Exhibit 99.1
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BUSINESS UPDATE
**For Immediate Release**
Multilink Technology Corporation Reports
First Quarter 2002 Results
. Revenues for the quarter of $10.1 million
. Positive cash flow from operations
. New driver products for the metro market
Somerset, New Jersey U.S.A. - April 30, 2002 - Multilink Technology Corporation
(Nasdaq: MLTC) today reported results for the first quarter ended March 31,
2002. Total revenues for the first quarter of 2002 were $10.1 million, compared
with $26.7 million for the fourth quarter of 2001 and $31.1 million in the first
quarter of 2001. Pro forma gross margins for the first quarter of 2002 were
40.9%, compared with 57.9% in the fourth quarter of 2001 and gross margins of
63.5% in the first quarter of 2001. Pro forma net loss for the first quarter of
2002 was $9.1 million, or diluted EPS ($0.13), compared with a net loss of $3.6
million, or diluted EPS ($0.05), in the fourth quarter of 2001 and net income of
$0.5 million, or diluted EPS $0.01, in the first quarter of 2001.
"Our first quarter 2002 results continue to reflect a very challenging
environment for optical transport products," stated Dr. Richard Nottenburg,
Multilink's Co-Chairman, President and Chief Executive Officer. "Carrier
spending reductions have caused delays in production schedules for design wins
and have reduced revenues from legacy products. As a result, we anticipate that
revenues will decline sequentially to approximately $5 million during the second
quarter of 2002 and will remain in the single-digit range during the third
quarter."
"We believe that following this bottoming out of our revenues, double-digit
sequential revenue growth and double-digit revenues will resume in the fourth
quarter as a result of new product introductions and a moderate recovery in our
end markets. We continue to strengthen our technological leadership and our
customer relationships and expand our total addressable market, while
streamlining expenses, increasing operational efficiency and maintaining a
strong balance sheet. We anticipate revenue from new products and increased
market share should enable us to generate at least $10 million in quarterly
revenues during the fourth quarter of 2002," 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 write downs to inventories and related charges to cost of
revenues that occurred in the first and fourth quarters of 2001. Pro forma
results also exclude the positive impact on gross margins from the sale of
inventory written down to its net realizable value in the first and fourth
quarters of 2001. A detailed reconciliation of GAAP to pro forma results is
provided later in this release. Gross margins under GAAP for the first quarter
of 2002 were 40.5%, compared with 41.5% in the fourth quarter of 2001 and gross
margins of 46.2% in the first quarter of 2001. Net loss attributable to common
shareholders under GAAP for the first quarter of 2002 was $10.4 million, or
diluted EPS ($0.15), compared with a net loss attributable to common
shareholders of $8.4 million, or diluted EPS ($0.12), in the fourth quarter of
2001 and a net loss attributable to common shareholders of $4.5 million, or
diluted EPS ($0.15), in the first quarter of 2001.
Recent Product Introductions
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Date Product Function / Description
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April 30, 2002 MSA- Announced the MTC5522, a precision multi-chip module, which
Compatible allows MSA module designers to meet their size, power
Modulator dissipation, performance and volume manufacturability
Driver (MDR) requirements for MSA modules. Multilink is providing metro
MTC5522 customers with an MSA-compliant solution that is easier to
design in, has lower power consumption and is ultimately
more cost-effective. Our Micro-Module(TM) products are
reducing component footprint requirements by up to 70
percent. Customer feedback confirms the significance of
reduced size, with no sacrifice in performance, to MSA
application design engineers.
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April 19, 2002 40 Gb/s Pysical Announced our first 40 Gb/s chipset, the MTC1307, 4:1 bit
Layer Solution digital multiplexer (MUX) and the MTC1308, 1:4 bit digital
MTC1307 and demultiplexer (DMUX). These low jitter, high-speed devices
1308 have been designed using Silicon Germanium (SiGe) process
technology for superior electrical performance and extended
data rate range up to 50 Gb/s. The MTC1307 and MTC1308
chipset addresses the increasing customer demand for
reliable, low cost, high-performance integrated circuits
suitable for next-generation prototype and experimental
systems.
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March 26, 2002 10 Gb/s Optical Introduced our 100 km optical transponder; the MTC21218
Transponder for which features the latest series of Multilink small form
up to 100 km factor, extremely low power, Ball Grid Array (BGA) products.
