Ciprico Reports Revenue Growth and Improved Bottom Line; Strong Sales from Broadcast Segment.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--April 22, 2003 Ciprico Inc. (Nasdaq:CPCI See CompactPCI. ), a leading manufacturer and marketer of high-performance Adj. 1. high-performance - modified to give superior performance; "a high-performance car" superior - of high or superior quality or performance; "superior wisdom derived from experience"; "superior math students" storage and system solutions, today announced results for the second quarter and six-month period ended March 31, 2003. Sales for the quarter were $8.6 million, an increase of 6 percent over the prior year and the first quarter of fiscal 2003. Ciprico recorded a net loss for the quarter of $675,000 or $0.14 per share versus a loss of $1.0 million or $0.21 per share for the same period last year, including an income tax benefit of $1.1 million, or $0.23 per share. Total 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. decreased $1.3 million or 25 percent from the same period last year. For the six months ended March 31, 2003, sales were $16.7 million, an increase of $1.4 million or 9 percent versus $15.3 million for the same period last year. Ciprico recorded a net loss for the first half of fiscal 2003 of $1.4 million or $0.29 per share, as compared with a net loss of $3.5 million or $0.72 per share for the same period last year, including an income tax benefit of $1.1 million, or $0.23 per share. Total operating expenses decreased $3.0 million or 28 percent from the same period last year. Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. H. Kill, Ciprico 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. , said, "We continue to improve our bottom line performance. Our broadcast business had another quarter of strong sales contribution with each of our key OEMs growing over the prior quarter and prior year. There continues to be cautious optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. in the broadcast industry that should help sustain our sales growth in this segment. However, sales in our military segment this past quarter were the lowest in five years. We believe the military action in the Middle East has adversely impacted the current spending in this segment as we are seeing delays in program deployments and funding. Despite this softness we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op of our prospects for growth in the military segment given our unique product offerings. Kill continued, "Our growth has come primarily from our NETarray(R) product while our new products continue to present us with growth opportunities. We had our first shipments of the DiMeda(TM) product with one of our broadcast OEMs during the second quarter. We continue to get positive customer feedback in both our segments regarding the simplified sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. networked capabilities of the DiMeda. We also rolled out our FibreSTORE(R) 2210, 2 Gb RAID (Redundant Array of Independent Disks) A disk subsystem that is used to increase performance or provide fault tolerance or both. RAID uses two or more ordinary hard disks and a RAID disk controller. In the past, RAID has also been implemented via software only. solution and expect to see continued ramping of this product during the second half. The delays in military spending have definitely def·i·nite adj. 1. Having distinct limits: definite restrictions on the sale of alcohol. 2. Indisputable; certain: a definite victory. 3. impacted the sales of the TALON(TM), our rugged and removable storage solution but we continue to build our funnel of opportunities." Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs S. Wargolet, VP - Finance & CFO See Chief Financial Officer. added, "We continue to closely manage our operating expenses to improve our bottom line performance. Looking forward we expect a modest increase in R&D and selling expenses associated with new product developments and higher sales. Given the uncertainties with the timing of spending in our military segment, predicting the timing of new product sales, and the unknown timing of any sustained economic recovery, it remains a challenge to provide specific financial guidance. Our ability to achieve our goal of break-even operating results will be somewhat dependent on our sales mix sales mix See product mix. and new product traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in the military." Kill concluded, "We have made solid progress this year, despite some of the geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. and economic factors. We expect to improve our profitability through growth in new product sales and some normalized demand within our military segment. We believe we are well-positioned for continued growth and profitability in our markets." The Company will host a conference call on Wednesday Wednesday: see week. , April 23 at 11:00 a.m. Eastern Time and 10:00 a.m. Central Time, to discuss this release. The conference call will be broadcast live via the 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 at www.ciprico.com. The conference call will also be available live via telephone at 800-219-6110. A replay will be available through April 30, 2003 at 866-881-2302, replay code 534188. Certain statements in this news release are 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. and should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with cautionary statements in Ciprico's SEC filings, reports to shareholders and other news releases. Such 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. , which reflect our current view of future events and financial performance, involve known and unknown risks that could cause actual results and facts to differ materially from those expressed in the forward-looking statements for a variety of reasons. Some of these reasons include the ability to achieve and maintain profitability; the impact of geopolitical and economic factors affecting the markets in which we are concentrated; the impact on revenues and earnings of the timing of product enhancements and new product releases; market acceptance of new products; sales and distribution issues; competition; dependence on suppliers; limited backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. and the historic and recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. pattern of a disproportionate dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por percentage of total quarterly sales occurring the last month and weeks
of a quarter. Investors should take such risks into account when making
investment decisions. Shareholders and other readers are cautioned not
to place undue reliance on these forward-looking statements, which speak
only as of the date on which they are made. Ciprico undertakes no
obligation to update publicly or revise any forward-looking statements.About Ciprico Ciprico designs, manufactures and markets storage and system solutions for digital media applications within the military and government, broadcast and entertainment, and enterprise markets. Ciprico solutions combine storage, networking and computing computing - computer technologies to simplify and accelerate digital media workflows. Ciprico is headquartered in Minneapolis Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. , MN. More information about Ciprico is available at www.ciprico.com.
