-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JwbKIS28AGJnGg8DukJ8FoWdRjZ0bqyaMQeKn6BlCIRwyr84nPrpbPfbqzThdbZg 0lYlc0UDxYh4tIBIID1Ocw== 0000950148-00-000276.txt : 20000225 0000950148-00-000276.hdr.sgml : 20000225 ACCESSION NUMBER: 0000950148-00-000276 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000222 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000224 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: SEC FILE NUMBER: 001-11174 FILM NUMBER: 551839 BUSINESS ADDRESS: STREET 1: 8943 FULLBRIGHT AVE CITY: CHATSWORTH STATE: CA ZIP: 91311 BUSINESS PHONE: 8187679044 MAIL ADDRESS: STREET 1: 8943 FULLBRIGHT AVE CITY: CHATSWORTH STATE: CA ZIP: 91311 8-K 1 FORM 8-K 1 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): FEBRUARY 22, 2000 MRV COMMUNICATIONS, INC. (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 06-1340090 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 8943 FULLBRIGHT AVE CHATSWORTH, CA 91311 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) ISSUER'S TELEPHONE NUMBER: (818)767-9044 (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT) 2 Item 5. Other Events On February 22, 2000, MRV Communications, Inc. issued a press release announcing its financial results at, and for the three months and year ended, December 31, 1999 and the acquisition of Fiber Optic Communications, Inc. A copy of that press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference Item 7. Financial Statements and Exhibits (c) Exhibits 99.1 Press Release dated February 22, 2000. 2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized. Date: February 23, 2000 MRV COMMUNICATIONS, INC. By: /s/ EDMUND GLAZER ----------------------------------- Edmund Glazer Executive Vice President Finance and Administration and Chief Financial Officer 3 EX-99.1 2 EXHIBIT 99.1 1 EXHIBIT 99.1 MRV Announces 4th Quarter Results and the Acquisition of FOCI -- Fiber Optic Communications, Inc. CHATSWORTH, Calif.--(BUSINESS WIRE)--Feb. 22, 2000--MRV Communications, Inc. (Nasdaq:MRVC) today reported its consolidated year-end and fourth quarter results for the period ended Dec. 31, 1999, and separately announced the acquisition of Fiber Optic Communications, Inc. ("FOCI"). Bringing into focus its business model of creating and managing growth companies in optical technology and Internet infrastructure, MRV announced the acquisition of FOCI and the decision to exit the Enterprise LAN switching business. Under the terms of the agreement, FOCI shareholders will receive shares of MRV common stock and cash with an aggregate value of approximately $263 million, based on the closing stock price of MRV on Feb. 18, 2000. MRV will take a one-time charge of approximately $13.8 million in connection with the decision to exit the enterprise LAN switching activities. Based in Hsinchu Science Park, Taiwan, FOCI is a leading manufacturer of passive fiber optic components for WDM transmission. The company has a broad array of products for use in EDFA and optical networks, including WDM couplers, isolators, attenuators, circulators, dispersion compensating grating, wavelength add-drop multiplexers, thin film and fiber Bragg grating filters, and MOICs. FOCI will showcase at the upcoming OFC show its new Lithium Niobate external modulators. Additional products in development include Arrayed Waveguide Grating DWDM multiplexers, and Planar lightwave circuit (PLC) photonic switches. Applications for FOCI product lines range from Long Haul Telecommunication systems to Fiber to The Home (FTTH). FOCI has more than 80 engineers, of which 45 have advanced degrees. All FOCI facilities, composed of 150,000 sq.ft., are ISO certified. The additional manufacturing space more than doubles MRV's available optical manufacturing capacity. MRV announced its intent to merge the FOCI operation with its Optical Access division prior to the contemplated IPO. The Optical Access division of MRV is a world class leader in active optical components. When combined, the merged company will be one of the largest and most advanced optical component and module manufacturers in the world. It will be the only known manufacturer, other than JDS-Uniphase, to combine active and passive technologies. Combining active and passive capabilities will lead to optical networking products with tightly integrated active and passive components, as well as MOICs and OEICs. By joining forces, the new entity will offer customers a broad array of active and passive components, and integrated modules, used to transmit and manage optical signals in fiber optic networks. Noam Lotan, President and CEO of MRV Communications commented on the acquisition: "Together with FOCI, we now have the ability to produce breakthrough hybrid products based on integrated active and passive components. It is important to note that FOCI has an exceptionally strong and cohesive management team, which worked together for many years at ITRI, prior to founding FOCI. We have great confidence in their abilities and our engineers are anxious to get started on some exciting joint projects." Steve Lin, President of FOCI added: "We are excited to align our technology, manufacturing expertise and capacity with a world class leader like MRV. By combining our complementary portfolios, we can offer a broad range of solutions integrating both 2 active and passive components to meet the increasing demand for products with a higher level of functionality." With the broad product range of the new entity, MRV becomes a powerhouse in optical technology. In addition to FOCI's line of passive components, the current activities within MRV include an in-house foundry for Long-Reach DFB lasers, optical transceivers, hybrid Triplexers for residential connectivity, and coarse WDM modules. The R&D activities of MRV's affiliates include extreme high power 980nm pump lasers for optical amplifiers, DWDM modules and EDFAs. Over the past 2 years, MRV adopted a business model of creating and managing several start-up companies and forming independent business units, in order to take them public. The principal focus of the MRV group of companies, which now comprises 14 companies, is: Optical components, Optical networks and Internet infrastructure. The FOCI acquisition and merger with MRV's Optical division, creates a stronger candidate for an IPO. This will further validate MRV's basic business model. Accordingly, MRV decided to exit the Enterprise LAN switching business, which no longer fits MRV's business model. Lotan continued: "Our business model supports the creation of value by focusing on faster growing entities and at the same time creating new start-up companies in optics and Internet infrastructure. Discontinuing our Enterprise LAN switching activity in favor of growing our optical components, optical networks and carriers revenue is the logical choice. It allows us to focus on higher pay-off opportunities in optics." Revenues for the three months ended December 31, 1999 and 1998 were $73,903,000 and $74,883,000, respectively. For the years ended December 31, 1999 and 1998 revenues were $288,524,000 and $264,075,000, respectively. Pro forma net income, before the charge for the write-off of inventories associated with LAN switching products was $669,000 for the fourth quarter of 1999 compared with $239,000 for the fourth quarter of 1998. Pro Forma Basic and Diluted Earnings per Share before the charge for Q4 1999 were $.02 compared with $.01 in the fourth quarter of 1998. Pro Forma net income before the charge for the year 1999 was $852,000 compared with a net loss of $20,106,000 in 1998. Pro Forma Basic and Diluted Earnings per Share, before the charge, for the year 1999 were $.03 compared with a Basic and Diluted Loss per Share of $.76 in 1998. Net Loss, including the charge for the write-off of inventories associated with LAN switching products was $13,092,000 for the fourth quarter of 1999 compared with Net Income of $239,000 for the fourth quarter of 1998. Basic and Diluted Losses per Share including the charge for Q4 1999 were $.48 compared with Earnings per Share of $.01 in the fourth quarter of 1998. Net Loss including the charge for the year 1999 was $12,909,000 compared with a net loss of $20,106,000 in 1998. Basic and Diluted Losses per Share, including the charge, for the year 1999 were $.48 compared with $.76 in 1998. About MRV Communications, Inc. MRV Communications, Inc. is in the business of creating and managing growth companies in Optical Technology and Internet infrastructure. The company has leveraged its early leadership in fiber optic transmission into a well-focused range of solutions, integrating switching, routing, access servers and optical transmission systems. 