Ciprico Reports Second Quarter Results in Line with Expectations; Record Bookings for the Quarter Lead to Strong Backlog for the Third Quarter.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--April 17, 2002 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, 2002. Sales for the quarter were $8.1 million, which represented sequential One after the other in some consecutive order such as by name or number. growth of 12 percent over the first quarter of fiscal 2002. Sales for the same quarter of the prior year were $9.4 million. The Company recorded a net loss for the quarter of $1.0 million, or $0.21 per share, including an income tax benefit of $1.1 million or $0.23 per share to record the effect of expected income tax refunds Tax refund Money back from the government when too much tax has been paid or withheld from a salary. related to recently enacted tax legislation. This compares to a net loss of $935,000 or $0.18 per share for the same period last year. Selling, general and administrative expenses for the quarter were $2.9 million, a 19 percent decrease from the prior year. Excluding costs in fiscal 2001 related to the SANStar acquisition, research and development expenses, on a 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 basis, increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $600,000, or 35 percent, to $2.3 million for the period. For the six months ended March 31, 2002, sales were $15.3 million versus $18.5 million for the same period last year. The Company recorded a net loss for the first half of fiscal 2002 of $3.5 million or $0.72 per share, including the income tax benefit of $0.23 per share, as compared with a net loss of $1.0 million or $0.20 per share for the same period last year. Selling, general and administrative expenses for the first half were down approximately $900,000 or 14 percent from the prior year. Research and development expenses, on a pro forma basis, increased $1.8 million, or 62 percent for the period. 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 move into the second half with positive momentum fueled by a quarter of record bookings and a 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. of $3 million. This was primarily driven by increased demand in our broadcast business and the addition of a new customer. While sales in our military segment reflect cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. program spending, our backlog includes a solid level of orders moving into the current quarter. We believe we are well positioned to take advantage of increased spending in this sector given our expertise with military and surveillance imagery imagery /im·age·ry/ (im´aj-re) 1. the formation of a mental representation of something perceived by the senses. 2. applications and our ruggedized product capabilities. Our new product introductions planned for the second half of the year are creating excitement throughout the organization. Our TALON(TM) product is a unique removable storage solution that provides us broader opportunities in new military applications that should also enhance our margins. We recently announced the introduction of the DiMeda(TM) 2400, which is the initial product release within our Digital Media Appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. (TM) family. DiMeda is an innovative system solution that can both simplify and accelerate applications of "digital media workflows" in broadcast, military and enterprise applications and will provide us new opportunities to expand our markets." 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, "While our visibility with our larger OEM's has improved, it remains a challenge to provide any meaningful long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. financial guidance. We are encouraged by the improved activity this past quarter, but remain cautious given a challenging economic climate. We believe that revenues for the third quarter of fiscal 2002 will be in the range of $8.5 to $10.5 million, and we anticipate a loss per share in the range of ($0.22) to ($0.42) per share, depending on the sales mix sales mix See product mix. . We expect our R&D spending to stabilize stabilize See peg. for the remainder of the year while our SG&A expenses may increase slightly as we focus on channel development activities with our new DiMeda solution. We believe we are on track towards achieving break-even operating performance over the next 6 to 12 months." Kill continued, "We are very pleased with our progress this year. We are beginning to see the benefit of 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 sales strategy and we have expectations for growth in each of our key markets this year. While the higher mix of broadcast sales impacted our margins, we expect to see some improvement through our new products, volume increases and cost reductions. We continue to closely monitor our 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. to improve our bottom line performance. We believe we are well-positioned for continued growth and to be the leader in each of our markets." The Company will host a conference call on Thursday Thursday: see week. , April 18 at 10:00 a.m. Central Time and 11:00 a.m. Eastern 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 888-233-0705, conference code 3751341. A replay will be available through April 25, 2002 at 800-642-1687, replay code 3751341. 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 an economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the markets 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 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 share amounts)
