[August 10, 2015] |
|
MRV Reports Second-Quarter 2015 Results
MRV Communications (NASDAQ: MRVC), a global
provider of packet and optical networking solutions, reported
financial results for the three- and six- months ended June 30, 2015.
"We have made significant progress toward our goal of transforming the
company into a leading provider of end-to-end packet and optical
solutions for metro services edge networks," stated MRV president and
chief executive officer Mark Bonney. "As separately announced, we
entered into an agreement on August 7, 2015 to sell our Network
Integration business, and we achieved several notable Network Equipment
highlights. We secured our first customer for both OptiPacket™ and our
complete portfolio with CentraCom, a long-time MRV user who values our
reliability, performance and customer service. Based on this experience
and our new low-power, high-capacity and intelligent solutions,
CentraCom selected MRV to expand its network and service portfolio,
demonstrating our capability as an end-to-end solutions provider. Also,
OptiDriver™ traction continued, as we expanded to a total of 65
customers at quarter end. Our new customers include a variety of
regional and national service providers, Internet exchanges and data
centers, many of which chose MRV for our 100G solutions.
"In addition to product and customer progress, we delivered
significantly improved financial results. In particular, Network
Equipment revenue grew over 12% and increased its operating income by
$2.0 million when compared to the second quarter a year ago. We will
continue to focus on building our position serving the rapidly expanding
metro edge market."
Second Quarter 2015 Results as compared to Second Quarter 2014
-
Total revenue was $42.7 million, compared to $43.1 million.
-
Network Equipment revenue of $24.5 million grew 12.4%, compared to
$21.8 million.
-
Network Integration revenue was $18.2 million and when
calculated on a constant currency basis would have been $22.6
million, compared to $21.4 million.
-
Total gross margin increased to 35.3% from 34.3%, reflecting the
larger contribution of revenue from Network Equipment, which had gross
margins of 48.7%, compared to Network Integration which had gross
margins of 17.2%. Total gross profit would have been $0.7 million, or
5%, higher for the three months ended June 30, 2015 had foreign
exchange rates remained the same as they were in the three months
ended June 30, 2014.
-
Total GAAP operating expenses decreased to $14.3 million, or 33.5% of
total revenue, from $15.9 million, or 36.9% of total revenue,
reflecting improved efficiencies while maintaining the ongoing
commitment to develop, market and support a differentiated product
road map for the Network Equipment business.
-
GAAP operating income improved $1.9 million to $0.8 million. Both
Network Equipment and Network Integration had positive GAAP operating
income at $0.5 million and $1.5 million respectively, which were
partially offset by corporate operating expenses of $1.3 million.
-
Non-GAAP operating income improved $1.7 million to $1.3 million, from
a non-GAAP operating loss of $0.4 million.
-
GAAP net loss improved $2.0 million to $0.3 million, or $0.04 per
share, from $2.3 million, or $0.31 per share.
-
Non-GAAP net income improved $1.8 million to $0.2 million, or $0.03
per share, from a non-GAAP net loss of $1.6 million, or $0.22 per
share.
A reconciliation of the non-GAAP measures to GAAP measures is provided
in the attached table.
Year-to-date June 30, 2015 Results as compared to year-to-date June
30, 2014
-
Total revenue amounted to $81.5 million, compared to $85.4 million.
Network Equipment revenue was $46.8 million, up 6%. Network
Integration revenue was $34.8 million, down 16%, primarily due to
unfavorable currency exchange. Total revenue would have been $8.0
million, or 10% higher for the six months ended June 30, 2015 had
foreign currency exchange rates remained the same as they were for the
six months ended June 30, 2014.
-
Year-to-date, total gross margin increased to 35.5%, from 32.8%,
reflecting the larger contribution of revenue from Network Equipment,
which had gross margins of 50.2%, compared to Network Integration
which had gross margins of 15.7%. Total gross profit would have been
$1.2 million, or 4%, higher for the six months ended June 30, 2015 had
foreign exchange rates remained the same as they were in the six
months ended June 30, 2014.
-
GAAP operating results improved to breakeven from a $5.0 million loss
in 2014. Both Network Equipment and Network Integration had positive
GAAP operating income at $0.3 million and $2.0 million respectively,
which were offset by a corporate operating expense of $2.4 million
-
Non-GAAP operating income improved $4.7 million to $1.2 million, from
a non-GAAP operating loss of $3.4 million.
