ADIC Posts Fiscal 2002 Profit of Two Cents Per Share; Quarterly Loss Shrinks as Sales Grow 10.8% Sequentially.Business Editors REDMOND, Wash.--(BUSINESS WIRE)--Dec. 12, 2002 - Cash Generated from Operations is $16 Million and $40 Million for Quarter, Year - ADVANCED DIGITAL INFORMATION CORPORATION (Nasdaq:ADIC) today announced sales for its fourth fiscal quarter ended October 31 were $84.2 million, a decline from $91.2 million in the same quarter last year and up 10.8 percent from $76.0 million in the immediately preceding quarter. Sales were $338 million for the full fiscal year 2002, a decline of 7.4 percent from fiscal 2001. The Company reported a net loss for the quarter of $1.2 million, or two cents per fully 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, versus pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. of $2.3 million, or four cents per fully diluted share, reported in the fourth quarter of 2001 and a loss of $2.1 million, or three 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. , in the preceding quarter. Fiscal 2002 earnings were $1.6 million, or two cents per fully diluted share, compared to pro forma earnings of $18.3 million, or 29 cents per fully diluted share, reported for 2001. Inclusion of acquisition costs and other one-time items resulted in reported net losses for the 2001 fourth quarter and fiscal year of $5.4 million and $10.8 million, respectively. "Annual 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. have increased by over $12 million, or 13.4 percent, during a year when sales declined 7.4 percent, despite significant cost cutting and headcount reductions in certain areas," 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. Chairman and Chief Executive Officer Peter van Oppen. "We believe fervently fer·vent adj. 1. Having or showing great emotion or zeal; ardent: fervent protests; a fervent admirer. 2. Extremely hot; glowing. that our software and hardware technologies will be increasingly important in the storage solutions marketplace. Growing acceptance of ADIC products by both end users and 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 partners reinforces that belief and justifies our continued investment in building long-term value in a defensible de·fen·si·ble adj. Capable of being defended, protected, or justified: defensible arguments. de·fen business," he said. In December of 2001, the Company confirmed it would maintain heavy investments in product development, sales and service channels as well as infrastructure at the expense of optimizing short-term profits. "Our success in following that strategy is visible through recent quarterly trends in gross margin and sales of Intelligent Storage Solution(TM) products," van Oppen said today. The Company generated cash from operations of $16.3 million and $40.0 million in the fourth quarter and fiscal year 2002, respectively. 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 , net of all debt, was $179.6 million, or approximately $2.89 per fully diluted share, at the end of the period, up from $175.0 million at the end of fiscal 2001. As of October 31, marketable securities primarily represented investment grade financial instruments of varying maturities consistent with the Company's investment policy. As part of an ongoing share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program, a total of 1,294,400 shares of common stock were repurchased during the fiscal year at an aggregate cost of $7.9 million, or approximately $6.07 per share. In addition, 55,282 shares were cancelled as a result of the settlement of escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. claims associated with the fiscal 2001 acquisition of Pathlight Technology, Inc. Cash investment in infrastructure during 2002 included $26.9 million in additional property, plant and equipment for a net increase in fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → of $16.7 million. OEM shipments for the fourth quarter and fiscal year 2002 were 42 percent and 44 percent of total sales compared to 43 percent and 42 percent for the previous fourth quarter and fiscal year. In early December, the Company announced that it had entered into an OEM sales agreement with Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. and, in November, it was announced that Cray (Cray, Inc., Seattle, WA, www.cray.com) A supercomputer manufacturer founded in 1972 as Cray Research, Inc., by Seymour Cray, a leading designer of large-scale computers at Control Data. In 1976, it shipped its first computer to Los Alamos National Laboratory. , Inc. had selected ADIC's StorNext(R) File System for its new generation Cray X1(TM) supercomputer supercomputer, a state-of-the-art, extremely powerful computer capable of manipulating massive amounts of data in a relatively short time. Supercomputers are very expensive and are employed for specialized scientific and engineering applications that must handle very . Each of Dell, Fujitsu-Siemens, Hewlett-Packard, 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 has extended the product range provided to it by ADIC during the past 12 months. During fiscal 2002, sales to Dell Computer were $63.5 million and sales to IBM Corporation were $86.2 million. Gross margin as a percentage of sales increased to 29.4 percent for the fourth quarter, up from 29.2 percent in the third quarter and 27.2 percent for the same period last year. Fiscal year 2002 gross margin was 27.2 percent of sales, down from pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma gross margin of 29.0 percent in fiscal 2001. Intelligent Storage Solutions(TM) (ISS ISS See Institutional Shareholder Services (ISS). ), which include elements of ADIC software