Exhibit 99.1
Multilink Technology Corporation Reports
Second Quarter 2002 Results
Somerset, New Jersey U.S.A. - August 13, 2002 - Multilink Technology Corporation
(Nasdaq: MLTC) today reported results for the second quarter ended June 30,
2002. Total revenues for the second quarter of 2002 were $5.0 million, compared
with $10.1 million for the first quarter of 2002 and $35.1 million in the second
quarter of 2001. Pro forma gross margins for the second quarter of 2002 were
32.5%, compared with 40.9% in the first quarter of 2002 and gross margins of
63.8% in the second quarter of 2001. Pro forma net loss for the second quarter
of 2002 was $17.5 million, or diluted EPS ($0.24), compared with a net loss of
$9.1 million, or diluted EPS ($0.13), in the first quarter of 2002 and net
income of $0.8 million, or diluted EPS $0.01, in the second quarter of 2001.
Total revenues for the six months ended June 30, 2002 were $15.1 million,
compared with $66.2 million for the six months ended June 30, 2001. Pro forma
gross margins for the six months ended June 30, 2002 were 38.1%, compared with
63.6% for the six months ended June 30, 2001. Pro forma net loss for the six
months ended June 30, 2002 was $26.6 million, or diluted EPS ($0.37), compared
with net income of $1.3 million, or diluted EPS $0.02, for the same period in
2001.
"The markets for our legacy products have undergone further deterioration during
the past three months, and our global list of tier-1 and emerging customers
continues to order and forecast very cautiously. At the same time, we are taking
significant actions to ensure that we are well positioned to emerge from the
downturn with the right-size employee team, strong global customer engagements
and a product portfolio focused outside of the optical core that provides
enterprise and broadband system vendors with leverage of existing,
high-bandwidth infrastructure," stated Dr. Richard Nottenburg, Multilink's
Chairman, President and Chief Executive Officer.
GAAP Basis Results
Pro forma operating results exclude certain items reported under generally
accepted accounting principles (GAAP), including deferred stock compensation,
write downs to inventories and related charges to cost of revenues, an asset
impairment charge and a valuation allowance recorded to fully reserve for
deferred tax assets. 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 and the positive impact to gross margins
and operating expenses from the adjustment of certain accruals. A detailed
reconciliation of GAAP to pro forma results is provided later in this release.
Gross margins under GAAP for the second quarter of 2002 were (76.9%), compared
with 40.5% in the first quarter of 2002 and gross margins of 62.5% in the second
quarter of 2001. Net loss attributable to common shareholders under GAAP for the
second quarter of 2002 was $44.0 million, or diluted EPS ($0.60), compared with
a net loss attributable to common shareholders of $10.5 million, or diluted EPS
($0.15), in the first quarter of 2002 and a net loss attributable to common
shareholders of $0.9 million, or diluted EPS ($0.03), in the second quarter of
2001.
Gross margins under GAAP were 1.8% for the six months ended June 30, 2002,
compared with gross margins of 54.8% for the same period in 2001. The net loss
attributable to common shareholders under GAAP for the six months ended June 30,
2002 was $54.5 million, or EPS ($0.76), compared with a net loss attributable to
common shareholders of $5.3 million, or EPS ($0.17), for the same period in
2001.
Recent Product Introduction
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Date Product Function / Description
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May 28, 2002 Vcat-10 The first product from our Intelligent
Mapper-Framer Edge(TM) product portfolio, the VCat-10,
MTC6210 is the only 10 Gb/s device to offer
Virtual Concatenation (VCat), which
"right-sizes" the SONET/SDH channels and
allows more efficient data transport and
supports Link Capacity Adjustment Scheme
(LCAS). LCAS increases the flexibility
of the virtual concatenation by allowing
dynamic reconfiguration of the VCat
groups. This creates the ability to
provide value-added system features such
as graceful degradation and/or
time-of-day services. The VCat-10 is
targeted towards next-generation
SONET/SDH equipment and next-generation
router/multi-service switch (MSS)
platforms incorporating the flexibility
of datacom with the resiliency of
SONET/SDH.
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Financial Guidance
Multilink expects revenue for the three months ended September 30, 2002 to
decline to the low, single-digit millions range. The company further expects
earnings per share, excluding charges related to the realignment program, in the
range of ($0.24) to ($0.25) for the third quarter. On April 30, 2002, Multilink
provided financial guidance for the year 2002 based on customer revenue
forecasts. At this time, the company will not provide updated revenue guidance
beyond the third quarter, and does not expect to achieve the previously stated
guidance for the fourth quarter of 2002. The continued limited visibility to new
customer orders and additional reductions to carrier capital spending prohibit
the company from forecasting revenues with adequate certainty.