-
GAAP net loss was $1.3 million, or $0.19 per share, a $5.1 million, or
$0.70 per share improvement versus 2014.
-
Non-GAAP net loss improved $4.7 million to $0.3 million, or $0.05 per
share, from a non-GAAP net loss of $5.0 million, or $0.69 per share.
Cash Flow Highlights
At June 30, 2015, cash and equivalents were $13.5 million, compared to
$22.4 million at December 31, 2014. From January 1, 2015 through June
30, 2015, the company used $4.5 million to repurchase 468,456 shares and
$5.4 million to retire short-term debt.
Sale of Network Integration Business
In a separate release issued today, MRV announced it entered into an
agreement on August 7, 2015 to sell Tecnonet S.p.A., its network
integration subsidiary based in Rome, Italy. The consideration includes
a cash payment by Maticmind to MRV of €15.6 million at closing plus a
cash payment by Tecnonet to MRV of €4.1 million prior to closing to
repay an outstanding intercompany obligation. MRV is entitled to seek
and procure third party debt financing for Tecnonet to provide the funds
for this payment, and Maticmind is obligated to assume this debt at
closing. Within 60 days of closing, the parties are required to make a
post-closing adjustment based on changes in debt and cash of Tecnonet
between June 30, 2015 and closing, as provided for in the purchase
agreement. The transaction is subject to stockholder approval at a
special meeting to be held as promptly as reasonable on or before
November 30, 2015.
Additional Information:
In connection with the proposed transaction, the Company will file a
proxy statement and other materials with the Securities and Exchange
Commission ("SEC") in the near future. THE COMPANY URGES INVESTORS TO
READ THE PROXY STATEMENT AND THESE OTHER MATERIALS CAREFULLY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE COMPANY AND THE PROPOSED TRANSACTION. Investors may obtain free
copies of the proxy statement (when available) as well as other filed
documents containing information about the Company at http://www.sec.gov,
the SEC's free Internet site.
The Company and its executive officers and directors may be deemed,
under SEC rules, to be participants in the solicitation of proxies from
the Company's stockholders with respect to the proposed transaction.
Information regarding the executive officers and directors of the
Company will be included in the proxy statement to be filed with the SEC
with respect to the Company's upcoming special meeting of stockholders.
More detailed information regarding the identity of the potential
participants, and their direct or indirect interests, by security
holdings or otherwise, will be set forth in the proxy statement and
other materials to be filed with SEC in connection with the proposed
transaction.
Conference Call Information:
MRV Communication's second quarter 2015 financial results conference
call is scheduled to take place on Aug. 10, 2015 at 5:00 p.m. ET. To
access the call in the U.S. please dial 800-753-9188, and for
international calls dial 719-785-1748 approximately 10 minutes prior to
the start of the conference. The conference ID is 5309177. The
conference call will also be broadcast live at www.mrv.com
where it will be available for replay for 90 days. In addition, a replay
will be available via telephone for one business day, beginning two
hours after the call. To listen to the replay, in the U.S. please dial
877-870-5176, and internationally dial 858-384-5517. The access code is
5309177.
About MRV Communications
MRV Communications is a global supplier of packet and optical solutions
that power the world's largest networks. MRV products combine innovative
hardware with intelligent software to make networks smarter, faster and
more efficient. Dedicated to the continued success of our customers, MRV
enables service providers, data center operators and large enterprises
to cost-effectively evolve their networks to address mission-critical
applications, such as high-capacity cloud and data center connectivity,
business services, mobile backhaul and the migration to virtualized and
programmable networks. Founded in 1988, MRV is headquartered in Southern
California with additional marketing, research and development
facilities outside of Boston and in Israel. For more information please
visit www.mrv.com.