and connectivity technology and are sold through both branded and OEM sales channels, represented 36 percent of sales in both the fourth quarter and the immediately preceding third quarter, an increase from 27 percent in fourth quarter 2001. ISS revenue for fiscal 2002 was 30 percent of total sales versus 17 percent of total sales in fiscal 2001. Subsequent to the end of the fiscal year, the Company's interest in a private company was converted into cash and marketable public equity securities with a combined total current value of approximately $8.8 million. This investment is reflected on the October 31, 2002 balance sheet as a non-current investment valued at $7.7 million. Assuming no significant change in the general economic environment, results for the first quarter of 2003 are expected to show sales between $80-90 million with an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. comparable to the quarter just completed. Results for fiscal 2001 have been restated to reflect the acquisition of Pathlight Technology on a pooling-of-interests basis. Director Resigns Former University of Washington President Richard L. McCormick has resigned from the Board of Directors of ADIC, effective November 15, 2002. Dr. McCormick has recently accepted the presidency of Rutgers University Rutgers University, main campus at New Brunswick, N.J.; land-grant and state supported; coeducational except for Douglass College; chartered 1766 as Queen's College, opened 1771. Campuses and Facilities Rutgers maintains three campuses. and is in the process of moving to New Jersey. 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 networks.(See Note a) The Company's storage management software and storage networking appliances provide IT managers innovative tools for storing, managing and protecting their most valuable digital assets. ADIC storage products are available through a worldwide sales force and a global network of resellers and OEMs, including Dell, Fujitsu-Siemens, Hewlett-Packard, IBM and Sun. Further information about ADIC is available at www.adic.com. Conference Call There will be a conference call to discuss fourth quarter and fiscal 2002 results as well as estimates for first quarter fiscal 2003 at 2:00 p.m. PT (5:00 p.m. ET) on December 12, 2002. The call can be accessed live on our website at www.adic.com/ir. Note a: IDC 2001 worldwide revenue and unit market share data for all automated systems using 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. , SDLT (Super DLT) See DLT. , LTO (Linear Tape Open) A family of open magnetic tape standards developed by HP, IBM and Quantum (formerly the Certance subsidiary of Seagate) that are licensed to third-party vendors. LTO cartridges contain a memory that stores historical usage data. , 8mm or AIT drive, and Gartner Dataquest, 2002 Market Shares and Forecasts for Tape Automation Systems, F. Yale, August 2002. 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. 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, 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 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. for the year ended October 31, 2001 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. ADIC(R) is a registered trademark and Intelligent Storage is a trademark of Advanced Digital Information Corporation. All other product or company names should be considered the property of their owners. -0-
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share amounts)
Three months ended Fiscal year ended
October 31, October 31,
2002 2001 2002 2001
------- ------- -------- --------
Net sales $84,190 $91,171 $337,599 $364,681
Cost of sales 59,426 66,331 245,832 258,893
Pathlight acquisition costs --- --- --- 4,109
------- ------- -------- --------
Gross profit 24,764 24,840 91,767 101,679
Sales and marketing 12,216 11,366 48,307 43,704
General and administrative 6,219 6,759 23,172 19,960
Research and development
expenses 9,964 7,607 32,230 27,763
Crossroads settlement costs --- --- --- 16,974
Acquisition expenses --- --- 1,475 8,837
------- ------- -------- --------
Operating loss (3,635) (892) (13,417) (15,559)
Other income (expense), net 157 (8,632) 11,864 819
------- ------- -------- --------
Loss before benefit for income
taxes (3,478) (9,524) (1,553) (14,740)
Benefit for income taxes (2,264) (4,118) (3,113) (3,908)
------- ------- -------- --------
Net income (loss) $(1,214) $(5,406) $ 1,560 $(10,832)
======= ======= ======== ========
Basic net income (loss) per
share $ (0.02) $ (0.09) $ 0.03 $ (0.18)
======= ======= ======== ========
Diluted net income (loss) per
share $ (0.02) $ (0.09) $ 0.02 $ (0.18)
======= ======= ======== ========
Shares used in computing basic
net income (loss) per share 62,204 61,638 62,304 60,381
======= ======= ======== ========
Shares used in computing diluted
net income (loss) per share 62,204 61,638 63,500 60,381
======= ======= ======== ========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 31, October 31,
2002 2001
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $150,741 $155,274
Accounts receivable, net 71,383 82,451
Inventories, net 32,296 42,430
Marketable securities 24,878 23,352
Other current assets 21,800 21,632
------------ --------
Total current assets 301,098 325,139
Property, plant and equipment, net 48,722 32,017
Service parts for maintenance, net 22,936 17,149
Marketable securities 7,221 1,550
Investments 10,928 9,953
Other non-current assets 8,232 13,562
-------- --------
$399,137 $399,370
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 69,419 $ 67,724
Long-term debt 984 1,170
Shareholders' equity 328,734 330,476
-------- --------
$399,137 $399,370
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