0000887969-15-000077.txt : 20151207 0000887969-15-000077.hdr.sgml : 20151207 20151207165350 ACCESSION NUMBER: 0000887969-15-000077 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20151203 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20151207 DATE AS OF CHANGE: 20151207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MRV COMMUNICATIONS INC CENTRAL INDEX KEY: 0000887969 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 061340090 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11174 FILM NUMBER: 151273299 BUSINESS ADDRESS: STREET 1: 20415 NORDHOFF ST CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8187730900 MAIL ADDRESS: STREET 1: 20415 NORDHOFF ST CITY: CHATSWORTH STATE: CA ZIP: 91311 8-K 1 mrv20158-kspacompletion.htm 8-K 8-K


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
Current Report
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported):  December 3, 2015
 
MRV COMMUNICATIONS, INC.
(Exact name of Registrant as specified in its charter)
 
DELAWARE
 
001-11174
 
06-1340090
(State or other jurisdiction of
 
(Commission file number)
 
(I.R.S. employer
incorporation or organization)
 
 
 
identification number)
 
20415 Nordhoff Street, Chatsworth, CA  91311
(Address of principal executive offices)  (zip code)
 
Registrant’s telephone number, including area code: (818) 773-0900
 
Not Applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
 
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 





Item 2.01 Completion of Disposition or Acquisition of Assets
 
On December 3, 2015, MRV Communications, Inc. (the "Company") completed the sale of all of the shares of its wholly owned subsidiary, Tecnonet S.p.A. ("Tecnonet"), pursuant to a shares purchase agreement, dated as of August 7, 2015 (the "Purchase Agreement") with Maticmind S.p.A, (the "Purchaser”), a company incorporated under the laws of Italy. The Purchase Agreement and sale of Tecnonet were approved by the Company's stockholders at the Company's special meeting of stockholders held on December 1, 2015. The Purchase Agreement also contains customary representations, warranties, covenants and indemnification obligations.

The initial total consideration received by the Company was €19.7 million, or approximately $21.5 million. The consideration included a cash payment by the Purchaser to the Company of €15.6 million received at closing plus cash payments made by Tecnonet to the Company prior to closing that totaled €4.1 million to repay an intercompany obligation. The repayment was facilitated by third party debt acquired by Tecnonet and assumed at closing by the Purchaser. Within 60 days of closing, a post-closing adjustment will commence, based on changes in cash and debt of Tecnonet, as provided for in the Purchase Agreement.

Tecnonet is an Italian supplier of a wide range of communications equipment from leading global manufacturers, as well as telecommunications solutions and services, including network infrastructure, unified communications, mobility and wireless, network security, cloud computing services, managed call center services, network integration, and optimization serving the Italian market.

Additional information on the financial impact of the transaction is included in Item 9.01(b) below. Further, the foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by the full text of the Purchase Agreement, which is incorporated by reference hereto as Exhibit 10.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits
 
(b)   Unaudited Pro Forma Condensed Consolidated Statements of Operations and Consolidated Balance Sheet
 
On December 3, 2015, the Company sold all of the issued and outstanding capital stock of Tecnonet to Maticmind for approximately €15.6 million as set forth in the Purchase Agreement. The description of the parties involved, consideration given and treatment of the results of operations, is contained in Item 2.01 above and is incorporated herein by reference.

The following presents our unaudited pro forma statements of operations for the fiscal years ended December 31, 2014, 2013 and 2012 and for the nine months ended September 30, 2015 and 2014 and our unaudited pro forma balance sheet as of September 30, 2015. The pro forma statements of operations give effect to the sale of Tecnonet. These financial statements should be read together with the Notes provided thereto.

The unaudited pro forma financial information is for informational purposes only and does not purport to present what our results would actually have been had these transactions actually occurred on the dates presented or to project our results of operations or financial position for any future period.  The information set forth below should be read together with (i) MRV’s unaudited condensed consolidated financial statements as of September 30, 2015 and 2014 included in MRV’s Quarterly Report filed with the SEC on Form 10-Q for the quarter ended September 30, 2015 and (ii) MRV’s audited consolidated financial statements for the each of the years in the three-year period ended December 31, 2014, included in MRV’s Annual Report filed with the SEC on Form 10-K for the year Ended December 31, 2014.







