Reports Q2 Revenues of $23.2 Million, a 22% Increase Over Prior
Year CHICAGO, Nov. 27 /PRNewswire-FirstCall/ -- Stratos
International, Inc. (NASDAQ:STLW) today announced financial results
for its second quarter ended October 31, 2006. Sales for the second
quarter of fiscal 2007 were $23.0 million. Stratos also recorded
license fees and royalty income of $0.2 million. Total revenues
were $23.2 million in the second quarter of fiscal 2007, a
sequential increase of 10% over total revenues of $21.2 million in
the first quarter of fiscal 2007, and a 22% increase over total
revenues of $19.0 million in the second quarter of fiscal 2006. The
net income attributable to common shareholders for the second
quarter of fiscal 2007 was $0.7 million, or $0.05 per share. By
comparison, in the second quarter of fiscal 2006, Stratos reported
a net loss attributable to common shareholders of $0.4 million or
$0.03 per share. Andy Harris, President and CEO of Stratos,
remarked, "We have taken a disciplined and measured approach in
managing this business with the goal of turning this company
profitable in a sustainable manner. Our goal is to build for the
long-term success of Stratos by pursuing niche opportunities
yielding high gross margins with a broad range of optical and
electronic product offerings. We generated $2.5 million of EBITDA
this quarter, making this our seventh consecutive quarter of
positive EBITDA." Year-to-Date Results Sales for the 6 months ended
October 31, 2006 were $44.1 million. Stratos also recorded license
fees and royalty income of $0.3 million. For comparison, sales for
the 6 months ended October 31, 2005 were $39.4 million, and license
fees and royalties were $0.2 million. The net loss attributable to
common shareholders for the 6 months ended October 31, 2006 was
$0.8 million, or $0.06 per share. By comparison, for the 6 months
ended October 31, 2005, Stratos reported a net loss attributable to
common shareholders of $1.6 million or $0.12 per share. Common
shares outstanding as of October 31, 2006 were 14,489,925 shares.
Cash and short-term investments at October 31, 2006 were $26.1
million compared to $30.7 million at April 30, 2006. Capital
expenditures were $0.3 million in the second quarter of fiscal
2007, compared to $0.2 million in the second quarter of fiscal
2006. Stratos repurchased 96,500 shares of its common stock in the
open market at a cost of $0.6 million during the second quarter of
fiscal 2007. Second 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 (800) 642-1687 or (706) 645-9291 and then
following the prompts to enter Conference ID Number 2017967. 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 environments
application. 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 100 patents.
Stratos currently serves more than 1,300 active customers, who are
primarily in telecom/datacom, military/aerospace and video markets.
Stratos' headquarters is in Chicago, Illinois, USA. 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 Six Months Ended October 31 October 31 2006 2005 2006
2005 Revenues: Net sales 23,036 18,949 44,100 39,429 License fees
and royalties 196 65 327 209 Total revenues 23,232 19,014 44,427
39,638 Cost of revenues 14,419 12,262 29,107 24,715 Gross profit
8,813 6,752 15,320 14,923 Operating expenses Research and
development 2,209 1,839 4,121 3,843 Sales and marketing 2,697 2,536
5,238 5,083 General and administrative 3,652 3,562 7,637 7,866
Restructuring and other charges 483 483 Total operating expenses
8,558 8,420 16,996 17,275 Income (loss) from operations 255 (1,668)
(1,676) (2,352) Investment income, net 362 295 725 547 Other income
156 1,027 462 381 Income (loss) before income taxes 773 (346) (489)
(1,424) Income tax provision - - - (9) Net income (loss) 773 (346)
(489) (1,433) Preferred Stock Dividends (25) (88) (312) (175) Net
income (loss) attributable to Common shareholders (Basic and
Diluted) 748 (434) (801) (1,608) Net income (loss) per share
attributable to common shareholders (Basic and Diluted) $0.05
($0.03) ($0.06) ($0.12) Weighted average number of Common Shares
outstanding: Basic 13,658,285 13,921,333 13,679,134 13,913,469
Weighted average number of Common Shares outstanding: Diluted
14,624,926 13,921,333 13,679,134 13,913,469 STRATOS INTERNATIONAL
INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (In
thousands, except per share amounts and shares outstanding) October
31 April 30 2006 2006 Assets Current assets Cash and cash
equivalents $7,993 $11,742 Short term investments 18,150 19,000
Accounts receivable - net 14,724 13,606 Inventories 18,290 15,482
Prepaid expenses and other current assets 818 590 Refundable income
taxes 1,837 1,837 Total current assets 61,812 62,257 Property plant
and equipment, net 14,204 16,437 Intangible assets, net of
amortization 11,141 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 $95,521 $99,154 Liabilities and shareholders' equity:
Current liabilities Accounts payable $4,945 $4,724 Accrued expenses
5,279 6,028 Income taxes payable 207 216 Total current liabilities
10,431 10,968 Redeemable Preferred Stock 982 1,979 Total
liabilities 11,413 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 October 31, 2006 and April 30, 2006,
respectively - - Common stock, $0.01 par value: Authorized
20,000,000 shares, 15,072,743 shares issued and 14,489,925 shares
outstanding at October 31, 2006; 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
323,303 322,607 Unearned Compensation (4,270) (4,400) Accumulated
other comprehensive income (283) (9) Accumulated deficit (231,070)
(230,269) Total shareholders' equity 84,108 86,207 Total
liabilities and shareholders' equity $95,521 $99,154 DATASOURCE:
Stratos International, Inc. CONTACT: Barry Hollingsworth, Vice
President & Chief Financial Officer, of Stratos International,
Inc., +1-708-457-2379, or Web site:
http://www.stratosinternational.com/
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