& cplSiteName &

MRV Dismisses & Replaces CFO After Financial Error

Dan O'Shea

Optical vendor MRV Communications has dismissed CFO Stephen Garcia and replaced him with board member Mark Bonney, after the company admitted problems with a series of business transactions in Italy that were not correctly reported to the SEC. The reporting snafu caused MRV to file its second-quarter earnings late, company officials explained during MRV's earnings call this week.

After MRV CEO Dave Stehlin briefly acknowledged that late earnings filing and welcomed Bonney aboard on the earnings call, he left it to the new CFO to explain what happened: "It was determined that Tecnonet, our Italian network integration business, recorded revenue on some transactions that customers had asked to be billed for, but [asked MRV] to hold the inventory." While so-called bill-and-hold practices are allowed under generally accepted accounting principles in Italy and the US, the transactions failed to meet SEC reporting requirements, Bonney said.

Bonney described the revenue effect on MRV as "immaterial." Accounting corrections result in a roughly $2 million revenue reduction for MRV, a $200,000 loss of gross profit and a $1.8 million inventory increase.

An MRV spokeswoman offered no further details on the exit of Garcia, who had been CFO since April 2012. Termination of Garcia's employment was mentioned in an SEC filing this week, just two weeks after Garcia's name was listed atop MRV's notice of late quarterly report filing with the SEC. Bonney, former CFO of consumer marketing company Direct Brands, will continue to be an MRV board member, and will also carry the title of executive vice president.

Want to know more about what's happening in the optical sector? Check out our dedicated optical content channel here on Light Reading.

The reporting problem overshadowed what looked to be a decent quarter for MRV, which has been making strides throughout this year to overcome a long period of poor performance and indecisiveness related to its optical strategy. Stehlin has refocused MRV on optical, guiding the company to revamp its products, while also remaking its sales team and efforts. (See BTE Bits: A Packet-Optical Review, MRV Unveils Senior VP of Sales and MRV Bounces Back.)

For the most recent quarter, MRV reported a revenue increase of 13% compared to the second quarter last year, to just more than $43 million.

With its new products, like its OptiDriver and OptiPacket platforms, the vendor has been winning over a range of customers, including Telstra, whose MRV-powered Carrier Ethernet 2.0 services made the short list of Leading Lights award finalists this year, but also several data center operators. (See Leading Lights Finalists 2014: Most Innovative Ethernet/Optical Service and i3D.Net Picks MRV's OptiDriver.)

— Dan O'Shea, Managing Editor, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Blogger
8/29/2014 | 4:40:55 PM
Also of note
Bonney also said the internal investigation into the reporting problem has wrapped up, so it's not likely there will be more fall out. The whole issue overshadows some of MRV's recent international successes. The i3D.Net deal, for example, was the second sale the vendor announced in the Netherlands in the last month.

Separately, operating expenses were up from $13.9 million to about $15.9 million, but as Bonney noted, that's reflective of MRV's ongoing efforts to invest in product development.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
Wednesday, November 9, 1:00PM EST
MANO 101
Friday, November 11, 1:00PM EST
Open Source for NFV MANO
Wednesday, November 16, 1:00PM EST
SDN 101
John Isch, Practice Director, Network & Voice, Orange Business Services
Friday, November 18, 1:00PM EST
SDN & Open Source
Christopher W. Rice, Senior Vice President of AT&T Labs, Domain 2.0 Architecture and Design
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
OneAccess NFV Solutions

10|26|16   |   5:30   |   (0) comments

Antoine Clerget, CTO of OneAccess, discusses how his company has expanded its product line from enterprise-class routers to include a universal virtualized CPE as well as a suite of VNFs to help telco customers evolve to an NFV future.
LRTV Custom TV
The Journey Toward Carrier-Grade WiFi

10|26|16   |   3:39   |   (0) comments

In this Light Reading interview, Dave Sperling, CTO at Smith Micro Software and active participant of the WBA's policy working group, discusses the need for carrier-grade WiFi. Technical and business challenges slowing the fulfillment of this goal are addressed, as well as management strategies that will enable communication service providers to optimize end user ...
LRTV Custom TV
ZTE BBWF Highlights

10|26|16   |     |   (0) comments

At BBWF 2016, ZTE showed a broad range of innovative technologies that are kick-starting an ultrafast broadband journey.
LRTV Custom TV
Next-Generation Technology Beyond DOCSIS 3.1

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Liu Jianhua speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Hybrid Video Solutions to Change TV, Change Future

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Ian Locke speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei Future-Oriented Giga Coax Network

10|20|16   |     |   (0) comments

At SCTE 2016, Huawei's Allen Wang speaks with Alan Breznick for an exclusive interview.
LRTV Custom TV
Huawei at SCTE 2016

10|20|16   |     |   (0) comments

Join Alan Breznick of Light Reading and take a sneak peek at the Huawei booth at SCTE 2016.
LRTV Custom TV
Assuring Network Quality in a Rapidly Changing Environment

10|20|16   |     |   (0) comments

As the rate of change and complexity increases in agile networks, the importance of introducing DevOps methodologies for integrating active test and assurance solutions throughout the full service lifecycle becomes critical to ensure that customers are experiencing the service quality they demand. The industry landscape is changing, and software-based test and ...
Telecom Innovators Video Showcase
A10 Networks on Service Providers' Industry Needs

10|20|16   |     |   (0) comments

Light Reading's Steve Saunders hears how A10 enables service providers to accelerate, secure and optimize their application delivery to drive down costs, enhance service availability, and better respond to customer requirements, so they can improve customer satisfaction, monetize their network, and grow revenues.
LRTV Custom TV
New NFV Use Cases for Cable TV

10|19|16   |     |   (0) comments

A large number of NFV use cases are focused on the enterprise domain, looking at virtualization of customer-premises equipment (CPE). To date, there has been little focus on the use cases and business case for virtualization of the video content delivery networks required to deliver unicast and streaming video to consumers. Amdocs commissioned Analysys Mason to ...
Women in Comms Introduction Videos
Meet the Future Workforce: New Faces, Expectations & Motivations

10|19|16   |   5:33   |   (1) comment

Millennials and their younger peers, Gen Z, expect more out of their network and more out of their work. Intel's Lynn Comp shares how the industry can prepare for this new generation of workers.
LRTV Custom TV
ZTE Global Services User Congress 2016 Highlights

10|19|16   |     |   (0) comments

ZTE held its 2nd Global Service User Conference in Dusseldorf on October 13-14. Representatives from network operators, leading industry analysts and ZTE senior expertsattended the event, exploring the best practice in managed services and the vision to transform network operations into the operations center of the future (OpCF) in the software-defined networking ...
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Trump: Dump AT&T/TW & Comcast/NBC
Alan Breznick, Cable/Video Practice Leader, Light Reading, 10/24/2016
Google Fiber Hits Pause Button, Scales Back
Alan Breznick, Cable/Video Practice Leader, Light Reading, 10/26/2016
T-Mobile: AT&T & TW Means Ma Bell Not Focused on Mobile
Dan Jones, Mobile Editor, 10/24/2016
Sprint: Revenue up 3%, Capex Will Rise Again
Dan Jones, Mobile Editor, 10/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
There's no question that, come 2020, 5G technology will turn the world's conception of what mobile networking is on its head. Within the world of 5G development, Dr. ...
Animals with Phones
'Oh, Were You Looking for This?' Click Here
'I was just playing some games...'
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.