Non-GAAP Measures
The company uses certain non-GAAP financial measures in this press
release to supplement its consolidated financial statements, which are
presented in accordance with GAAP. These non-GAAP measures include
non-GAAP operating income (loss), non-GAAP net income (loss) and
non-GAAP basic and diluted income (loss) per share. The company's
non-GAAP financial measures exclude the impact of stock-based
compensation expense, fair value adjustments, litigation costs,
severance and related restructuring costs, and other non-recurring
expenses, which the company believes are not indicative of its core
operating results. The company used these non-GAAP measures when
evaluating its financial results as well as for internal resource
management, planning and forecasting purposes. These non-GAAP measures
should not be viewed in isolation from or as a substitute for the
company's financial results in accordance with GAAP. A reconciliation of
GAAP to non-GAAP measures is attached to this press release.
Certain revenue information is presented on a constant currency basis.
The company presents this supplemental revenue information, because it
believes doing so facilitates a comparison of its operating results from
period to period without regard to changes resulting solely from
fluctuations in currency rates. The company calculates constant currency
revenue growth by comparing current-period revenues to prior-period
revenues with both periods converted at the U.S. Dollar/local currency
average foreign exchange rate for each month of the prior period for the
currencies in which it does business.
Forward Looking Statements
This press release may contain statements regarding future financial and
operating results of MRV, management's assessment of business trends,
and other statements about management's future expectations, beliefs,
goals, plans or prospects and those of the market segments in which MRV
is engaged that are based on management's current expectations,
estimates, forecasts and projections about MRV and its consolidated
businesses and the respective market segments in which MRV's businesses
operate, in addition to management's assumptions. Statements in this
press release regarding MRV's future financial and operating results,
which are not statements of historical facts, constitute forward-looking
statements within the meaning of the U.S. Private Securities Litigation
Reform Act of 1995. Words such as "anticipate," "appear," "believe,"
"estimate," "expect," "intend," "may," "should," "plan," "project,"
"contemplate," "target," "foresee," "goal," "likely," "will," and
"would" or variations of such words and similar expressions, are
intended to identify such forward-looking statements which are not
statements of historical facts. These forward-looking statements are not
guarantees of future performance nor guarantees that the events
anticipated will occur or expected conditions will remain the same or
improve. These statements involve certain risks, uncertainties and
assumptions, the likelihood of which are difficult to assess and may not
occur, including risks that each of its business segments may not make
the expected progress in its respective market, or that management's
long-term strategy may not achieve the expected results. Therefore,
actual outcomes, performance and results may differ from what is
expressed or forecast in such forward-looking statements, and such
differences may vary materially from current expectations.
For further information regarding risks and uncertainties associated
with MRV's businesses, please refer to the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Risk
Factors" sections of MRV's SEC filings, including, but not limited to
its annual report on Form 10-K for the year ended December 31, 2014,
copies of which may be obtained by contacting MRV's investor relations
department or by visiting MRV's website at http://www.mrv-corporate.com
or the SEC's EDGAR website at http://www.sec.gov.
All information in this release is as of August 10, 2015 unless
