ADIC Reports Second Quarter Sales of $94.8 Million as Annual Growth Tops 46 Percent -- Sales Growth Reflects Strength in Branded, OEM Business --.Business/High Tech Editors REDMOND, Wash.--(BUSINESS WIRE)--May 16, 2001 ADVANCED DIGITAL INFORMATION CORPORATION (Nasdaq:ADIC) today announced sales grew 46 percent to $94.8 million for the second quarter ended April 30, 2001 versus sales of $64.9 million for the same period a year ago. Earnings were $7.9 million, or 15 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. Excluding the effect of a one-time asset sale in the same period last year, comparable earnings for the second quarter of 2000 were $7.6 million, or 14 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. . "ADIC experienced another quarter of exceptional revenue growth when compared to both the same quarter last year and the immediately preceding quarter," 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. "After growing 41 percent in the first quarter, we are extremely pleased to post sales growth of 46 percent for the second quarter together with an increase in our gross profit percentage from 29.4 to 31.0 percent between the first and second quarters of fiscal 2001," he said. The Company attributed the increased sequential gross profit percentage to an increased proportion of ADIC(R) branded sales versus 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 for the period as well as to improved margins on OEM business. OEM sales represented 38 percent of revenues for the second quarter, down from 45 percent in the first quarter of fiscal 2001. The gross profit percentage in the second quarter of fiscal 2000 was 36.1 percent at a time when OEM sales, which characteristically have a lower gross profit percentage, represented 22 percent of total sales. "Second quarter 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. increased 22 percent over the same quarter last year and nearly 17 percent over the first quarter," commented van Oppen, "as the Company accelerated spending on sales and marketing and R&D in an effort to further capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. its momentum in the marketplace." "ADIC's strategy requires continued expansion of our proprietary hardware and software technologies in order to grow both our revenues and our gross margin," 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. "We acquired Pathlight to gain access to its existing technologies and development team," he said. "Already, we have integrated Pathlight's intelligent connectivity and SAN management tools into ADIC products that we expect to ship on both a branded and OEM basis in the current quarter," according to Stonecipher. "The incorporation of new technologies, extensions of our product offerings and development of additional branded and OEM channels are what make us confident of sales growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. in our existing ADIC business of 35-40 percent through fiscal 2002," he said. On May 11, 2001, ADIC completed the acquisition of Pathlight Technology, Inc. for a total consideration of 10.3 million shares. The Company noted that its acquisition of Pathlight will be accounted for as a pooling-of-interests transaction and, as previously announced, will result in one-time purchase costs and associated restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs of $10-$12 million in the third quarter as well as restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of prior period results and dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. of anticipated results for the remainder of 2001. Reported consolidated growth rates in the second half of fiscal 2001 are expected to be in the 30-35 percent range due to inclusion of Pathlight results for 2000 and 2001. Pathlight is expected to have a positive effect on sales growth rates, earnings and earnings per share in fiscal 2002 when consolidated growth rates are anticipated to revert re·vert v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. to the range of 35-40 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 as of April 30, 2001 were down approximately $35 million from January 31, 2001. Senior Vice President and Chief Financial Officer Jon Gacek noted, "despite the reduction in cash and securities this quarter, the balance sheet improved over the preceding period as a result of a $27 million reduction in current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. and a $4 million reduction in inventory. Finished goods inventory levels may remain a challenge as our OEM customers continue to grow in number and breadth." Conference Call There will be a conference call to discuss the second quarter fiscal 2001 earnings at 8:30 a.m. Eastern Time on May 17, 2001. The call can be accessed live on our website at www.adic.com/ir. About ADIC Advanced Digital Information Corporation (Nasdaq:ADIC) is a leading storage solutions provider to the open systems marketplace offering a broad range of Intelligent Storage(TM) products designed to enhance organizations' abilities to store, protect, manage and use their rapidly growing network data. ADIC products include technology-independent 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. storage systems, specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. storage management software, and multiple-protocol storage networking (SAN/NAS) connectivity and management tools. ADIC storage products are available through a worldwide sales force and a global network of resellers and OEMs, including 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 (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) . Further information about ADIC is available at www.adic.com. 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 "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 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, 2000 and to the Company's Registration Statement on Form S-4 filed on February 14, 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 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 Six months ended
April 30, April 30,
(Unaudited) (Unaudited)
2001 2000 2001 2000
---- ---- ---- ----
Net sales $ 94,778 $ 64,898 $184,844 $128,760
Cost of sales 65,384 41,483 129,000 82,443
-------- -------- -------- --------
Gross profit 29,394 23,415 55,844 46,317
Selling and
administrative expenses 14,543 12,582 27,252 23,533
Research and
development expenses 5,902 4,118 10,722 8,074
-------- -------- -------- --------
Operating profit 8,949 6,715 17,870 14,710
Gain on sale
of Crossroads -- 74,446 -- 74,446
Other income 3,069 3,676 7,273 6,079
-------- -------- -------- --------
Income before provision
for income taxes 12,018 84,837 25,143 95,235
Provision for
income taxes 4,101 28,894 8,519 32,106
Minority interest -- -- -- 18
-------- -------- -------- --------
Net income $ 7,917 $ 55,943 $ 16,624 $ 63,111
======== ======== ======== ========
Basic net income
per share $ .15 $ 1.09 $ .32 $ 1.23
======== ======== ======== ========
Diluted net income
per share $ .15 $ 1.03 $ .31 $ 1.17
======== ======== ======== ========
Shares used in
computing basic
net income per share 52,079 51,524 52,010 51,334
======== ======== ======== ========
Shares used in
computing diluted
net income per share 53,861 54,104 53,961 53,911
======== ======== ======== ========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 30, 2001 October 31, 2000
---------------- ----------------
(Unaudited)
ASSETS
Current assets:
Cash $146,826 $185,169
Accounts receivable, net 85,518 67,821
Inventories, net 73,006 48,110
Marketable equity
securities 25,382 19,349
Other current assets 9,288 10,389
-------- --------
Total current assets 340,020 330,838
Property, plant and
equipment, net 24,070 18,864
Investments 21,088 20,972
Other non-current assets 11,588 12,400
-------- --------
$396,766 $383,074
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities $ 58,001 $ 67,696
Long-term debt 1,082 1,087
Shareholders' equity 337,683 314,291
-------- --------
$396,766 $383,074
======== ========
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