EX-99.1 2 c00760exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
Stratos International Announces Second Quarter Results
Reports Q2 Revenues of $19.0 Million
CHICAGO, Dec. 8 /PRNewswire-FirstCall/ — Stratos International, Inc. (Nasdaq: STLW), today announced financial results for its second quarter ended October 29, 2005.
Sales for the second quarter of fiscal 2006 were $18.9 million. Stratos also recorded license fees and royalty income of $0.1 million. For comparison, second quarter fiscal 2005 sales for the three months ended October 31, 2004 were $18.2 million. Sales for the first quarter of fiscal 2006 were $20.5 million and license fees and royalties were $0.1 million.
The net loss attributable to common shareholders for the second quarter of fiscal 2006 was $0.4 million, or $0.03 per share. The net loss in the second quarter includes a net benefit of approximately $0.6 million primarily related to the resolution of prior year accruals. Second quarter results include $0.5 million of non-recurring restructuring charges, which includes the closing of a corporate office in Westlake Village, CA.
By comparison, in the second quarter of fiscal 2005, Stratos reported a net loss attributable to common shareholders of $4.1 million or $0.30 per share. The net loss attributable to common shareholders for the first quarter of fiscal 2006 was $1.2 million or $0.09 per share.
Andy Harris, President and CEO of Stratos, remarked, “We are pleased that we achieved a third consecutive quarter of positive EBITDA and continued our trend toward profitability. Our continued focus on the customer, investing in new product offerings, and achieving increased operating efficiency will bring Stratos to success in our markets and our objective of sustained profitability.”
Year-to-Date Results
Sales for the 6 months ended October 29, 2005 were $39.4 million. Stratos also recorded license fees and royalty income of $0.2 million. For comparison, sales for the 6 months ended October 31, 2004 were $39.2 million, and license fees and royalties were $0.2 million.
The net loss attributable to common shareholders for the 6 months ended October 29, 2005 was $1.6 million, or $0.12 per share. By comparison, for the 6 months ended October 31, 2004, Stratos reported a net loss attributable to common shareholders of $4.6 million or $0.34 per share.

 


 

Common shares outstanding as of October 29, 2005 were 14,612,884 shares. Cash and short-term investments at October 29, 2005 were $34.0 million compared to $31.8 million at April 30, 2005. Capital expenditures were $0.2 million in the second quarter of fiscal 2006 compared to $0.2 million in the second quarter of the prior year.
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 web cast by visiting the investor relations section of the Stratos International website at 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 2708920. 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.

 


 

For additional information, contact Barry Hollingsworth, Vice President & Chief Financial Officer at (708) 457-2379, or email at bhollingsworth@stratoslightwave.com. Website: www.stratosinternational.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  
    2005     2004     2005     2004  
Revenues:
                               
Net sales
  $ 18,949     $ 18,181     $ 39,429     $ 39,204  
License fees and royalties
    65       29       209       249  
Total revenues
    19,014       18,210       39,638       39,453  
 
                               
Cost of revenues
    12,262       12,439       24,715       26,253  
Gross profit
    6,752       5,771       14,923       13,200  
 
                               
Operating expenses
                               
Research and development
    1,839       2,422       3,843       4,828  
Sales and marketing
    2,536       2,610       5,083       5,419  
General and administrative
    3,562       6,197       7,866       11,377  
Restructuring and other charges
    483             483        
Litigation settlements, net
          (1,463 )           (4,026 )
Total operating expenses
    8,420       9,766       17,275       17,598  
 
                               
Loss from operations
    (1,668 )     (3,995 )     (2,352 )     (4,398 )
 
                               
Investment income, net
    295       65       547       129  
Other income
    1,027       (69 )     381       (123 )
 
                               
Loss before income taxes
    (346 )     (3,999 )     (1,424 )     (4,392 )
 
                               
Income tax (provision) credit
                  (9 )        
 
                               
Net loss
    (346 )     (3,999 )     (1,433 )     (4,392 )
 
                               
Preferred Stock Dividends
  $ (88 )   $ (88 )   $ (175 )   $ (175 )
 
                               
Net loss attributable to
                               
Common shareholders
  $ (434 )   $ (4,087 )   $ (1,608 )   $ (4,567 )
 
                               
Net loss per share
                               
attributable to common shareholders
  $ (0.03 )   $ (0.30 )   $ (0.12 )   $ (0.34 )
 
                               
Weighted average number of
                               
Common Shares outstanding:
                               
Basic and diluted
    13,921,333       13,549,000       13,913,469       13,542,000  

 


 

STRATOS INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except per share amounts and shares outstanding)
                 
    October 29     April 30  
    2005     2004  
Assets
               
Current assets
               
Cash and cash equivalents
  $ 9,515     $ 13,276  
Short term investments
    24,500       18,552  
Accounts receivable — net
    11,261       12,926  
Inventories
    15,556       15,974  
Prepaid expenses
    955       6,139  
Refundable income taxes
    3,804       4,267  
Other current assets
               
Total current assets
    65,591       71,134  
 
               
Property plant and equipment, net
    19,021       21,338  
Intangible assets, net of amortization
    12,760       13,462  
Goodwill and other long lived assets
    6,110       6,110  
Assets held for sale
    2,868       2,936  
Other assets
               
Total assets
  $ 106,350     $ 114,980  
 
               
Liabilities and shareholders’ equity:
               
Current liabilities
               
Accounts payable
  $ 4,579     $ 6,987  
Accrued expenses
    6,647       11,259  
Current portion of long-term debt
            815  
Total current liabilities
    11,226       19,061  
 
               
Long term debt, less current portion
               
Deferred Income Taxes
    446       446  
Redeemable Preferred Stock
    5,000       5,000  
Total liabilities
    16,672       24,507  
 
               
Shareholders’ equity
               
Preferred stock, $0.01 par value, authorized
               
5,000,000 shares, issued and outstanding 50,000
               
shares at October 31, 2005 and April 30, 2005.
           
Common stock, $0.01 par value, authorized
               
100,000,000 shares, issued and outstanding
               
14,612,884, and 14,559,348 at October 31, 2005
               
and April 30, 2005 respectively.
    146       146  
Cost of shares in treasury
    (259 )     (259 )
Additional paid in capital
    320,643       320,410  
Unearned Compensation
    (3,239 )     (3,505 )
Accumulated other comprehensive income
    286       (29 )
Accumulated deficit
    (227,899 )     (226,290 )
Total shareholders’ equity
    89,678       90,473  
 
               
Total liabilities and shareholders’ equity
  $ 106,350     $ 114,980