1998 ADIC Sales Grow 56% to $41.6 Million in Fourth Quarter as Internal Growth, Acquisition Fuel Rise; Quarterly Loss Reflects Non-recurring Charges.REDMOND, Wash.--(BUSINESS WIRE)--Dec. 9, 1998--Advanced Digital Information Corporation (Nasdaq/NMS:ADIC) today announced results for the fourth quarter and fiscal year ended Oct. 31, 1998. Results include nine weeks of sales and earnings related to the former EMASS tape storage division of Raytheon Company that ADIC acquired on Aug. 19, 1998. In addition, reported earnings include approximately $5.26 million in after-tax, non-recurring costs associated with the acquisition. Sales for the fourth quarter and fiscal year ended October 31 are $41.6 million and $114.6 million, representing increases of 56 percent and 23 percent, respectively, over the comparable prior year periods. Net loss for the quarter is $3.5 million, or 36 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , while earnings for the fiscal year are $1.5 million, or 16 cents per share. Earnings for the fourth quarter and fiscal year 1997 were $2.7 million and $8.5 million, or 27 and 92 cents per share, respectively. Without the effect of non-recurring items, 1998 fourth quarter earnings would have been approximately $1.7 million, or 18 cents per share, and earnings for the full fiscal year would have been $6.8 million, or 69 cents per share. Non-recurring items include $4.5 million in quarterly expense resulting from the elimination of acquired in-process technology, $380,000 in assets made redundant as a result of the acquisition and $513,000 in increased cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold reflecting one-time purchase accounting adjustments. Taken together, these items reduce reported fourth quarter and fiscal year income by approximately $5.26 million after the effect of income taxes. Purchased tax-loss carryforwards did not affect reported income but should result in approximately $500,000 cash savings in tax payments related to the fourth quarter. "We are pleased to report improved sales results based on strength in our traditional ADIC tape library products, OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and sales and the integration of the former EMASS products into ADIC," said Chairman and Chief Executive Officer Peter van Oppen. "All three categories contributed significantly to our growth in the fourth quarter. Without the benefit of the acquisition, ADIC sales grew over 16 percent sequentially compared with the third quarter," he said. The company noted that OEM sales represented over nine percent of total revenue for the quarter while branded product distributed through reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. channels remained the core of ADIC's business. The former EMASS business contributed over $12.1 million in sales for the quarter including significant contributions from hardware, service and software sales. Before the effects of non-recurring charges, the former EMASS business contributed positively to earnings for the quarter after reflecting the capital costs associated with its acquisition. The company also noted that the operations of ADIC and the former EMASS business are being rapidly integrated and will not be reported separately in the future. Chuck Stonecipher, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , said, "We are particularly gratified grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. by several measures of improved operating efficiencies for the quarter. Inventory has been significantly reduced and collections are up for the traditional ADIC business while our cash balances have improved dramatically." He noted cash and marketable Marketable are securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly. investments reached nearly $30 million at the end of the period, or more than $8 million net of all long and short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. , including acquisition-related debt. Headquartered in Redmond, Wash., Advanced Digital Information Corporation (ADIC) has been providing data storage solutions since its founding in 1983. With an installed base of nearly 35,000 libraries and the broadest product line in the industry, ADIC is the leading drive-independent supplier of automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. tape libraries used to store and protect information in computer networks. Marketed under ADIC and EMASS brands and the brands of OEM partners, including Dell and Unisys, these storage devices are available with DLT (Digital Linear Tape) A magnetic tape technology originally developed by Digital for its VAX line. The technology was later sold to Quantum, which makes it available to other manufacturers. DLT uses half-inch, single-hub cartridges similar to IBM's 3480/3490/3590 line. , D2, half-inch, AIT, 4mm and 8mm tape technologies, and are supported by leading backup and storage management software products for Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. , UNIX UNIX Operating system for digital computers, developed by Ken Thompson of Bell Laboratories in 1969. It was initially designed for a single user (the name was a pun on the earlier operating system Multics). , and MVS (Multiple Virtual Storage) Introduced in 1974, the primary operating system used with IBM mainframes (the others are VM and DOS/VSE). MVS is a batch processing-oriented operating system that manages large amounts of memory and disk space. operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. . The company's own storage management tools include AMASS (Archive Management And Storage System) Tape management software for Unix from Quantum Corporation, Colorado Springs, CO (www.quantum.com). Originally developed by ADIC, AMASS makes the tape library look like an infinite disk drive to the application. (R) direct data access software which provides network users shared access to information stored in automated libraries. A pioneer in the development of products for Storage Area Networks, ADIC markets Fibre Channel routers Overview A channel router is a specific variety of router for integrated circuits. Normally using two layers of interconnect, it must connect the specified pins on the top and bottom of the channel. for use in Storage Area Networks and tape libraries with direct Fibre Channel connectivity. Further product information is available via the Internet at http://www.emass.com and http://www.adic.com ADIC, FastStor, Scalar scalar, quantity or number possessing only sign and magnitude, e.g., the real numbers (see number), in contrast to vectors and tensors; scalars obey the rules of elementary algebra. Many physical quantities have scalar values, e.g. and EMASS are trademarks of Advanced Digital Information Corporation. DLT is a trademark of Quantum Corporation. All other product or company names should be considered the property of their owners. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's existing and future products and services and future operating results that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe", "expect", "intend", "anticipate", variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect the company's actual results include general economic trends, technical competition or obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. , supply constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. , changes in market pricing and production problems. Reference is made to the company's latest Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the SEC for a more detailed description of such factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release or to reflect the occurrence of unanticipated events. -0-
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amounts)
Three months ended Fiscal year ended
Oct. 31, Oct. 31,
(Unaudited)
1998 1997 1998 1997
Net sales $41,571 $26,599 $114,557 $93,204
Cost of sales 29,598 18,499 81,389 65,556
------- ------- -------- -------
Gross profit 11,973 8,100 33,168 27,648
Acquired in-process
technology 4,492 -- 4,492 --
Selling and
administrative
expenses 7,849 3,793 20,792 13,556
Research and
development
expenses 2,420 854 4,484 2,910
------- ------- -------- -------
Operating profit
(loss) (2,788) 3,453 3,400 11,182
Other income
and expense 90 345 1,329 1,481
------- ------- -------- -------
Income (loss) before
provision for
income taxes (2,698) 3,798 4729 12,663
Provision for
income taxes 794 1,124 3174 4,166
Minority interest 25 -- 25 --
------- ------- -------- -------
Net income
(loss) $(3,517) $2,674 $1,530 $8,497
======= ======= ======== ========
Basic income (loss)
per share $(0.36) $0.27 $0.16 $0.94
======= ======= ======== ========
Diluted income (loss)
per share $(0.36) $0.27 $0.16 $0.92
======= ======= ======== ========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Oct. 31, 1998 Oct. 31, 1997
ASSETS
Current assets:
Cash $28,226 $32,807
Accounts receivable, net 30,766 18,078
Inventories, net 32,294 16,075
Other current assets 6,006 1,483
-------- --------
Total current assets 97,292 68,443
Property, plant and
equipment, net 7,351 2,509
Investment and other assets 7,764 4,242
======== ========
$112,407 $75,194
======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities $30,715 $15,084
Long-term debt and other
long-term liabilities 18,664 --
Minority interest 25 --
Shareholders' equity 63,003 60,110
======== ========
$112,407 $75,194
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