DELAWARE | 001-11174 | 06-1340090 | ||
(State or other jurisdiction of | (Commission file number) | (I.R.S. employer | ||
incorporation or organization) | identification number) |
Exhibit Number | Description | ||
99.1 | Press Release dated November 3, 2016 |
Date: November 3, 2016 | ||
MRV COMMUNICATIONS, INC. | ||
By: | /s/ Stephen G. Krulik | |
Stephen G. Krulik | ||
Chief Financial Officer |
• | Revenue was $18.9 million, compared to $22.9 million. This reflects fewer orders from global Tier-1 service provider customers, reduced sales to the data center interconnect market, particularly in Europe, and fewer large scale network projects in North America as well as lower contribution from legacy infrastructure management products. |
• | Gross profit including $0.3 million of non-recurring costs related to the aforementioned consolidation of contract manufacturing relationships was $9.0 million, a gross margin of 47.3%, compared to $12.1 million, or 52.8%. The declines in both gross profit and gross margin reflect the impact of the mix of products and of the geographic regions to which they were sold. |
• | Non-GAAP gross margin (non-GAAP gross profit as a percentage of revenue) was 49.3%, compared to 53.0%. |
• | Operating expenses were $11.9 million, compared to $12.2 million, reflecting lower labor costs and professional fees, partially offset by non-recurring charges of $0.2 million related to the idle facility due to the consolidation of facilities in California. |
• | GAAP net loss from continuing operations was $3.1 million, or $0.45 per share, compared to GAAP net income from continuing operations of $0.1 million, or $0.02 per share. |
• | Non-GAAP net loss from continuing operations was $2.2 million, or $0.31 per share, compared to non-GAAP net income of $0.9 million, or $0.13 per share. |
• | Total GAAP net loss, including discontinued operations, was $3.1 million, or $0.45 per share, compared to total GAAP net income of $0.9 million, or $0.13 per share. |
• | Total revenue amounted to $59.4 million, compared to $69.6 million. More than 40% of the decline was related to reduced sales of legacy infrastructure management products and the remainder was as a result of lower orders from global Tier-1 service provider accounts and fewer network expansion projects. |
• | Year-to-date gross profit including $0.7 million of non-recurring costs related to the aforementioned consolidation of contract manufacturing relationships was $28.8 million, a gross margin of 48.5%, compared to $35.6 million, or 51.1%, principally as a result of the lower sales of infrastructure management products. |
• | Non-GAAP year-to-date total gross margin was 49.8%, compared to 51.3%. |
• | Year-to-date operating expenses were $37.4 million, compared to $37.7 million as lower SG&A was partially offset by increased product development and engineering expenses. |
• | GAAP net loss from continuing operations was $9.0 million, or $1.31 per share, compared to $2.3 million, or $0.33 per share. |
• | Non-GAAP net loss from continuing operations was $6.9 million, or $1.00 per share, compared $0.8 million, or $0.11 per share. |
• | Total GAAP net loss, including discontinued operations, was $9.0 million, or $1.31 per share, compared to $0.5 million, or $0.07 per share. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue: | |||||||||||||||
Product revenue | $ | 16,063 | $ | 20,847 | $ | 50,728 | $ | 61,809 | |||||||
Service revenue | 2,884 | 2,086 | 8,685 | 7,828 | |||||||||||
Total revenue | 18,947 | 22,933 | 59,413 | 69,637 | |||||||||||
Cost of Revenue: | |||||||||||||||
Cost of product | 8,868 | 9,758 | 26,748 | 31,007 | |||||||||||
Cost of services | 1,113 | 1,061 | 3,825 | 3,013 | |||||||||||
Total cost of revenue | 9,981 | 10,819 | 30,573 | 34,020 | |||||||||||
