EX-99.1 2 c03335exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
Stratos International Announces Third Quarter Results
Reports Q3 Revenues of $19.2 Million
CHICAGO, Mar 9 /PRNewswire-FirstCall/ — Stratos International, Inc. (Nasdaq: STLW), today announced financial results for its third quarter ended January 31, 2006.
Sales for the third quarter of fiscal 2006 were $19.0 million. Stratos also recorded license fees and royalty income of $0.2 million. Total revenues were $19.2 million in the third quarter of fiscal 2006. For comparison, third quarter fiscal 2005 revenues for the three months ended January 31, 2005 were $19.5 million.
The net loss attributable to common shareholders for the third quarter of fiscal 2006 was $1.1 million, or $0.08 per share. Third quarter results include a net benefit of $0.7 million related to a litigation settlement, and $0.4 million of restructuring charges for the closing of a corporate office in Westlake Village, CA.
By comparison, in the third quarter of fiscal 2005, Stratos reported a net loss attributable to common shareholders of $8.7 million or $0.64 per share.
Andy Harris, President and CEO of Stratos, remarked, “We are pleased that we achieved a fourth consecutive quarter of positive EBITDA and continued our trend toward profitability. Our progress in realizing benefits from our restructuring and operating efficiency initiatives is gaining momentum. Now, as we invest in new product development and product enhancements, we plan to leverage our competitive advantage as an agile and technically skilled organization to build our diverse customer base and revenues. We continue to improve our operating model and closed the quarter with $35.8 million in cash and long-term investments.”
Year-to-Date Results
Sales for the 9 months ended January 31, 2006 were $58.4 million. Stratos also recorded license fees and royalty income of $0.4 million. For comparison, sales for the 9 months ended January 31, 2005 were $58.6 million, and license fees and royalties were $0.4 million.
The net loss attributable to common shareholders for the 9 months ended January 31, 2006 was $2.7 million, or $0.19 per share. By comparison, for the 9 months ended January 31, 2005, Stratos reported a net loss attributable to common shareholders of $13.2 million or $0.97 per share.
Common shares outstanding as of January 31, 2006 were 14,562,641 shares. Cash and short-term investments at January 31, 2006 were $35.8 million compared to $31.8 million at April 30, 2005. Capital expenditures were $0.1 million in the third quarter of fiscal 2006 compared to

 

 

$0.2 million in the third quarter of the prior year. During the quarter Stratos repurchased 142,470 shares of its common stock in the open market at a cost of $0.9 million.
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 5441816. 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@stratosintl.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   Nine Months Ended
    January 31   January 31
    2006   2005   2006   2005
Revenues:
                                
Net sales
   $ 18,993     $ 19,430     $ 58,422     $ 58,634  
License fees and royalties
     201       103       410       352  
Total revenues
     19,194       19,533       58,832       58,986  
 
                                
Cost of revenues
     12,304       13,400       37,020       39,654  
Gross profit
     6,890       6,133       21,812       19,332  
 
                                
Operating expenses
                                
Research and development
     2,299       2,382       6,142       7,210  
Sales and marketing
     2,389       2,443       7,471       7,861  
General and administrative
     3,921       6,301       11,787       17,643  
Restructuring and other charges
     359       4,275       842       4,275  
Litigation settlements, net
     (700 )     (63 )     (700 )     (4,090 )
Total operating expenses
     8,268       15,338       25,542       32,899  
 
                                
Loss from operations
     (1,378 )     (9,205 )     (3,730 )     (13,567 )
 
                                
Investment income, net
     340       173       887       302  
Other income
     16       467       397       307  
 
                                
Loss before income taxes
     (1,022 )     (8,565 )     (2,446 )     (12,958 )
 
                                
Income tax (provision) credit
     41       —       32          
 
                                
Net loss
     (981 )     (8,565 )     (2,414 )     (12,958 )
 
                                
Preferred Stock Dividends
   $ (88 )   $ (88 )   $ (263 )   $ (263 )
 
                                
Net loss attributable to Common shareholders
   $ (1,069 )   $ (8,653 )   $ (2,677 )   $ (13,221 )
 
                                
Net loss per share attributable to common shareholders
   $ (0.08 )   $ $0.64 )   $ (0.19 )   $ (0.97 )
 
                                
Weighted average number of Common Shares outstanding:
                                
Basic and diluted
     13,875,654       13,559,133       13,900,956       13,669,525  

 

 

STRATOS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except per share amounts and shares outstanding)
                 
    January 31   April 30
    2006   2005
Assets
                
Current assets
                
Cash and cash equivalents
   $ 13,776     $ 13,276  
Short term investments
     22,000       18,552  
Accounts receivable — net
     11,984       12,926  
Inventories
     15,060       15,974  
Prepaid expenses
     603       6,139  
Refundable income taxes
     1,837       4,267  
Total current assets
     65,260       71,134  
 
                
Property plant and equipment, net
     17,652       21,338  
Intangible assets, net of amortization
     12,424       13,462  
Goodwill and other long lived assets
     6,110       6,110  
Assets held for sale
     2,864       2,936  
Total assets
   $ 104,310     $ 114,980  
 
                
Liabilities and shareholders’ equity:
                
Current liabilities
                
Accounts payable
   $ 4,218     $ 6,987  
Accrued expenses
     6,573       11,259  
Current portion of long-term debt
             815  
Total current liabilities
     10,791       19,061  
 
                
Deferred Income Taxes
     446       446  
Redeemable Preferred Stock
     5,000       5,000  
Total liabilities
     16,237       24,507  
 
                
Shareholders’ equity
                
Preferred stock, $0.01 par value, authorized 5,000,000 shares, issued and outstanding 50,000 shares at January 31, 2006 and April 30, 2005.
     —       —  
Common stock, $0.01 par value, authorized 100,000,000 shares, issued and outstanding 14,562,641, and 14,559,348 at January 31, 2006 and April 30, 2005 respectively.
     148       146  
Cost of shares in treasury
     (1,109 )     (259 )
Additional paid in capital
     321,162       320,410  
Unearned Compensation
     (3,378 )     (3,505 )
Accumulated other comprehensive income
     219       (29 )
Accumulated deficit
     (228,969 )     (226,290 )
Total shareholders’ equity
     88,073       90,473  
 
                
Total liabilities and shareholders’ equity
   $ 104,310     $ 114,980