otherwise stated. MRV undertakes no duty to update any forward-looking
statement to conform the statement to actual results or changes in MRV's
expectations.
|
MRV Communications, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Product revenue
|
|
$
|
31,156
|
|
|
$
|
30,671
|
|
|
$
|
59,487
|
|
|
$
|
62,215
|
|
Service revenue
|
|
11,558
|
|
|
12,453
|
|
|
22,000
|
|
|
23,227
|
|
Total revenue
|
|
42,714
|
|
|
43,124
|
|
|
81,487
|
|
|
85,442
|
|
Cost of Revenue:
|
|
|
|
|
|
|
|
|
Cost of product
|
|
20,072
|
|
|
19,210
|
|
|
37,835
|
|
|
40,112
|
|
Cost of services
|
|
7,550
|
|
|
9,132
|
|
|
14,684
|
|
|
17,297
|
|
Total cost of revenue
|
|
27,622
|
|
|
28,342
|
|
|
52,519
|
|
|
57,409
|
|
Gross profit
|
|
15,092
|
|
|
14,782
|
|
|
28,968
|
|
|
28,033
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Product development and engineering
|
|
5,310
|
|
|
5,392
|
|
|
10,435
|
|
|
10,970
|
|
Selling, general and administrative
|
|
8,979
|
|
|
10,516
|
|
|
18,541
|
|
|
22,038
|
|
Total operating expenses
|
|
14,289
|
|
|
15,908
|
|
|
28,976
|
|
|
33,008
|
|
Operating Income (loss)
|
|
803
|
|
|
(1,126
|
)
|
|
(8
|
)
|
|
(4,975
|
)
|
Interest expense
|
|
(50
|
)
|
|
(40
|
)
|
|
(99
|
)
|
|
(190
|
)
|
Other expense, net
|
|
(281
|
)
|
|
(420
|
)
|
|
(301
|
)
|
|
(387
|
)
|
Income (loss) before provision for income taxes
|
|
472
|
|
|
(1,586
|
)
|
|
(408
|
)
|
|
(5,552
|
)
|
Provision for income taxes
|
|
752
|
|
|
681
|
|
|
940
|
|
|
932
|
|
Net Loss
|
|
$
|
(280
|
)
|
|
$
|
(2,267
|
)
|
|
$
|
(1,348
|
)
|
|
$
|
(6,484
|
)
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic
|
|
$
|
(0.04
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.89
|
)
|
Net loss per share - diluted
|
|
$
|
(0.04
|
)
|
|
$
|
(0.31
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
(0.89
|
)
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
6,988
|
|
|
7,360
|
|
|
7,059
|
|
|
7,322
|
|
Diluted
|
|
6,988
|
|
|
7,360
|
|
|
7,059
|
|
|
7,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MRV Communications, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except par values)
(unaudited)
|
|
|
|
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
13,516
|
|
|
$
|
22,422
|
|
Restricted time deposits
|
|
194
|
|
|
235
|
|
Accounts receivable, net
|
|
43,118
|
|
|
43,513
|
|
Other receivables
|
|
10,924
|
|
|
11,012
|
|
Inventories, net
|
|
17,316
|
|
|
21,683
|
|
Income taxes receivable
|
|
-
|
|
|
558
|
|
Deferred income taxes
|
|
670
|
|
|
535
|
|
Other current assets
|
|
6,004
|
|
|
5,454
|
|
Total current assets
|
|
91,742
|
|
|
105,412
|
|
Property and equipment, net
|
|
4,605
|
|
|
4,890
|
|
Deferred income taxes
|
|
1,777
|
|
|
2,105
|
|
Intangible assets, net
|
|
1,275
|
|
|
1,364
|
|
Other assets
|
|
653
|
|
|
801
|
|
Total assets
|
|
$
|
100,052
|
|
|
$
|
114,572
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Short-term debt
|
|
$
|
-
|
|
|
$
|
5,402
|
|
Deferred consideration payable
|
|
233
|
|
|
233
|
|
Accounts payable
|
|
23,242
|
|
|
24,327
|
|
Accrued liabilities
|
|
14,732
|
|
|
14,545
|
|
Deferred revenue
|
|
13,394
|
|
|
13,527
|
|
Other current liabilities
|
|
408
|
|
|
297
|
|
Total current liabilities
|
|
52,009
|
|
|
58,331
|
|
Other long-term liabilities
|
|
4,623
|
|
|
5,271
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Preferred Stock, $0.01 par value: Authorized - 1,000 shares; no
shares issued or outstanding
|
|
-
|
|
|
-
|
|
Common Stock, $0.0017 par value:
|
|
|
|
|
Authorized - 16,000 shares
|
|
|
|
|
Issued - 8,318 shares in 2015 and 8,242 shares in 2014
|
|
|
|
|
Outstanding - 6,993 shares in 2015 and 7,386 in 2014
|
|
270
|
|
|
270
|
|
Additional paid-in capital
|
|
1,285,015
|
|
|
1,284,483
|
|
Accumulated deficit
|
|
(1,221,840
|
)
|
|
(1,220,492
|
)
|
Treasury stock - 1,325 shares in 2015 and 856 shares in 2014
|
|
(14,962
|
)
|
|
(10,412
|
)
|
Accumulated other comprehensive income
|
|
(5,063
|
)
|
|
(2,879
|
)
|
Total stockholders' equity
|
|
43,420
|
|
|
50,970
|
|
Total liabilities and stockholders' equity
|
|
$
|
100,052
|
|
|
$
|
114,572
|
|
|
|
|
|
|
|
|
|
|
MRV Communications, Inc.