Gross profit | 8,966 | 12,114 | 28,840 | 35,617 | |||||||||||
Operating expenses: | |||||||||||||||
Product development and engineering | 4,937 | 4,901 | 15,406 | 15,336 | |||||||||||
Selling, general and administrative | 6,931 | 7,281 | 21,955 | 22,396 | |||||||||||
Total operating expenses | 11,868 | 12,182 | 37,361 | 37,732 | |||||||||||
Operating loss | (2,902 | ) | (68 | ) | (8,521 | ) | (2,115 | ) | |||||||
Interest expense | (7 | ) | (11 | ) | (35 | ) | (48 | ) | |||||||
Other income (expense), net | (173 | ) | 188 | (348 | ) | (26 | ) | ||||||||
Income (loss) from continuing operations before provision for income taxes | (3,082 | ) | 109 | (8,904 | ) | (2,189 | ) | ||||||||
Provision (benefit) for income taxes | 31 | (39 | ) | 128 | 88 | ||||||||||
Income (loss) from continuing operations | (3,113 | ) | 148 | (9,032 | ) | (2,277 | ) | ||||||||
Income from discontinued operations, net of income taxes of $490 and $1,303 in 2015 | — | 738 | — | 1,814 | |||||||||||
Net income (loss) | $ | (3,113 | ) | $ | 886 | $ | (9,032 | ) | $ | (463 | ) | ||||
Net income (loss) per share — basic | |||||||||||||||
From continuing operations | $ | (0.45 | ) | $ | 0.02 | $ | (1.31 | ) | $ | (0.33 | ) | ||||
From discontinued operations | — | 0.11 | — | 0.26 | |||||||||||
Net income (loss) per share — basic | $ | (0.45 | ) | $ | 0.13 | $ | (1.31 | ) | $ | (0.07 | ) | ||||
Net income (loss) per share — diluted | |||||||||||||||
From continuing operations | $ | (0.45 | ) | $ | 0.02 | $ | (1.31 | ) | $ | (0.33 | ) | ||||
From discontinued operations | — | 0.11 | — | 0.26 | |||||||||||
Net income (loss) per share — diluted | $ | (0.45 | ) | $ | 0.13 | $ | (1.31 | ) | $ | (0.07 | ) | ||||
Weighted average number of shares: | |||||||||||||||
Basic | 6,868 | 6,978 | 6,912 | 7,032 | |||||||||||
Diluted | 6,868 | 7,014 | 6,912 | 7,032 |
September 30, 2016 | December 31, 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 20,922 | $ | 26,169 | |||
Restricted time deposits | 5,277 | 5,190 | |||||
Accounts receivable, net | 15,373 | 14,837 | |||||
Inventories, net | 10,185 | 10,226 | |||||
Other current assets | 3,461 | 6,851 | |||||
Total current assets | 55,218 | 63,273 | |||||
Property and equipment, net | 3,295 | 4,050 | |||||
Intangible assets, net | 1,067 | 1,153 | |||||
Other assets | 423 | 608 | |||||
Total assets | $ | 60,003 | $ | 69,084 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Deferred consideration payable | $ | 233 | $ | 233 | |||
Accounts payable | 8,473 | 5,749 | |||||
Accrued liabilities | 9,252 | 9,972 | |||||
Deferred revenue | 6,783 | 7,642 | |||||
Other current liabilities | 135 | 196 | |||||
Total current liabilities | 24,876 | 23,792 | |||||
Other long-term liabilities | 3,819 | 3,846 | |||||
Commitments and contingencies (Note 12) | |||||||
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 — 8,429 shares in 2016 and 8,341 shares in 2015 | |||||||
Outstanding — 6,839 shares in 2016 and 6,982 in 2015 | 270 | 270 | |||||
Additional paid-in capital | 1,286,953 | 1,285,787 | |||||
Accumulated deficit | (1,236,703 | ) | (1,227,671 | ) | |||
Treasury stock — 1,591 shares in 2016 and 1,359 shares in 2015 | (17,730 | ) | (15,355 | ) | |||
Accumulated other comprehensive loss | (1,482 | ) | (1,585 | ) | |||
Total stockholders' equity | 31,308 | 41,446 | |||||
Total liabilities and stockholders' equity | $ | 60,003 | $ | 69,084 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue: | ||||||||||||||||
GAAP revenue | $ | 18,947 | $ | 22,933 | $ | 59,413 | $ | 69,637 | ||||||||
Cost of revenue | ||||||||||||||||
GAAP cost of revenue | 9,981 | 10,819 | 30,573 | 34,020 | ||||||||||||
Stock-based charges | (39 | ) | (35 | ) | (109 | ) | (90 | ) | ||||||||
