ADIC Sales Up 52 Percent in Q4 to $63 Million as 1999 Annual Revenues Top $223 Million; Quarterly EPS is $ .26 per Share Before Acquisition Related R&D Charges.REDMOND, Wash.--(BUSINESS WIRE)--Dec. 8, 1999-- Advanced Digital Information Corporation (Nasdaq:ADIC) today announced results for its fourth quarter and fiscal year ended October 31, 1999. Earnings are $.18 and $.73 per share, for the quarter and year ended October 31, including approximately $2.1 million of in-process research and development (IPRD IPRD Institute for Policy Research & Development IPRD In-Process Research & Development IPRD In-Plant Reliability Data IPRD Integrated Payloads Requirements Document IPRD Instructional Performance Requirements Document (Instructional Design) ) expenses related to the Storage Area Network (SAN) software technology acquired in the purchase of MountainGate Imaging Systems Corporation on September 17, 1999. Fourth quarter and annual earnings, excluding the $2.1 million of IPRD expenses, are $.26 and $.82 per share. Sales for the fourth quarter and fiscal year ended October 31, 1999 are $63.0 million and $223.4 million, representing increases of 52 percent and 95 percent over the comparable prior year periods. Net income for the quarter is $4.1 million, or $.18 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. , while income for the fiscal year is $15.2 million, or $.73 per share. Excluding the effect of the acquired IPRD expenses, 1999 fourth quarter earnings were $6.1 million, or $.26 per share and adjusted fiscal 1999 earnings were $17.3 million or $.82 per share. Net loss for the fourth quarter of fiscal 1998, including after tax acquisition related charges of $5.3 million, was $3.5 million or $(.18) per share, while earnings for the 1998 fiscal year were $1.5 million or $.08 per share. "Our fourth quarter operating performance included sequential quarterly sales growth of 10 percent and gross margin exceeded 35 percent for the second consecutive quarter. The quarter was a fittingly robust conclusion to a year where we grew revenues 95 percent, successfully integrated a major acquisition, raised approximately $136 million in new equity and, most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , provided outstanding open system storage solutions to our customers," said Peter van Oppen, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We have enjoyed excellent success in emerging e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. and technology markets as well as in other high-growth sectors. Sales to our 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 also expanded dramatically during the year, accounting for 19 percent and 16 percent of net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight in the fourth quarter and full year, respectively," 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. The Company noted OEM sales are expected to continue to thrive based on growth in existing OEM channels and, later in the year, based on recently announced OEM relationships with 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) Corporation and Fujitsu-Siemens Computers. "ADIC continues to increase its hardware and software presence in both branded and OEM channels serving the exploding network storage solutions market," noted Chief Financial Officer Jon Gacek. "The acquisition of MountainGate during the fourth quarter, the acquisition of EMASS in August 1998 and a tripling of our R&D expense during 1999 all attest To solemnly declare verbally or in writing that a particular document or testimony about an event is a true and accurate representation of the facts; to bear witness to. To formally certify by a signature that the signer has been present at the execution of a particular writing so as to the increasing software and value-added engineering content of our solutions," he said. "We are also very pleased with this year's operating performance. For the fourth quarter we achieved 52% sales growth compared to the comparable prior year period, while our overall inventory levels increased just $1 million, or 3 percent." The Company's October 31, 1999 balance sheet includes a cash balance of $156.5 million, an investment in Crossroads Systems, Inc. (Nasdaq: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 ) of $185.5 million, deferred income tax liabilities of $64.2 million and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $339.0 million. The increased cash balance reflects $135.6 million in proceeds from the Company's follow-on common stock offering completed in September 1999. The investment in Crossroads, combined with substantially all of the deferred income tax liability, represents the after tax market value of the Company's 2.6 million share investment in Crossroads stock at the October 31 closing share price. Crossroads completed an initial public offering in October 1999. Shareholders' equity increased to $339.0 million primarily as a result of the follow-on offering Follow-On Offering An offering of additional shares after a company has had an initial public offering. Notes: This sometimes means the company is strapped for cash. So they need to issue more shares to pay bills or finance a new project. , the appreciation of the investment in Crossroads common stock and ADIC's 1999 net income of $15.2 million. About ADIC With more than 50,000 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 and a suite of innovative software solutions and Storage Area Networking (SAN) products, ADIC is a leading global provider in the growing market to manage and protect information for computer networks. Marketed under ADIC and ADIC/GRAU brands and the brands of OEM partners, including Dell, Exabyte and Unisys, automated tape libraries are available with DLTtape, AIT, D2, half-inch, and 4mm tape technologies, and are supported by leading backup and storage management software products for Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. , UNIX UNIX Operating system for digital computers, developed by Ken Thompson of Bell Laboratories in 1969. It was initially designed for a single user (the name was a pun on the earlier operating system Multics). , and mainframe operating systems Operating systems can be categorized by technology, ownership, licensing, working state, usage, and by many other characteristics. In practice, many of these groupings may overlap. . The Company's own storage management tools include 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. (R), FileServ and CentraVision, software products which provide users with shared access to network data. A pioneer in Storage Area Networks, ADIC's Open SAN solutions combine open-system SAN hardware and software with installation services and single-call support. Further ADIC information 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 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, year 2000 issues, 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. 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 investment in Crossroads. Reference is made to the Company's Prospectus dated September 23, 1999 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, 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. and AMASS 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. -0-
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share amounts)
Three months ended Fiscal year ended
Oct. 31, Oct. 31,
(Unaudited)
1999 1998 1999 1998
-------- -------- -------- --------
Net sales $ 62,988 $ 41,571 $223,367 $114,557
Cost of sales 40,797 29,598 146,627 81,389
-------- -------- -------- --------
Gross profit 22,191 11,973 76,740 33,168
Selling and
administrative
expenses 10,420 7,850 37,922 20,792
Research and
development expenses 3,866 2,420 13,356 4,484
Acquired in-process
technology 2,054 4,492 2,054 4,492
-------- -------- -------- --------
Operating profit (loss) 5,851 (2,789) 23,408 3,400
Other income, net 554 92 1,026 1,329
-------- -------- -------- --------
Income (loss) before
provision for
income taxes 6,405 (2,697) 24,434 4,729
Provision for income
taxes 2,413 795 8,917 3,174
Minority interest (82) 25 299 25
-------- -------- -------- --------
Net income (loss) $ 4,074 $ (3,517) $ 15,218 $ 1,530
======== ======== ======== ========
Basic net income
(loss) per share $ .18 $ (.18) $ .75 $ .08
======== ======== ======== ========
Diluted net income
(loss) per share $ .18 $ (.18) $ .73 $ .08
======== ======== ======== ========
Shares used in
computing basic net
income (loss) per
share 22,136 19,557 20,337 19,485
======== ======== ======== ========
Shares used in
computing diluted
net income (loss)
per share 23,263 19,557 20,878 19,730
======== ======== ======== ========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Oct. 31, Oct. 31,
1999 1998
-------- --------
ASSETS
Current assets:
Cash $156,548 $ 28,226
Accounts receivable, net 44,568 31,797
Inventories, net 33,317 32,294
Other current assets 7,949 4,975
-------- --------
Total current assets 242,382 97,292
Property, plant and
equipment, net 8,712 7,351
Investment in Crossroads
Systems, Inc. 185,544 4,000
Other non-current assets 16,336 3,764
======== ========
$452,974 $112,407
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 48,017 $ 30,711
Long-term debt and other
long-term liabilities 1,507 18,668
Deferred income taxes 64,168
Minority interest 324 25
Shareholders' equity 338,958 63,003
======== ========
$452,974 $112,407
======== ========
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