Segmented Operating Data
(In thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
|
|
|
|
|
|
|
|
Network Equipment
|
|
$
|
24,536
|
|
|
$
|
21,833
|
|
|
$
|
46,813
|
|
|
$
|
44,152
|
|
Network Integration
|
|
18,195
|
|
|
21,355
|
|
|
34,783
|
|
|
41,408
|
|
Total before intersegment adjustments
|
|
42,731
|
|
|
43,188
|
|
|
81,596
|
|
|
85,560
|
|
Intersegment adjustments
|
|
(17
|
)
|
|
(64
|
)
|
|
(109
|
)
|
|
(118
|
)
|
Total
|
|
$
|
42,714
|
|
|
$
|
43,124
|
|
|
$
|
81,487
|
|
|
$
|
85,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Gross profit
|
|
|
|
|
|
|
|
|
Network Equipment
|
|
$
|
11,959
|
|
|
$
|
11,185
|
|
|
$
|
23,503
|
|
|
$
|
21,944
|
|
Network Integration
|
|
3,133
|
|
|
3,598
|
|
|
5,464
|
|
|
6,088
|
|
Total before intersegment adjustments
|
|
15,092
|
|
|
14,783
|
|
|
28,967
|
|
|
28,032
|
|
Intersegment adjustments
|
|
-
|
|
|
(1
|
)
|
|
1
|
|
|
1
|
|
Total
|
|
$
|
15,092
|
|
|
$
|
14,782
|
|
|
$
|
28,968
|
|
|
$
|
28,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating Expenses
|
|
|
|
|
|
|
|
|
Network Equipment
|
|
$
|
11,439
|
|
|
$
|
12,688
|
|
|
$
|
23,181
|
|
|
$
|
26,287
|
|
Network Integration
|
|
1,600
|
|
|
1,894
|
|
|
3,426
|
|
|
3,538
|
|
Total before intersegment adjustments
|
|
13,039
|
|
|
14,582
|
|
|
26,607
|
|
|
29,825
|
|
Corporate unallocated operating expenses and adjustments
|
|
1,250
|
|
|
1,326
|
|
|
2,369
|
|
|
3,183
|
|
Total
|
|
$
|
14,289
|
|
|
$
|
15,908
|
|
|
$
|
28,976
|
|
|
$
|
33,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Operating Income (loss)
|
|
|
|
|
|
|
|
|
Network Equipment
|
|
$
|
520
|
|
|
$
|
(1,503
|
)
|
|
$
|
322
|
|
|
$
|
(4,343
|
)
|
Network Integration
|
|
1,533
|
|
|
1,704
|
|
|
2,038
|
|
|
2,550
|
|
Total before intersegment adjustments
|
|
2,053
|
|
|
201
|
|
|
2,360
|
|
|
(1,793
|
)
|
Corporate unallocated operating loss and adjustments
|
|
(1,250
|
)
|
|
(1,327
|
)
|
|
(2,368
|
)
|
|
(3,182
|
)
|
Total
|
|
$
|
803
|
|
|
$
|
(1,126
|
)
|
|
$
|
(8
|
)
|
|
$
|
(4,975
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP reconciliation
Three Months Ended June 30, 2015 and 2014
(Unaudited, in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
Consolidated amounts
|
|
Network Equipment
|
|
Network Integration
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
42,714
|
|
|
$
|
43,124
|
|
|
$
|
24,519
|
|
|
$
|
21,769
|
|
|
$
|
18,195
|
|
|
$
|
21,355
|
|
Cost of revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenue
|
|
27,622
|
|
|
28,342
|
|
|
12,560
|
|
|
10,585
|
|
|
15,062
|
|
|
17,757
|
|
Stock-based charges
|
|
(25
|
)
|
|
(33
|
)
|
|
(25
|
)
|
|
(33
|
)
|
|
-
|
|
|
-
|
|
Non-GAAP adjusted cost of revenue
|
|
$
|
27,597
|
|
|
$
|
28,309
|
|
|
$
|
12,535
|
|
|
$
|
10,552
|
|
|
$
|
15,062
|
|
|
$
|
17,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
$
|
15,092
|
|
|
$
|
14,782
|
|
|
$
|
11,959
|
|
|
$
|
11,184
|
|
|
$
|
3,133
|
|
|
$
|
3,598
|
|
Stock-based charges
|
|
25
|
|
|
33
|
|
|
25
|
|
|
33
|
|
|
-
|
|
|
-
|