Severance & transition costs | (327 | ) | — | (652 | ) | — | ||||||||||
Non-GAAP adjusted cost of revenue | 9,615 | 10,784 | 29,812 | 33,930 | ||||||||||||
Gross profit: | ||||||||||||||||
GAAP gross profit | 8,966 | 12,114 | 28,840 | 35,617 | ||||||||||||
Stock-based charges | 39 | 35 | 109 | 90 | ||||||||||||
Severance & transition costs | 327 | — | 652 | — | ||||||||||||
Non-GAAP adjusted gross profit | 9,332 | 12,149 | 29,601 | 35,707 | ||||||||||||
Non-GAAP Gross Margin % | 49.3 | % | 53.0 | % | 49.8 | % | 51.3 | % | ||||||||
Operating expenses: | ||||||||||||||||
GAAP Product development and engineering | 4,937 | 4,901 | 15,406 | 15,336 | ||||||||||||
Stock-based charges | (24 | ) | (68 | ) | (163 | ) | (161 | ) | ||||||||
Non-GAAP Product development and engineering | 4,913 | 4,833 | 15,243 | 15,175 | ||||||||||||
GAAP Selling, general & administrative: | 6,931 | 7,281 | 21,955 | 22,396 | ||||||||||||
Stock-based charges | (346 | ) | (213 | ) | (834 | ) | (507 | ) | ||||||||
Severance & transition costs | (206 | ) | (63 | ) | (206 | ) | (349 | ) | ||||||||
Litigation costs | (14 | ) | — | (105 | ) | — | ||||||||||
Divestiture costs | — | (385 | ) | (68 | ) | (385 | ) | |||||||||
Non-GAAP Selling, general & administrative | 6,365 | 6,620 | 20,742 | 21,155 | ||||||||||||
GAAP operating expenses: | 11,868 | 12,182 | 37,361 | 37,732 | ||||||||||||
Stock-based charges | (370 | ) | (281 | ) | (997 | ) | (668 | ) | ||||||||
Severance & transition costs | (206 | ) | (63 | ) | (206 | ) | (349 | ) | ||||||||
Litigation costs | (14 | ) | — | (105 | ) | — | ||||||||||
Divestiture costs | — | (385 | ) | (68 | ) | (385 | ) | |||||||||
Non-GAAP operating expenses | $ | 11,278 | $ | 11,453 | $ | 35,985 | $ | 36,330 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
GAAP operating loss: | $ | (2,902 | ) | $ | (68 | ) | $ | (8,521 | ) | $ | (2,115 | ) | ||||
Stock-based charges | 409 | 316 | 1,106 | 758 | ||||||||||||
Severance & transition costs | 533 | 63 | 858 | 349 | ||||||||||||
Litigation costs | 14 | — | 105 | — | ||||||||||||
Divestiture costs | — | 385 | 68 | 385 | ||||||||||||
Non-GAAP operating income (loss) | (1,946 | ) | 696 | (6,384 | ) | (623 | ) | |||||||||
Net income (loss): | ||||||||||||||||
GAAP net income (loss) | (3,113 | ) | 148 | (9,032 | ) | (2,277 | ) | |||||||||
Stock-based charges | 409 | 316 | 1,106 | 758 | ||||||||||||
Severance & transition costs | 533 | 63 | 858 | 349 | ||||||||||||
Litigation costs | 14 | — | 105 | — | ||||||||||||
Divestiture costs | — | 385 | 68 | 385 | ||||||||||||
Income tax impact | (6 | ) | — | (42 | ) | — | ||||||||||
Non-GAAP adjusted net income (loss) | (2,163 | ) | 912 | (6,937 | ) | (785 | ) | |||||||||
Income from Tecnonet discontinued operations | — | 738 | — | 1,814 | ||||||||||||
Non-GAAP adjusted net income (loss) including income from Tecnonet discontinued operations | $ | (2,163 | ) | $ | 1,650 | $ | (6,937 | ) | $ | 1,029 | ||||||
Weighted average number of shares - Basic | 6,868 | 6,978 | 6,912 | 7,032 | ||||||||||||
GAAP EPS - Continuing operations | $ | (0.45 | ) | $ | 0.02 | $ | (1.31 | ) | $ | (0.33 | ) | |||||
Non-GAAP EPS - Continuing operations | (0.31 | ) | 0.13 | (1.00 | ) | (0.11 | ) | |||||||||
GAAP EPS - Discontinued operations | — | 0.11 | — | 0.26 | ||||||||||||
Non-GAAP EPS - Discontinued operations | — | 0.11 | — | 0.26 | ||||||||||||
Weighted average number of shares - Diluted | 6,868 | 7,014 | 6,912 | 7,032 | ||||||||||||
GAAP EPS - Continuing operations | $ | (0.45 | ) | $ | 0.02 | $ | (1.31 | ) | $ | (0.33 | ) | |||||
Non-GAAP EPS - Continuing operations | (0.31 | ) | 0.13 | (1.00 | ) | (0.11 | ) | |||||||||
GAAP EPS - Discontinued operations | — | 0.11 | — | 0.26 | ||||||||||||
Non-GAAP EPS - Discontinued operations | — | 0.11 | — | 0.26 |