ADIC(R) Earns 11 Cents Per Share on Record Q4 Sales of $126 Million; Quarterly Branded Revenues up 26 Percent; Scalar(R) i500 Library Ships.REDMOND Redmond, city (1990 pop. 35,800), King co., W Wash., a suburb of Seattle, on Lake Sammamish; inc. 1912. Its economy centers around computer software (Microsoft Corp. , Wash. -- Advanced Digital Information Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : ADIC) today announced net earnings of $6.4 million, or 11 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. , on all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal record quarterly revenue of $126.2 million for the fiscal fourth quarter ending October October: see month. 31, 2005. Full fiscal year 2005 earnings totaled $14.3 million, or 23 cents per share, on sales of $454.2 million. Quarterly net income increased 13 percent on nine percent revenue growth over the same period last year while operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. grew approximately 94 percent. Annual net income is up 85 percent on essentially flat revenue and annual operating income is up 83 percent. Gross profit as a percentage of sales grew 250 basis points to 31.9 percent during the period versus the same quarter of fiscal 2004 and increased approximately 220 basis points to 30.6 percent for the full fiscal year. "We are pleased to report record total sales and record branded sales for any quarter in our history as market acceptance of our products continues to grow. Improved operating performance is evident as operating income grew at a much faster rate than revenue in both the quarter and full year," according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Chair and Chief Executive Officer Peter van Oppen. "In particular, strength in our branded business offset predicted reductions in our 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 business for the year, resulting in improved gross margin as a percentage of sales," he said. "Customers are confirming that ADIC's long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investment in our i-layer intelligent storage technology takes the risk out of tape backup Using magnetic tape for storing duplicate copies of hard disk files. Users can add an internal or external tape drive to their desktop computers for backup purposes, and files are typically copied to the tapes using a backup utility that updates on a periodic schedule. , reduces service costs and lowers total costs of ownership," according to van Oppen. ADIC branded sales were up approximately 26 percent from the same period last year to 65 percent of total revenue while quarterly OEM sales were down approximately 13 percent to 35 percent of total revenue. For the full fiscal year, branded sales were up about 16 percent to 61 percent of total revenue while OEM sales fell 18 percent to 39 percent of revenue. The Company noted OEM revenues have been fairly flat for the past three quarters and that the annual decline had been predicted for several quarters. "In mid-November n. 1. the middle part of November. Noun 1. mid-November - the middle part of November period, period of time, time period - an amount of time; "a time period of 30 years"; "hastened the period of time of his recovery"; "Picasso's blue , we announced the first customer shipments of our new 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. (R) i500 midrange midrange Epidemiology The halfway point or midpoint in a set of observations; for most data, MR is calculated as the sum of the smallest observation and the largest observation, divided by 2; for age data, one is added to the numerator; a midrange is usually library, which is a significant milestone for both our branded and OEM business," van Oppen said. The Scalar(R) i500 is the first in the industry to offer growing midrange environments the combination of flexible scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it and integrated intelligence needed to improve the effectiveness of backup. Quarterly operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. grew by $3.7 million compared to the immediately preceding quarter and approximately $4.2 million versus the fourth quarter 2004. Sequential and annual increases reflect increased selling costs related to higher branded sales volumes, R&D spending connected with the development of the new Scalar(R) i500 library as well as accounting and tax compliance costs. In addition, operating expenses for the fourth quarter include previously announced expenses of $1.3 million related the closure of facilities and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities in the U.S. and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . As a result of new accounting standards,
subsequent quarters are expected to include non-cash stock option
expenses ranging between $662,000 and $1.4 million per quarter based on
grants outstanding as of our fiscal year end. Option grants in
