The Company’s Optical Communications Systems business unit saw a 12% sequential increase.
CHATSWORTH, Calif.--(BUSINESS WIRE)--Mar. 15, 2012--MRV Communications, Inc. (OTCQB: MRVC) (“MRV” or the “Company”), a leading provider of optical communications network infrastructure equipment and integration and managed services, today announced financial results for the quarter and year ended December 31, 2011.
Commenting on the Company’s financial results announced today, Barry Gorsun, MRV’s chief executive officer, stated, “As the year progressed we experienced continued momentum, enabling us to report 19% sequential revenue growth in the fourth quarter. The strong end to the year resulted in another year of record revenue. While we are pleased with our top-line performance, we continue to implement initiatives designed to improve operating income, in part by removing costs, enhancing productivity and driving sales. We also focused on driving shareholder value in 2011, building off our efforts in 2010. As we enter 2012, we will continue to identify opportunities to enhance shareholder value while supporting our business units.”
MRV reported fourth quarter 2011 revenue of $74.1 million, compared with revenue of $62.5 million in the third quarter and $73.6 million in the fourth quarter of 2010. The $11.6 million sequential increase is attributable to a $9.0 million increase in the Company’s Network Integration group and, to a lesser degree, a $2.9 million increase at MRV’s Network Equipment group, partially offset by an increase in inter-segment sales between each of these two business units, which are eliminated in the Company’s consolidated reporting. Both reporting segments benefited from a seasonally strong fourth quarter with the largest sequential increases in revenue coming from the French and Italian Network Integration subsidiaries, which had softer third quarters due to weak local telecom markets. The Company’s Optical Communications Systems business unit saw a 12% sequential increase.
Gross margin for the fourth quarter of 2011 was 37.9%, down from 40.2% last quarter and 39.2% in the fourth quarter of 2010. The sequential decrease was due primarily to the Company’s Italian business unit in the Network Integration group and a decrease in the proportion of revenue contributed by the Network Equipment group which has higher margins.
Operating expenses in the fourth quarter of $33.4 million included a $7.1 million goodwill impairment charge related to MRV’s Scandinavian subsidiary. Excluding this charge, operating expenses in the fourth quarter were $26.3 million, or 35% of revenue, compared to $21.6 million, or 35% of revenue, in the third quarter and $25.8 million, or 35% of revenue, in the fourth quarter of the prior year. The $4.7 million sequential increase included several charges that impact comparability to prior periods including $1.4 million in payments to stock option and restricted stock holders to compensate them for the loss in value of their equity grants due to the $75 million special dividend paid in November 2011, $0.5 million in severance to our former CEO, and $0.2 million in a litigation settlement. The remaining increase was due primarily to higher sales and marketing costs due to normal seasonality. Operating loss for the quarter was $5.3 million, compared with operating income of $3.4 million in the fourth quarter of 2010. This was the result of a $7.1 million goodwill impairment charge in one of MRV’s business units, and $2.1 million in other charges as described above.
On a full year basis, MRV reported revenues of $266.8 million, a $10.7 million, or 4%, increase compared to $256.0 million for 2010. Both operating segments contributed to a decline in gross margins from 43.2% last year to 40.3% in 2011.
A more detailed discussion of MRV’s 2011 fourth quarter and full year financial results, including an analysis by business segment, is included in the Management Discussion and Analysis section of the Company’s Form 10-K filed ton March 15 (2012).
About MRV Communications, Inc.
MRV Communications, Inc. is a leading global provider of carrier Ethernet, WDM optical transport, infrastructure management equipment and solutions, as well as network integration and managed services. MRV’s solutions enable the delivery and provisioning of next-generation optical transport and carrier Ethernet services over any fiber infrastructure. MRV provides equipment and services worldwide to telecommunications service providers, enterprises, and governments, enabling network evolution and increasing efficiency, while reducing complexity and costs. Through its subsidiaries, MRV operates R&D centers in North America and Europe, along with support centers and sales offices around the world. For more information about MRV, visit http://www.mrv.com.