EXHIBIT 99.1
BUSINESS UPDATE
**For Immediate Release**
Multilink Technology Corporation Reports
Fourth Quarter 2001 Results
. Revenues for the quarter of $26.7 million
. Introduced smallest form factor 10 Gb/s Silicon Germanium chipset
. Received ISO 9001:2000 Certification
Somerset, New Jersey U.S.A. - January 29, 2002 - Multilink Technology
Corporation (Nasdaq: MLTC), a leading provider of advanced semiconductor-based
solutions that accelerate the deployment of high-speed optical networks, today
reported results for the fourth quarter and fiscal year ended December 31, 2001.
Total revenues for the fourth quarter of 2001 were $26.7 million, compared with
$37.6 million for the third quarter of 2001 and $25.4 million in the fourth
quarter of 2000. Pro forma gross margins for the fourth quarter of 2001 were
57.9%, compared with 64.7% in the third quarter of 2001 and gross margins of
63.4% in the fourth quarter of 2000. Pro forma net loss for the fourth quarter
of 2001 was $3.6 million, or diluted EPS ($0.05), compared with net income of
$1.6 million, or diluted EPS $0.02, in the third quarter of 2001 and net income
of $1.1 million, or diluted EPS $0.01, in the fourth quarter of 2000.
Total revenues for the year ended December 31, 2001 were $130.5 million,
compared with $72.7 million for the year ended December 31, 2000. Pro forma
gross margins for the years ended December 31, 2001 and 2000 were 62.8%. Pro
forma net loss for the year ended December 31, 2001 was $0.7 million, or diluted
EPS ($0.01), compared with net income of $6.4 million, or diluted EPS $0.08, for
the same period in 2000.
Dr. Richard Nottenburg, Multilink's Co-Chairman, President and Chief Executive
Officer commented on the quarter, "We are pleased that we executed within the
range that we provided for the quarter. However, we continue to be disappointed
by the near-term demand in the optical transport space and the lack of
improvement in the end markets of our customers. We expect that revenues will
decline sequentially to between $10 and $12 million during the first quarter of
2002."
Dr. Nottenburg continued, "At the same time, we have secured a number of
important design wins across the breadth of our expanding product line,
including our SuperFEC(TM). We have also enlarged our total addressable market
and increased the number of relationships we have with customers that will be
the leaders in 2002 and beyond. We expect to begin realizing revenues from our
design wins from an expanded customer base during the second half of 2002."
"Throughout the downturn, we will continue to expand upon our Company's skill-
sets within product development to continue our technological leadership and
gain marketshare, while streamlining our overhead and infrastructure within a
totally fabless model," concluded Dr. Nottenburg.
GAAP Basis Results
Pro forma operating results exclude certain items reported under generally
accepted accounting principles (GAAP), including deferred stock compensation in
each period and certain write downs to inventories which occurred in the first
and fourth quarters of 2001. Pro forma operating results include cancellation
payments received by the Company. Gross margins under GAAP for the fourth
quarter of 2001 were 41.5%, compared with 63.0% in the third quarter of 2001 and
gross margins of 62.0% in the fourth quarter of 2000. Net loss attributable
to common shareholders under GAAP for the fourth quarter of 2001 was $8.4
million, or EPS ($0.12), compared with net income attributable to common
shareholders of $1.4 million, or diluted EPS $0.01, in the third quarter of 2001
and net income attributable to common shareholders of $1.8 million, or diluted
EPS $0.02, in the fourth quarter of 2000.
Gross margins under GAAP were 54.5% for the year ended December 31, 2001,
compared with gross margins of 61.7% for the same period in 2000. The net loss
attributable to common shareholders under GAAP for the year ended December 31,
2001 was $12.4 million, or EPS ($0.25), compared with a net loss attributable to
common shareholders of $10.1 million, or EPS ($0.34), for the same period in
2000.
Recent Product Introductions
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Date Product Function / Description
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The MTC21208 is a high-end transponder that complies with the 300
January 40km to 80km pin Multi-Source Agreement (MSA) specifications and also offers an
21, 2002 Transponder extended feature set. Customers currently using our transponder
MTC21208 solution have expressed the need to support distances of up to
80km. This product introduction allows Multilink to deliver a
compact, low power solution that provides system vendors a
reduction in cost by increasing their system reach and bandwidth
capacity. By integrating our superior products into a compact,
high performing, low power unit, we simplify our customers' design
efforts, shorten their time to market and reduce their cost of
operations.