MRV Communications, Inc.
Index





MRV Communications, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2014
(In thousands, except per share data)

 
 
MRV
 
Sale of
 
Pro
 
 
Communications (1)
 
Tecnonet (a)
 
Forma (b)
Revenue:
 
 
 
 
 
 
Product revenue
 
$
124,477

 
$
(47,649
)
 
$
76,828

Service revenue
 
47,579

 
(37,869
)
 
9,710

Total revenue
 
172,056

 
(85,518
)
 
86,538

Cost of Revenue:
 
 
 
 
 
 
Cost of product
 
82,588

 
(42,884
)
 
39,704

Cost of services
 
33,690

 
(29,458
)
 
4,232

Total cost of revenue
 
116,278

 
(72,342
)
 
43,936

Gross profit
 
55,778

 
(13,176
)
 
42,602

Operating expenses:
 
 
 
 
 
 
Product development and engineering
 
20,833

 
—

 
20,833

Selling, general and administrative
 
42,695

 
(7,614
)
 
35,081

Total operating expenses
 
63,528

 
(7,614
)
 
55,914

Operating loss
 
(7,750
)
 
(5,562
)
 
(13,312
)
Interest (expense) income
 
(329
)
 
505

 
176

Other income (expense), net
 
227

 
245

 
472

Loss before provision for income taxes
 
(7,852
)
 
(4,812
)
 
(12,664
)
Provision (benefit) for income taxes
 
4,303

 
(2,430
)
 
1,873

Net Loss
 
$
(12,155
)
 
$
(2,382
)
 
$
(14,537
)
 
 
 
 
 
 
 
Net loss per share — basic
 
$
(1.66
)
 
 
 
$
(1.98
)
Net loss per share — diluted
 
$
(1.66
)
 
 
 
$
(1.98
)
 
 
 
 
 
 
 
Weighted average number of shares:
 
 
 
 
 
 
Basic
 
7,344

 
 
 
7,344

Diluted
 
7,344

 
 
 
7,344


See the accompanying notes which are integral part of these unaudited pro forma condensed consolidated financial statements.




MRV Communications, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2013
(In thousands, except per share data)

 
 
MRV
 
Sale of
 
Pro
 
 
Communications (1)
 
Tecnonet (a)
 
Forma (b)
Revenue:
 
 
 
 
 
 
Product revenue
 
$
118,911

 
$
(38,095
)
 
$
80,816

Service revenue
 
47,290

 
(37,541
)
 
9,749

Total revenue
 
166,201

 
(75,636
)
 
90,565

Cost of Revenue:
 
 
 
 
 
 
Cost of product
 
74,085

 
(35,581
)
 
38,504

Cost of services
 
34,123

 
(29,138
)
 
4,985

Total cost of revenue
 
108,208

 
(64,719
)
 
43,489

Gross profit
 
57,993

 
(10,917
)
 
47,076

Operating expenses:
 
 
 
 
 
 
Product development and engineering
 
19,381

 
—

 
19,381

Selling, general and administrative
 
42,993

 
(6,297
)
 
36,696

Total operating expenses
 
62,374

 
(6,297
)
 
56,077

Operating loss
 
(4,381
)
 
(4,620
)
 
(9,001
)
Interest (expense) income
 
(526
)
 
554

 
28

Other expense, net
 
(407
)
 
(5
)
 
(412
)
Loss before provision for income taxes
 
(5,314
)
 
(4,071
)
 
(9,385
)
Provision (benefit) for income taxes
 
1,508

 
(1,546
)
 
(38
)
Net Loss
 
$
(6,822
)
 
$
(2,525
)
 
$
(9,347
)
 
 
 
 
 
 
 
Net loss per share — basic
 
$
(0.91
)
 
 
 
$
(1.25
)
Net loss per share — diluted
 
$
(0.91
)
 
 
 
$
(1.25
)
 
 
 
 
 
 
 
Weighted average number of shares:
 
 
 
 
 
 
Basic
 
7,484

 
 
 
7,484

Diluted
 
7,484

 
 
 
7,484


See the accompanying notes which are integral part of these unaudited pro forma condensed consolidated financial statements.