Three Months Six Months
Ended Ended
March 31, March 31,
2002 2001 2002 2001
-------- -------- -------- --------
NET SALES $8,110 $9,412 $15,325 $18,478
Cost of sales 5,356 5,504 9,852 10,714
-------- -------- -------- --------
GROSS PROFIT 2,754 3,908 5,473 7,764
OPERATING EXPENSES:
Research and development 2,294 2,303 4,769 3,538
Sales and marketing 2,205 2,905 4,602 5,608
General and administrative 670 627 1,311 1,241
-------- -------- -------- --------
Total operating expenses 5,169 5,835 10,682 10,387
-------- -------- -------- --------
LOSS FROM OPERATIONS (2,415) (1,927) (5,209) (2,623)
Other income, primarily
interest 236 511 538 1,077
-------- -------- -------- --------
LOSS BEFORE INCOME TAXES (2,179) (1,416) (4,671) (1,546)
Income tax benefit (1) (1,130) (481) (1,130) (525)
-------- -------- -------- --------
NET LOSS $(1,049) $(935) $(3,541) $(1,021)
========= ========= ======== =========
Shares used to calculate
loss per share:
Basic and diluted 4,904 5,057 4,919 5,050
NET LOSS PER COMMON SHARE:
Basic and diluted $(0.21) $(0.18) $(0.72) $(0.20)
======== ======== ======== ========
(1) Amounts for 2002 reflect current income tax benefit related to
expected Federal income tax refunds filed under the provisions of
the Job Creation and Worker Assistance Act of 2002, enacted on
March 9, 2002
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:
2002 2001
------------------- -------------------------
Sales % of Total Sales % of Total
----------------------------------------------------------------------
Broadcast & Entertainment $ 4.8 59% $ 4.9 52%
Military & Government 3.0 37 2.8 30
Other 0.3 4 1.7 18
-------- -------- -------- ---------
Total $ 8.1 100% $ 9.4 100%
======== ======== ======== =========
2002 2001
------------------- -------------------------
Geographic Location Sales % of Total Sales % of Total
----------------------------------------------------------------------
Domestic $ 7.3 90% $ 7.5 80%
International 0.8 10 1.9 20
-------- -------- -------- ---------
Total $ 8.1 100% $ 9.4 100%
======== ======== ======== =========
For the six months ended
March 31:
2002 2001
------------------- -------------------------
Market Sales % of Total Sales % of Total
----------------------------------------------------------------------
Broadcast & Entertainment $ 7.1 46% $ 9.3 50%
Military & Government 7.5 49 6.5 35
Other 0.7 5 2.7 15
-------- -------- -------- ---------
Total $ 15.3 100% $ 18.5 100%
======== ======== ======== =========
2002 2001
------------------- -------------------------
Geographic Location Sales % of Total Sales % of Total
----------------------------------------------------------------------
Domestic $ 13.5 88% $ 15.1 82%
International 1.8 12 3.4 18
-------- -------- -------- ---------
Total $ 15.3 100% $ 18.5 100%
======== ======== ======== =========
CIPRICO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands) March 31, Sept. 30,
2002 2001
--------- ----------
ASSETS
Current assets:
Cash and cash equivalents $2,088 $6,377
Marketable securities 17,986 17,499
Accounts receivable, less allowance 6,148 3,841
Inventories, net 5,518 5,254
Income taxes receivable 1,265 869
Other current assets 399 701
-------- --------
Total current assets 33,404 34,541
Property and equipment, net 3,478 3,904
Marketable securities 5,098 6,139
Other assets 28 95
-------- --------
$42,008 $44,679
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,367 $2,570
Accrued expenses 2,672 2,206
Deferred revenue 417 373
-------- --------
Total current liabilities 6,456 5,149
Shareholders' equity:
Capital stock 49 50
Additional paid-in capital 35,594 36,013
Retained earnings (deficit) (3) 3,538
Deferred compensation from restricted stock (88) (71)
-------- --------
Total shareholders' equity 35,552 39,530
-------- --------
$42,008 $44,679
======== ========
CIPRICO INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands) Six Months Ended
March 31,
2002 2001
-------- --------
Cash flows from operating activities:
Net loss $(3,541) $(1,021)
Depreciation and amortization 1,170 1,084
Changes in operating assets and liabilities (1,362) (220)
------- -------
Net cash flows used in operating activities (3,733) (157)
------- -------
Cash flows from investing activities:
Equipment purchases (761) (1,380)
Purchases of marketable securities (19,900) (25,138)
Proceeds from sale or maturity of marketable
securities 20,454 27,629
------- -------
Net cash flows provided by (used in) investing
activities (207) 1,111
------- -------
Cash flows from financing activities:
Repurchase of common stock (486) (52)
Proceeds from issuance of common stock 137 133
------- -------
Net cash flows provided by (used in) financing
activities (349) 81
------- -------
Net increase (decrease) in cash and cash
equivalents (4,289) 1,035
Cash and cash equivalents at beginning of period 6,377 3,496
------- -------
Cash and cash equivalents at end of period 2,088 4,531
Marketable securities, current 17,986 20,895
Marketable securities, non-current 5,098 8,551
------- -------
Total cash and marketable securities $25,172 $33,977
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