Stratos (NASDAQ:STLW)
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Reports Q3 Revenues of $22.3 Million, a 16% Increase over Prior Year
CHICAGO, March 1 /PRNewswire-FirstCall/ -- Stratos International, Inc. (NASDAQ:STLW), today announced financial results for its third quarter ended January 31, 2007.
Sales for the third quarter of fiscal 2007 were $22.1 million. Stratos also recorded license fees and royalty income of $0.2 million. Total revenues were $22.3 million in the third quarter of fiscal 2007, a 16% increase over total revenues of $19.2 million in the third quarter of fiscal 2006.
The net income attributable to common shareholders for the third quarter of fiscal 2007 was $1.5 million, or $0.10 per share on a diluted basis. By comparison, in the third quarter of fiscal 2006, Stratos reported a net loss attributable to common shareholders of $1.1 million or $0.08 per share on a diluted basis.
Andy Harris, President and CEO of Stratos, remarked, "we are pleased with our fiscal third quarter results. Our strategy of providing unique solutions and quick turnaround capabilities has resulted in a 320 basis-point increase in gross margin over the prior year. Our goal is to continue to unlock value in this company by improving operations and turning this company profitable in a sustainable manner. We generated $2.6 million of EBITDA this quarter, making this our eighth consecutive quarter of positive EBITDA."
Year-to-Date Results
Sales for the nine months ended January 31, 2007 were $66.2 million. Stratos also recorded license fees and royalty income of $0.5 million. For comparison, sales for the nine months ended January 31, 2006 were $58.4 million, and license fees and royalties were $0.4 million.
The net income attributable to common shareholders for the nine months ended January 31, 2007 was $0.7 million, or $0.05 per share. By comparison, for the nine months ended January 31, 2006, Stratos reported a net loss attributable to common shareholders of $2.7 million or $0.19 per share.
Common shares outstanding as of January 31, 2007 were 14,494,647 shares. Cash and short-term investments at January 31, 2007 were $31.3 million compared to $30.7 million at April 30, 2006. Capital expenditures were $0.2 million in the third quarter of fiscal 2007, compared to $0.1 million in the third quarter of fiscal 2006.
Third quarter and year-to-date results are preliminary, as the company's auditors have not completed their quarterly review process.
Webcast of Investor Call Available Today at 4:00PM Central Time
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 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 (888) 203-1112 or (719) 457-0820 and then following the prompts to enter conference ID 9280104. 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 environment applications. 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 150 US patents issued and pending. Stratos currently serves more than 1,300 active customers, primarily in the telecom/datacom, military/aerospace and video markets.
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 Nine Months Ended
January 31 January 31
2007 2006 2007 2006
Revenues:
Net sales 22,101 $18,993 66,202 $58,422
License fees and
royalties 167 201 494 410
Total revenues 22,268 19,194 66,696 58,832
Cost of revenues 13,553 12,304 42,660 37,020
Gross profit 8,715 6,890 24,036 21,812
Operating expenses
Research and development 1,939 2,299 6,060 6,142
Sales and marketing 2,621 2,389 7,859 7,471
General and
administrative 3,741 3,921 11,378 11,787
Restructuring and
other charges 359 842
Litigation settlements,
net (700) (700)
Total operating expenses 8,301 8,268 25,297 25,542
Income (loss) from
operations 414 (1,378) (1,261) (3,730)
Interest income, net 713 340 1,437 887
Other income 405 16 867 397
Income (loss) before
income taxes 1,532 (1,022) 1,043 (2,446)
Income tax provision (17) 41 (17) 32
Net income (loss) 1,515 (981) 1,026 (2,414)
Preferred Stock
Dividends (17) (88) (329) (263)
Net income (loss)
attributable to
Common shareholders
(Basic and Diluted) 1,498 (1,069) 697 (2,677)
Net incomeloss per share
attributable to common
shareholders
(Basic) $0.11 ($0.08) $0.05 ($0.19)
(Diluted) $0.10 ($0.08) $0.05 ($0.19)
Weighted average number of
Common Shares
outstanding:
Basic 13,750,904 13,875,654 13,653,864 13,900,956
Weighted average number of
Common Shares
outstanding:
Diluted 14,672,975 13,875,654 14,579,675 13,900,956
STRATOS INTERNATIONAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except per share amounts and shares outstanding)
January 31 April 30
2007 2006
Assets
Current assets
Cash and cash equivalents $13,111 $11,742
Short term investments 18,150 19,000
Accounts receivable - net 14,147 13,606
Inventories 18,993 15,482
Prepaid expenses and other current assets 706 2,427
Total current assets 65,107 62,257
Property plant and equipment, net 12,960 16,437
Intangible assets, net of amortization 10,854 11,832
Goodwill and other long lived assets 5,664 5,664
Assets held for sale 2,600 2,864
Other assets 100 100
Total assets $97,285 $99,154
Liabilities and shareholders' equity:
Current liabilities
Accounts payable $4,543 $4,724
Accrued expenses 5,783 6,028
Income taxes payable 186 216
Total current liabilities 10,512 10,968
Redeemable Preferred Stock 982 1,979
Total liabilities 11,494 12,947
Shareholders' equity
Preferred stock, $0.01 par value:
Authorized 1,000,000 shares, issued and
outstanding 9,820 and 19,790 shares of
Series B redeemable preferred stock at
January 31, 2007 and April 30, 2006,
respectively - -
Common stock, $0.01 par value:
Authorized 20,000,000 shares, 15,077,455
shares issued and 14,494,647 shares
outstanding at January 31, 2007;
14,942,164 shares issued and 14,640,643
shares outstanding at April 30, 2006. 151 149
Cost of shares in treasury (3,723) (1,871)
Additional paid in capital 319,437 322,607
Unearned Compensation - (4,400)
Accumulated other comprehensive income (502) (9)
Accumulated deficit (229,572) (230,269)
Total shareholders' equity 85,791 86,207
Total liabilities and shareholders' equity $97,285 $99,154
DATASOURCE: Stratos International, Inc.
CONTACT: Barry Hollingsworth, Vice President & Chief Financial Officer,
Stratos International, Inc., +1-708-457-2379,
Web site: http://www.stratosinternational.com/