MRV Communications, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2012
(In thousands, except per share data)

 
 
MRV
 
Sale of
 
Pro
 
 
Communications (1)
 
Tecnonet (a)
 
Forma (b)
Revenue:
 
 
 
 
 
 
Product revenue
 
$
106,447

 
$
(37,501
)
 
$
68,946

Service revenue
 
45,214

 
(34,920
)
 
10,294

Total revenue
 
151,661

 
(72,421
)
 
79,240

Cost of Revenue:
 
 
 
 
 
 
Cost of product
 
62,949

 
(32,420
)
 
30,529

Cost of services
 
33,560

 
(28,169
)
 
5,391

Total cost of revenue
 
96,509

 
(60,589
)
 
35,920

Gross profit
 
55,152

 
(11,832
)
 
43,320

Operating expenses:
 
 
 
 
 
 
Product development and engineering
 
15,344

 
—

 
15,344

Selling, general and administrative
 
48,599

 
(6,262
)
 
42,337

Impairment of goodwill
 
1,056

 
(1,056
)
 
—

Total operating expenses
 
64,999

 
(7,318
)
 
57,681

Operating loss
 
(9,847
)
 
(4,514
)
 
(14,361
)
Interest (expense) income
 
(601
)
 
676

 
75

Gain from settlement of deferred consideration obligation
 
2,314

 
—

 
2,314

Other income (expense), net
 
(54
)
 
(6
)
 
(60
)
Loss before provision (benefit) for income taxes
 
(8,188
)
 
(3,844
)
 
(12,032
)
Provision (benefit) for income taxes
 
(1,013
)
 
(1,455
)
 
(2,468
)
Loss from continuing operations
 
(7,175
)
 
(2,389
)
 
(9,564
)
Income from discontinued operations, net of income taxes of $4,588
 
12,839

 
—

 
12,839

Net Income (loss)
 
$
5,664

 
$
(2,389
)
 
$
3,275

 
 
 
 
 
 
 
Net income (loss) per share — basic and diluted
 
 
 
 
 
 
From continuing operations
 
$
(0.92
)
 
 
 
$
(1.22
)
From discontinued operations
 
$
1.64

 
 
 
$
1.64

Net income per share — basic and diluted
 
$
0.72

 
 
 
$
0.42

 
 
 
 
 
 
 
Weighted average number of shares:
 
 
 
 
 
 
Basic
 
7,813

 
 
 
7,813

Diluted
 
7,817

 
 
 
7,817


See the accompanying notes which are integral part of these unaudited pro forma condensed consolidated financial statements.






MRV Communications, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2015
(In thousands, except per share data)

 
 
MRV
 
Sale of
 
Pro
 
 
Communications (1)
 
Tecnonet (a)
 
Forma (b)
Revenue:
 
 
 
 
 
 
Product revenue
 
$
86,337

 
$
(24,529
)
 
$
61,808

Service revenue
 
32,425

 
(24,597
)
 
7,828

Total revenue
 
118,762

 
(49,126
)
 
69,636

Cost of Revenue:
 
 
 
 
 
 
Cost of product
 
52,804

 
(21,797
)
 
31,007

Cost of services
 
22,311

 
(19,298
)
 
3,013

Total cost of revenue
 
75,115

 
(41,095
)
 
34,020

Gross profit
 
43,647

 
(8,031
)
 
35,616

Operating expenses:
 
 
 
 
 
 
Product development and engineering
 
15,335

 
—

 
15,335

Selling, general and administrative
 
27,134

 
(4,739
)
 
22,395

Total operating expenses
 
42,469

 
(4,739
)
 
37,730

Operating loss
 
1,178

 
(3,292
)
 