|
Non-GAAP adjusted gross profit
|
|
$
|
15,117
|
|
|
$
|
14,815
|
|
|
$
|
11,984
|
|
|
$
|
11,217
|
|
|
$
|
3,133
|
|
|
$
|
3,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Product development and engineering
|
|
$
|
5,310
|
|
|
$
|
5,392
|
|
|
$
|
5,310
|
|
|
$
|
5,391
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Stock-based charges
|
|
(44
|
)
|
|
(50
|
)
|
|
(44
|
)
|
|
(50
|
)
|
|
-
|
|
|
-
|
|
Non-GAAP Product development and engineering
|
|
$
|
5,266
|
|
|
$
|
5,342
|
|
|
$
|
5,266
|
|
|
$
|
5,341
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Selling, general & administrative
|
|
7,729
|
|
|
9,192
|
|
|
6,129
|
|
|
7,297
|
|
|
1,600
|
|
|
1,894
|
|
Stock-based charges
|
|
(76
|
)
|
|
(103
|
)
|
|
(67
|
)
|
|
(87
|
)
|
|
(9
|
)
|
|
(16
|
)
|
Severance
|
|
(159
|
)
|
|
(211
|
)
|
|
(159
|
)
|
|
(211
|
)
|
|
-
|
|
|
-
|
|
Litigation costs
|
|
(41
|
)
|
|
(82
|
)
|
|
-
|
|
|
(82
|
)
|
|
(41
|
)
|
|
-
|
|
Non-GAAP Selling, general & administrative
|
|
$
|
7,453
|
|
|
$
|
8,796
|
|
|
$
|
5,903
|
|
|
$
|
6,917
|
|
|
$
|
1,550
|
|
|
$
|
1,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Corporate charges (1)
|
|
1,250
|
|
|
1,324
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Stock-based charges
|
|
(100
|
)
|
|
(142
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Severance
|
|
(37
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Litigation costs
|
|
(4
|
)
|
|
(96
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Non-GAAP Corporate charges
|
|
$
|
1,109
|
|
|
$
|
1,086
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
GAAP operating expenses
|
|
$
|
14,289
|
|
|
$
|
15,908
|
|
|
$
|
11,439
|
|
|
$
|
12,688
|
|
|
$
|
1,600
|
|
|
$
|
1,894
|
|
Non-GAAP operating expenses
|
|
$
|
13,828
|
|
|
$
|
15,224
|
|
|
$
|
11,169
|
|
|
$
|
12,258
|
|
|
$
|
1,550
|
|
|
$
|
1,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss) (1)
|
|
$
|
803
|
|
|
$
|
(1,126
|
)
|
|
$
|
520
|
|
|
$
|
(1,504
|
)
|
|
$
|
1,533
|
|
|
$
|
1,704
|
|
Stock-based charges
|
|
245
|
|
|
328
|
|
|
136
|
|
|
170
|
|
|
9
|
|
|
16
|
|
Severance
|
|
196
|
|
|
211
|
|
|
159
|
|
|
211
|
|
|
-
|
|
|
-
|
|
Litigation costs
|
|
45
|
|
|
178
|
|
|
-
|
|
|
82
|
|
|
41
|
|
|
-
|
|
Non-GAAP adjusted operating income (loss)
|
|
$
|
1,289
|
|
|
$
|
(409
|
)
|
|
$
|
815
|
|
|
$
|
(1,041
|
)
|
|
$
|
1,583
|
|
|
$
|
1,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP reconciliation
(continued)
Three Months Ended June 30, 2015 and 2014
(Unaudited, in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
Consolidated amounts
|
|
Network Equipment
|
|
Network Integration
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Income (loss) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(280
|
)
|
|
$
|
(2,267
|
)
|
|
$
|
200
|
|
|
$
|
(1,577
|
)
|
|
$
|
1,011
|
|
|
$
|
575
|
Stock-based charges
|
|
245
|
|
|
328
|
|
|
136
|
|
|
170
|
|
|
9
|
|
|
16
|
Severance
|
|
196
|
|
|
211
|
|
|
159
|
|
|
211
|
|
|
-
|
|
|
-
|
Litigation costs
|