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The high performance MTC5593 Clock and Data Recovery (CDR) module
December Clock and Data provides customers with several advantages, including more than a
4, 2001 Recovery (CDR) 40% reduction in size (60.9 x 27.9 x 12.7 mm) from Multilink's
Module previous generation CDR's, low power dissipation and superior
MTC5593 jitter performance. The module is designed to regenerate the
clock and data component from an incoming 12 Gb/s
Non-Return-to-Zero (NRZ) or a Return-to-Zero (RZ) data stream.
The MTC5593 demonstrates Multilink's ability to combine its
leading-edge technology, integrated circuits and higher level
assembly expertise into top-tier products in cost, size, power and
performance.
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The industry's smallest form factor 10 Gb/s Silicon Germanium
November BGA Packaged chipset, the MTC1235 Multiplexer with integrated Clock Multiplier
27, 2001 SerDes Chipset Unit (MUX-CMU) and MTC1236 Demultiplexer with integrated Clock and
Introduced Data Recovery (CDR-DMUX). This high performance, low power
chipset is provided in a unique, small form factor (10 x 10 mm)
ceramic Ball Grid Array (BGA), which reduces the size of optical
networking equipment for Multilink customers.
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Earnings Conference Call
Multilink will hold a conference call to discuss quarterly results and financial
guidance today, January 29, 2002, at 5:00 pm EST. The conference call will be
broadcast over the Internet. To listen to the call, please visit Multilink's
web-site at http://www.mltc.com and then select Investor Relations and the link
to `4th Quarter Earnings Announcement' approximately ten minutes before the
start of the call. Please note that it will be necessary to have Windows Media
Player installed on your computer to listen to the call and that this will be
available for downloading from the Multilink site. A replay of the call, in
it's entirety, will be available on the website for approximately seven days
following the live call.
About Multilink:
Multilink Technology Corporation designs, develops and markets advanced mixed
signal integrated circuits, modules, VLSI products and higher-level assemblies
designed to enable the
next generation of high-speed optical networking systems. By providing our
customers with sophisticated products developed by utilizing systems level
expertise and a high level of component integration, we facilitate our
customers' ability to meet their time-to-market requirements. Our products span
the markets from Metro to Ultra Long Haul optical transport equipment with a
focus on the fastest commercially available speeds of 10 Gb/s and higher.
Multilink is headquartered in Somerset, New Jersey with additional offices
located throughout North America and Europe.
Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:
This release and our comments during the conference call may contain forward-
looking statements that are based on our current expectations, estimates and
projections about our industry, and reflect management's beliefs and certain
assumptions made by us based upon information available to us at this time.
Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," "may," "will" and variations of these words or similar expressions
are intended to identify forward-looking statements. In addition, any statements
that refer to expectations, projections or other characterizations of future
events or circumstances, including any underlying assumptions, are forward-
looking statements. These statements speak only as of the date hereof. Such
information is subject to change, and we will not necessarily inform you of such
changes. These statements are not guarantees of future performance and are
subject to risks, uncertainties and assumptions that are difficult to predict.
Therefore, our actual results could differ materially and adversely from those
expressed in any forward-looking statements as a result of various factors.
Important factors that may cause such a difference for Multilink include, but
are not limited to, general economic conditions and specific conditions in the
markets we address, including the recent significant economic slowdown in the
technology sector and semiconductor industry; the timing, rescheduling or
cancellation of significant customer orders; the loss of a key customer; our
ability to specify, develop or acquire, complete, introduce, market and
transition to volume production new products and technologies in a timely
manner; the timing of customer-industry qualification and certification of our
products and the risks of non-qualification or non-certification; the rate at
which our present and future customers and end-users adopt Multilink's
technologies and products in our target markets; delays in the adoption and
acceptance of industry standards in those markets; the qualification,
availability and pricing of competing products and technologies and the
resulting effects on revenues and pricing of our products; our ability to retain
and hire key executives, technical personnel and other employees in the numbers,
with the capabilities, and at the compensation levels needed to implement our
business and product plans; our ability to protect our intellectual property;
the availability and pricing of foundry and assembly capacity and raw materials;
fluctuations in the manufacturing yields of our third party semiconductor
foundries and other problems or delays in the fabrication, assembly, testing or
delivery of our products; the risks of producing products with new suppliers and
at new fabrication and assembly facilities; the effects of new and emerging
technologies; the risks and uncertainties associated with our international
operations; changes in our product or customer mix; the quality of our products
and any remediation costs; the level of orders received that can be shipped in a
fiscal quarter; and other factors.
Our forthcoming Annual Report on Form 10-K, our Registration Statement on Form
S-1 and our other SEC filings discuss some of the important risk factors that
may affect our business, results of operations and financial condition. We
undertake no obligation to revise or update publicly any forward-looking
statements for any reason.
- Tables Follow -
Multilink Technology Corporation
Consolidated Statement of Operations
(in thousands, except for per share amounts)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------------------------------
2001 2000 2001 2000
-------- ------- -------- -------
Total revenues $ 26,694 $25,374 $130,468 $72,721
Cost of revenues, excluding deferred stock compensation 11,237 9,292 48,574 27,048
Inventory write down 3,892 - 8,788 -
Deferred stock compensation 483 360 2,051 834
-------- ------- -------- -------
Total cost of revenues 15,612 9,652 59,413 27,882
-------- ------- -------- -------
Gross profit 11,082 15,722 71,055 44,839
Operating expenses:
Research and development, excluding deferred stock
compensation 14,559 9,008 54,741 24,624
Sales and marketing, excluding deferred stock
compensation 4,302 2,723 17,387 7,130
General and administrative, excluding deferred stock
compensation 2,646 3,303 11,795 7,611
Deferred stock compensation 2,677 2,136 9,895 6,076
Research & development - warrant issuance - - - 6,375
-------- ------- -------- -------
Total operating expenses 24,184 17,170 93,818 51,816
Operating loss (13,102) (1,448) (22,763) (6,977)
Other income and expenses 273 725 953 1,561
-------- ------- -------- -------
Loss before benefit for income taxes (12,829) (723) (21,810) (5,416)
Benefit for income taxes (4,398) (2,595) (9,446) (1,748)
-------- ------- -------- -------
Net income (loss) $ (8,431) $ 1,872 $(12,364) $(3,668)
======== ======= ======== =======
Accretion of preferred stock to redemption value - 24 24 95
Dividend related to warrant issuance - - - 6,375
Net income (loss) per common share
Basic $ (0.12) $ 0.06 $ (0.25) $ (0.34)
======== ======= ======== =======
Diluted $ (0.12) $ 0.02 $ (0.25) $ (0.34)
======== ======= ======== =======
Weighted average shares-basic 68,762 30,000 49,989 30,000
-------- ------- -------- -------
Weighted average shares-diluted 68,762 76,431 49,989 30,000
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Multilink Technology Corporation
Reconciliation of Pro forma Net Income and Earnings Per Share
(in thousands, except for per share amounts)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
-----------------------------------------
2001 2000 2001 2000
------- ------- -------- ---------
Net income (loss) attributable to common shareholders $(8,431) $ 1,848 $(12,388) $(10,138)
======= ======= ======== ========
Deferred stock compensation 3,160 2,496 11,946 6,910
Warrant issuances 0 0 0 6,456
Accretion of preferred stock to redemption value 0 24 24 95
Dividend related to warrant issuance 0 0 0 6,375
Write down to inventories 3,892 0 8,788 0
Aggregate pro forma tax adjustment (2,203) (3,286) (9,037) (3,287)
------- ------- -------- --------
Pro forma net income (loss) $(3,582) $ 1,082 (667) 6,411
Net income (loss) per common share
Basic $ (0.12) $ 0.06 $ (0.25) $ (0.34)
======= ======= ======== ========
Diluted $ (0.12) $ 0.02 $ (0.25) $ (0.34)
======= ======= ======== ========
Pro forma net income (loss) per common share:
Basic $ (0.05) $ 0.04 $ (0.01) $ 0.21
======= ======= ======== ========
Diluted $ (0.05) $ 0.01 $ (0.01) $ 0.08
======= ======= ======== ========
Weighted average shares:
Basic 68,762 30,000 49,989 30,000
======= ======= ======== ========
Diluted 68,762 76,431 49,989 76,439
======= ======= ======== ========
Multilink Technology Corporation
Select Balance Sheet Data
December 31, 2001 and 2000
(in thousands)
(unaudited)
2001 2000
Cash and short term investments $ 92,682 $29,159
Accounts receivable 19,849 13,771
Inventories 8,735 17,264
Total current assets $131,751 $66,731
Property and equipment, net 28,160 17,765
Total assets $187,053 $90,266
Accounts payable $ 8,366 $10,987
Total current liabilities $ 33,220 $25,083
Long term obligations, net of current 1,673 1,018
Redeemable convertible preferred stock 0 55,073
Total shareholders' equity $152,160 $ 9,092
Total liabilities and shareholders' equity $187,053 $90,266
A/R days (DSO) 68 49
Inventory days (DOS) 71 169
For more information, please contact:
Richard Sawchak, Director-Investor Relations
Multilink Technology Corporation
300 Atrium Drive, Second Floor
Somerset, New Jersey 08873-4105
Tel: (732) 537-3776
Fax: (732) 537-3781
Email: rsawchak@mltc.com
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