(2,114
)
Interest (expense) income
 
(151
)
 
221

 
70

Other income (expense), net
 
(99
)
 
(46
)
 
(145
)
Loss before provision for income taxes
 
928

 
(3,117
)
 
(2,189
)
Provision (benefit) for income taxes
 
1,390

 
(1,259
)
 
131

Net Loss
 
$
(462
)
 
$
(1,858
)
 
$
(2,320
)
 
 
 
 
 
 
 
Net loss per share — basic
 
$
(0.07
)
 
 
 
$
(0.33
)
Net loss per share — diluted
 
$
(0.07
)
 
 
 
$
(0.33
)
 
 
 
 
 
 
 
Weighted average number of shares:
 
 
 
 
 
 
Basic
 
7,032

 
 
 
7,032

Diluted
 
7,032

 
 
 
7,032


See the accompanying notes which are integral part of these unaudited pro forma condensed consolidated financial statements.





MRV Communications, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2014
(In thousands, except per share data)

 
 
MRV
 
Sale of
 
Pro
 
 
Communications (1)
 
Tecnonet (a)
 
Forma (b)
Revenue:
 
 
 
 
 
 
Product revenue
 
$
93,411

 
$
(34,561
)
 
$
58,850

Service revenue
 
35,201

 
(28,083
)
 
7,118

Total revenue
 
128,612

 
(62,644
)
 
65,968

Cost of Revenue:
 
 
 
 
 
 
Cost of product
 
60,672

 
(30,797
)
 
29,875

Cost of services
 
25,191

 
(22,105
)
 
3,086

Total cost of revenue
 
85,863

 
(52,902
)
 
32,961

Gross profit
 
42,749

 
(9,742
)
 
33,007

Operating expenses:
 
 
 
 
 
 
Product development and engineering
 
16,030

 
—

 
16,030

Selling, general and administrative
 
32,118

 
(5,431
)
 
26,687

Total operating expenses
 
48,148

 
(5,431
)
 
42,717

Operating loss
 
(5,399
)
 
(4,311
)
 
(9,710
)
Interest (expense) income
 
(306
)
 
408

 
102

Other income (expense), net
 
(160
)
 
404

 
244

Loss before provision for income taxes
 
(5,865
)
 
(3,499
)
 
(9,364
)
Provision (benefit) for income taxes
 
1,659

 
(1,739
)
 
(80
)
Net Loss
 
$
(7,524
)
 
$
(1,760
)
 
$
(9,284
)
 
 
 
 
 
 
 
Net loss per share — basic
 
$
(1.03
)
 
 
 
$
(1.27
)
Net loss per share — diluted
 
$
(1.03
)
 
 
 
$
(1.27
)
 
 
 
 
 
 
 
Weighted average number of shares:
 
 
 
 
 
 
Basic
 
7,335

 
 
 
7,335

Diluted
 
7,335

 
 
 
7,335


See the accompanying notes which are integral part of these unaudited pro forma condensed consolidated financial statements.





MRV Communications, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2015
(In thousands)
 
MRV Communications(1)
 
Tecnonet (c)
 
Impact of Transactions (d)
 
Pro Forma (e)
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
19,914

 
$
(5,800
)
 
$
20,988

 
$
35,102

Restricted time deposits
190

 
—

 
—

 
190

Accounts receivable, net
36,930

 
(19,255
)
 
—

 
17,675

Other receivables
9,596

 
(9,186
)
 
—

 
410

Inventories, net
20,070

 
(10,565
)
 
—

 
9,505

Deferred income taxes
689

 
(48
)
 
—

 
641

Other current assets
5,846

 
(4,019
)
 
—

 
1,827

Total current assets
93,235

 
(48,873
)
 
20,988

 
65,350

Property and equipment, net
4,603

 
(312
)
 
—

 
4,291

Deferred income taxes
1,871

 
—

 
—

 
1,871

Intangible asset, net
1,214

 
—

 
—

 
1,214

Other assets
678

 
(85
)
 