|
45
|
|
|
178
|
|
|
-
|
|
|
82
|
|
|
41
|
|
|
-
|
Income tax impact
|
|
(18
|
)
|
|
(71
|
)
|
|
-
|
|
|
(33
|
)
|
|
(16
|
)
|
|
-
|
Non-GAAP adjusted net income (loss)
|
|
$
|
188
|
|
|
$
|
(1,621
|
)
|
|
$
|
495
|
|
|
$
|
(1,147
|
)
|
|
$
|
1,045
|
|
|
$
|
591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
|
|
6,988
|
|
|
7,360
|
|
|
|
|
|
|
|
|
|
GAAP EPS - Basic and Diluted
|
|
$
|
(0.04
|
)
|
|
$
|
(0.31
|
)
|
|
|
|
|
|
|
|
|
Non-GAAP EPS - Basic and Diluted
|
|
$
|
0.03
|
|
|
$
|
(0.22
|
)
|
|
|
|
|
|
|
|
|
(1)
|
|
Consolidated amounts presented in the above tables include
corporate unallocated operating expenses and intersegment
adjustments which are not reflected in Network Equipment or
Network Integration, therefore amounts may not total.
|
|
|
|
Non-GAAP reconciliation
Six Months Ended June 30, 2015 and 2014
(Unaudited, in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
Consolidated amounts
|
|
Network Equipment
|
|
Network Integration
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP revenue
|
|
$
|
81,487
|
|
|
$
|
85,442
|
|
|
$
|
46,704
|
|
|
$
|
44,034
|
|
|
$
|
34,783
|
|
|
$
|
41,408
|
|
Cost of revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP cost of revenue
|
|
52,519
|
|
|
57,409
|
|
|
23,200
|
|
|
22,089
|
|
|
29,319
|
|
|
35,320
|
|
Stock-based charges
|
|
(55
|
)
|
|
(53
|
)
|
|
(55
|
)
|
|
(53
|
)
|
|
-
|
|
|
-
|
|
Non-GAAP adjusted cost of revenue
|
|
$
|
52,464
|
|
|
$
|
57,356
|
|
|
$
|
23,145
|
|
|
$
|
22,036
|
|
|
$
|
29,319
|
|
|
$
|
35,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross profit
|
|
$
|
28,968
|
|
|
$
|
28,033
|
|
|
$
|
23,504
|
|
|
$
|
21,945
|
|
|
$
|
5,464
|
|
|
$
|
6,088
|
|
Stock-based charges
|
|
55
|
|
|
53
|
|
|
55
|
|
|
53
|
|
|
-
|
|
|
-
|
|
Non-GAAP adjusted gross profit
|
|
$
|
29,023
|
|
|
$
|
28,086
|
|
|
$
|
23,559
|
|
|
$
|
21,998
|
|
|
$
|
5,464
|
|
|
$
|
6,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Product development and engineering
|
|
$
|
10,435
|
|
|
$
|
10,970
|
|
|
$
|
10,435
|
|
|
$
|
10,970
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Stock-based charges
|
|
(93
|
)
|
|
(73
|
)
|
|
(93
|
)
|
|
(73
|
)
|
|
-
|
|
|
-
|
|
Non-GAAP Product development and engineering
|
|
$
|
10,342
|
|
|
$
|
10,897
|
|
|
$
|
10,342
|
|
|
$
|
10,897
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Selling, general & administrative
|
|
16,174
|
|
|
18,855
|
|
|
12,748
|
|
|
15,317
|
|
|
3,426
|
|
|
3,538
|
|
Stock-based charges
|
|
(126
|
)
|
|
(130
|
)
|
|
(111
|
)
|
|
(122
|
)
|
|
(15
|
)
|
|
(8
|
)
|
Severance
|
|
(249
|
)
|
|
(472
|
)
|
|
(249
|
)
|
|
(472
|
)
|
|
-
|
|
|
-
|
|
Litigation costs
|
|
(475
|
)
|
|
(82
|
)
|
|
-
|
|
|
(82
|
)
|
|
(475
|
)
|
|
-
|
|
Non-GAAP Selling, general & administrative
|
|
$
|
15,324
|
|
|
$
|
18,171
|
|
|
$
|
12,388
|
|
|
$
|
14,641
|
|
|
$
|
2,936
|
|
|
$
|
3,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Corporate charges (1)
|
|
2,367
|
|
|
3,183
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Stock-based charges
