EXHIBIT 99.1
[FIBERCORE INC. LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
FIBERCORE REPORTS 2002 RESULTS
CHARLTON, MASS - MAY 19, 2003 -- 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 fourth quarter and year ended December 31, 2002
The Company filed its annual report on Form 10-K with the SEC late due to delays
in finalizing the results from its foreign subsidiaries. This resulted in the
Company being notified on April 17 that it would be delisted from the Nasdaq
Smallcap Market effective April 28, 2003 as further discussed in the Company's
earlier release of April 23, 2003. The delisting action has been deferred
pending a hearing that the Company requested which will be held on May 22, 2003.
The Company received an opinion from its auditors, Deloitte & Touche LLP, that
questioned the Company's ability to continue as a going concern and the Company
is actively pursuing additional financing, debt restructuring and further cost
reductions to improve its liquidity situation. The Company must raise
approximately $5 million in additional financing soon and/or restructure some of
its obligations to address its liquidity crisis. The Company is also attempting
to renegotiate the terms on approximately $18 million in short-term debts and
notes payable.
For 2002, sales decreased by 51% to $25.5 million from $52.4 million in 2001.
This was attributable to the dramatic downturn in the telecommunications
industry that began in 2001 and continued throughout 2002. Based on industry
sources, fiber optic cable market volumes dropped in 2002 from 2001 levels by
approximately 65% in the US and 70% in Western Europe, where most of the
Company's customers are located. During this period worldwide shipments dropped
by 50%, and the value of the market dropped even further when price reductions
are considered. The Company incurred a net loss for 2002 of $31.1 million, or
$0.48 per share, compared to net income of $0.5 million, or $0.01 per share in
2001. The 2002 results contain a number of charges for restructuring and the
write-off of certain assets on its balance sheet. These charges total $14
million including the write-off of goodwill, patents, inventory write-downs,
restructuring charges, and an additional $1.7 million for non-cash interest
expense.
The gross profit for the year was a negative $0.2 million, or 1% of sales, in
2002 as compared to a gross profit of $16.3 million, or 31% of sales, in 2001.
The lower margin was primarily due to the substantially lower level of sales
combined with significantly lower selling prices. The gross margin was 6% during
the first nine months of 2002 but was further negatively impacted in the
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FIBERCORE, INC. FIBER OPTICS FOR THE NEXT GENERATION
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253 Worcester Rd o P.O. Box 180 o Charlton, MA 01507
o Tel: (508) 248-3900 o Fax: (508) 248-5588
FiberCore, Inc.
Page 2
fourth quarter as the Company wrote down $1.9 million in inventory and sold some
of its lower grade inventory below production costs.
The Company incurred an operating loss of $22.6 million in 2002 as compared to
an operating profit of $5.4 million in 2001. This loss includes $14 million in
write-downs of assets and restructuring charges described above. Net income was
further negatively impacted by higher interest expenses associated with the
Company's recent expansion activities, non-cash interest expense of $1.7 million
associated with the convertible debentures the Company issued during the first
half of 2002 and by foreign exchange losses of $4.3 million incurred primarily
during the second and third quarters by the Company's Brazilian subsidiary.
Sales in the fourth quarter of 2002 decreased by 44% to $5.2 million from $9.2
million in the year ago period, and were down 15% from the third quarter of
2002. Sales continued to be negatively impacted by reduced demand in the
single-mode fiber market and by reduced pricing in all markets.
The Company reported a net loss of $16.7 million, or $0.24 per share, in the
fourth quarter of 2002. The fourth quarter included $12.7 million in charges
described above. This compares to a net loss of approximately $3.3 million, or
$0.05 per share, in the year ago quarter.
Gross profit in the quarter was a negative $1.4 million, compared to a negative
gross profit of $0.6 million in the year ago period. FiberCore's gross margin
was severely impacted by $1.9 million of inventory write-downs during the
quarter.
Dr. Aslami, President and CEO commented, "2002 was a difficult year for
FiberCore, as it was for most companies in our industry. After making
significant investments in acquisitions and capacity expansion during 2000 and
2001, we were faced with an unprecedented collapse in demand for single-mode
fiber and the ensuing price declines not only for single mode fiber, but for
multimode fiber as well. With the sudden reduction in capital expenditures by
the telecom carriers that began in 2001 and the related high levels of inventory
being maintained by the major fiber and cable manufacturers at that time, we
experienced declines in both demand and pricing for our single-mode fiber.
Offsetting some of the decline in the single-mode business, we were able to grow
our multimode fiber business with a volume increase of 45% and a revenue
increase of 32%. As a result of these trends, multimode sales contributed
approximately two-thirds of 2002 revenues as compared to one-quarter of revenues
in 2001."
