Ciprico Reports Third Quarter Results in Line with Expectations; 12% Sequential Revenue Growth Includes Sales of New TALON and DiMeda Products.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--July 22, 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 third quarter and nine-month period ended June June: see month. 30, 2002. Sales for the quarter were $9.1 million, which represented sequential One after the other in some consecutive order such as by name or number. growth of 12 percent over the second quarter of fiscal 2002. Sales for the same quarter of the prior year were $9.5 million. The Company recorded a net loss for the quarter of $1.9 million, or $0.39 per share. This compares to a net loss of $873,000 or $0.17 per share for the same period last year. Selling, general and administrative expenses for the quarter were $3.0 million, a 23 percent decrease from the prior year. Research and development expenses increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 3 percent to $2.1 million for the period. For the nine months ended June 30, 2002, sales were $24.4 million versus $27.9 million for the same period last year. The Company recorded a net loss for the first nine months of fiscal 2002 of $5.4 million or $1.11 per share, including an income tax benefit of $0.23 per share, as compared with a net loss of $1.9 million or $0.38 per share for the same period last year. Selling, general and administrative expenses were down approximately $1.8 million or 17 percent from the prior year. Research and development expenses increased $1.3 million, or 23 percent in the current 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 are pleased with our sales growth despite a very challenging economic climate and continue to minimize In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. 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 bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. performance despite the impact of lower margins caused by a less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. sales mix sales mix See product mix. . Increased demand and a new customer have primarily driven our sales growth in the broadcast segment. Sales in our military segment continue to reflect the 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. spending patterns of this program-oriented business. While we have been selected for, and are aggressively pursuing additional programs, the timing of actual funding and deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of these projects continue to be impacted by the active military engagements occurring globally." "The first shipments of our TALON(TM) and DiMeda(TM) 2400 products were made during this past quarter, beginning the process of penetrating penetrating breaching the tissues of the body. our markets and improving our sales mix. The TALON is a unique rugged and removable storage solution that provides us new opportunities in military applications and provides us opportunities for higher margins. This product further leverages our existing ruggedized product offering which, together with 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, further positions us to take advantage of increased spending in this sector. DiMeda is an innovative system solution that can both simplify and accelerate applications of "digital media workflows" in broadcast, military and enterprise applications. Our software development efforts in the DiMeda family are focused on adding innovative features to enhance the value proposition to users in our existing markets and allow us to pursue new market 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, "Given continued economic uncertainties and timing of military spending, it remains a challenge to provide 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 believe that revenues for the fourth quarter of fiscal 2002 will be in the range of $9 to $10 million, and we anticipate a loss per share in the range of $0.24 to $0.40 per share, depending on sales mix. We expect our operating expenses will be relatively flat from this past quarter. We continue to closely manage our operating expenses to improve our bottom line performance. Depending on the timing and acceptance of our new product introductions, we believe we can achieve break-even operating results during fiscal 2003. " Kill continued, "Even in this challenging environment, we have made solid progress this year. We are committed to evaluating strategic opportunities to further leverage our technology offerings and unique market position, particularly given the strength of our balance sheet. We believe we are well-positioned for continued growth and profitability in our markets." The Company will host a conference call on Tuesday Tuesday: see week. , July July: see month. 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 888-233-0705. A replay will be available through July 30, 2002 at 800-642-1687, replay code 4749851. 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 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 share amounts) Three Months Nine Months
Ended Ended
June 30, June 30,
2002 2001 2002 2001
------------------ ------------------
NET SALES $9,081 $9,467 $24,406 $27,945
Cost of sales 6,146 5,338 15,998 16,052
-------- -------- -------- --------
GROSS PROFIT 2,935 4,129 8,408 11,893
OPERATING EXPENSES:
Research and development 2,090 2,029 6,859 5,586
Sales and marketing 2,284 2,927 6,886 8,536
General and administrative 667 915 1,978 2,157
-------- -------- -------- --------
Total operating expenses 5,041 5,871 15,723 16,279
-------- -------- -------- --------
LOSS FROM OPERATIONS (2,106) (1,742) (7,315) (4,386)
Other income, primarily interest 213 419 751 1,497
-------- -------- -------- --------
LOSS BEFORE INCOME TAXES (1,893) (1,323) (6,564) (2,889)
Income tax benefit (1) -- (450) (1,130) (975)
-------- -------- -------- --------
NET LOSS $(1,893) $(873) $(5,434) $(1,914)
======== ======== ======== ========
Shares used to calculate loss
per share:
Basic and diluted 4,886 5,060 4,908 5,060
NET LOSS PER COMMON SHARE:
Basic and diluted $(0.39) $(0.17) $(1.11) $(0.38)
======== ======== ======== ========
(1) Amounts for 2002 reflect current income tax benefit related to
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 June 30 are shown in the charts below (in millions).