|
|
(183
|
)
|
|
(219
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Severance
|
|
(37
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Litigation costs
|
|
(4
|
)
|
|
(96
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Warrant revaluation charges
|
|
-
|
|
|
(406
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Non-GAAP Corporate charges
|
|
$
|
2,143
|
|
|
$
|
2,462
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
GAAP operating expenses
|
|
$
|
28,976
|
|
|
$
|
33,008
|
|
|
$
|
23,183
|
|
|
$
|
26,287
|
|
|
$
|
3,426
|
|
|
$
|
3,538
|
|
Non-GAAP operating expenses
|
|
$
|
27,809
|
|
|
$
|
31,530
|
|
|
$
|
22,730
|
|
|
$
|
25,538
|
|
|
$
|
2,936
|
|
|
$
|
3,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income (loss) (1)
|
|
$
|
(8
|
)
|
|
$
|
(4,975
|
)
|
|
$
|
321
|
|
|
$
|
(4,342
|
)
|
|
$
|
2,038
|
|
|
$
|
2,550
|
|
Stock-based charges
|
|
457
|
|
|
475
|
|
|
259
|
|
|
248
|
|
|
15
|
|
|
8
|
|
Severance
|
|
286
|
|
|
472
|
|
|
249
|
|
|
472
|
|
|
-
|
|
|
-
|
|
Litigation costs
|
|
479
|
|
|
178
|
|
|
-
|
|
|
82
|
|
|
475
|
|
|
-
|
|
Warrant revaluation charges
|
|
-
|
|
|
406
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Non-GAAP adjusted operating income (loss)
|
|
$
|
1,214
|
|
|
$
|
(3,444
|
)
|
|
$
|
829
|
|
|
$
|
(3,540
|
)
|
|
$
|
2,528
|
|
|
$
|
2,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP reconciliation
(continued)
Six Months Ended June 30, 2015 and 2014
(Unaudited, in thousands except per share data)
|
|
|
|
|
|
|
|
|
|
Consolidated amounts
|
|
Network Equipment
|
|
Network Integration
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net Income (loss) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(1,348
|
)
|
|
$
|
(6,484
|
)
|
|
$
|
(129
|
)
|
|
$
|
(4,429
|
)
|
|
$
|
1,209
|
|
|
$
|
895
|
Stock-based charges
|
|
457
|
|
|
475
|
|
|
259
|
|
|
248
|
|
|
15
|
|
|
8
|
Severance
|
|
286
|
|
|
472
|
|
|
249
|
|
|
472
|
|
|
-
|
|
|
-
|
Litigation costs
|
|
479
|
|
|
178
|
|
|
-
|
|
|
82
|
|
|
475
|
|
|
-
|
Warrant revaluation charges
|
|
-
|
|
|
406
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Income tax impact
|
|
(192
|
)
|
|
(71
|
)
|
|
-
|
|
|
(33
|
)
|
|
(190
|
)
|
|
-
|
Non-GAAP adjusted net income (loss)
|
|
$
|
(318
|
)
|
|
$
|
(5,024
|
)
|
|
$
|
379
|
|
|
$
|
(3,660
|
)
|
|
$
|
1,509
|
|
|
$
|
903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
|
|
7,059
|
|
|
7,322
|
|
|
|
|
|
|
|
|
|
GAAP EPS - Basic and Diluted
|
|
$
|
(0.19
|
)
|
|
$
|
(0.89
|
)
|
|
|
|
|
|
|
|
|
Non-GAAP EPS - Basic and Diluted
|
|
$
|
(0.05
|
)
|
|
$
|
(0.69
|
)
|
|
|
|
|
|
|
|
|
(1)
|
|
Consolidated amounts presented in the above tables include
corporate unallocated operating expenses and intersegment
adjustments which are not reflected in Network Equipment or
Network Integration, therefore amounts may not total.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150810006176/en/
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