"If we can resolve our liquidity issues, we believe we are well positioned for
the industry's recovery when it does occur, as our focus is primarily on feeder
loop, premise, and the "last mile" applications, which are expected to lead the
recovery in the optical fiber markets. The long-haul market recovery is expected
to be much slower, but FiberCore is not a major player in this field, especially
in the US and Europe" added Dr. Aslami.
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FIBERCORE, INC. FIBER OPTICS FOR THE NEXT GENERATION
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253 Worcester Rd o P.O. Box 180 o Charlton, MA 01507
o Tel: (508) 248-3900 o Fax: (508) 248-5588
FiberCore, Inc.
Page 3
"During 2002 and early in 2003, we have worked diligently to reduce our cost
structure significantly and have made major steps in technology improvements,
including implementing our plasma technology to reduce our production costs and
improve our product capabilities. The Company continues to work through a period
of tight liquidity resources and has not yet concluded any of the financing
alternatives we discussed in our last update on April 3. While sales have picked
up during the past six weeks, the Company is still in need of completing a
financing package quickly to meet its obligations. While I cannot make any
assurances, we are in ongoing discussions with several groups to provide funding
to the Company in the near-term, including negotiating the terms of the
investments," concluded Dr. Aslami. "Assuming we successfully resolve our
liquidity issues, we expect significant operating and cash flow improvement in
our operation, and a return to profitability in 2004."
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: 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.
CONTACTS:
AT THE COMPANY: AT FRB|WEBER SHANDWICK:
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Dr. Mohd A. Aslami, President/CEO Alison Ziegler - General Info.
Robert Lobban, CFO Peter Seltzberg - Analyst Info.
508/248-3900 Judith Sylk-Siegel - Media Info.
212/445-8400
--Financial Tables Follow--
FIBERCORE, INC. FIBER OPTICS FOR THE NEXT GENERATION
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253 Worcester Rd o P.O. Box 180 o Charlton, MA 01507
o Tel: (508) 248-3900 o Fax: (508) 248-5588
FiberCore, Inc.
Page 4
FIBERCORE, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands except share data)
Three Months Ended Year Ended
December 31, December 31,
2002 2001 2002 2001
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Net sales $5,191 $9,247 $25,557 $52,362
Cost of sales:
Cost of sales 4,648 9,879 22,206 36,084
Restructuring costs --- 197 ---
Write-down of inventory 1,922 --- 3,388 ---
---------------- --------------- ------------------ ----------------
Total cost of sales 6,571 9,879 25,791 36,084
Gross profit (loss) (1,379) (632) (234) 16,278
Operating expenses:
Selling, general and administrative expenses 2,501 2,480 10,061 8,692
Research and development 508 665 1,877 2,189
Restructuring costs --- --- 103 ---
Write-off of goodwill 7,313 --- 7,313 ---
Write-off of patents 2,972 --- 2,972 ---
---------------- --------------- ------------------ ----------------
Income (loss) from operations (14,673) (3,777) (22,559) 5,397
Interest expense, net (969) (419) (3,109) (2,028)
Non-cash interest expense on convertible debt (543) --- (1,735) ---
Other income (expense) - net 169 1,944 (4,534) 484
---------------- --------------- ------------------ ----------------
Income (loss) before income taxes and
minority interest (16,016) (2,252) (31,937) 3,853
Provision for income taxes (860) (903) (471) (3,006)
---------------- --------------- ------------------ ----------------
Earnings (loss) before minority interest (16,876) (3,155) (32,408) 847
Minority interest in (income) loss of
subsidiaries 138 (152) 1,331 (367)
---------------- --------------- ------------------ ----------------
Net earnings (loss) $(16,738) $(3,307) $(31,077) $480
================ =============== ================== ================
Basic earnings (loss) per share
of common stock $(0.24) $(0.05) $(0.48) $0.01
================ =============== ================== ================
Diluted earnings (loss) per share
of common stock $(0.24) $(0.05) $(0.48) $0.01
================ =============== ================== ================
Weighted average shares outstanding:
Basic 68,876,094 59,071,451 64,881,661 58,074,724
Diluted 68,876,094 59,071,451 64,881,661 63,885,536
SELECTED BALANCE SHEET DATA: December 31, December 31,
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2002 2001
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Working capital (Deficiency) $(27,352) $(1,319)
Total assets 75,603 92,983
Long-term obligations 21,700 22,475
Total liabilities 71,126 49,491
Minority interest 15 5,117
Accumulated deficit (50,490) (19,413)
Stockholders' equity 4,462 38,375
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FIBERCORE, INC. FIBER OPTICS FOR THE NEXT GENERATION
- --------------------------------------------------------------------------------
253 Worcester Rd o P.O. Box 180 o Charlton, MA 01507
o Tel: (508) 248-3900 o Fax: (508) 248-5588