet, optical and software
platforms designed for flexibility and reliability. To learn
more about MRV visit www.mrv.com and follow us on Twitter
@MRVC.
Non-GAAP Measures
The company uses certain non-GAAP financial measures in this
press release to supplement its consolidated financial statements,
which are presented in accordance with GAAP. These non-GAAP
measures include non-GAAP operating loss, non-GAAP net loss and
non-GAAP basic and diluted loss per share. The company's non-GAAP
financial measures exclude the impact of stock-based compensation
expense, litigation costs, severance and related transition costs,
transaction costs and costs related to the sale of Tecnonet S.p.A.,
which the company believes are not indicative of its core operating
results. The company used these non-GAAP measures when evaluating
its financial results as well as for internal resource management,
planning and forecasting purposes. These non-GAAP measures should
not be viewed in isolation from or as a substitute for the
company's financial results in accordance with GAAP. A
reconciliation of GAAP to non-GAAP measures is attached to this
press release.
Forward Looking Statements
This press release may contain statements, including statements
related to the transactions contemplated by the Merger Agreement,
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 "will
likely result," "are expected to," " is anticipated," "appear,"
"believe," "could," "estimate," "expect," "intend," "may,"
"should," "outlook," "plan," "project," "contemplate," "target,"
"foresee," "goal," "likely," "will," and "would" or 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 units 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.
With respect to the transactions contemplated by the Merger
Agreement, there is no assurance that the transactions will be
consummated. Potential risks and uncertainties related to such
transactions include, among others, the impact of the announcement
of the pending transactions on the Company's business, its
financial and operating results and its employees, suppliers and
customers; factors affecting the feasibility and timing of the
consummation of the transactions, including, without limitation,
the ability to satisfy the conditions to closing contained in the
Merger Agreement and Offer; and risks related to realization of the
expected benefits of these transactions to the Company and its
stockholders.
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 annual report on Form 10-K for
the year ended December 31, 2016 and
its quarterly report on Form 10-Q for the quarter ended
March 31, 2017, 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 August
2, 2017 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)
|
|
(unaudited)
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Product
revenue
|
$
|
16,283
|
|
|
$
|
18,658
|
|
|
$
|
34,408
|
|
|
$
|
34,665
|
|
|
Service
revenue
|
3,442
|
|
|
2,926
|
|
|
6,492
|
|
|
5,801
|
|
|
Total
revenue
|
19,725
|
|
|
21,584
|
|
|
40,900
|
|
|
40,466
|
|
|
Cost of
Revenue:
|
|
|
|
|
|
|
|
|
Cost of
product
|
8,666
|
|
|
10,285
|
|
|
17,935
|
|
|
17,880
|
|
|
Cost of
services
|
902
|
|
|
1,228
|
|
|
2,104
|
|
|
2,712
|
|
|
Total cost of
revenue
|
9,568
|
|
|
11,513
|
|
|
20,039
|
|
|
20,592
|
|
|
Gross
profit
|
10,157
|
|
|
10,071
|
|
|
20,861
|
|
|
19,874
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Product development
and engineering
|
4,610
|
|
|
5,125
|
|
|
9,338
|
|
|
10,469
|
|
|
Selling, general and
administrative
|
7,455
|
|
|
7,007
|
|
|
14,223
|
|
|
15,024
|
|
|
Total operating
expenses
|
12,065
|
|
|
12,132
|
|
|
23,561
|
|
|
25,493
|
|
|
Operating
loss
|
(1,908)
|
|
|
(2,061)
|
|
|
(2,700)
|
|
|
(5,619)
|
|
|
Other income
(expense), net
|
(155)
|
|
|
74
|
|
|
(358)
|
|
|
(203)
|
|
|
Loss before
provision for income taxes
|
(2,063)
|
|
|
(1,987)
|
|
|
(3,058)
|
|
|
(5,822)
|
|
|
Provision for income
taxes
|
34
|
|
|
36
|
|
|
80
|
|
|
97
|
|
|
Net
loss
|
$
|
(2,097)
|
|
|
$
|
(2,023)
|
|
|
$
|
(3,138)
|
|
|
$
|
(5,919)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
— basic
|
$
|
(0.31)
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.46)
|
|
|
$
|
(0.84)
|
|
|
Net loss per share
— diluted
|
$
|
(0.31)
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.46)
|
|
|
$
|
(0.84)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares:
|
|
|
|
|
|
|
|
|
Basic
|
6,786
|
|
|
7,092
|
|
|
6,784
|
|
|
7,042
|
|
|
Diluted
|
6,786
|
|
|
7,092
|
|
|
6,784
|
|
|
7,042
|
|
|
MRV
Communications, Inc.
