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FROM: L. B. STAUFFER, SR. VP
NICHOLAS PATRUNO, INVESTOR RELATIONS
PORTER, LEVAY & ROSE, INC.
(212) 564-4700
COMPANY GEORGE ROBERTS, CFO
CONTACT: (508) 347-2261
FOR IMMEDIATE RELEASE
SPECTRAN REPORTS SECOND QUARTER/SIX MONTHS RESULTS
STURBRIDGE, MA, JULY 30 -- SpecTran Corporation (NASDAQ, NM: SPTR),
which develops, manufactures and markets glass optical fibers and value-added
fiber optic products, today reported results for the second quarter and six
months ended June 30, 1999.
Second quarter revenues were $22,587,000, up 38 percent from revenues
of $16,358,000 for the same period a year ago. Operating income was $1,763,000,
up from the operating loss of $2,371,000 incurred during the same period in
1998. The 1998 operating loss included one-time charges, including inventory
write-downs at SpecTran Specialty. In the second quarter of 1999, due primarily
to tax losses associated with the sale of its interest in General Photonics, the
company's joint venture with General Cable, SpecTran incurred a net loss of
$621,000 or nine cents per share, compared with a net loss of $1,383,000 or
twenty cents per share for the same period a year ago.
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For the first six months of 1999, SpecTran incurred a net loss of
$389,000 or six cents per share compared with a net loss of $518,000 or seven
cents per share for the first half of 1998. Revenues for the first half of 1999
were $42,966,000, up 36 percent from the $31,471,000 achieved in the same period
in 1998.
Commenting on the company's results, SpecTran chairman and CEO, Charles
B. Harrison, said, "During the second quarter, SpecTran sold its interest in
General Photonics, SpecTran's joint venture with General Cable Corporation, to
BICC General Cable, Inc. for $2,367,200. As part of the transaction, General
Photonics repaid a loan to SpecTran for $325,000 and BICC General Cable
purchased approximately 30,000 kilometers of optical fiber from SpecTran's CFT
subsidiary. The sale resulted in an after-tax book loss of $237,000 on
SpecTran's interest in the joint venture and a one-time tax liability of
$1,099,000, both of which adversely affect this quarter's and the first half's
results. Other income, as compared to last year, was adversely affected by the
elimination of the Corning supply contract settlement at the end of 1998,
coupled with the increased interest expense in 1999 associated with servicing
our debt.
"On July 15, 1999 SpecTran announced it entered into an Agreement of
Merger with Lucent Technologies for $64 million or $9 a share, plus the
assumption by Lucent of $35 million of SpecTran's debt, in an all-cash tender
offer. Tender offer letters were mailed to SpecTran's shareholders of record on
July 21, 1999 and are valid until August 17, 1999, unless extended. It is
expected that the transaction will be completed by the end of the quarter ending
September 30, 1999. SpecTran's board of directors unanimously approved the
tender offer and the merger and determined that the terms of the tender offer
and the merger are fair to and in the best interests of SpecTran's stockholders
and unanimously recommends that all SpecTran stockholders accept the tender
offer and tender their shares to the purchaser pursuant to the terms of the
tender offer," Harrison concluded.
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SpecTran Corporation develops, manufactures and markets glass optical
fibers and value-added fiber optic products. For global communications markets,
SpecTran manufactures standard fiber and cable as well as special performance
fiber and cable. The company's application specific optical fiber and cable
products also serve industrial, aerospace and medical markets worldwide. For
additional information about SpecTran, visit the company's web site at
www.spectran.com.
NOTE: This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainties that may cause
results to differ materially from expectations, including without limitation,
the ability of the company to market and develop its products, general economic
conditions and competitive conditions in markets served by the company.
Forward-looking statements include, but are not limited to, global economic
conditions, product demand, competitive products and pricing, manufacturing
efficiencies, cost reductions, manufacturing capacity, facility expansions and
new plant start-up costs, the rate of technology change and other risks.
Although the company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this press release will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the company or any other person
that the objectives and plans of the company will be achieved.
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SPECTRAN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS, EXCEPT PER SHARE AMOUNTS (UNAUDITED)
FOR THE SIX MONTHS ENDED FOR THE THREE MONTHS ENDED
------------------------ --------------------------
6/30/99 6/30/98(a) 6/30/99 6/30/98(a)
------- ------- ------- -------
Net Sales $ 42,966 $ 31,471 $ 22,587 $ 16,358
Cost of Sales 31,547 23,806 16,489 13,805
-------- -------- -------- --------
Gross Profit 11,419 7,665 6,098 2,553
-------- -------- -------- --------
Selling and Administrative Expenses 6,749 6,653 3,666 3,518
Research and Development Costs 1,424 2,581 669 1,406
-------- -------- -------- --------
Income from Operations 3,246 (1,569) 1,763 (2,371)
-------- -------- -------- --------
Other income (Expense):
Interest Income 126 147 98 33
Interest Expense (1,475) (476) (739) (352)
Other, Net 41 1,583 53 741
-------- -------- -------- --------
Other Income (Expense), net (1,308) 1,254 (588) 422
-------- -------- -------- --------
Income before Income Taxes and
Equity in Joint Venture 1,938 (315) 1,175 (1,949)
Income Tax Expense Before Joint Venture 756 (136) 458 (775)
-------- -------- -------- --------
Net Income Before Joint Venture Sale 1,182 (179) 717 (1,174)
-------- -------- -------- --------
Joint Venture:
Equity in Loss of Joint Venture (385) (598) (3) (346)
Tax Benefit in Equity Loss 150 259 1 137
Book & Tax Loss on Sale of Joint Venture (1,336) -- (1,336) --
-------- -------- -------- --------
Net Loss on Joint Venture (1,571) (339) (1,338) (209)
-------- -------- -------- --------
Net Income $ (389) $ (518) $ (621) $ (1,383)
======== ======== ======== ========
Net Income Per Share of Common Stock:
Basic $ (.06) $ (.07) $ (.09) $ (.20)
Weighted Average Number of
Common Shares Outstanding:
Basic 7,004 7,002 7,005 7,002
(a) Due to a change in accounting treatment of certain fiber sales, sales
and cost of sales for the second quarter and June year-to-date of 1998
were reduced by $674,000 and $789,000, respectively
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1999