Adaptec Reports Second Quarter Profits of $32 Million; Revenue $185 million; EPS $0.31.Business Editors/Technology Writers MILPITAS Milpitas (mĭl'pē`təs), city (1990 pop. 50,686), Santa Clara co., W Calif., a suburb of San Jose, southeast of San Francisco; inc. 1954. Manufactures include computers and paint. , Calif.--(BUSINESS WIRE)--Oct. 19, 2000 Adaptec (company) Adaptec - A company specialising in the aera of movement of data between computers. Adaptec designs hardware and software products to transfer data from a computer to a peripheral device or network. , Inc. (Nasdaq:ADPT ADPT Automated Data Processing/Telecommunications ADPT Adaptec Corporation (stock symbol) ADPT Adaptive Prediction ADPT Auger Depth Profiling Technique ADPT Automated Data Processing Telecommunications ADPT Adapter ), the global leader in innovative storage solutions, today announced financial results for its second quarter of fiscal year 2001, which ended September September: see month. 30, 2000. 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 (a) (see editorial addendum addendum n. an addition to a completed written document. Most commonly this is a proposed change or explanation (such as a list of goods to be included) in a contract, or some point that has been subject of negotiation after the contract was originally proposed by ) operating results for the second fiscal quarter 2001 and comparative quarters were: -- Net revenues of $185 million, up 1% sequentially from net revenues of $183 million in the first quarter of fiscal year 2001 and down 5% from net revenues of $194 million in the second quarter of fiscal year 2000. -- Net income of $32 million, down 9% sequentially from net income of $35 million in the first quarter of fiscal year 2001 and down 37% from net income of $50 million in the second quarter of fiscal year 2000. -- Diluted earnings per share of $0.31, down 6% sequentially from diluted earnings per share of $0.33 in the first quarter of fiscal year 2001 and down 33% from diluted earnings per share of $0.46 in the second quarter of fiscal 2000. "Overall, demand is strong for our products," said Bob Stephens Ste·phens , Alexander Hamilton 1812-1883. American politician who was vice president of the Confederacy (1861-1865) under Jefferson Davis. , President 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. . "During the quarter, we introduced three new Ultra160 RAID products and have already shipped 15,000 units. Additionally, our Fibre Channel shipments were stronger than anticipated. The continued motherboard Also called the "system board," it is the main printed circuit board in an electronic device, which contains sockets that accept additional boards. In a desktop computer, the motherboard contains the CPU, chipset, PCI bus slots, AGP slot, memory sockets and controller circuits for the shortages that affected the distribution channel during the September quarter are easing as we move into the December December: see month. quarter. We expect our sales to be favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted, as VARs can now configure See configuration. (software) configure - A program by Richard Stallman to discover properties of the current platform and to set up make to compile and install gcc. Cygnus configure was a similar system developed by K. servers and ship through to end users." Business Update The business activities in Q2 were highlighted by several key announcements including filing the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. registration statement of our Software Products Group spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. , Roxio, and two key product introductions. In addition to filing the IPO registration statement, the Software Products Group announced the hiring of Christopher Gorog as president and CEO of the Roxio subsidiary. Gorog's experience includes senior management positions with Universal Studios and Disney. The group also announced Easy CD Creator Adaptec Easy CD Creator is a CD authoring program bundled with many early CD writers. It was part of a suite often just known as Adaptec Easy CD Creator, which consisted of:
NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. and Compaq. Adaptec's Direct Attached Storage group extended its leadership position in the channel RAID market with the introduction of a new line of microprocessor-based Ultra160 SCSI SCSI in full Small Computer System Interface Once common standard for connecting peripheral devices (disks, modems, printers, etc.) to small and medium-sized computers. SCSI has given way to faster standards, such as Firewire and USB. RAID controllers A disk controller card that supports one or more RAID configurations. Originally only for SCSI drives, RAID controllers have become very popular for PATA and SATA drives. See RAID. , built on Adaptec's Trident II Ultra160 SCSI chip design. Early interest in the product has been strong, including an 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 design win from Compaq. Also on the RAID front, Adaptec introduced a new initiative called "RAID Everywhere" that will enable Adaptec to drive RAID technology into the PC-server marketplace, by leveraging Adaptec's channel strengths, global support infrastructure, and ability to make complex technologies easy-to-use. In Storage Networking, Adaptec introduced its first Fibre Channel host bus adapter See host adapter. since announcing its partnership with Agilent earlier in the year. The adapter A device that allows one system to connect to and work with another. An adapter is often a simple circuit that converts one set of signals to another; however, the term often refers to devices which are more accurately called "controllers. will be a focal point focal point n. See focus. in the Company's efforts to develop end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. SAN solutions for the marketplace. The Company also announced an OEM Fibre Channel win with Pinnacle Systems Pinnacle Systems, Inc. is a California-based American manufacturer of digital video hardware and software for the consumer and broadcast markets. It was founded in 1986. In 2002 Pinnacle purchased VOB Computersysteme GmbH (now pinnaclesys.de). for video storage connectivity solutions. In other Storage Networking news, Adaptec announced an 1,800 square-foot, multi-million dollar expansion of its Fibre Channel interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. testing labs and its entry into the 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. Corp.