STLW Stratos Intl (MM)

Reports Q4 Revenues of $20.7 Million CHICAGO, June 15 /PRNewswire-FirstCall/ -- Stratos International, Inc. (NASDAQ:STLW), today announced financial results for its fourth quarter ended April 29, 2006. Sales for the fourth quarter of fiscal 2006 were $20.6 million. Stratos also recorded license fees and royalty income of $0.1 million. Total revenues were $20.7 million in the fourth quarter of fiscal 2006, a sequential increase of 8% over total revenues of $19.2 million in the third quarter of fiscal 2006. For comparison, fourth quarter fiscal 2005 revenues for the three months ended April 30, 2005 were $21.5 million. The net loss attributable to common shareholders for the fourth quarter of fiscal 2006 was $1.3 million, or $0.09 per share. Fourth quarter results include a net benefit of $0.4 million related to a litigation settlement, and $0.2 million of restructuring charges. By comparison, in the fourth quarter of fiscal 2005, Stratos reported a net loss attributable to common shareholders of $2.4 million or $0.18 per share. Andy Harris, President and CEO of Stratos, remarked, "We are pleased with the measured progress this company is making reflected in the 8% growth in total revenues from the third to fourth quarter of fiscal 2006. Fiscal 2006 was a transition year for Stratos. We reduced our recurring operating expenses by $7.6 million compared to the prior year and ended the year with a healthy balance sheet and a cash balance of $30.7 million. We remain very optimistic about our future." Revenues for the fiscal year 2006 were $79.6 million, compared to $80.5 million for the same period last year. Included in revenues were license fees and royalties of $0.5 million in 2006, and 2005. The net loss attributable to common shareholders for 2006 was $4.0 million or $0.29 per share compared to $15.7 million or $1.16 per share for 2005. Common shares outstanding as of April 29, 2006 were 14,640,643 shares. Cash and short-term investments at April 29, 2006 were $30.7 million compared to $31.8 million at April 30, 2005. Capital expenditures were $0.2 million in the fourth quarter of fiscal 2006, and $1.0 million in the full fiscal year 2006, compared to $0.3 million in the fourth quarter of fiscal 2005, and $1.0 million in the full fiscal year 2005. Stratos repurchased 105,566 shares of its common stock in the open market at a cost of $0.8 million during the fourth quarter, and repurchased 248,036 shares of its common stock during the fiscal year 2006 in the open market at a cost of $1.6 million. Stratos repurchased 30,210 shares of its preferred stock at a cost of $3.8 million during the fourth quarter. 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 9817139. The replay will be available for two days following the call. A web cast replay will also be available on Stratos' website. ABOUT STRATOS INTERNATIONAL Stratos International, Inc. is a leading designer, developer and manufacturer of RF and Microwave, as well as optical subsystems, components 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 and shares outstanding) Three Months Ended Twelve Months Ended April 29 April 30 April 29 April 30 2006 2005 2006 2005 Revenues: Net sales $20,620 $21,297 $79,042 $79,931 License fees and royalties 129 171 540 523 Total revenues 20,749 21,468 79,582 80,454 Cost of revenues 13,071 12,989 50,090 52,642 Gross profit 7,678 8,479 29,492 27,812 37.0% 39.5% 37.1% 34.6% Operating expenses Research and development 2,128 2,308 8,270 9,518 Sales and marketing 2,739 2,605 10,212 10,467 General and administrative 3,993 4,229 15,781 21,907 Restructuring and other charges 182 404 1,023 4,679 Litigation settlements, net (400) 1,536 (1,100) (2,553) Total operating expenses 8,642 11,082 34,186 44,018 Loss from operations (964) (2,603) (4,694) (16,206) Investment income, net 332 251 1,219 553 Other income 440 120 838 464 Loss before income taxes (192) (2,232) (2,637) (15,189) Income tax (provision) credit (226) (118) (194) (118) Net loss (418) (2,350) (2,831) (15,307) Preferred Stock Dividends ($884) ($87) ($1,147) ($350) Net loss attributable to Common shareholders ($1,302) ($2,437) ($3,978) ($15,657) Net loss per share attributable to common shareholders ($0.09) ($0.18) ($0.29) ($1.16) Weighted average number of Common Shares outstanding: Basic and diluted 13,827,000 13,642,000 13,888,000 13,546,000 STRATOS INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands, except per share amounts and shares outstanding) April 29 April 30 2006 2005 Assets Current assets Cash and cash equivalents $11,742 $13,276 Short term investments 19,000 18,552 Accounts receivable - net 13,806 12,926 Inventories 15,482 15,974 Prepaid expenses 390 6,139 Refundable income taxes 1,837 4,267 Total current assets 62,257 71,134 Property plant and equipment, net 16,437 21,338 Intangible assets, net of amortization 11,932 13,462 Goodwill and other long lived assets 5,664 6,110 Assets held for sale 2,864 2,936 Total assets $99,154 $114,980 Liabilities and shareholders' equity: Current liabilities Accounts payable $4,724 $6,987 Accrued expenses 6,028 11,259 Income taxes payable 216 - Current portion of long-term debt 815 Total current liabilities 10,968 19,061 Deferred Income Taxes - 446 Redeemable Preferred Stock 1,979 5,000 Total liabilities 12,947 24,507 Shareholders' equity Preferred stock, $0.01 par value, authorized 1,000,000 shares, issued and outstanding 19,790 shares at April 30, 2006 and 50,000 shares at April 30, 2005. - - Common stock, $0.01 par value, authorized 20,000,000 shares, issued and outstanding 14,640,643 and 14,559,348 at April 30, 2006 and April 30, 2005 respectively. 149 146 Cost of shares in treasury (1,871) (259) Additional paid in capital 322,607 320,410 Unearned Compensation (4,400) (3,505) Accumulated other comprehensive income (9) (29) Accumulated deficit (230,269) (226,290) Total shareholders' equity 86,207 90,473 Total liabilities and shareholders' equity $99,154 $114,980 DATASOURCE: Stratos International, Inc. CONTACT: Barry Hollingsworth, Vice President & Chief Financial Officer of Stratos, +1-708-457-2379, or email, Web site: http://www.stratosinternational.com/

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