—

 
593

Total assets
$
101,601

 
$
(49,270
)
 
$
20,988

 
$
73,319

 
 
 
 
 
 
 
 
Liabilities and stockholders' equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Short-term debt
$
2,887

 
$
(2,887
)
 
$
—

 
$
—

Deferred consideration payable
233

 
—

 
—

 
233

Accounts payable
22,006

 
(14,803
)
 
—

 
7,203

Accrued liabilities
13,854

 
(3,104
)
 
—

 
10,750

Deferred revenue
13,317

 
(4,634
)
 
—

 
8,683

Other current liabilities
235

 
(3,102
)
 
2,867

 
—

Total current liabilities
52,532

 
(28,530
)
 
2,867

 
26,869

Other long-term liabilities
4,603

 
(794
)
 
—

 
3,809

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 — 8,330 shares in 2015 and 8,242 shares in 2014
 
 
 
 
 
 
 
Outstanding — 6,972 shares in 2015 and 7,386 in 2014
270

 
—

 
—

 
270

Additional paid-in capital
1,285,409

 
—

 
—

 
1,285,409

Accumulated deficit
(1,220,954
)
 
(21,955
)
 
16,834

 
(1,226,075
)
Treasury stock — 1,359 shares in 2015 and 856 shares in 2014
(15,355
)
 
—

 
—

 
(15,355
)
Accumulated other comprehensive loss
(4,904
)
 
2,009

 
1,287

 
(1,608
)
Total stockholders' equity
44,466

 
(19,946
)
 
18,121

 
42,641

Total liabilities and stockholders' equity
$
101,601

 
$
(49,270
)
 
$
20,988

 
$
73,319


See the accompanying notes which are integral part of these unaudited pro forma condensed consolidated financial statements.




MRV Communications, Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

Note 1. Sale of Tecnonet and Basis of Presentation

On December 3, 2015, the Company completed the sale of all of the shares of its wholly owned subsidiary, Tecnonet S.p.A. ("Tecnonet"), pursuant to a shares purchase agreement, dated as of August 7, 2015 (the "Purchase Agreement") with Maticmind S.p.A, (the "Purchaser”), a company incorporated under the laws of Italy. The Purchase Agreement and sale of Tecnonet were approved by the Company's stockholders at the Company's special meeting of stockholders held on December 1, 2015. The Purchase Agreement also contains customary representations, warranties, covenants and indemnification obligations.

The initial total consideration received by the Company was €19.7 million, or approximately $21.5 million. The consideration included a cash payment by the Purchaser to the Company of €15.6 million received at closing plus cash payments made by Tecnonet to the Company prior to closing that totaled €4.1 million to repay an intercompany obligation. The repayment was facilitated by third party debt acquired by Tecnonet and assumed at closing by the Purchaser. Within 60 days of closing, a post-closing adjustment will commence, based on changes in cash and debt of Tecnonet, as provided for in the Purchase Agreement.

Tecnonet is an Italian supplier of a wide range of communications equipment from leading global manufacturers, as well as telecommunications solutions and services, including network infrastructure, unified communications, mobility and wireless, network security, cloud computing services, managed call center services, network integration, and optimization serving the Italian market.

The historical information of MRV Communications is derived from the historical financial statements of MRV. The unaudited pro forma consolidated balance sheet data as of September 30, 2015 is presented to illustrate the estimated effect of the proposed sale of Tecnonet and other pro forma transactions as if the transactions had occurred on September 30, 2015. The unaudited pro forma condensed consolidated statements of operations data for the years ended December 31, 2014, 2013 and 2012 and the nine months ended September 30, 2015 and 2014 are presented to illustrate the estimated effects of the proposed sale and the other pro forma transactions as if the transactions had occurred on January 1st of each year.

Note 2. Unaudited Pro Forma Adjustments and Assumptions

Unaudited Pro Forma Consolidated Statements of Operations

(a) Reflects the historical operations of Tecnonet.