-based Fibre Alliance compatibility program. Adaptec also strengthened its industry-leading position in EtherStorage, announcing a partnership with Crosstor to enable Ethernet-attached solutions that incorporate storage-over-IP technology. In the Desktop market, Adaptec focused on maximizing revenue in the SCSI connectivity market in which Adaptec holds a leading share, and began efforts to strengthen its product portfolio to include new desktop solutions such as 1394 (Firewire) and USB USB in full Universal Serial Bus Type of serial bus that allows peripheral devices (disks, modems, printers, digitizers, data gloves, etc.) to be easily connected to a computer. . Revised Forecast Reporting Procedures In connection with the adoption of new SEC rules governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. fair disclosure (Regulation FD) and in order to ensure that all investors continue to have equal access to the same information, Adaptec is changing its procedures for making financial projections to provide such information only in conjunction with our quarterly earnings release. During the quarter, Adaptec will continue its practice of meeting privately with investors, the media, investment analysts and others, but will refrain from updating projections made during the earnings release or otherwise providing material non-public information during these meetings. Adaptec is expecting a strong third quarter with at least an eight percent sequential growth in net revenues and improved earnings. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This press 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. regarding future events or the future performance of Adaptec including statements regarding conditions in the distribution channel, sales through the distribution channel, Adaptec's ability to sell RAID products in the PC server market, anticipate revenues and earnings and overall corporate performance. Actual events could, of course, differ materially as a result of many factors including the timing of product introductions by Adaptec and its competitors, the degree of market acceptance of Adaptec's products, the impact of component shortages on Adaptec's customers, changes in industry standards, changes in Adaptec's product mix, rapid or unexpected changes in customer requirements, purchasing decisions by key customers, competitive pricing pressures, overall conditions in the high-performance PC, server and software markets, and general economic conditions. For a more complete description of these and other factors, please refer to the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Certain Factors Bearing on Future Results" in Item I of the Company's Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2000. Conference Call Replays A Webcast replay will be available until October 27, 2000 by logging on to Adaptec's home page at http://www.adaptec.com. A telephone replay will also be available until October 27, 2000 by calling 800/633-8284 and referencing reservation No. 16400155 after 8:00 am PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT on October 19, 2000. About Adaptec Adaptec, Inc. (Nasdaq:ADPT), is the global leader in innovative storage solutions. Adaptec's hardware and software solutions for Business and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the applications move, manage, and protect critical data and digital content. Adaptec's direct-attached storage Direct-attached storage (DAS) refers to a digital storage system directly attached to a server or workstation, without a storage network in between. It is a retronym, mainly used to differentiate non-networked storage from SAN and NAS. , network storage solutions and desktop software solutions for digital content are found in high-performance networks, servers, workstations and desktops from the world's leading manufacturers, and are sold through distribution channels to ISPs, enterprises, medium and small businesses and consumers. Adaptec is an S&P 500 and a NASDAQ 100 member. More information is available at www.adaptec.com.
Adaptec, Inc.
Condensed Consolidated Statements of Operations -- Pro Forma(a)
(unaudited)
Three Month Period Ended
September 30, September 30,
2000 1999
(in thousands, except per share data)
Net revenues $ 185,468 $ 194,280
Cost of revenues 72,830 66,267
Gross profit 112,638 128,013
Operating expenses:
Research and development 30,339 23,210
Selling, marketing and
administrative 42,518 40,242
Total operating expenses 72,857 63,452
Income from operations 39,781 64,561
Interest and other income 7,101 8,193
Interest expense (3,079) (2,962)
Income from operations before
provision for income taxes 43,803 69,792
Provision for income taxes 12,265 19,542
Net income $ 31,538 $ 50,250
Basic net income per common share $ 0.32 $ 0.49
Diluted net income per common share $ 0.31 $ 0.46
Shares used in computing basic net
income per share 99,084 102,523
Shares used in computing diluted net
income per share 101,514 113,062
(a) Pro forma operating results for the three month period ended September 30, 2000 exclude the following: amortization of goodwill and other intangibles, amortization of deferred stock-based compensation, general and administrative expenses incurred in connection with the spin-off of Roxio, Inc., gain on the sale of land, gain on the sale of JNI (Java Native Interface) A programming interface (API) in Sun's Java Virtual Machine used for calling native platform elements such as GUI routines. RNI (Raw Native Interface) is the JNI counterpart in Microsoft's Java Virtual Machine. JNI - Java Native Interface Corporation common stock, and the related income tax effect associated with each of these items. Pro forma operating results for the three month period ended September 30, 1999 exclude the following: amortization of goodwill and other intangibles, write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of acquired in-process technology, gain on the exchange of a warrant to purchase JNI Corporation common stock, and the related income tax effect associated with each of these items.