|
|
Condensed
Consolidated Balance Sheets
|
|
(In thousands,
except par values)
|
|
(unaudited)
|
|
|
June 30,
2017
|
|
December 31,
2016
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
24,333
|
|
|
$
|
25,116
|
|
|
Restricted cash and
time deposits
|
4,918
|
|
|
272
|
|
|
Accounts receivable,
net
|
16,926
|
|
|
14,295
|
|
|
Inventories
|
9,374
|
|
|
9,657
|
|
|
Other current
assets
|
2,177
|
|
|
2,378
|
|
|
Total current
assets
|
57,728
|
|
|
51,718
|
|
|
Property and
equipment, net
|
2,985
|
|
|
3,130
|
|
|
Intangible assets,
net
|
893
|
|
|
1,064
|
|
|
Other
assets
|
264
|
|
|
348
|
|
|
Total
assets
|
$
|
61,870
|
|
|
$
|
56,260
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Deferred
consideration payable
|
$
|
233
|
|
|
$
|
233
|
|
|
Accounts
payable
|
9,296
|
|
|
8,353
|
|
|
Accrued
liabilities
|
9,974
|
|
|
9,195
|
|
|
Deferred
revenue
|
7,223
|
|
|
6,146
|
|
|
Other current
liabilities
|
4,778
|
|
|
156
|
|
|
Total current
liabilities
|
31,504
|
|
|
24,083
|
|
|
Other long-term
liabilities
|
3,968
|
|
|
3,478
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred Stock,
$0.01 par value: Authorized — 1,000 shares; no shares issued or
outstanding
|
—
|
|
|
—
|
|
|
Common Stock, $0.0017
par value:
|
|
|
|
|
Authorized — 16,000
shares
|
|
|
|
|
Issued — 8,435 shares
in 2017 and 8,425 shares in 2016
|
|
|
|
|
Outstanding — 6,812
shares in 2017 and 6,802 shares in 2016
|
270
|
|
|
270
|
|
|
Additional paid-in
capital
|
1,288,135
|
|
|
1,287,336
|
|
|
Accumulated
deficit
|
(1,242,501)
|
|
|
(1,239,308)
|
|
|
Treasury stock —
1,623 shares in 2017 and 2016
|
(18,098)
|
|
|
(18,098)
|
|
|
Accumulated other
comprehensive loss
|
(1,408)
|
|
|
(1,501)
|
|
|
Total
stockholders' equity
|
26,398
|
|
|
28,699
|
|
|
Total liabilities
and stockholders' equity
|
$
|
61,870
|
|
|
$
|
56,260
|
|
|
MRV
Communications, Inc.
|
|
Consolidated
Non-GAAP reconciliation
|
|
(Unaudited, in
thousands except per share data)
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended
June 30,
|
|
Three
Months
Ended
March 31,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
revenue
|
|
$
|
19,725
|
|
|
$
|
21,584
|
|
|
$
|
40,900
|
|
|
$
|
40,466
|
|
|
$
|
21,175
|
|
|
|
Cost of
revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of
revenue
|
|
9,568
|
|
|
11,513
|
|
|
20,039
|
|
|
20,592
|
|
|
10,471
|
|
|
|
Stock-based
charges
|
|
(21)
|
|
|
(28)
|
|
|
(36)
|
|
|
(70)
|
|
|
(15)
|
|
|
|
Severance and
transition costs
|
|
—
|
|
|
(325)
|
|
|
—
|
|
|
(325)
|
|
|
—
|
|
|
|
Non-GAAP adjusted
cost of revenue
|
|
9,547
|
|
|
11,160
|
|
|
20,003
|
|
|
20,197
|
|
|
10,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
10,157
|
|
|
10,071
|
|
|
20,861
|
|
|
19,874
|
|
|
10,704
|
|
|
|
Stock-based
charges
|
|
21
|
|
|
28
|
|
|
36
|
|
|
70
|
|
|
15
|
|
|
|
Severance and
transition costs
|
|
—
|
|
|
325
|
|
|
—
|
|
|
325
|
|
|
—
|
|
|
|
Non-GAAP adjusted
gross profit
|
|
10,178
|
|
|
10,424
|
|
|
20,897
|
|
|
20,269
|
|
|
10,719
|
|
|
|
Non-GAAP Gross
Margin %
|
|
51.6
|
%
|
|
48.3
|
%
|
|
51.1
|
%
|
|
50.1
|
%
|
|
50.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
Product development and engineering
|
|
4,610
|
|
|
5,125
|
|
|
9,338
|
|
|
10,469
|
|
|
4,728
|
|
|
|
Stock-based
charges
|
|
(39)
|
|
|
(63)
|
|
|
(98)
|
|
|
(139)
|
|
|
(59)
|
|
|
|
Non-GAAP Product development and engineering
|
|
4,571
|
|
|
5,062
|
|
|
9,240
|
|
|
10,330
|
|
|
4,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Selling,