(b) Reflects the Company’s historical operations excluding Tecnonet’s historical operations.
Unaudited Pro Forma Consolidated Balance Sheet

(c) Adjustment to eliminate the assets and liabilities of Tecnonet as of September 30, 2015.
(d) Reflects maximum cash proceeds of transaction, consisting of cash paid for equity and intercompany debt between the Company and Tecnonet converted to U.S. dollars on the closing date. Intercompany debt is to be repaid from external financing, which will be assumed by Buyer. The consideration for the transaction includes a cash payment by the Purchaser of €15.6 million at closing plus a cash payment by Tecnonet to the Company of approximately €4.1 million prior to closing to repay an outstanding intercompany obligation.
(e) Reflects the Company's historical balance sheet excluding Tecnonet, adjusted for the transaction proceeds.
(d)   Exhibits
Exhibit 10.1
Shares Purchase Agreement, dated as of August 7, 2015, by and between MRV Communications, Inc., as Seller, and Maticmind S.p.A., as Purchaser. (incorporated by reference from Exhibit 10.1 of Form 8-K filed on August 10, 2015)

Exhibit 99.1
Press Release dated December 7, 2015, announcing the closing of the sale of Tecnonet S.p.A.




SIGNATURE
 
Pursuant to the requirements of the Exchange Act, the Company has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.
Date: December 7, 2015
 
 
 
 
 
 
MRV COMMUNICATIONS, INC.
 
 
 
 
By:
/s/ Stephen G. Krulik
 
 
Stephen G. Krulik
 
 
Chief Financial Officer


 EX-99.1 2 mrvexhibit991.htm EXHIBIT 99.1 Exhibit



MRV Closes Sale of Tecnonet S.p.A.
Focuses on Network Equipment Business

CHATSWORTH, Calif..- Dec. 7, 2015 -MRV Communications (NASDAQ: MRVC), a global provider of packet and optical networking solutions, closed the sale of Tecnonet S.p.A., its Network Integration subsidiary based in Rome, Italy, to Maticmind S.p.A. based in Milan, Italy for the initial total consideration of €19.7 million or approximately $21.5 million. The consideration included a cash payment by Maticmind to MRV of €15.6 million received at closing plus cash payments made by Tecnonet to MRV, prior to closing that totaled €4.1 million to repay an intercompany obligation. The repayment was facilitated by third party debt acquired by Tecnonet and assumed at closing by Maticmind. Within 60 days of closing, a post-closing adjustment will commence, based on changes in cash and debt of Tecnonet, as provided for in the purchase agreement.

“We are pleased to have achieved the sale of the Network Integration business both for the value received and as it allows us to focus all of our energy on the Network Equipment business and support of our vision as an end-to-end packet and optical networking solutions provider,” stated MRV President and Chief Executive Officer Mark Bonney. “The Network Equipment business has higher gross margins and greater potential than the Network Integration business had.” Bonney continued, “While we have experienced, and continue to see challenging conditions in the equipment market, we are confident that with a stronger balance sheet, an enhanced product line and our differentiated end-to-end packet and optical solutions, we are better positioned to serve our customers and make a more significant impact on this dynamic market.”

Norton Rose Fulbright LLP in New York and Italy served as legal advisors for MRV.

About MRV Communications
MRV Communications is a global supplier of packet and optical solutions that power the world’s largest networks. MRV products combine innovative hardware with intelligent software to make networks smarter, faster and more efficient. Dedicated to the continued success of our customers, MRV enables service providers, data center operators and large enterprises to cost-effectively evolve their networks to address mission-critical applications, such as high-capacity cloud and data center connectivity, business services, mobile backhaul and the migration to virtualized and programmable networks. Founded in 1988, MRV is headquartered in Southern California with additional marketing, research and development facilities outside of Boston and in Israel. 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 "anticipate," "appear," "believe," "estimate," "expect," "intend," "may," "should," "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 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 annual report on Form 10-K for the year ended December 31, 2014, 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 December 7, 2015 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.
 
IR Contact: Cathy Mattison/Kirsten Chapman, LHA, (415) 433-3777, ir@mrv.com