Special Situation Report:

Date: July 27, 2004

Newsbreak !

It's a Prime Time for Tech Turnarounds, such as MRV Communications, as featured in an article on the very respectable web site, TheStreet.com!

It's a Prime Time for Tech Turnarounds: by Robert Marcin, RealMoney.com Contributor, 7/26/2004
MRV Communications (NasdaqNM: MRVC) has been unprofitable for so long, who knows what the stock will do when the company achieves GAAP profitability in 2005. The company is a leading manufacturer of optical systems and components and should benefit handsomely if and when the major telcos ever build out their FTTP (fiber to the premises) systems. Click here for more information concerning this exciting story.

Our Feature Profile:

MRV Communications, Inc.

(NasdaqNM: MRVC)

Company Profile

MRV Communications, Inc. engages in the design, manufacture, sale, distribution, integration, and support of communication equipment and services, and optical components. The company operates in three segments: The Networking Group, The Optical Components Group, and Development Stage Enterprise Group. The Networking Group segment provides equipment, which include switches, routers, physical layer products, and console management products, as well as networking products for aerospace, defense and other applications, including voice and cellular communication. Its customers include governments, telecommunications service providers, and commercial customers. The Optical Components Group segment designs, manufactures, and sells optical communications components, which include fiber optic transceivers for metropolitan, access, and Fiber-to-the-Premises applications. Development Stage Enterprise Group segment develops optical components, subsystems and network equipment, and other products for the infrastructure of the Internet. The company sells its products through direct sales force, manufacturers’ representatives, value-added-resellers, distributors, and systems integrators worldwide. MRV Communications was organized in 1988 as MRV Technologies, Inc. and changed its name to MRV Communications, Inc. in 1992. The company is headquartered in San Fernando Valley, California.

Company Products:

MRV provides a completely integrated, secure, end-to-end solution from optical transport, Ethernet aggregation and remote presence management to network management. At the access layer, the MRV solution provides any form of Ethernet connectivity, from VDSL over standard Telephone-wires, up to Gigabit Ethernet, with complete intrusion and traffic rate control. In the backbone, the complete IP and MPLS solution connects these high-speed networks together, and even allows VPNs and unmatched Quality of Service. Where there is no fiber, or fiber cannot easily be deployed, MRV provides a solution using FSO technology, which can be deployed quickly and easily to carry any protocol from one building to the next without digging up the street. When Gigabits are not enough, or when a customer requires a full wavelength to itself, MRV provides a full solution of WDM technology. MRV also provides a unique network management system that allows in-band and out-of-band control over network elements, right down to the power strips.

Technology Overview:

Founded in 1988 by Caltech scientists, MRV has had a long history of technology innovation. The company were early pioneers in the field of fiber-optic transmitter and receiver components, and have long held a technology leadership position in several forms of optical transport. MRV was also among the early pioneers in Ethernet networking, with the first 100Base-TX uplink module first affordable 10/100 auto-sensing Ethernet switch, the first Gigabit Ethernet uplink module and the first Gigabit Ethernet switch. At the same time, their components division was pioneering affordable, small form-factor Coarse Wave Division Multiplexing technology. In the mid-1990s MRV combined these two technologies together, to produce the first ever multi-gigabit Ethernet line interface using 4 channels of CWDM technology together with an early form of link aggregation.

MRV has extended its lead in optical technology with a broad range of Pluggable Optical Interfaces, including Gigabit Interface Converters (GBIC), Small Form Pluggable (SFP) and 10 gbps Small Form Pluggable (XFP). Pluggable interfaces comprise a series of technological enhancements to traditional optical or copper interfaces. First and foremost, they are very small hot-swappable modules that can easily be removed from the host device. For more information concerning recent developments, click here.

Key Management:

• Dr. Shlomo Margalit, Chairman, Chief Technical Officer, Sec. and Member of Exec. Committee
• Mr. Noam Lotan, Chief Exec. Officer, Pres, Director and Member of Exec. Committee
• Mr. Shay Gonen, Chief Financial Officer and Principal Accounting Officer
• Dr. Near Margalit Ph.D., Chief Exec. Officer of Luminent Inc.
• Mr. Kevin Rubin, VP of Finance and Corp. Compliance Officer

SEC Filings:

Recent SEC filings for MRV Communications, Inc. can be found at: http://finance.yahoo.com/q/sec?s=MRVC

Key Competitors:

Key competitors for MRV Communications, Inc. can be found at: http://finance.yahoo.com/q/co?s=MRVC

Share Information

Latest Press Release

07/26/04

It's a Prime Time for Tech Turnarounds

Contact Information

Technical Analysis

Conclusion

We believe MRVC is a leading communications company for designing and manufacturing optical systems, and combined with its poised technical chart, the company could potentially do well over the next 6 months. MRVC presents the opportunity of future growth, and hopefully the stock price will be reflective of this growth and prosperity.

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