general & administrative:
|
|
7,455
|
|
|
7,007
|
|
|
14,223
|
|
|
15,024
|
|
|
6,768
|
|
|
|
Stock-based
charges
|
|
(329)
|
|
|
(259)
|
|
|
(670)
|
|
|
(488)
|
|
|
(341)
|
|
|
|
Severance and
transition costs
|
|
(167)
|
|
|
—
|
|
|
(186)
|
|
|
—
|
|
|
(19)
|
|
|
|
Litigation
costs
|
|
126
|
|
|
(56)
|
|
|
(8)
|
|
|
(91)
|
|
|
(134)
|
|
|
|
Divestiture
costs
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
(68)
|
|
|
(5)
|
|
|
|
Merger
costs
|
|
(1,174)
|
|
|
—
|
|
|
(1,174)
|
|
|
—
|
|
|
—
|
|
|
|
Non-GAAP Selling,
general & administrative
|
|
5,911
|
|
|
6,692
|
|
|
12,180
|
|
|
14,377
|
|
|
6,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses:
|
|
12,065
|
|
|
12,132
|
|
|
23,561
|
|
|
25,493
|
|
|
11,496
|
|
|
|
Stock-based
charges
|
|
(368)
|
|
|
(322)
|
|
|
(768)
|
|
|
(627)
|
|
|
(400)
|
|
|
|
Severance and
transition costs
|
|
(167)
|
|
|
—
|
|
|
(186)
|
|
|
—
|
|
|
(19)
|
|
|
|
Litigation
costs
|
|
126
|
|
|
(56)
|
|
|
(8)
|
|
|
(91)
|
|
|
(134)
|
|
|
|
Divestiture
costs
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
(68)
|
|
|
(5)
|
|
|
|
Merger
costs
|
|
(1,174)
|
|
|
—
|
|
|
(1,174)
|
|
|
—
|
|
|
—
|
|
|
|
Non-GAAP operating
expenses
|
|
$
|
10,482
|
|
|
$
|
11,754
|
|
|
$
|
21,420
|
|
|
$
|
24,707
|
|
|
$
|
10,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MRV
Communications, Inc.
|
|
Consolidated
Non-GAAP reconciliation
|
|
(continued)
|
|
(Unaudited, in
thousands except per share data)
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended
June 30,
|
|
Three Months Ended
March 31,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
loss:
|
|
$
|
(1,908)
|
|
|
$
|
(2,061)
|
|
|
$
|
(2,700)
|
|
|
$
|
(5,619)
|
|
|
$
|
(792)
|
|
|
|
Stock-based
charges
|
|
389
|
|
|
350
|
|
|
804
|
|
|
697
|
|
|
415
|
|
|
|
Severance and
transition costs
|
|
167
|
|
|
325
|
|
|
186
|
|
|
325
|
|
|
19
|
|
|
|
Litigation
costs
|
|
(126)
|
|
|
56
|
|
|
8
|
|
|
91
|
|
|
134
|
|
|
|
Divestiture
costs
|
|
—
|
|
|
—
|
|
|
5
|
|
|
68
|
|
|
5
|
|
|
|
Merger
costs
|
|
1,174
|
|
|
—
|
|
|
1,174
|
|
|
—
|
|
|
—
|
|
|
|
Non-GAAP operating
loss
|
|
(304)
|
|
|
(1,330)
|
|
|
(523)
|
|
|
(4,438)
|
|
|
(219)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
(2,097)
|
|
|
(2,023)
|
|
|
(3,138)
|
|
|
(5,919)
|
|
|
(1,041)
|
|
|
|
Stock-based
charges
|
|
389
|
|
|
350
|
|
|
804
|
|
|
697
|
|
|
415
|
|
|
|
Severance and
transition costs
|
|
167
|
|
|
325
|
|
|
186
|
|
|
325
|
|
|
19
|
|
|
|
Litigation
costs
|
|
(126)
|
|
|
56
|
|
|
8
|
|
|
91
|
|
|
134
|
|
|
|
Divestiture
costs
|
|
—
|
|
|
—
|
|
|
5
|
|
|
68
|
|
|
5
|
|
|
|
Income tax
impact
|
|
50
|
|
|
(22)
|
|
|
(3)
|
|
|
(36)
|
|
|
(54)
|
|
|
|
Merger
costs
|
|
1,174
|
|
|
—
|
|
|
1,174
|
|
|
—
|
|
|
—
|
|
|
|
Non-GAAP adjusted
net loss
|
|
$
|
(443)
|
|
|
$
|
(1,314)
|
|
|
$
|
(964)
|
|
|
$
|
(4,774)
|
|
|
$
|
(522)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares - Basic and Diluted
|
|
6,786
|
|
|
7,092
|
|
|
6,784
|
|
|
7,042
|
|
|
6,802
|
|
|
|
GAAP EPS - Basic and
Diluted
|
|
$
|
(0.31)
|
|
|
$
|
(0.29)
|
|
|
$
|
(0.46)
|
|
|
$
|
(0.84)
|
|
|
$
|
(0.15)
|
|
|
|
Non-GAAP EPS - Basic
and Diluted
|
|
$
|
(0.07)
|
|
|
$
|
(0.19)
|
|
|
$
|
(0.14)
|
|
|
$
|
(0.68)
|
|
|
$
|
(0.08)
|
|
|
IR Contact:
Cathy
Mattison/Kirsten Chapman
LHA Investor Relations
(415) 433-3777
ir@mrv.com
View original
content:http://www.prnewswire.com/news-releases/mrv-reports-second-quarter-results-300498265.html
SOURCE MRV Communications LTD.