MTC21218 This solution provides the reach and bandwidth capacity
required by system vendors and allows them to improve the
performance of optical networking systems for overall system
cost reductions. This 300 pin MSA compatible transponder
solution is suitable for strategic customer applications
such as dense wavelength division multiplexer (DWDM)
systems, metropolitan area networks, IP routers and ATM
switches.
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March 13, 2002 Modulator Introduced the MTC5526, Multilink's form-factor compatible
Driver (MDR) MDR for metro Non-Return-to-Zero (NRZ) applications.
for Metro Multilink is providing the advantage of long-haul
Equipment performance to the metro market by utilizing the high
Upgrades performing MTC5529 Micro-Module(TM) MDR, integrated onto a
MTC5526 board assembly with configuration circuitry. The module's
configuration, along with its package dimensions, allows
metro designers to simply replace commonly used modulator
drivers with the higher-performing, more cost-effective
Multilink device without having to redesign or reconfigure
their system board.
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February 11, 2002 12.5 Gb/s Introduced the MTC5529, the industry's first high
Micro- performance, very small form factor 12.5 Gb/s NRZ MDR. Using
Module(TM) MDR Multilink's unique Micro-Module(TM) technology, this product
MTC5529 allows Multilink to incorporate several highly-sophisticated
integrated circuits into an easy-to-install BGA package. We
are moving our leading-edge technologies of previously
announced Multilink modules onto a new packaging platform
which dramatically reduces power, size, and cost for lithium
niobate based fiber optic transmission.
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Earnings Conference Call
Multilink will hold a conference call to discuss quarterly results and financial
guidance today, April 30, 2002, at 5:00 pm EDT. 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 `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 recent 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
March 31,
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2002 2001
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Total revenues $ 10,091 $ 31,068
Cost of revenues, excluding deferred stock compensation 5,445 11,349
Inventory write down and related charges - 4,895
Deferred stock compensation 564 477
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Total cost of revenues 6,009 16,721
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Gross profit 4,082 14,347
Operating expenses:
Research and development, excluding deferred stock compensation 12,789 12,536
Sales and marketing, excluding deferred stock compensation 3,932 3,527
General and administrative, excluding deferred stock compensation 2,398 2,946
Deferred stock compensation 2,213 2,581
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Total operating expenses 21,332 21,590
Operating loss (17,250) (7,243)
Other income and expenses 391 115
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Loss before benefit for income taxes (16,859) (7,128)
Benefit for income taxes (6,368) (2,676)
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Net income (loss) $(10,491) $ (4,452)
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Accretion of preferred stock to redemption value - 24
Net loss per common share basic and diluted $ (0.15) $ (0.15)
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Weighted average shares basic and diluted 70,704 30,060
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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
March 31,
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2002 2001
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Net income (loss) attributable to common shareholders $(10,491) $ (4,476)
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Deferred stock compensation 2,777 3,058
Positive gross margin impact related to inventories written down
during 2001 (520) 0
Accretion of preferred stock to redemption value 0 24
Dividend related to warrant issuance 0 0
Write down to inventories 0 4,895
Aggregate pro forma tax adjustment (848) (2,998)
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Pro forma net income (loss) $ (9,082) $ 503
Net income (loss) per common share
Basic $ (0.15) $ (0.15)
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Diluted $ (0.15) $ (0.15)
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Pro forma net income (loss) per common share:
Basic $ (0.13) $ 0.02
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Diluted $ (0.13) $ 0.01
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Weighted average shares:
Basic 70,704 30,060
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Diluted 70,704 78,349
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Multilink Technology Corporation
Select Balance Sheet Data
March 31, 2002 and 2001
(in thousands)
(unaudited)
2002 2001
Cash and short term investments $ 91,247 $ 20,877
Accounts receivable 7,802 14,667
Inventories 7,966 15,636
Total current assets $114,901 $ 61,645
Property and equipment, net 35,895 21,063
Total assets $184,315 $ 90,999
Accounts payable $ 7,182 $ 10,561
Total current liabilities $ 33,036 $ 26,727
Long term obligations, net of current 5,525 1,390
Redeemable convertible preferred stock 0 55,097
Total shareholders' equity $145,754 $ 7,785
Total liabilities and shareholders' equity $184,315 $ 90,999
A/R days (DSO) 70 43
Inventory days (DOS) 122 125
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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