subsequent periods may increase non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cashdisbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) . The Company realized tax benefits of $721,000 and $4.2 million for the fourth quarter and fiscal year 2005, respectively. Such tax benefits resulted from a combination of the resolution of state tax audits, completion of a Federal tax audit and release of related tax contingency contingency n. an event that might not occur. reserves. Net cash provided by operations during fiscal 2005 was $48.6 million and total investment in property, plant and equipment was $13.9 million. Subtracting cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses reported through July July: see month. 31 indicates fourth quarter cash provided by operations was approximately $11.4 million. Total cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has reached $252.6 million at the end of the period, up from $240.6 million reported as of the end of the third quarter. For the fiscal year, cash and marketable securities grew from $232.9 million despite repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of approximately 2.9 million shares of common stock at an average price of $7.89 per share, or $22.9 million. Minimal shares were repurchased during the fourth quarter, primarily as a result of stock trading restrictions associated with disclosure of the Company's investment and potential acquisition activities. Fourth quarter and fiscal 2005 financial results are unaudited. Final audited results will be available in the Company's 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. expected to be filed on or before January January: see month. 16, 2006. The Company is not presently aware of any reason audited results should differ from the results presented herein. About ADIC Advanced Digital Information Corporation (NASDAQ: ADIC) is a leading provider of Intelligent Storage(TM) solutions to the open systems marketplace. ADIC is the world's largest 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 systems using the drive technologies most often employed for backing up open system, client-server (programming) client-server - A common form of distributed system in which software is split between server tasks and client tasks. A client sends requests to a server, according to some protocol, asking for information or action, and the server responds. networks.(1) The Company's data management software, storage networking appliances, and disk-based backup and restore solutions provide IT managers innovative tools for storing, managing, and protecting their most valuable digital assets in a variety of disk and tape environments. ADIC storage products are available through a worldwide sales force and a global network of resellers, OEMs and partnerships, including Apple, Dell, EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. , Fujitsu-Siemens, HP, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , and Sun. Further information about ADIC is available at www.adic.com. (1) Market Share: Gartner (Gartner, Inc., Stamford, CT, www.gartner.com) The largest information technology consulting firm that specializes in research and analysis. Founded in 1979 by Gideon Gartner, it has grown through acquisitions, including Dataquest in 1995 and Techrepublic in 2000. Dataquest (Dataquest Inc., San Jose, CA, www.dataquest.com) A major market research and analysis firm in the information field. Dataquest offers market intelligence on more than 25 topics and provides conferences, annual subscriptions and custom research. , Tape Automation Systems Market Shares, 2004, F. Yale, August 2005. ADIC and Scalar are registered trademarks and Intelligent Storage is a trademark of Advanced Digital Information Corporation. All other trade or service marks mentioned in this document should be considered the property of their respective 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 future products and services and future operating results that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The words "expect", "anticipate", and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . 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, purchase deferrals by customers, acceptance of new products, success of new sales channels, 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, production problems and the Company's ability to complete announced restructurings on schedule. Reference is made to the Company's Annual Report on Form 10-K for the year ended October 31, 2004 for a more detailed description of factors that could affect the Company's actual results. 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. Conference Call There will be a conference call to discuss fiscal 2005 and fourth quarter results as well as fiscal 2006 business outlook at 1:30 p.m. PT (4:30 p.m. ET) on December 15, 2005. The call can be accessed live on our website at www.adic.com/ir.