3 As the Internet evolves into a single global communication network, MRV has launched the development of new technologies to drive the next generation infrastructures. Such developments encompass optical access systems, subscribers' management systems and Linux-based solutions. MRV has initiated and funded cutting-edge start-up companies including New Access Communications, Charlotte's Networks, Hyperchannel and Zuma Networks. 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 Securities and Exchange Commission, specifically the most recent reports on Forms 10K and 10Q, 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. 4 MRV COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 1999 1998 (audited) ASSETS CURRENT ASSETS: Cash & cash equivalents $ 34,330 $ 20,692 Short-term investments 10,141 30,493 Accounts receivable, net of reserves of $8,451 in 1999 and $8,487 in 1998 60,637 54,596 Inventories 35,392 47,467 Refundable income taxes 3,216 -- Deferred income taxes 6,907 5,035 Other current assets 6,336 5,508 Total current assets 156,959 163,791 PROPERTY AND EQUIPMENT - At cost, net of depreciation and amortization 19,600 19,357 OTHER ASSETS: Goodwill, net 27,214 26,666 Investments, principally U.S. Treasuries 101,936 100,138 Deferred income taxes 5,324 5,661 Loan financing costs and other 3,500 4,579 $ 314,533 $ 320,192 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of financing lease obligations $ 198 $ 185 Accounts payable 33,455 29,757 Accrued liabilities 15,403 13,606 Accrued restructuring costs -- 82 Deferred revenue 1,478 4,398 Income taxes payable -- 445 Total current liabilities 50,534 48,473 LONG-TERM LIABILITIES Convertible debentures 90,000 90,000 Capital lease obligations, net of current portion 1,481 1,400 Deferred income taxes 281 48 Other long-term liabilities 2,647 2,869 Total long term liabilities 94,409 94,317 MINORITY INTERESTS 2,775 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 28,117 shares outstanding in 1999 and 26,639 shares outstanding in 1998 124 88 Additional paid-in capital 191,440 180,656 Treasury stock (133) (133) Retained earnings (deficit) (18,377) (5,471) Accumulated other comprehensive loss (6,239) (711) Total stockholders' equity 166,815 174,429 $ 314,533 $ 320,192 5 MRV COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Year Ended, Three Months Ended December 31, December 31, 1999 1998 1999 1998 (Audited) (Unaudited) REVENUES, net $288,524 $264,075 $ 73,903 $ 74,883 COSTS AND EXPENSES: Cost of goods sold 197,442 165,385 58,828 56,287 Research and development expenses 35,319 25,817 9,806 8,480 Selling, general and administrative expenses 71,757 56,753 23,488 16,978 Purchased technology in progress -- 20,633 -- -- Restructuring costs -- 15,671 -- (7,523) Operating (loss) income (15,994) (20,184) (18,219) 661 Interest expense related to convertible notes 4,500 2,480 1,125 1,110 Other income (expense), net 4,822 6,819 872 3,537 Provision (credit) for income taxes (2,153) 5,707 (4,731) 4,665 Minority interests (610) 1,345 (649) 975 NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (12,909) (22,897) (13,092) (2,552) EXTRAORDINARY ITEM Gain on repurchase of convertible notes -- 2,791 -- 2,791 NET INCOME (LOSS) $(12,909) $(20,106) $(13,092) $ 239 NET INCOME (LOSS) PER-SHARE - BASIC, BEFORE EXTRAORDINARY ITEM $ (0.48) $ (0.86) $ (0.48) $ (0.10) NET INCOME (LOSS) PER-SHARE - DILUTED, BEFORE EXTRAORDINARY ITEM $ (0.48) $ (0.86) $ (0.48) $ (0.10) NET INCOME (LOSS) PER SHARE - BASIC $ (0.48) $ (0.76) $ (0.48) $ 0.01 NET INCOME (LOSS) PER SHARE - DILUTED $ (0.48) $ (0.76) $ (0.48) $ 0.01 SHARES USED IN PER SHARE CALCULATION - BASIC 26,960 26,532 27,541 26,637 SHARES USED IN PER SHARE CALCULATION - DILUTED 26,960 26,532 27,541 30,207 (Continued on following page) 6 MRV COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued) (In thousands, except per share data) Year Ended, Three Months Ended December 31, December 31, 1999 1998 1999 1998 (Audited) (Unaudited) PRO FORMA INFORMATION (UNAUDITED) WRITE OFF OF ASSETS ASSOCIATED WITH LAN PRODUCTS $ 13,761 $-- $ 13,761 $-- NET INCOME (LOSS) BEFORE WRITE OFF OF ASSETS ASSOCIATED WITH LAN PRODUCTS $ 852 $(20,106) $ 669 $ 239 EARNINGS PER SHARE BEFORE WRITE OFF OF ASSETS ASSOCIATED WITH LAN PRODUCTS - BASIC $ 0.03 $ (0.76) $ 0.02 $ 0.01 EARNINGS PER SHARE BEFORE WRITE OFF OF ASSETS ASSOCIATED WITH LAN PRODUCTS - DILUTED $ 0.03 $ (0.76) $ 0.02 $ 0.01 SHARES USED IN PER-SHARE CALCULATION - BASIC 26,960 26,532 27,541 26,637 SHARES USED IN PER-SHARE CALCULATION - DILUTED 29,601 26,532 30,786 30,207 -----END PRIVACY-ENHANCED MESSAGE-----