STLW Stratos Intl (MM)

Stratos International Announces Third Quarter Results Reports Q3 Sales of $19.4 Million CHICAGO, March 3 /PRNewswire-FirstCall/ -- Stratos International, Inc. (NASDAQ:STLW), a leading provider of optoelectronic, fiber optic, radio frequency (RF) and microwave subsystems and components, today announced financial results for its third quarter of fiscal 2005, ended January 31, 2005. Sales for the third quarter of fiscal 2005 were $19.4 million. The Company also recorded license fees and royalty income of $0.1 million in the third quarter of fiscal 2005. In comparison, second quarter fiscal 2005 revenue was $18.2 million and license fees and royalty income was $0.1 million. Income from legal settlements in the second quarter was $1.4 million. Third quarter fiscal 2004 revenue was $16.0 million and license fee income was $0.3 million. "We are pleased to have reported third quarter revenues higher than the mid point of our previously announced guidance of $18 to $20 million. The third quarter represents a transition period because of the restructuring actions that we implemented in late January. A key objective of the restructuring was to reduce corporate operating expenses and increase our focus and responsiveness to customer requirements. At present, we expect fourth quarter sales to fall into the $18.5 to $20.5 million range," said Andy Harris, President and Chief Executive Officer. The net loss attributable to common shareholders for the third quarter of fiscal 2005 was $8.7 million, or $0.64 per share. By comparison, the Company reported a net loss attributable to common shareholders of $5.4 million or $0.40 per share for the third quarter of fiscal 2004, and a net loss attributable to common shareholders of $4.1 million or $0.30 per share for the second quarter of fiscal 2005. Third quarter results include $4.2 million of non-recurring charges incurred due to a restructuring of the business as previously stated in the Company's January 25th press release. The non-recurring charges consisted of $2.4 million in severance costs and $1.8 million in lease costs associated with closed facilities. The Company anticipates annual savings of $4.0 million on an on-going basis resulting from those actions. In addition, the Company incurred $0.5 million in asset write-downs and $0.4 million in additional excess and obsolete inventory provisions. Sales for the nine months ended January 31, 2005 were $58.6 million, compared to $29.7 million for the same period last year (which did not fully reflect the Company's acquisition of Sterling Holding Company in November 2003). License fee income for the nine months in fiscal 2005 were $0.4 million, compared to $0.9 million in the comparable period of the prior fiscal year. Income from legal settlements for nine months in fiscal 2005 was $4.1 million, compared to $0.1 million in the comparable period of the prior fiscal year. The net loss attributable to common shareholders for the nine months ended January 31, 2005 was $13.2 million or $0.97 per share compared to $20.2 million or $2.15 per share for the same period last year. Financial results include operating results of Sterling Holding Company from the date of its acquisition on November 6, 2003. The merger with Sterling provided Stratos with two leading brands, Trompeter and Semflex, a suite of highly profitable and complementary specialty RF and microwave products, and an expanded customer base and strong sales channels. Webcast/Conference Call Stratos International will host a live audio webcast and conference call on Thursday, March 3rd, 2005 at 5:00 pm EDT. Investors and other interested parties may listen to the live webcast by visiting the investor relations section of the Stratos International website at http://www.stratoslightwave.com/ . Andy Harris, Chief Executive Officer, and Barry Hollingworth, Chief Financial Officer, will discuss the Company's earnings and operations. A replay of the conference call will be available for 48 hours beginning at 7:00 pm EST. The replay number is (706) 645-9291 with a conference ID of 4050328. A webcast replay will also be available on the Company's website. ABOUT STRATOS INTERNATIONAL Stratos International, Inc. is a leading designer, developer and manufacturer of active and passive optical, optoelectronic, RF and Microwave components, subsystems and interconnect products used in telecom, enterprise, military and video markets. Stratos has a rich history of optical and mechanical packaging expertise and has been a pioneer in developing several