CHARLTON, Mass., May 15 /PRNewswire-FirstCall/ -- FiberCore, Inc.
(Nasdaq: FBCE), a leading manufacturer and global supplier of optical fiber
and preform for the telecommunication and data communications markets, today
announced results for the first quarter ended March 31, 2002.
Sales in the first quarter of 2002 decreased by 51% to $7.9 million from
$16.2 million in the first quarter of 2001 and decreased by 15% from fourth
quarter levels. Sales were negatively impacted by a 95% decline in sales to
South America, which is primarily a single-mode market. Overall, single-mode
sales were down in all regions, while multimode sales increased by
approximately 20%. Production at Xtal has been reduced in line with demand.
To help offset some of the reduction in sales, the Company continues to focus
on increasing both its multimode business and exports to markets outside
Brazil.
Gross profit in the quarter was $(185,000), compared to a gross profit of
$6.6 million, or 40.6% of sales, in the first quarter of 2001. FiberCore's
gross margin was severely impacted by continuing price declines in single-mode
fiber, lower production levels, and a $787,000 writedown of inventory to
reflect the deterioration of prices in the first quarter of 2002. Without the
inventory writedown, the gross profit would have been $602,000, or 7.6% of
sales, which compares favorably to the gross profit of $(632,000), or (6.8%)
of sales in the fourth quarter of 2001.
Cost cutting at the Company's facilities in the first quarter, as well as
planned cost cutting in the second quarter of 2002 are expected to save in
excess of $3.0 million annually, beginning in the third quarter of 2002. In
addition, we expect gross margins to increase with the implementation of
productivity improvements scheduled for the second half of the year.
R&D spending increased by 10% to $484,000 in the first quarter from
$440,000 in the first quarter of 2001. The Company plans to continue the
development of its recently patented Plasma Outside Vapor Deposition (POVD)
process as well as other manufacturing initiatives, which are all intended to
reduce production costs. Higher interest expenses in the quarter were
associated with the Company's expansion program in Germany.
The loss from operations in the first quarter of 2002 was approximately
$3.3 million compared to a profit from operations of approximately
$4.5 million in the first quarter of 2001, and a loss from operations in the
fourth quarter of 2001 of approximately $4.0 million.
FiberCore reported a net loss of $4.1 million, or $0.07 per diluted share,
in the first quarter of 2002. The net loss includes $502,000 of non-cash
interest expense in connection with a deemed beneficial conversion feature and
the fair value of warrants issued to a group of institutional investors
related to the issuance of $5.0 million of convertible, subordinated
debentures in January 2002. The charge to interest expense was offset by a
$287,000 increase in additional paid-in-capital and, accordingly, that amount
had no effect on the net equity, operations, or cash flow of the Company. In
the first quarter of 2001, the net profit was approximately $3.0 million, or
$0.05 per diluted share.
Dr. Aslami, President and CEO commented, "We continue to be impacted by
the weak industry environment, particularly in our single-mode fiber business
in South America. We do believe, however, that our business is either at or
near bottom. While recent industry estimates from market analysts call for a
19% reduction in the single-mode market in 2002, most are looking for a
rebound in the first half of 2003. The multimode market is expected to
continue to exhibit steady growth, albeit at lower levels than previously
projected, and we continue to expect a growing percentage of our business to
come from multimode fiber."
"At March 31, 2002, our backlog was approximately $283 million, down from
$292 million at the end of 2001. While approximately $48 million of the
backlog is scheduled for shipment in 2002, we are currently using $40 million
in our projections. Our backlog remains subject to change depending on
business conditions, including contractual re-pricing, rescheduling of
deliveries, and the booking of new orders for 2002 delivery. As a result of
our continued excellent relationships with our customers, we should benefit,
accordingly, when business begins to recover," added Dr. Aslami.
"We continue to focus on improving our cash flow and have further
downsized our plant in Brazil and reduced staffing by 56% at Xtal to better
align production to currently depressed market demand. We anticipate taking a
$0.5 million restructuring charge in the second quarter to account for costs
associated with this staffing reduction. We estimate that the anticipated
quarterly savings from the restructuring will be approximately $275,000.
