ADIC Earns $14 Million, or $0.27 Per Share, in Third Quarter On Slower Growth, Gain On Share Sales; Company to Repurchase Up to Three Million Shares.Business Editors, High-Tech Writers REDMOND, Wash.--(BUSINESS WIRE)--Aug. 17, 2000 Advanced Digital Information Corporation (NASDAQ/NMS Symbol: ADIC) today announced earnings of more than $14.2 million, or 27 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the third quarter ending July 31, 2000. ADIC earnings include a pre-tax gain of $14.3 million on the sale of shares of Crossroads Systems, Inc. (NASDAQ/NMS Symbol: CRDS CRDS Contribution pour Le Remboursement de la Dette Sociale (French: Social Debt Repayment Contribution) CRDS Cavity Ring-Down Spectroscopy CRDS Community Rehabilitation and Disability Studies ) owned by the Company. Excluding the effect of this asset sale, earnings were $4.9 million with diluted earnings of 9 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. versus 11 cents per share the same period a year ago. Revenues were $66.0 million, an increase of 15 percent from the same period last year. "Although we are disappointed to report our second consecutive quarter of aggregate comparative revenue growth at or below 20 percent," said Chairman and Chief Executive Officer Peter van Oppen, "the underlying trends continue to foreshadow fore·shad·ow tr.v. fore·shad·owed, fore·shad·ow·ing, fore·shad·ows To present an indication or a suggestion of beforehand; presage. fore·shad outstanding future growth." As in the second quarter, the Company's U.S. core library business, which represented over 65 percent of total global revenues in each quarter, grew at rates in excess of 50 percent versus the same period in the prior year. European core library sales were up nearly 10 percent for the period. Both increases were significantly offset by declines in large library sales and associated service revenues of approximately 44 percent overall. Lingering lin·ger v. lin·gered, lin·ger·ing, lin·gers v.intr. 1. To be slow in leaving, especially out of reluctance; tarry. See Synonyms at stay1. 2. Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 effects and economic softness in Europe, where large libraries have historically been strongest, were factors in the decline of this business. "The good news is that our near-term order forecasts suggest fourth quarter and first quarter sales should grow at double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" sequential rates over the immediately preceding quarter and more than 20 percent over comparable quarters in the prior 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. van Oppen. "New orders for large libraries indicate that, instead of the moderate to precipitous declines experienced in the past two quarters, we will have significant sequential increases in that business. Stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders should allow continued strong growth in the vast majority of our business to become more apparent in the aggregate revenue totals," he said. "Robust market opportunities and our strong cash position have persuaded us to continue increasing spending levels," according to 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. "We expect to see very significant revenues associated with our Dell, Fujitsu Siemens (Fujitsu Siemens Computers, Inc. (USA), Milpitas, CA, www.fujitsu-siemens.com) Fujitsu Siemens Computers USA is a wholly owned research and development subsidiary of Fujitsu Siemens Computers. and 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) 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 agreements over the next two quarters. Dell and Siemens are presently shipping and we have been informed that IBM expects shipments of LTO-based products to be imminent. In addition, we have several new product and partnership initiatives, which we expect to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... over the next two quarters. As a result, we believe the short-term drop in operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before , which is more than offset by non-operating earnings, is fully justified by the opportunities before us," Stonecipher said. Separately, the Company announced that its Board of Directors had authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: 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 up to 3 million common shares on the open market. The Company intends to purchase shares from time to time with the goal of partially offsetting the dilutive effects Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of various incentive programs. ADIC said gross margin declined from 35.2 percent of sales in third quarter 1999 to 33.4 in the just completed quarter as a result of reduced revenues from large libraries. It also noted that, as anticipated, increased OEM revenues may have a negative effect on gross margin percentage over the next few quarters. Selling and administrative expenses increased 38 percent from the same period a year ago to $13 million, while research and development expenses were $4.4 million, an increase of 27 percent over the third quarter of fiscal 1999. The Company also noted that OEM sales represented approximately 21 percent of revenue for the period. The Company reported cash and marketable equity securities, excluding remaining Crossroads shares, total nearly $227 million. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying decreased $1.4 from the immediately preceding quarter to $54.4 million. Inventories at July 31 totaled $46.8 million which was essentially level with the amount of inventory the Company had on hand at April 30. ADIC said it had sold 321,500 shares of Crossroads during the period at an average price of $46 per share resulting in a gain of $14.3 million. The Company continues to hold approximately 1,774,000 share of Crossroads which are recorded at the market price on July 31 of $4.563 per share, or a total $8.1 million. The Company's average cost of Crossroads shares is $1.53 per share. About ADIC With more than 65,000 automated tape libraries installed, innovative storage management software, Fibre Channel Storage Area Network (SAN) solutions, and Network Attach Storage (NAS (1) See network access server. (2) (Network Attached Storage) A specialized file server that connects to the network. A NAS device contains a slimmed-down operating system and a file system and processes only I/O requests by supporting the popular ) appliances, ADIC is the world's leading device-independent storage solutions provider to the open systems marketplace. The Company offers a broad range of products designed to help organizations stay more productive by making it easier for them to store, protect, manage and use their rapidly growing network data. ADIC's industry-leading line of automated storage products are available through a worldwide sales force and a global network of resellers and OEM partners, including Dell, IBM and Fujitsu Siemens. Further information about ADIC is available at http://www.adic.com. Conference Call There will be a conference call to discuss the third quarter fiscal 2000 earnings at 2pm PST PST Paroxysmal supraventricular tachycardia, see there on August 17. The call can be accessed live on our website at www.adic.com/ir. 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", 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, changes in market pricing and production problems. In addition, the market for technology stocks such as Crossroads is extremely volatile and there is no assurance that ADIC will realize the value currently reflected on its balance sheet when and if it liquidates its remaining investment in Crossroads. Reference is made to the Company's Prospectus dated September 23, 1999 and Annual Report Form on 10K 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 after the date of this release or to reflect the occurrence of unanticipated events. 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. , FileServ, CentraVision and 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. are trademarks of Advanced Digital Information Corporation. 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. is a trademark of Quantum Corporation. All other product or company names should be considered the property of their owners.
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amounts)
Three months Nine months
ended ended
July 31, July 31,
(Unaudited) (Unaudited)
2000 1999 2000 1999
----------------------------------------
Net sales $ 66,022 $ 57,191 $194,783 $160,379
Cost of sales 43,943 37,075 126,387 105,830
-------- -------- -------- --------
Gross profit 22,079 20,116 68,396 54,549
Selling and
administrative expenses 12,997 9,409 36,530 27,502
Research and
development expenses 4,370 3,440 12,444 9,490
-------- -------- -------- --------
Operating profit 4,712 7,267 19,422 17,557
Gain on sale of Crossroads 14,345 -- 88,791 --
Other income (expense), net 2,795 41 8,874 472
-------- -------- -------- --------
Income before provision
for income taxes 21,852 7,308 117,087 18,029
Provision for income taxes 7,629 2,663 39,735 6,504
Minority interest -- 98 18 381
-------- -------- -------- --------
Net income $ 14,223 $ 4,547 $ 77,334 $ 11,144
======== ======== ======== ========
Basic net income per share $ 0.28 $ 0.11 $ 1.50 $ 0.28
======== ======== ======== ========
Diluted net income per share $ 0.27 $ 0.11 $ 1.44 $ 0.27
======== ======== ======== ========
Shares used in computing
basic net income
per share 51,654 39,952 51,442 39,462
======== ======== ======== ========
Shares used in computing
diluted net income
per share 53,505 42,051 53,777 40,992
======== ======== ======== ========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
July 31, 2000 October 31, 1999
(Unaudited)
ASSETS
Current assets:
Cash $201,666 $156,548
Accounts receivable, net 54,429 44,568
Inventories, net 46,807 33,317
Marketable equity
securities 25,550 2,222
Other current assets 6,327 5,727
-------- --------
Total current assets 334,779 242,382
Property, plant and
equipment, net 13,245 8,712
Investment in Crossroads
Systems, Inc. 8,097 185,544
Investments and other assets 22,050 16,336
-------- --------
$378,171 $452,974
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 67,044 $ 48,017
Long-term debt 1,229 1,507
Deferred income tax 1,814 64,168
Minority interest 324
Shareholders' equity 308,084 338,958
-------- --------
$378,171 $452,974
======== ========
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