CHARLTON, Mass., Nov. 14 /PRNewswire/ -- 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 third quarter ended September 30, 2001.
Sales in the third quarter of 2001 decreased by 33% to $8.8 million from
$13.2 million in the year ago period, in line with recently revised guidance.
Sales were negatively impacted at the Company's Xtal FiberCore Brasil S.A.
facility by a breach of contract situation with one of its larger South
American customers, which has since been resolved, as well as a general
softening in the South American market. Sales for FiberCore Jena ("FCJ")
increased by 36% over the same period in 2000. The Company reported a net
loss of $2.2 million, or $0.04 per diluted share, in the third quarter of
2001. This compares to a net profit of approximately $0.8 million, or $0.01
per diluted share, in the year ago quarter. The impact of foreign exchange
losses penalized net income by approximately $1.6 million, or $0.03 per share,
in the third quarter of 2001. These losses were due to a weakening of the
Brazilian Real in the latter portion of the quarter that partially reflected
the uncertainty in the financial situation in Argentina. The losses were
primarily attributable to outstanding short-term loan balances. The Real has
since strengthened and a portion of this loss could be offset if the current
exchange rate remains in effect through year-end.
Gross profit in the quarter was $3.1 million, or 35% of sales, compared to
$3.9 million, or 29% of sales, in the year ago period. FiberCore's gross
margin continued to benefit from year-over-year manufacturing process
improvements and strong multimode shipments from FCJ.
Operating margin was 3.8% for the quarter, a significant decline from the
first six months of 2001, primarily as a result of reduced volumes. R&D
spending increased by 115% to $502,000 in the third quarter from $233,000 in
the prior year period, driven in part by spending on the Company's recently
patented Plasma Outside Vapor Deposition (POVD) process as well as other
manufacturing initiatives.
For the first nine months of 2001, sales increased by 87% to $43.1 million
from $23.1 million in the first nine months of 2000. The prior year period
includes only four months of sales from Xtal. Excluding Xtal, the increase in
sales for the period was 41%. Net income for the first nine months of 2001
was $3.8 million, or $0.06 per share, compared to a net loss of $5.0 million,
or $0.11 per share. Included in the prior year period is non-cash, interest
charges of $5.4 million, or $0.11 per share.
Dr. Aslami, President and CEO commented, "The third quarter was difficult
for FiberCore as we were not able to escape the softness that has been
prevalent throughout our industry for most of 2001. With the sudden reduction
in capital expenditures by the telecom carriers and the related high levels of
inventory currently maintained by the major fiber manufacturers, we
experienced declines in both demand and pricing during the quarter,
particularly in our single-mode fiber business in South America. This, along
with the customer situation in South America, led to increased inventories at
Xtal and temporary reductions in production."
"However, we expect that the third quarter will be the low point for
FiberCore," said Dr. Aslami. "We have been working diligently to shift sales
into other regions of the world where demand for our products remains strong,
albeit at lower prices. We are seeing success in these efforts. We
anticipate trimming inventories to more normal levels over the next few months
and expect our sales to rebound in the fourth quarter. This should also
translate into improved results compared to third quarter levels and we
foresee returning operations to full capacity in 2002."
Dr. Aslami continued, "The softening in the South American market has also
impacted our local financing efforts. As a result of the circumstances, we
have slowed the planned capacity expansion at Xtal until the market stabilizes
further. However, we will continue to invest in equipment to improve our
manufacturing processes and reduce our production costs."
"At September 30, 2001, our backlog was over $350 million, up from
$320 million at the end of the second quarter and $190 million at year-end
2000. This increase includes some contracts that extend out through 2005 and
provides a level of confidence in our business projections and capacity
planning. As the only independent fiber supplier, we continue to be viewed as
a favored supply source of independent cablers around the world. These two
factors as well as our new technology initiatives and recently strengthened
management team make us confident in our ability to continue to execute on our
long-term growth plan," added Dr. Aslami.
"For 2001, we still expect revenue to increase between 50% and 65% over
2000 levels. As the industry works to better equalize supply and demand,
prices should begin to stabilize in the coming months. While lower fiber
prices will continue to impact 2002 at the gross margin level, this will be
partially offset by our technology and manufacturing process improvements.
Despite the current industry slowdown, we continue to anticipate strong growth
in 2002 and beyond," concluded Dr. Aslami.
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 Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
(unaudited) (unaudited) (unaudited) (unaudited)
Net sales $8,823 $13,188 $43,116 $23,054
Cost of sales 5,734 9,329 25,980 16,773
Gross profit 3,089 3,859 17,136 6,281
Operating expenses:
Selling, general and
administrative
expenses 2,253 1,665 6,212 3,338
Research and development 502 233 1,524 663
Income (loss) from
operations 334 1,961 9,400 2,280
Interest expense, net (943) (581) (1,609) (6,324)
Other income (expense)
- net (1,607) 53 (1,684) 80
Income (loss)
before income
taxes and minority
interest (2,216) 1,433 6,107 (3,964)
Provision for income
taxes (308) (507) (2,103) (902)
Earnings (loss)
before minority
interest (2,524) 926 4,004 (4,866)
Minority interest
in (income) loss
of subsidiaries 283 (90) (216) (127)
Net earnings
(loss) $(2,241) $836 $3,788 $(4,993)
Basic earnings
(loss) per share
of common stock $(0.04) $0.02 $0.06 $(0.11)
Diluted earnings
(loss) per share
of common stock $(0.04) $0.01 $0.06 $(0.11)
Weighted average shares
outstanding:
Basic 60,205,880 52,803,670 59,636,649 47,073,042
Diluted 60,205,880 59,482,582 65,633,372 47,073,042
SELECTED BALANCE SHEET DATA:
September 30, December 31,
2001 2000
(unaudited) (audited)
Working capital $5,271 $2,047
Total assets 88,791 67,453
Long-term obligations 20,069 9,849
Total liabilities 44,537 28,551
Minority interest 4,966 4,750
Accumulated deficit (16,105) (19,893)
Stockholders' equity 39,288 34,152
SOURCE FiberCore, Inc.
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Related links:
http://www.FiberCoreUSA.com
CONTACT:
Dr. Mohd A. Aslami, President and CEO, or
Robert Lobban, CFO, both of FiberCore, Inc., +1-508-248-3900;
General Info., Alison Ziegler, or Analyst Info., Peter Seltzberg,
both of FRB Weber Shandwick, +1-212-445-8400
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