While it remains extremely difficult to provide guidance in this market
environment, we do expect to see sequential revenue improvement, as well as
further improvement in gross profit and cash flow as a result of these
actions. In that regard, both operating income and cash flow from operations
have improved from fourth quarter levels and are expected to turn positive
beginning in the third quarter, although we still expect a net loss over the
next several quarters," concluded Dr. Aslami.
Due to management's travel schedule, FiberCore will be holding its
conference call to discuss its financial results and continuing business plans
on Monday, May 20 at 8:30 a.m. ET. Interested individuals are invited to
listen to the call live over the Internet at http://www.FiberCoreUSA.com or
http://www.viavid.com . The teleconference may also be accessed by dialing
(800) 240-6709. International callers can dial (303) 262-2142. A replay of
the teleconference will be available on http://www.FiberCoreUSA.com ,
http://www.viavid.com , or by dialing (800) 405-2236 or (303) 590-3000, using
passcode 472710.
FiberCore, Inc. develops, manufactures, and markets single-mode and
multimode optical fiber preforms and optical fiber for the telecommunications
and data communications markets. In addition to its standard multimode and
single-mode fiber, FiberCore also offers various grades of fiber for use in
laser-based systems up to 10 gigabits/sec, to help guarantee high bandwidths
and to suit the needs of Feeder Loop (also known as Metropolitan Area
Network), Fiber-to-the Curb, Fiber-to-the Home and Fiber-to-the Desk
applications. Manufacturing facilities are presently located in Jena, Germany
and Campinas, Brazil.
For more information about the company, its products, or shareholder
information please visit our Website at: http://www.FiberCoreUSA.com or contact us
at: Phone - 508-248-3900 or by FAX - 508-248-5588 or E-Mail:
sales@FiberCoreUSA.com; investor_relations@FiberCoreUSA.com
Except for the historical matters discussed above, the statements in this
press release are forward looking and are made pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. They are
based on the Company's current expectations and are subject to a number of
risks and uncertainties. Actual results may differ materially from those
projected as a result of certain general economic and business conditions;
loss of market share through competition; introduction of competing products
by other companies; changes in industry capacity; pressure on prices from
competition or from purchasers of the Company's products; availability of
qualified personnel; the delivery of an ability to commission new equipment as
scheduled; ability to obtain required financing; dependence on a limited
number of raw material suppliers; the loss or reduced creditworthiness of any
significant customers; and other factors detailed from time to time in the
Company's filings with the Securities and Exchange Commission.
FIBERCORE, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands except share data)
Three Months Ended
March 31,
2002 2001
(unaudited) (unaudited)
Net sales $7,885 $16,226
Cost of sales 7,283 9,635
Writedown of Inventory 787
Total Cost of Sales 8,070 9,635
Gross profit (loss) (185) 6,591
Operating expenses:
Selling, general and administrative expenses 2,612 1,697
Research and development 484 440
Income (loss) from operations (3,281) 4,454
Interest expense, net (1,085) (184)
Other income (expense) - net (85) (151)
Income (loss) before income taxes and
minority interest (4,451) 4,119
Provision for income taxes 103 (857)
Earnings (loss) before minority interest (4,348) 3,262
Minority interest in (income) loss of
subsidiaries 270 (283)
Net earnings (loss) $(4,078) $2,979
Basic earnings (loss) per share
of common stock $(0.07) $0.05
Diluted earnings (loss) per share
of common stock $(0.07) $0.05
Weighted average shares outstanding:
Basic 61,415,040 59,126,674
Diluted 61,415,040 65,676,715
SELECTED BALANCE SHEET DATA: March 31, December 31,
2002 2001
(unaudited) (audited)
Working capital (Deficiency) $(8,834) $(1,319)
Total assets 97,841 92,983
Long-term obligations 21,818 22,475
Total liabilities 58,452 49,491
Minority interest 4,847 5,117
Accumulated deficit (23,491) (19,413)
Stockholders' equity 34,542 38,375
SOURCE FiberCore, Inc.
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Related links:
http://www.FiberCoreUSA.com
CONTACT:
Dr. Mohd A. Aslami, President-CEO, or Robert
Lobban, CFO, both of FiberCore, Inc., +1-508-248-3900, or
General, Alison Ziegler, or Analysts, Peter Seltzberg, or Media,
Judith Sylk-Siegel, of FRB Weber Shandwick, +1-212-445-8000
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