Stratos International Announces Second Quarter Results Reports Q2
Sales of $18 Million CHICAGO, Dec. 7 /PRNewswire-FirstCall/ --
Stratos International, Inc. (NASDAQ:STLW), a leading provider of
optoelectronic, fiber optic, and radio frequency (RF) and microwave
subsystems and components, today announced financial results for
its second quarter of fiscal 2005, ended October 31, 2004. Sales
for the second quarter of fiscal 2005 were $18.2 million,
consistent with the revised guidance provided by the Company in its
press release on November 5. The Company also recorded license fees
and royalty income of $1.5 million in the second quarter of fiscal
2005. For comparison, first quarter fiscal 2005 revenue for the
three months ended July 31, 2004 was $21.0 million. First quarter
fiscal 2005 license fees and royalty income for the three months
ended July 31, 2004 was $2.8 million. Second quarter fiscal 2004
revenue for the three months ended October 31, 2003 was $7.1
million. 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. "The sequential decline in
revenue was primarily due to soft market demand for transceiver
sales to Telecom and enterprise customers, coupled with the returns
of a specific transceiver sold to one customer. Our balance sheet
remains healthy with approximately $37 million of cash and
short-term investments at quarter end," said David Slack, Chief
Financial Officer. The net loss attributable to common shareholders
for the second quarter of fiscal 2005 was $4.1 million, or $0.30
per share. By comparison, the Company reported a net loss
attributable to common shareholders of $7.5 million or $1.02 per
share for the second quarter of fiscal 2004, and a net loss
attributable to common shareholders of $480,000, or $0.04 per share
for the first quarter of fiscal 2005. Sales for the six months
ended October 31, 2004 were $39.2 million, compared to $13.7
million for the same period last year. License fees and royalty
income for the first six months in fiscal 2005 was $4.3 million,
compared to $619,000 in the comparable period of the prior fiscal
year. The net loss attributable to common shareholders for the
first six months ended October 31, 2004 was $4.6 million or $0.34
per share compared to $14.8 million or $2.00 per share for the same
period last year. In May, Stratos International announced its
decision to explore various strategic alternatives to maximize
shareholder value, including the possible sale of the Company. The
Company has retained CIBC World Markets Corp. as its exclusive
financial advisor. There is no assurance that a transaction will
result involving the Company. In the meantime, the Company expects
to continue operations as usual by seeking new business, developing
new products and working with customers to maintain a high level of
customer service. Webcast/Conference Call Stratos International
will host a live audio webcast and conference call on Tuesday,
December 7, 2004 at 5:00 pm EST. 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/ . David A. Slack, 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 2332535. 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 high
margin 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 Six Months Ended October 31 October 31 2004 2003 2004
2003 Revenue: Net sales $18,181 $7,111 $39,204 $13,682 License fees
and royalties 1,493 113 4,276 619 Total 19,674 7,224 43,480 14,301
Costs and expenses: Cost of products sold 12,439 8,020 26,253
15,498 Research and development 2,422 1,807 4,828 4,697 Sales and
marketing 2,610 1,327 5,419 2,845 General and administrative 6,267
3,775 11,501 6,473 Total costs and expenses 23,738 14,929 48,001
29,513 Loss from operations (4,064) (7,705) (4,521) (15,212)
Investment income 65 184 129 423 Loss before income taxes (3,999)
(7,521) (4,392) (14,789) Provision (credit) for income taxes - - -
- Net loss (3,999) (7,521) (4,392) (14,789) Preferred Stock
Dividends $(88) $- $(175) $- Net loss attributable to Common
shareholders $ (4,087) $(7,521) $(4,567) $(14,789) Net loss per
share, basic and diluted : Net loss $(0.30) $(1.02) $ (0.33) $
(2.00) Preferred stock dividend requirement - - (0.01) - Net loss
per share attributable to common shareholders $(0.30) $(1.02) $
(0.34) $ (2.00) Weighted average number of Common Shares
outstanding: Basic 13,548,922 7,392,495 13,541,547 7,378,408
Diluted 13,548,922 7,392,495 13,541,547 7,378,408 STRATOS
INTERNATIONAL INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands) October 31 April 30 2004 2004 (Unaudited) ASSETS CURRENT
ASSETS Cash and cash equivalents $27,388 $15,501 Short term
investments 9,247 21,488 Accounts receivable - net 10,703 12,544
Inventories 16,871 15,964 Recoverable income taxes 4,212 4,176
Prepaid expenses 1,235 1,326 TOTAL CURRENT ASSETS 69,656 70,999
PROPERTY, PLANT AND EQUIPMENT 89,678 91,530 Less allowances for
depreciation 65,848 64,574 NET PROPERTY, PLANT AND EQUIPMENT 23,830
26,956 OTHER ASSETS Goodwill and other long lived assets 6,110
6,110 Intangible assets, net of amortization 14,036 14,665 Assets
held for sale 2,988 4,441 Other 6,043 5,879 TOTAL OTHER ASSETS
29,177 31,095 TOTAL ASSETS $122,663 $129,050 LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $7,044
$8,422 Current portion of long-term debt 1,766 2,230 Other current
liabilities 8,153 7,373 TOTAL CURRENT LIABILITIES 16,963 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 318,629 319,212 Accumulated
deficit (215,201) (210,633) Unearned Compensation (2,796) (3,809)
Treasury Stock (248) (248) Foreign Currency Translation Adjustment
(271) 114 TOTAL SHAREHOLDERS' EQUITY 100,255 104,779 TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $122,663 $129,050 DATASOURCE:
Stratos International, Inc. CONTACT: David A. Slack, Chief
Financial Officer, or Barry R. Hollingsworth, Investor Relations,
both of Stratos International, Inc., +1-708-867-9600 Web site:
http://www.stratoslightwave.com/
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