ADIC Earns $1.9 Million, or 20 Cents Per Share, in Second Quarter As Channel Inventory Constrains Revenue Growth.REDMOND, Wash.--(BUSINESS WIRE)--May 18, 1998-- Dell Agreement, FastStor Acceptance Highlight Quarter Advanced Digital Information Corp. (NASDAQ/NMS Symbol:ADIC) today announced earnings grew 2 percent to $1.9 million, or 20 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 sales of $24.8 million for the quarter ended April 30, 1998. Revenue grew by approximately 12 percent over second quarter 1997, during which the company earned $1.9 million on sales of $22.1 million. "We are pleased to report another quarter marked by outstanding accomplishments and solid profitability despite revenue levels which understate un·der·state v. un·der·stat·ed, un·der·stat·ing, un·der·states v.tr. 1. To state with less completeness or truth than seems warranted by the facts. 2. sales of our products at the end user level," said Chairman and Chief Executive Officer Peter van Oppen. "Second quarter highlights included announcement of our agreement to provide an 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 version of ADIC's FastStor tape library for resale by Dell Computer Corp. and continued strong acceptance of our branded FastStor products," he said. The company noted production shipments to Dell began during May. Quarterly revenues grew more slowly than the market growth rate for automated tape libraries which is estimated to be greater than 30 percent per 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. the company. While the effect on ADIC has not been as extreme as has been reported among certain microprocessor and PC producers, the company said it has felt the effect of efforts to reduce channel inventories during 1998. End user sales information indicates that quarterly sales from the company's major distributors to end users grew at approximately 30 percent while distributor purchases from ADIC grew at about six percent. Approximately 80 percent of the company's sales are in PC markets with between 50-60 percent of sales flowing through distribution channels which provide end user sales information. "ADIC expects to see substantially improved growth in revenue and earnings during the third and fourth quarters," van Oppen said. Lower gross margins, lower production rates and somewhat higher 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. during the second quarter were a result of costs associated with the qualification of products for Dell and relocation of the company's headquarters and manufacturing facilities during April. In addition, the company noted that higher than normal channel and internal inventories exaggerated the normal effects of price declines during the quarter. "We believe gross margins and manufacturing rates will show improvement over the remainder of the fiscal year as these transient issues are behind us," said 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. Chuck Stonecipher. Acceptance of the new products including the pioneering FastStor product, 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. 1000 and the Fibre Channel products continues to be extremely high, according to the company. Headquartered in Redmond, Washington Redmond is a city in King County, Washington, USA. It is situated on the eastern edge of the Seattle urban area, in what is known as the Eastside. In 2003 the Census Bureau estimated the city population was 46,391. , Advanced Digital Information Corp. has been providing data storage solutions since its founding in 1983. With an installed base of over 25,000 libraries, ADIC is a leading provider of automated tape libraries used to backup and archive electronic data in client/server network (1) A communications network that uses dedicated servers. In this context, the term is used to contrast it with a peer-to-peer network, which allows any client to also be a server. (2) A network that is processing applications designed for client/server architecture. computing computing - computer environments. ADIC products 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. (a trademark of Quantum Corp.), AIT (Sony), 4mm and 8mm tape drive technologies and are supported by leading suppliers of backup and storage management software products. During 1997, ADIC became a minority investor in Fibre Channel architecture pioneer Crossroads Systems Inc. and introduced a family of 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. In 1998, the company announced a product licensing and development agreement with Veritas Software Veritas Software Corp. was an international software company that was founded in 1983 as Tolerant Systems, renamed Veritas Software Corp. in 1989, and merged with Symantec in 2005. It was headquartered in Mountain View, California. (Nasdaq:VRTS VRTS Veritas Software (stock symbol) VRTS Verification Requirements Tracking System ) and a significant OEM supply partnership with Dell Computer Corp. (Nasdaq:DELL). ADIC maintains sales offices throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe with established reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. channels around the world. Further product information is available via the Internet at http://www.adic.com. -0- All 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. contained herein involve risks and uncertainties, including technical and competitive factors, which could cause results to differ materially. Such risks are detailed in ADIC's Form 10K and other documents on file with the SEC. -0-
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amounts)
--Unaudited--
Three months ended Six months ended
April 30, April 30,
1998 1997 1998 1997
Net sales $ 24,806 $ 22,073 $ 47,672 $ 42,142
Cost of sales 17,796 15,563 33,247 29,660
Gross profit 7,010 6,510 14,425 12,482
Selling and
administrative expenses 4,182 3,248 7,966 6,296
Research and
development expenses 627 691 1,245 1,323
Operating profit 2,201 2,571 5,214 4,863
Other income 518 341 1,079 594
Income before provision
for income taxes 2,719 2,912 6,293 5,457
Provision for income taxes 785 1,011 1,998 1,896
Net income $ 1,934 $ 1,901 $ 4,295 $ 3,561
Basic net income
per share $ 0.20 $ 0.21 $ 0.44 $ 0.42
Diluted net income
per share $ 0.20 $ 0.21 $ 0.43 $ 0.41
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 30, 1998 Oct. 31, 1997
(Unaudited)
ASSETS
Current assets:
Cash $ 20,327 $ 32,807
Accounts receivable, net 22,415 18,078
Inventories, net 21,617 16,075
Other current assets 2,003 1,483
Total current assets 66,362 68,443
Property, plant and equipment, net 3,509 2,509
Investment and other assets 4,207 4,242
$ 74,078 $ 75,194
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,000 $ 11,237
Other current liabilities 2,693 3,847
Total current liabilities 9,693 15,084
Shareholders' equity 64,385 60,110
$ 74,078 $ 75,194
CONTACT: ADIC Peter van Oppen Chuck Stonecipher 425/881-8004 www.adic.com |
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