optical devices using innovative form factors for telecom, datacom and harsh environments application. This expertise, coupled with several strategic acquisitions, has allowed the Company to amass a broad range of products and build a strong IP portfolio of more than 100 patents. The Company is a market leader in several niches including specialty optical products such as RJ and low rider transceivers, Media Interface Adapters, flex circuits, as well as high performance RF and microwave coax and triax interconnect products. The Company currently serves more than 400 active customers in telecom, military and video markets. This press release contains predictions and other forward-looking statements. All forward-looking statements in this press release are based on information available to the Company as of the date hereof, and we assume no obligation to update any such forward-looking statements. Forward-looking statements are subject to risks and uncertainties and actual results may differ materially from any future performance suggested. These factors include rapid technological change in the optical communications industry; fluctuations in operating results; the Company's dependence on a few large customers; and competition. Other risk factors that may affect the Company's performance are listed in the Company's annual report on Form 10-K and other reports filed from time to time with the Securities and Exchange Commission. For additional information contact Stratos International at 7444 W. Wilson Ave., Chicago, IL USA 60706-4549, Tel: 708.867.9600. Fax: 708.867.0996. Website: http://www.stratoslightwave.com/ . STRATOS INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share amounts and shares outstanding) Three Months Ended Nine Months Ended January 31 January 31 2005 2004 2005 2004 Revenue: Net sales $19,430 $16,034 $58,634 $29,716 License fees and royalties 103 333 352 868 Total 19,533 16,367 58,986 30,584 Costs and expenses: Cost of products sold 13,737 12,608 39,991 28,106 Research and development 2,557 2,054 7,385 6,752 Sales and marketing 2,856 2,429 8,274 5,275 General and administrative 9,651 5,344 20,993 12,224 Total costs and expenses 28,801 22,435 76,643 52,357 Loss from operations (9,268) (6,068) (17,657) (21,773) Investment & Other income 640 629 609 1460 Income from settlements 63 63 4,090 148 Loss before income taxes (8,565) (5,376) (12,958) (20,165) Provision (credit) for income taxes - - - - Net loss (8,565) (5,376) (12,958) (20,165) Preferred Stock Dividends $(88) $(55) $(263) $(55) Net loss attributable to Common shareholders $(8,653) $(5,431) $(13,221) $(20,220) Net loss per share, basic and diluted: Net loss $(0.63) $(0.40) $ (0.95) $ (2.14) Preferred stock dividend requirement (0.01) (0.00) (0.02) (0.01) Net loss per share attributable to common shareholders $(0.64) $(0.40) $ (0.97) $ (2.15) Weighted average number of Common Shares outstanding: Basic 13,559,133 13,507,019 13,669,525 9,421,278 Diluted 13,559,133 13,507,019 13,669,525 9,421,278 STRATOS INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) January 31 April 30 2005 2004 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $23,709 $15,501 Short term investments 9,447 21,488 Accounts receivable - net 11,776 12,544 Inventories 16,440 15,964 Recoverable income taxes 4,212 4,176 Prepaid expenses 1,140 1,326 TOTAL CURRENT ASSETS 66,724 70,999 PROPERTY, PLANT AND EQUIPMENT 89,940 91,530 Less allowances for depreciation 67,445 64,574 NET PROPERTY, PLANT AND EQUIPMENT 22,495 26,956 OTHER ASSETS Goodwill and other long lived assets 6,110 6,110 Intangible assets, net of amortization 13,710 14,665 Assets held for sale 2,989 4,441 Other 5,698 5,879 TOTAL OTHER ASSETS 28,507 31,095 TOTAL ASSETS $117,726 $129,050 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $6,834 $8,422 Current portion of long-term debt 1,458 2,230 Other current liabilities 12,019 7,373 TOTAL CURRENT LIABILITIES 20,311 18,025 OTHER LIABILITIES Long term debt - 801 Deferred Income Taxes 445 445 Redeemable Preferred Stock 5,000 5,000 SHAREHOLDERS' EQUITY Common Stock 142 143 Paid in capital 318,431 319,212 Accumulated deficit (223,854) (210,633) Unearned Compensation (2,415) (3,809) Treasury Stock (248) (248) Foreign Currency Translation Adjustment (86) 114 TOTAL SHAREHOLDERS' EQUITY 91,970 104,779 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $117,726 $129,050 DATASOURCE: Stratos International, Inc. CONTACT: Jim Tournier, Investor Relations of Stratos International, Inc., +1-708-457-2645 Web site: http://www.stratoslightwave.com/

Copyright