For the quarter ended June 30:
2002 2001
------------------ -----------------
Market Sales % of Total Sales % of Total
----------------------------------------------------------------------
Broadcast & Entertainment $5.2 57% $4.2 44%
Military & Government 3.7 41 4.2 44
Other 0.2 2 1.1 12
------- --------- ------ ----------
Total $9.1 100% $9.5 100%
======= ========= ====== ==========
2002 2001
------- ----------- ------ -----------
Geographic Location Sales % of Total Sales % of Total
---------------------------------------------------------------------
Domestic $8.6 95% $8.7 92%
International 0.5 5 0.8 8
------- --------- ------ ----------
Total $9.1 100% $9.5 100%
======= ========= ====== ==========
For the nine months ended June 30:
2002 2001
------------------ -----------------
Market Sales % of Total Sales % of Total
----------------------------------------------------------------------
Broadcast & Entertainment $12.2 50% $13.5 48%
Military & Government 11.2 46 10.7 39
Other 1.0 4 3.7 13
------- --------- ------ ----------
Total $24.4 100% $27.9 100%
======= ========= ====== ==========
2002 2001
------------------ -----------------
Geographic Location Sales % of Total Sales % of Total
----------------------------------------------------------------------
Domestic $22.1 91% $23.7 85%
International 2.3 9 4.2 15
------- --------- ------ ----------
Total $24.4 100% $27.9 100%
======= ========= ====== ==========
CIPRICO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands) June 30, September 30,
2002 2001
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 6,311 $6,377
Marketable securities 13,505 17,499
Accounts receivable, less allowance 6,789 3,841
Inventories, net 4,839 5,254
Income taxes receivable -- 869
Other current assets 348 701
------------ ------------
Total current assets 31,792 34,541
Property and equipment, net 3,301 3,904
Marketable securities 5,124 6,139
Other assets 57 95
------------ ------------
$40,274 $44,679
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,362 $2,570
Accrued expenses 3,185 2,206
Deferred revenue 451 373
------------ ------------
Total current liabilities 6,998 5,149
Shareholders' equity:
Capital stock 49 50
Additional paid-in capital 35,202 36,013
Retained earnings (deficit) (1,896) 3,538
Deferred compensation from restricted
stock (79) (71)
------------ ------------
Total shareholders' equity 33,276 39,530
------------ ------------
$ 40,274 $44,679
============ ============
CIPRICO INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands) Nine months Ended June 30,
2002 2001
--------------------------
Cash flows from operating activities:
Net loss $(5,434) $(1,914)
Depreciation and amortization 1,770 1,622
Changes in operating assets and
liabilities 308 (503)
------------ ------------
Net cash flows used in operating
activities (3,356) (795)
------------ ------------
Cash flows from investing activities:
Equipment purchases (1,153) (1,828)
Purchases of marketable securities (24,945) (37,542)
Proceeds from sale or maturity of
marketable securities 29,954 39,490
------------ ------------
Net cash flows provided by investing
activities 3,856 120
------------ ------------
Cash flows from financing activities:
Repurchase of common stock (703) (52)
Proceeds from issuance of common stock 137 231
------------ ------------
Net cash flows provided by (used in)
financing activities (566) 179
------------ ------------
Net decrease in cash and cash equivalents (66) (496)
Cash and cash equivalents at beginning
of period 6,377 3,496
------------ ------------
Cash and cash equivalents at end of period 6,311 3,000
Marketable securities, current 13,505 21,455
Marketable securities, non-current 5,124 8,534
------------ ------------
Total cash and marketable securities $24,940 $32,989
============ ============
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