ADIC Reports Sales of $90 Million in First Quarter as Annual Growth Exceeds 41 Percent; First Quarter Earnings Reach $8.7 Million, or 16 Cents Per Share.Business Editors 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.--(BUSINESS WIRE)--Feb. 14, 2001 Advanced Digital Information Corporation (Nasdaq:ADIC) today announced sales grew 41 percent to $90.1 million for the first quarter ended Jan. 31, 2001, versus sales of $63.9 million for the same period a year ago. Earnings were $8.7 million, or 16 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 quarter as compared to $7.2 million, or 13 cents per diluted share, for the first quarter of fiscal 2000. "Revenue growth was exceptional this quarter as 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 grew by nearly $20 million over levels in the fourth quarter reflecting the ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of sales to 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 continued strength among existing OEM customers," commented Chairman and Chief Executive Officer Peter van Oppen. "We diverted di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. production and engineering resources to support OEM demand but opportunities for both branded and OEM business remain robust," he said. Total OEM revenue was 45 percent of sales versus 28 percent of sales in the previous period. North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. sales of core products, which include OEM sales, grew at an annual rate of over 71 percent for the first quarter after having grown at annual rates exceeding 50 percent during each quarter of fiscal 2000. Worldwide sales of core products grew at a 51 percent annual rate for the quarter and represented approximately 86 percent of total revenue. The Company said that, as expected, the rapid acceleration of OEM sales caused a significant reduction in gross margin as a percentage of sales. Gross margin for the first period was 29.4 percent of sales versus an average of 35.2 percent during fiscal 2000. This reduction in gross margin is generally a result of lower margins to OEM customers that are expected to be offset by lower sales and marketing costs in the long term although the Company believes the gross margin reduction was exaggerated in the first quarter. "We anticipate that the product mix and production costs for our OEM business will improve as our newer, multi-product OEM relationships mature and as our business continues to shift to higher value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: products," van Oppen said. The Company has previously announced that its multi-product OEM relationships include Dell Computer, IBM and Fujitsu-Siemens. Selling and administrative expense increased 16 percent to $12.7 million during the first quarter versus the same period a year ago while research and development expenses were $4.8 million during the period, an increase of 22 percent. Cash and marketable Marketable are securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly. equity securities totaled approximately $207 million at Jan. 31, an increase of $3 million since Oct. 31. At Jan. 31, the Company owned 500,000 shares of Crossroads Systems, Inc. The Company noted that 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 by approximately $1.0 million during the quarter to $66.9 million and inventory increased $29 million to approximately $77 million. "There was good receivable control during the period although our inventories were above acceptable 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. levels," said Chief Financial Officer Jon JON Jonah JON Jesus of Nazareth JON Job Order Number JON Johnston Island, US, Outlying Islands (Airport Code) Gacek. "The inventory increase is significant and reflects both the magnitude of sales increase and the uncertainty of demand experienced during the quarter. We are very committed to supporting our partners and our inventory tends to increase during periods of significant shifts in demand. We expect that we will see inventory reductions during the current period," he said. Separately, the Company noted that it will make the initial filing of its Registration Statement on Form S-4 this week to register 10.3 million shares that it will exchange for 100 percent of the outstanding equity securities of Pathlight Technology, Inc. The acquisition of Pathlight is expected to be accounted for as a pooling of interest Noun 1. pooling of interest - an accounting method used in the merging of companies; the balance sheets are added together item by item; this method is tax-free and is anticipated to close during the Company's quarter ending April 30, 2001. "We have been very pleased with the reaction we are receiving from our branded sales channel partners, industry partners and OEM customers on our acquisition of Pathlight," 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. "With the acquisition of Pathlight we are uniquely positioned to provide Intelligent Storage(TM) solutions to open systems end users through our established ADIC branded channels and our OEM customer channels," he said. About ADIC With more than 80,000 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 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 Computer, IBM and 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. . On Jan. 30, 2001, the Company announced that it had entered into a merger agreement with storage networking pioneer Pathlight Technology, Inc. for total consideration of 10.3 million ADIC shares. The merger is expected to close during ADIC's second quarter ending April 30, 2001. The merged companies will offer a broad range of Intelligent Storage(TM) products including SAN management, connectivity and virtualization An umbrella term for enhancing a computer's ability to do work. Following are the ways virtualization is used. Hardware Virtualization Partitioning the computer's memory into separate and isolated "virtual machines" simulates multiple machines within one physical computer. products that complement ADIC's existing storage hardware and software solutions. Further information about ADIC is available at www.adic.com Conference Call There will be a conference call to discuss the first quarter fiscal 2001 earnings at 2:00 p.m. PST PST Paroxysmal supraventricular tachycardia, see there on Feb. 14, 2001. 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 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, 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 Oct. 31, 2000, 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 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.
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for per share amounts)
Three months ended January 31,
(Unaudited)
2001 2000
------------ -------------
Net sales $ 90,066 $ 63,863
Cost of sales 63,616 40,961
------------ -------------
Gross profit 26,450 22,902
Selling and administrative
expenses 12,709 10,951
Research and development
expenses 4,820 3,956
------------ -------------
Operating profit 8,921 7,995
Other income 4,204 2,403
------------ -------------
Income before provision for
income taxes 13,125 10,398
Provision for income taxes 4,418 3,212
Minority interest -- 18
------------ -------------
Net income $ 8,707 $ 7,168
============ =============
Basic net income per share $ .17 $ .14
============ =============
Diluted net income per share $ .16 $ .13
============ =============
Shares used in computing basic
net income per share 51,943 51,149
============ =============
Shares used in computing diluted
net income per share 54,063 53,723
============ =============
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Jan. 31, 2001 Oct. 31, 2000
(Unaudited)
ASSETS
Current assets:
Cash $ 181,490 $ 185,169
Accounts receivable, net 66,871 67,821
Inventories, net 77,255 48,110
Marketable equity securities 25,878 19,349
Other current assets 8,283 10,389
----------- ------------
Total current assets 359,777 330,838
Property, plant and equipment, net 21,962 18,864
Investments 22,784 20,972
Other non-current assets 11,471 12,400
----------- ------------
$ 415,994 $ 383,074
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 84,756 $ 67,696
Long-term debt 1,166 1,087
Shareholders' equity 330,072 314,291
----------- ------------
$ 415,994 $ 383,074
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