Adaptec, Inc.
Condensed Consolidated Statements of Operations -- Actual
(unaudited)
Three Month Period Ended
September 30, September 30,
2000 1999
(in thousands, except per share data)
Net revenues $ 185,468 $ 194,280
Cost of revenues 72,830 66,267
Gross profit 112,638 128,013
Operating expenses:
Research and development 30,987 23,210
Selling, marketing and
administrative 45,261 40,242
Amortization of goodwill and other
intangibles 19,476 2,255
Write-off of acquired in-process
technology -- 3,016
Total operating expenses 95,724 68,723
Income from operations 16,914 59,290
Interest and other income 90,025 19,113
Interest expense (3,079) (2,962)
Income from operations before
provision for income taxes 103,860 75,441
Provision for income taxes 44,421 23,277
Net income $ 59,439 $ 52,164
Basic net income per common share $ 0.60 $ 0.51
Diluted net income per common share $ 0.58 $ 0.48
Shares used in computing basic net
income per share 99,084 102,523
Shares used in computing diluted net
income per share 105,962 113,062
Adaptec, Inc.
Condensed Consolidated Statements of Operations -- Pro Forma(a)
(unaudited)
Six Month Period Ended
September 30, September 30,
2000 1999
(in thousands, except per share data)
Net revenues $ 368,895 $ 386,658
Cost of revenues 143,340 133,054
Gross profit 225,555 253,604
Operating expenses:
Research and development 60,193 47,735
Selling, marketing and administrative 82,032 79,610
Total operating expenses 142,225 127,345
Income from operations 83,330 126,259
Interest and other income 14,741 16,631
Interest expense (6,123) (5,921)
Income from operations before provision
for income taxes 91,948 136,969
Provision for income taxes 25,746 38,351
Net income $ 66,202 $ 98,618
Basic net income per common share $ 0.66 $ 0.95
Diluted net income per common share $ 0.64 $ 0.90
Shares used in computing basic net
income per share 99,944 103,333
Shares used in computing diluted net
income per share 103,497 113,626
(a) Pro forma operating results for the six month period ended September 30, 2000 exclude the following: amortization of goodwill and other intangibles, amortization of deferred stock-based compensation, general and administrative expenses incurred in connection with the spin-off of Roxio, Inc., gain on the sale of land, gain on the sale of JNI Corporation common stock, and the related income tax effect associated with each of these items. Pro forma operating results for the six month period ended September 30, 1999 exclude the following: amortization of goodwill and other intangibles, write-off of acquired in-process technology, gain on the sale of land, gain on the exchange of a warrant to purchase JNI Corporation common stock, and the related income tax effect associated with each of these items.
Adaptec, Inc.
Condensed Consolidated Statements of Operations -- Actual
(unaudited)
Six Month Period Ended
September 30, September 30,
2000 1999
(in thousands, except per share data)
Net revenues $ 368,895 $ 386,658
Cost of revenues 143,340 133,054
Gross profit 225,555 253,604
Operating expenses:
Research and development 61,489 47,735
Selling, marketing and administrative 87,641 79,610
Amortization of goodwill and other
intangibles 38,951 2,750
Write-off of acquired in-process
technology -- 3,016
Total operating expenses 188,081 133,111
Income from operations 37,474 120,493
Interest and other income 110,716 31,064
Interest expense (6,123) (5,921)
Income from operations before provision
for income taxes 142,067 145,636
Provision for income taxes 60,980 42,932
Net income $ 81,087 $ 102,704
Basic net income per common share $ 0.81 $ 0.99
Diluted net income per common share $ 0.78 $ 0.94
Shares used in computing basic net
income per share 99,944 103,333
Shares used in computing diluted net
income per share 103,497 113,626
Adaptec, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
September 30, March 31,
2000 2000
(in thousands)
ASSETS
Current assets
Cash and marketable securities(b) $ 567,966 $ 662,691
Accounts receivable, net 98,880 90,165
Inventories 74,559 68,378
Other current assets 123,470 74,352
Total current assets 864,875 895,586
Property and equipment, net 114,425 135,222
Goodwill and other intangibles 236,180 275,108
Other long-term assets 53,615 40,368
$ 1,269,095 $ 1,346,284
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 41,983 $ 34,009
Accrued liabilities 211,935 193,217
Total current liabilities 253,918 227,226
4 3/4% Convertible Subordinated Notes 229,800 229,800
Other long-term liability 10,800 14,400
Stockholders' equity
Common stock 99 103
Additional paid-in capital -- 58,535
Deferred stock-based compensation (1,148) (2,444)
Accumulated other comprehensive income 13,731 51,800
Retained earnings 761,895 766,864
Total stockholders' equity 774,577 874,858
$ 1,269,095 $ 1,346,284
(b) 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 balance includes investments in JNI Corporation with a fair market value of $24.3 million as of September 30, 2000 and $100.4 million as of March 31, 2000. |
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