CIPRICO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except per Three Months Six Months
share amounts) Ended Ended
March 31, March 31,
2003 2002 2003 2002
----------------- ------------------
NET SALES $8,571 $8,110 $16,683 $15,325
Cost of sales 5,469 5,356 10,631 9,852
------- --------- -------- ---------
GROSS PROFIT 3,102 2,754 6,052 5,473
OPERATING EXPENSES:
Research and development 1,584 2,294 3,032 4,769
Sales and marketing 1,698 2,205 3,376 4,602
General and administrative 606 670 1,278 1,311
------- --------- -------- ---------
Total operating expenses 3,888 5,169 7,686 10,682
------- --------- -------- ---------
LOSS FROM OPERATIONS (786) (2,415) (1,634) (5,209)
Other income, primarily interest 111 236 276 538
------- --------- -------- ---------
LOSS BEFORE INCOME TAXES (675) (2,179) (1,358) (4,671)
Income tax benefit - (1,130) - (1,130)
------- --------- -------- ---------
NET LOSS $(675) $(1,049) $(1,358) $(3,541)
======= ========= ======== =========
Shares used to calculate loss per
share:
Basic and diluted 4,658 4,904 4,685 4,919
NET LOSS PER COMMON SHARE:
Basic and diluted $(0.14) $(0.21) $(0.29) $(0.72)
======= ========= ======== =========
SALES INFORMATION
Comparative information on sales by market and geographic location for
the period ended March 31 are shown in the charts below (in millions).
For the quarter ended March 31:
2003 2002
------------- -------------
Market Sales % of Sales % of
Total Total
----------------------------------------------------------------------
Broadcast & Entertainment $6.5 76% $4.8 59%
Military & Government 2.0 23 3.0 37
Other 0.1 1 0.3 4
------ ------ ------ ------
Total $8.6 100% $8.1 100%
====== ====== ====== ======
2003 2002
------------- -------------
Geographic Location Sales % of Sales % of
Total Total
----------------------------------------------------------------------
Domestic $8.1 94% $7.3 90%
International 0.5 6 0.8 10
------ ------ ------ ------
Total $8.6 100% $8.1 100%
====== ====== ====== ======
For the six months ended March 31:
2003 2002
------------- -------------
Market Sales % of Sales % of
Total Total
----------------------------------------------------------------------
Broadcast & Entertainment $11.2 67% $7.1 46%
Military & Government 5.2 31 7.5 49
Other 0.3 2 0.7 5
------ ------ ------ ------
Total $16.7 100% $15.3 100%
====== ====== ====== ======
2003 2002
------------- -------------
Geographic Location Sales % of Sales % of
Total Total
----------------------------------------------------------------------
Domestic $15.9 95% $13.5 88%
International 0.8 5 1.8 12
------ ------ ------ ------
Total $16.7 100% $15.3 100%
====== ====== ====== ======
CIPRICO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands) March 31, September 30,
2003 2002
-----------------------
ASSETS
Current assets:
Cash and cash equivalents $8,472 $6,413
Marketable securities 15,628 18,071
Accounts receivable, less allowance 6,108 3,590
Inventories, net 4,686 3,145
Income taxes receivable - 789
Other current assets 348 898
--------- -------------
Total current assets 35,242 32,906
Property and equipment, net 2,743 2,608
Marketable securities - 2,547
Other assets 43 54
--------- -------------
$38,028 $38,115
========= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $5,138 $2,724
Accrued expenses 2,149 2,755
Deferred revenue 386 398
--------- -------------
Total current liabilities 7,673 5,877
Shareholders' equity:
Capital stock 47 48
Additional paid-in capital 34,671 35,188
Retained earnings (deficit) (4,324) (2,966)
Deferred compensation from restricted stock (39) (32)
--------- -------------
Total shareholders' equity 30,355 32,238
--------- -------------
$38,028 $38,115
========= =============
CIPRICO INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands) Six Months Ended
March 31,
2003 2002
-----------------
Cash flows from operating activities:
Net loss $(1,358) $(3,541)
Depreciation and amortization 932 1,170
Changes in operating assets and liabilities (924) (1,362)
-------- --------
Net cash flows used in operating activities (1,350) (3,733)
-------- --------
Cash flows from investing activities:
Equipment purchases (1,058) (761)
Purchases of marketable securities (11,088) (19,900)
Proceeds from sale or maturity of marketable
securities 16,078 20,454
-------- --------
Net cash flows provided by (used in) investing
activities 3,932 (207)
-------- --------
Cash flows from financing activities:
Repurchase of common stock (622) (486)
Proceeds from issuance of common stock 99 137
-------- --------
Net cash flows provided by (used in) financing
activities (523) (349)
-------- --------
Net increase (decrease) in cash and cash equivalents 2,059 (4,289)
Cash and cash equivalents at beginning of period 6,413 6,377
-------- --------
Cash and cash equivalents at end of period 8,472 2,088
Marketable securities, current 15,628 17,986
Marketable securities, non-current - 5,098
-------- --------
Total cash and marketable securities $24,100 $25,172
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