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share amounts)
(Unaudited)
Three Months Ended Fiscal Year Ended
October 31, October 31,
2005 2004 2005 2004
-------- -------- -------- --------
Revenue:
Product $111,826 $102,961 $398,527 $409,371
Service 14,346 12,452 55,651 45,448
-------- -------- -------- --------
Total revenue 126,172 115,413 454,178 454,819
Cost of revenue:
Product 75,124 72,869 274,702 290,660
Service 10,771 8,604 40,413 34,928
-------- -------- -------- --------
Total cost of revenue 85,895 81,473 315,115 325,588
Gross profit 40,277 33,940 139,063 129,231
Sales and marketing 17,539 15,897 66,597 64,836
General and administrative 6,874 6,135 25,886 24,242
Research and development 11,494 9,660 42,493 37,925
-------- -------- -------- --------
Operating profit 4,370 2,248 4,087 2,228
Other income, net 1,339 1,409 6,030 3,365
-------- -------- -------- --------
Income before benefit for
income taxes 5,709 3,657 10,117 5,593
Benefit for income taxes (721) (2,036) (4,156) (2,142)
-------- -------- -------- --------
Net income $ 6,430 $ 5,693 $ 14,273 $ 7,735
======== ======== ======== ========
Basic net income per share $ 0.11 $ 0.09 $ 0.23 $ 0.12
======== ======== ======== ========
Diluted net income per share $ 0.11 $ 0.09 $ 0.23 $ 0.12
======== ======== ======== ========
Shares used in computing basic
net income per share 61,353 63,690 62,726 64,023
======== ======== ======== ========
Shares used in computing
diluted
net income per share 61,617 64,057 63,000 64,794
======== ======== ======== ========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 31, 2005 October 31, 2004
---------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents $ 131,554 $ 94,695
Accounts receivable, net 105,879 93,025
Inventories, net 26,218 38,728
Marketable securities 121,025 138,238
Other current assets 15,895 13,602
--------------- ---------------
Total current assets 400,571 378,288
Property, plant and equipment, net 42,499 45,913
Service parts for maintenance, net 26,491 29,993
Investments 3,485 2,769
Other non-current assets 23,041 18,067
--------------- ---------------
$ 496,087 $ 475,030
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Deferred revenue - current $ 39,910 $ 31,727
Other current liabilities 77,637 65,200
--------------- ---------------
Total current liabilities 117,547 96,927
Deferred revenue - long-term 18,242 13,605
Other long-term liabilities 400 600
Shareholders' equity 359,898 363,898
--------------- ---------------
$ 496,087 $ 475,030
=============== ===============
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Fiscal Year Ended
October 31,
--------------------
2005 2004
--------- ---------
Cash flows from operating activities:
Net income $ 14,273 $ 7,735
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 26,624 24,538
Bad debt expense 899 211
Inventory obsolescence 2,300 3,335
Stock compensation 129 --
(Gain) loss on securities and investment
transactions 59 (73)
Deferred income taxes (6,840) (2,898)
Tax benefit from exercise of stock options 466 1,971
Gain on assets held for sale (2,549) --
Loss on asset impairment 247 --
Other 358 81
Change in assets and liabilities:
Accounts receivable (13,132) 6,616
Inventories 9,928 (8,465)
Other current assets (1,881) (402)
Service parts for maintenance (7,729) (11,032)
Current liabilities 12,042 (4,630)
Deferred revenue 13,450 14,692
--------- ---------
Net cash provided by operating activities 48,644 31,679
--------- ---------
Cash flows from investing activities:
Purchase of property, plant and equipment (13,855) (14,644)
Proceeds from assets held for sale 4,498 16,740
Purchase of marketable securities (261,464) (113,744)
Proceeds from securities transactions 279,775 86,035
Purchase of other investments (776) (692)
Purchase of intangible assets -- (200)
Return of investment on other investments -- 71
--------- ---------
Net cash provided by (used in) investing
activities 8,178 (26,434)
--------- ---------
Cash flows from financing activities:
Repayment of short-term and long-term debt -- (1,221)
Repurchase of common stock (22,893) (9,510)
Proceeds from issuance of common stock for
stock options,
stock warrants and Stock Purchase Plan 3,842 8,073
--------- ---------
Net cash used in financing activities (19,051) (2,658)
--------- ---------
Effect of exchange rate changes on cash (912) 657
--------- ---------
Net increase in cash and cash equivalents 36,859 3,244
Cash and cash equivalents at beginning of period 94,695 91,451
--------- ---------
Cash and cash equivalents at end of period $ 131,554 $ 94,695
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