STLW Stratos Intl (MM)

Reports Q1 Revenues of $20.6 Million CHICAGO, Aug. 25 /PRNewswire-FirstCall/ -- Stratos International, Inc. (NASDAQ:STLW), today announced financial results for its first quarter ended July 31, 2005. Sales for the first quarter of fiscal 2006 were $20.5 million. Stratos also recorded license fees and royalty income of $0.1 million. For comparison, fourth quarter fiscal 2005 sales for the three months ended April 30, 2005 were $21.3 million and license fees and royalty income were $0.2 million. Sales for the first quarter of fiscal 2005 were $21.0 million and license fees and royalties were $0.2 million. The net loss attributable to common shareholders for the first quarter of fiscal 2006 was $1.2 million, or $0.09 per share. The net loss in the first quarter includes a net benefit of $0.4 million primarily related to the resolution of accruals. By comparison, Stratos reported a net loss attributable to common shareholders of $0.5 million or $0.04 per share for the first quarter of fiscal 2005, which included $2.6 million in income related to litigation settlements. The net loss attributable to common shareholders for the fourth quarter of fiscal 2005 was $2.4 million or $0.18 per share. Common shares outstanding as of July 31, 2005 were 14,580,123 shares. Cash and short-term investments at July 31, 2005 were $34.6 million compared to $31.8 million at April 30, 2005. Capital expenditures were $0.4 million in the first quarter of fiscal 2006 compared to $0.2 million in the first quarter of the prior year. Andy Harris, President and CEO of Stratos, remarked, "We are pleased that our revenue numbers hit our guidance range and we achieved positive EBITDA in the quarter. The impact of our emphasis on improving our financial and operational discipline is being demonstrated. I believe our continued focus on the customer will bring Stratos to success in our markets and bring us to profitability." Webcast of Investor Call Available Today Chief Executive Officer, Andy Harris, and Chief Financial Officer, Barry Hollingsworth will discuss Stratos' earnings and operations. 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.stratosinternational.com/ . An audio replay of the call will be accessible to the public two hours after the call's completion by calling (800) 642-1687 or (706) 645-9291 and then following the prompts to enter Conference ID Number 8479746. The replay will be available for two days following the call. A webcast replay will also be available on Stratos' 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 Stratos to amass a broad range of products and build a strong IP portfolio of more than 100 patents. Stratos currently serves more than 1,300 active customers, who are primarily in telecom/datacom, military/aerospace and video markets. Stratos' headquarters is in Chicago, Illinois, USA. Safe Harbor Statement This press release contains predictions and other forward-looking statements. All forward-looking statements in this press release are based on information available to Stratos 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; Stratos' dependence on a few large customers; and competition. Other risk factors that may affect the Company's performance are listed in Stratos' annual report on Form 10-K and other reports filed from time to time with the Securities and Exchange Commission. STRATOS INTERNATIONAL INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share amounts) Three Months Ended July 31 2005 2004 Revenues: Net sales $20,480 $21,023 License fees and royalties 144 220 Total revenues 20,624 21,243 Cost of revenues 12,453 13,814 Gross profit 8,171 7,429 Gross profit % 39.6% 35.0% Operating expenses Research and development 2,004 2,406 Sales and marketing 2,547 2,809 General and administrative 4,304 5,180 Litigation settlements, net - (2,563) Total operating expenses 8,855 7,832 Loss from operations (684) (403) Gain on sale of business - - Investment income, net 252 64 Other income (expenses) (647) (54) Loss before income taxes (1,079) (393) Income tax (provision) credit (9) - Net loss (1,088) (393) Preferred Stock Dividends ($87) ($87) Net loss attributable to Common shareholders ($1,175) ($480) Per share data, basic and diluted: Net loss ($0.08) ($0.03) Preferred stock dividend requirement (0.01) (0.01) Net loss per share attributable to common shareholders ($0.09) ($0.04) Weighted average number of Common Shares outstanding: Basic and diluted 13,894 13,534 STRATOS INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands, except shares outstanding) July 31 April 30 2005 2005 Assets Current assets Cash and cash equivalents $10,633 $13,276 Short term investments 23,947 18,552 Accounts receivable - net 12,654 12,926 Inventories 14,891 15,974 Refundable income taxes 3,803 4,267 Prepaid expenses and other current assets 1,071 6,139 Total current assets 66,999 71,134 Property plant and equipment, net 20,145 21,338 Intangible and other assets, net of amortization 13,130 13,462 Goodwill and other indefinite lived assets 6,110 6,110 Assets held for sale 2,902 2,936 Total assets $109,286 $114,980 Liabilities and Shareholders' Equity Current liabilities Accounts payable $5,019 $6,987 Accrued expenses 8,561 11,259 Current portion of long-term debt 442 815 Total current liabilities 14,022 19,061 Deferred Income Taxes 446 446 Redeemable Preferred Stock 5,000 5,000 Shareholders' equity Preferred stock, $0.01 par value, authorized 5,000,000 shares, issued and outstanding 50,000 shares at July 31, 2005 and April 2004 - - Common stock, $0.01 par value, authorized 100,000,000 shares, issued and outstanding 14,580,123 at July 31, 2005 and 14,559,348 at April 30, 2005 respectively 146 146 Cost of shares in treasury (259) (259) Additional paid in capital 320,468 320,410 Unearned Compensation (3,302) (3,505) Accumulated other comprehensive income 231 (29) Accumulated deficit (227,466) (226,290) Total shareholders' equity 89,818 90,473 Total liabilities and shareholders' equity 109,286 114,980 DATASOURCE: Stratos International, Inc. CONTACT: Jim Tournier, Investor Relations of Stratos International, Inc., +1-708-457-2645, or Web site: http://www.stratoslightwave.com/

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