ADIC Reports Breakeven First Quarter EPS As Mix, Margin Show Continued Strategic Improvement; Branded Sales Up 8%, OEM Sales Down 21%; $15+ Million Cash from Operations.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:ADIC) today announced a small net loss of $270,000, or zero 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 $110.8 million for the first quarter ended January January: see month. 31, 2005. The Company earned $4.8 million, or seven cents per share, on sales of $118.3 million during the same period a year ago and $5.7 million, or nine cents per share, on sales of $115.4 million in the immediately preceding fourth quarter. Gross profit as a percentage of sales for the period was 29.6 percent, the highest in the past five quarters, versus 29.0 percent during first quarter 2004 and 29.4 percent in the preceding fourth quarter despite modestly lower total sales. Overall first quarter sales declined six percent and four percent from the year ago period and preceding period, respectively. ADIC branded sales grew eight percent versus the same quarter last year to nearly 58 percent of total revenues. Branded sales were just over 50 percent of total sales a year ago and 57 percent of sales in the fourth quarter ended October October: see month. 31. 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 decreased to approximately 42 percent of sales in the quarter, down from nearly 50 percent in first quarter 2004, as an anticipated decline in OEM sales continued. The Company reported 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. of $1.4 million versus operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $4.7 million during first quarter 2004 and $2.2 million in the preceding fourth quarter. Net cash provided by operating activities during the quarter totaled $15.3 million, leaving a quarter-ending balance of 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 of over $245 million. "We never like reporting breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations quarters but these results are about as expected and continue to bode bode 1 v. bod·ed, bod·ing, bodes v.tr. 1. To be an omen of: heavy seas that boded trouble for small craft. 2. well for our shift toward higher margins and branded business in a quarter that would typically be dominated by OEM sales," 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. "It is always significant to report an improved margin percentage despite lower total volume. We expect continued volume increases in the branded portion of our business will bring further margin improvement and profitability." "On the product side, the enormously popular 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. i2000 library grew more than 21 percent from the fourth quarter and was up approximately 62 percent from the same period last year as it benefited from new reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. channels and continued broad acceptance among enterprise-class customers," he said. "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. were slightly higher than expected for the quarter, particularly in R&D, as we incurred incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. expenses related to prototyping new products for both our branded and OEM channels," according to van Oppen. "Such costs are not likely to be repeated and we would expect R&D costs to be somewhat lower in the second quarter." Earlier this month, the Company announced the pending closure of two R&D facilities in Ithaca, New York
For other places or objects named Ithaca, see Ithaca (disambiguation). and Santa Clara, California Santa Clara, California (IPA: /ˌsæntəˈklærə/) , founded in 1777 and incorporated in 1852, is a city in Santa Clara County, in the U.S. state of California. . The decision was made in an effort to optimize optimize - optimisation efficiency and customer service. Approximately 60 Team Members will be affected, the majority of whom are being offered relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. to another ADIC facility. Both closures are expected to be completed during the fourth quarter of fiscal 2005. This quarter is the first reporting period where ADIC has presented revenue and cost of revenue separately for products and services. Service revenue is derived from contracts for field support provided to our branded-product customers and not otherwise included in the base price of the product. Service does not include revenue or cost associated with basic warranty support on new branded or OEM products, but a significant amount of service revenue is directly associated with new product sales. The Company's deferred revenue balance reflects contracts for services to be performed in subsequent periods and has been growing rapidly with expansion of the installed base of enterprise-class products. Service margins are expected to further improve as utilization rates increase for the Company's global services personnel and parts infrastructure. 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 and OEMs, including 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. , 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, 2003, F. Yale, April 2004. ADIC, Pathlight, StorNext, 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 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, 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 first quarter results as well as estimates for the second quarter of fiscal 2005 at 1:30 p.m. PT (4:30 p.m. ET) on February February: see month. 17, 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
January 31,
2005 2004
-------- --------
Revenue:
Product $ 97,630 $107,934
Service 13,190 10,371
-------- --------
Total revenue 110,820 118,305
Cost of revenue:
Product 68,535 75,454
Service 9,492 8,532
-------- --------
Total cost of revenue 78,027 83,986
Gross profit 32,793 34,319
Sales and marketing 16,682 14,072
General and administrative 6,273 6,204
Research and development 11,257 9,380
-------- --------
Operating profit (loss) (1,419) 4,663
Other income, net 1,087 1,991
-------- --------
Income (loss) before provision
(benefit) for income taxes (332) 6,654
Provision (benefit) for income taxes (62) 1,886
-------- --------
Net income (loss) $ (270) $ 4,768
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Basic net income (loss) per share $ 0.00 $ 0.07
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Diluted net income (loss) per share $ 0.00 $ 0.07
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Shares used in computing basic
net income (loss) per share 63,791 63,815
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Shares used in computing diluted
net income (loss) per share 63,791 65,270
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ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 31, October 31,
2005 2004
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $240,395 $226,890
Accounts receivable, net 84,319 93,025
Inventories, net 34,124 38,728
Marketable securities 5,024 6,043
Other current assets 14,497 13,602
-------- --------
Total current assets 378,359 378,288
Property, plant and equipment, net 45,121 45,913
Service parts for maintenance, net 30,085 29,993
Investments 3,232 2,769
Other non-current assets 18,639 18,067
-------- --------
$475,436 $475,030
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Deferred revenue - current $ 33,918 $ 31,727
Other current liabilities 61,903 65,200
-------- --------
Total current liabilities 95,821 96,927
Deferred revenue -- long-term 14,902 13,605
Other long-term liabilities 400 600
Shareholders' equity 364,313 363,898
-------- --------
$475,436 $475,030
======== ========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
January 31,
-------------------
2005 2004
-------- --------
Cash flows from operating activities:
Net income (loss) $ (270) $ 4,768
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,262 6,164
Bad debt expense 260 72
Inventory obsolescence 876 884
Gain on securities and investment transactions (34) (661)
Deferred income taxes 15 (93)
Tax benefit from exercise of stock options 50 1,289
Other 21 --
Change in assets and liabilities:
Accounts receivable 8,494 (4,546)
Inventories 3,795 (3,889)
Other current assets (1,839) 220
Service parts for maintenance (2,199) (2,623)
Current liabilities (3,450) (407)
Deferred revenue 3,306 2,754
-------- --------
Net cash provided by operating activities 15,287 3,932
-------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment (2,790) (2,498)
Proceeds from assets held for sale -- 15,117
Purchase of marketable securities -- (4,005)
Proceeds from securities transactions 1,017 16,064
Purchase of other investments (429) (364)
Return of investment on other investments -- 71
-------- --------
Net cash provided by (used in) investing activities (2,202) 24,385
-------- --------
Cash flows from financing activities:
Repayment of short-term and long-term debt -- (51)
Proceeds from issuance of common stock for stock
options 381 3,888
-------- --------
Net cash provided by financing activities 381 3,837
-------- --------
Effect of exchange rate changes on cash 39 647
-------- --------
Net increase in cash and cash equivalents 13,505 32,801
Cash and cash equivalents at beginning of period 226,890 180,401
-------- --------
Cash and cash equivalents at end of period $240,395 $213,202
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