Earnings Conference Call
Multilink will hold a conference call to discuss quarterly results and financial
guidance today, August 13, 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 Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q,
recent Current Reports on Form 8-K, and other Securities and Exchange Commission
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 Six Months Ended
June 30, June 30,
----------------------------------- ---------
2002 2001 2002 2001
-------- -------- -------- --------
Total revenues $ 4,959 $ 35,103 $ 15,050 $ 66,171
Cost of revenues, excluding deferred stock compensation 2,092 12,721 7,537 24,070
Inventory write down and related charges 5,307 -- 5,307 4,895
Fixed asset impairment 1,051 -- 1,051 --
Deferred stock compensation 324 445 888 921
-------- -------- -------- --------
Total cost of revenues 8,774 13,166 14,783 29,886
-------- -------- -------- --------
Gross profit (3,815) 21,937 267 36,285
Operating expenses:
Research and development, excluding deferred stock compensation 11,949 13,259 24,738 25,795
Sales and marketing, excluding deferred stock compensation 3,720 4,507 7,652 8,034
General and administrative, excluding deferred stock compensation 2,068 3,310 4,466 6,256
Deferred stock compensation 2,501 2,303 4,714 4,884
-------- -------- -------- --------
Total operating expenses 20,238 23,379 41,570 44,969
Operating loss (24,053) (1,442) (41,303) (8,684)
Other income and expenses 95 44 486 159
-------- -------- -------- --------
Loss before benefit for income taxes (23,958) (1,398) (40,817) (8,525)
Provision (benefit) for income taxes 20,062 (545) 13,694 (3,221)
-------- -------- -------- --------
Net loss $(44,020) $ (853) $(54,511) $ (5,304)
======== ======== ======== ========
Accretion of preferred stock to redemption value -- -- -- 24
Net loss per common share basic and diluted $ (0.60) $ (0.03) $ (0.76) $ (0.17)
======== ======== ======== ========
Weighted average shares basic and diluted 72,911 33,688 71,807 31,874
-------- -------- -------- --------
Multilink Technology Corporation
Reconciliation of Pro forma Net Income and Earnings Per Share
(in thousands, except for per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- -------------------
2002 2001 2002 2001
-------- -------- -------- --------
Net loss attributable to common shareholders $(44,020) $ (853) $(54,511) $ (5,328)
======== ======== ======== ========
Deferred stock compensation 2,825 2,748 5,602 5,805
Positive gross margin impact related to inventories written down (215) 0 (735) 0
Fixed asset impairment 1,051 0 1,051 0
Inventory write downs and related charges 5,307 0 5,307 4,895
Adjustments to accruals:
Cost of revenues (1,038) 0 (1,038) 0
Research and development (767) 0 (767) 0
Sales and marketing (470) 0 (470) 0
General and administrative (191) 0 (191) 0
-------- -------- -------- --------
Total adjustments to accruals (2,466) 0 (2,466) 0
Accretion of preferred stock 0 0 0 24
Aggregate pro forma tax adjustment 20,003 (1,071) 19,155 (4,071)
-------- -------- -------- --------
Pro forma net income (loss) $(17,515) $ 824 $(26,597) $ 1,325
Net income (loss) per common share
Basic $ (0.60) $ (0.03) $ (0.76) $ (0.17)
======== ======== ======== ========
Diluted $ (0.60) $ (0.03) $ (0.76) $ (0.17)
======== ======== ======== ========
Pro forma net income (loss) per common share:
Basic $ (0.24) $ 0.02 $ (0.37) $ 0.04
======== ======== ======== ========
Diluted $ (0.24) $ 0.01 $ (0.37) $ 0.02
======== ======== ======== ========
Weighted average shares:
Basic 72,911 33,688 71,807 31,874
======== ======== ======== ========
Diluted 72,911 80,831 71,807 79,590
======== ======== ======== ========
Multilink Technology Corporation
Select Balance Sheet Data
June 30, 2002 and December 31, 2001
(in thousands)
(unaudited)
June 30, December 31,
2002 2001
Cash and short term investments $ 79,714 $ 92,682
Accounts receivable 1,524 19,849
Inventories 2,866 8,735
Total current assets $ 88,043 $131,751
Property and equipment, net 35,245 28,160
Total assets $127,559 $187,053
Accounts payable $ 5,715 $ 8,366
Total current liabilities $ 27,083 $ 33,220
Long term obligations, net of current 7,230 1,673
Total shareholders' equity $ 93,246 $152,160
Total liabilities and shareholders' equity $127,559 $187,053
A/R days (DSO) 28 68
Inventory days (DOS) 78 71
For more information, please contact:
Richard Sawchak, Director of Investor and Public 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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