ADIC Second Quarter Sales Fall 16% to $80.7 Million; Net Income is $2.5 Million, or Four Cents Per Share; Stock Buyback Authorized.Business Editors, Technology Writers REDMOND, Wash.--(BUSINESS WIRE)--May 16, 2002 ADVANCED DIGITAL INFORMATION CORPORATION(R) (Nasdaq:ADIC) today confirmed sales for its second fiscal quarter ended April 30 fell 16 percent from the same quarter last year to $80.7 million. Sales were down sequentially nearly 17 percent from the record $96.7 million total reported for the first fiscal quarter ended January 31, 2002. On May 2, the Company pre-announced that second quarter sales were expected to be $80-$82 million. Net income for the second quarter was $2.5 million, or four 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. , before 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 adjustments. Pro forma net income, reflecting the elimination of $3.5 million in non-cash income related to the maturation maturation /mat·u·ra·tion/ (mach-u-ra´shun) 1. the process of becoming mature. 2. attainment of emotional and intellectual maturity. 3. of call options on owned equity securities and the elimination of $1.5 million in one-time acquisition charges relating primarily to purchased in-process research and development, was approximately $1.2 million, or two cents per share. 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 were approximately 45 percent of revenue compared with 38 percent in the second quarter of 2001. In the immediately preceding quarter, OEM and branded sales each represented about 50 percent of total sales. Second quarter gross margin was approximately 26.0 percent, an increase from 24.6 percent reported in the first quarter but still down from 31.2 percent in the same period a year ago. "There is no way to describe sales this quarter as anything but disappointing," stated 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. Peter van Oppen. "At the end of the first quarter, we foresaw a modest decline in OEM sales, growth in the U.S. branded business and no further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in Europe. We actually experienced a more than 25 percent decline in OEM revenue, as well as an eight percent decline in both U.S. and European branded business," he said. The Company believes these declines are principally a result of weak economic conditions affecting its OEM customers and its own branded customers. "We are, however, pleased to note our gross margin percentage improved by 1.4 points compared to first quarter despite a 17 percent sequential reduction in shipments. We believe this is a very positive indication of both a higher proportion of Intelligent Storage(TM) solutions in our sales mix sales mix See product mix. as well as material cost reductions," van Oppen said. Separately, ADIC noted that it had been selected to supply a new automation platform to an existing OEM customer and that it had agreed to supply SAN connectivity appliances to a new OEM customer. Both awards were made during the quarter just completed and each should result in meaningful 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. shipments beginning in the fourth quarter. Product announcements, if any, will come from the OEM customers. The Company also noted that it had acquired the people, assets and intellectual property of V-Stor LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control during the period for an undisclosed sum. V-Stor is a developer of software technology enabling disk storage capacity to be employed in traditional tape storage applications. ADIC re-iterated that its intention is to make prudent investments in sales, marketing and R&D during this economic downturn in anticipation of an eventual market recovery. Consistent with that plan, quarterly pro forma 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. are up approximately nine percent and seven percent on an annual and sequential basis, respectively. The Company anticipates that such investments will result in steady improvement in gross margin which would be accelerated by resumed sales growth in a stronger macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. environment. Certain cost reductions associated with reduced sales volume will continue to be implemented as deemed appropriate. In the absence of any significant improvement in the general economic environment, sales and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the third quarter are expected to remain at levels similar to those experienced on a pro forma basis in the second quarter. New OEM and branded products as well as seasonal factors are likely to result in a resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of moderate sequential revenue and earnings growth in the fourth fiscal 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. the Company. "The balance sheet continued to strengthen during the period," said Chief Financial Officer Jon Gacek. "We profitably sold marketable equity securities during the quarter which created other income of $2.5 million, exclusive of non-cash pro forma adjustments, and contributed to an increase in our cash balance which now totals $179 million. Receivables and inventory each improved by more than $4 million, 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. fell by over $3 million and we funded $6.5 million in net capital investment during the quarter," he noted. "The provision for income taxes for the quarter is a tax benefit of $479,000 which reflects our reduced income relative to non-taxable items and tax credits which, together, result in a lower expected tax rate for the year," according to Gacek. Results for the 2001 fiscal periods have been restated to reflect the acquisition of Pathlight Technology on a pooling-of-interests basis. 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. The Company also announced that its Board of Directors has authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of up to two million shares of Common Stock. ADIC believes any such purchases, which may be made from time to time, represent good value for the Company and its shareholders and will help offset potentially dilutive effects Dilutive effect Result of a transaction that decreases earnings per common share (EPS). of existing incentive programs. 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 tape systems using the drive technologies most often employed for backing up open system, client-server networks(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 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. 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 drives. Conference Call There will be a conference call to discuss the second quarter fiscal 2002 earnings at 2:00 p.m. PT (5:00 p.m. ET) on May 16, 2002. 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 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 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 OPERATIONS
(In thousands, except for per share amounts)
Three months ended Six months ended
April 30, April 30,
2002 2001 2002 2001
-------- -------- -------- --------
Net sales $ 80,687 $ 96,134 $177,410 $188,560
Cost of sales 59,696 66,150 132,617 130,970
-------- -------- -------- --------
Gross profit 20,991 29,984 44,793 57,590
Selling and
administrative
expenses 17,485 15,835 33,823 29,989
Research and
development
expenses 7,269 6,840 14,070 13,042
Acquisition
expenses 1,475 -- 1,475 --
-------- -------- -------- --------
Operating profit
(loss) (5,238) 7,309 (4,575) 14,559
Other income 7,266 3,033 10,209 5,484
-------- -------- -------- --------
Income before
provision (benefit)
for income taxes 2,028 10,342 5,634 20,043
Provision (benefit)
for income taxes (479) 3,634 745 6,826
-------- -------- -------- --------
Net income $ 2,507 $ 6,708 $ 4,889 $ 13,217
======== ======== ======== ========
Basic net income
per share $ 0.04 $ 0.11 $ 0.08 $ 0.22
======== ======== ======== ========
Diluted net income
per share $ 0.04 $ 0.11 $ 0.08 $ 0.21
======== ======== ======== ========
Shares used in
computing basic
net income per
share 62,396 60,944 62,235 60,875
======== ======== ======== ========
Shares used in
computing diluted
net income per
share 63,824 63,540 63,959 64,432
======== ======== ======== ========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 30, 2002 October 31, 2001
-------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents $178,877 $155,274
Accounts receivable, net 81,627 82,451
Inventories, net 32,112 42,430
Marketable equity securities 1,554 23,352
Other current assets 20,091 21,632
-------- --------
Total current assets 314,261 325,139
Property, plant and equipment, net 42,992 32,017
Service parts for maintenance, net 19,143 17,149
Investments 11,353 11,503
Other non-current assets 13,591 13,562
-------- --------
$401,340 $399,370
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 63,241 $ 67,724
Long-term debt 1,157 1,170
Shareholders' equity 336,942 330,476
-------- --------
$401,340 $399,370
======== ========
|
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion