& cplSiteName &

MRV Dismisses & Replaces CFO After Financial Error

Dan O'Shea
8/27/2014
50%
50%

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
DOShea
50%
50%
DOShea,
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.
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 Interviews
No Stopping Cable's Ethernet Gains

12|9|16   |     |   (0) comments


Vertical Systems' Erin Dunne explains why US cable operators, which now command a record-high 26% of the Ethernet market, will keep boosting their share.
LRTV Interviews
Fixing IoT Security Is an Ecosystem Challenge

12|9|16   |   05:34   |   (1) comment


Level 3 Communications' Chief Security Officer Dale Drew says service providers, manufacturers and even consumers must combine to halt massive DDoS attacks using IoT devices in botnets. The solution he has in mind includes reputation-based routing by the service provider but also more secure endpoint devices and greater consumer awareness.
LRTV Interviews
Cox Clears $2B in Business Revenue

12|8|16   |     |   (0) comments


Cox's Jeff Breaux discusses how the third-largest US MSO will reach the $2 billion revenue mark this year and plans to hit $3 billion by 2021
LRTV Interviews
Can Cable Climb Upmarket?

12|7|16   |     |   (0) comments


Carol Wilson and Alan Breznick assess cable's prospects for winning more enterprises in a landscape rocked by corporate M&A activity.
Women in Comms Introduction Videos
TalkTalk Exec: Find Your North Star at Work

12|7|16   |   3:38   |   (1) comment


Women need to find their purpose, a professional North Star, and create a personal board for themselves, according to Alex Tempest, director of partners at TalkTalk Business.
LRTV Interviews
Verizon: Beware Unknown Unknowns

12|7|16   |   04:58   |   (0) comments


Chris Novak, director of the Verizon Enterprise Solutions Risk Team, explains that enterprises who don't conduct a thorough audit of their assets often leave some things unprotected because they don't know they exist. Many times these unprotected assets are part of corporate M&A activity but left unshielded they can become a hacker's playground, he tells Light ...
LRTV Interviews
ETSI's CTO Talks NFV, 5G & NGP

12|5|16   |   09:45   |   (0) comments


Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (2) comments


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
Upcoming Live Events
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cable Nodes Becoming a Choke Point
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
Consolidated Snaps Up Fairpoint for $1.5B
Iain Morris, News Editor, 12/5/2016
Small Arctic ISP Caches Netflix in New Way
Mari Silbey, Senior Editor, Cable/Video, 12/7/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
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.
Animals with Phones
A Mobile Safari Click Here
Literally.
Latest Comment
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.