Ciprico Reports Third Quarter Results.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--July 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 third quarter and nine-month period ended June June: see month. 30, 2003. Sales for the quarter were $8.4 million, a decrease of 7 percent over the third quarter of fiscal 2002, and a 2 percent decrease over the second quarter of fiscal 2003. Ciprico recorded a net loss for the quarter of $992,000 or $0.21 per share versus a loss of $1.9 million or $0.39 per share for the same period last year. 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 $1.1 million or 22 percent from the same period last year. For the nine months ended June 30, 2003, sales were $25.1 million, an increase of 3 percent over the same period last year. Ciprico recorded a net loss for the first nine months of fiscal 2003 of $2.4 million or $0.50 per share, as compared with a net loss of $5.4 million or $1.11 per share for the same period in fiscal 2002, which included an income tax benefit of $1.1 million, or $0.23 per share. Total operating expenses decreased $4.1 million or 26 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 were challenged this past quarter in our goals to achieve top line growth and improved bottom line performance. Sales in our military segment did not meet our expectations due to continued delays in program deployments and funding, although were improved over the previous quarter. We continue to be actively engaged in a number of programs with our new products but the 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 volume rollout remains difficult to predict. Our broadcast business was up over last year although we did see softer demand from some 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 customers this quarter. Kill continued, "We remained focused on achieving our goal of break-even operating performance. Our growth prospects in the broadcast segment remain solid. While current sales levels in the military have been disappointing, we remain confident of our prospects in this sector. While short term spending seems to be directed toward war efforts, we continue to advance our new program activity. Many of these programs involve our new product offerings such as the TALON(TM), our rugged and removable storage solution, and DiMeda(TM), our digital media appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. , each of which had new customer shipments this past quarter." 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 are taking steps to further reduce our operating expenses and stabilize stabilize See peg. cash flow. In the fourth quarter, we consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: a number of sales and marketing positions, including further streamlining of our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . These and other cost reduction efforts are expected to save approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.0 million in annual costs. We expect to record a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge in the fourth quarter of approximately $500,000 in connection with these restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). efforts. In addition we have taken measures to reduce our use of working capital, primarily through refinements in our inventory areas, and expect our cash levels will remain relatively stable for the remainder of the fiscal year. "While we have realigned our expenses, we continue to make investments in new product developments that we believe are critical to 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. success. 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 in improving our bottom line performance. We have taken the necessary actions to further realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. our costs given the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. sales impacts, particularly with our military business. 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. , 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 800-240-4186. A replay will be available through July 30, 2003 at 800-405-2236, replay code 544422. 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 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 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 Nine Months
share amounts) Ended Ended
June 30, June 30,
2003 2002 2003 2002
---------------- ------------------
NET SALES $8,431 $9,081 $25,114 $24,406
Cost of sales 5,607 6,146 16,238 15,998
------- -------- -------- ---------
GROSS PROFIT 2,824 2,935 8,876 8,408
OPERATING EXPENSES:
Research and development 1,574 2,090 4,606 6,859
Sales and marketing 1,734 2,284 5,110 6,886
General and administrative 613 667 1,891 1,978
------- -------- -------- ---------
Total operating expenses 3,921 5,041 11,607 15,723
------- -------- -------- ---------
LOSS FROM OPERATIONS (1,097) (2,106) (2,731) (7,315)
Other income, primarily interest 105 213 381 751
------- -------- -------- ---------
LOSS BEFORE INCOME TAXES (992) (1,893) (2,350) (6,564)
Income tax benefit - - - (1,130)
------- -------- -------- ---------
NET LOSS $(992) $(1,893) $(2,350) $(5,434)
======= ======== ======== =========
Shares used to calculate loss per
share:
Basic and diluted 4,647 4,886 4,676 4,908
NET LOSS PER COMMON SHARE:
Basic and diluted $(0.21) $(0.39) $(0.50) $(1.11)
======= ======== ======== =========
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:
2003 2002
-------------- ---------------
Market Sales % of Sales % of
Total Total
----------------------------------------------------------------------
Broadcast & Entertainment $5.7 68% $5.2 57%
Military & Government 2.5 30 3.7 41
Other 0.2 2 0.2 2
----- -------- ------ --------
Total $8.4 100% $9.1 100%
===== ======== ====== ========
2003 2002
-------------- ---------------
Geographic Location Sales % of Sales % of
Total Total
----------------------------------------------------------------------
Domestic $8.1 96% $8.6 95%
International 0.3 4 0.5 5
----- -------- ------ --------
Total $8.4 100% $9.1 100%
===== ======== ====== ========
For the nine months ended June 30:
2003 2002
--------------- ---------------
Market Sales % of Sales % of
Total Total
----------------------------------------------------------------------
Broadcast & Entertainment $17.0 68% $12.2 50%
Military & Government 7.7 31 11.2 46
Other 0.4 1 1.0 4
------ -------- ------ --------
Total $25.1 100% $24.4 100%
====== ======== ====== ========
2003 2002
--------------- ---------------
Geographic Location Sales % of Sales % of
Total Total
----------------------------------------------------------------------
Domestic $24.0 96% $22.1 91%
International 1.1 4 2.3 9
------ -------- ------ --------
Total $25.1 100% $24.4 100%
====== ======== ====== ========
CIPRICO INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands) June 30, September 30,
2003 2002
---------------------------
ASSETS
Current assets:
Cash and cash equivalents $8,034 $6,413
Marketable securities and short term
investments 13,610 18,071
Accounts receivable, less allowance 5,919 3,590
Inventories, net 4,649 3,145
Income taxes receivable - 789
Other current assets 382 898
------------- -------------
Total current assets 32,594 32,906
Property and equipment, net 2,450 2,608
Marketable securities - 2,547
Other assets 43 54
------------- -------------
$35,087 $38,115
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,217 $2,724
Accrued expenses 2,338 2,755
Deferred revenue 313 398
------------- -------------
Total current liabilities 5,868 5,877
Shareholders' equity:
Capital stock 46 48
Additional paid-in capital 34,517 35,188
Retained deficit (5,316) (2,966)
Deferred compensation from restricted
stock (28) (32)
------------- -------------
Total shareholders' equity 29,219 32,238
------------- -------------
$35,087 $38,115
============= =============
CIPRICO INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands) Nine Months Ended
June 30,
2003 2002
-----------------
Cash flows from operating activities:
Net loss $(2,350) $(5,434)
Depreciation and amortization 1,374 1,770
Changes in operating assets and liabilities (2,506) 308
-------- --------
Net cash flows used in operating activities (3,482) (3,356)
-------- --------
Cash flows from investing activities:
Equipment purchases (1,236) (1,153)
Purchases of marketable securities (17,093) (24,945)
Proceeds from sale or maturity of marketable
securities 24,101 29,954
-------- --------
Net cash flows provided by investing activities 5,772 3,856
-------- --------
Cash flows from financing activities:
Repurchase of common stock (692) (703)
Proceeds from issuance of common stock 23 137
-------- --------
Net cash flows used in financing activities (669) (566)
-------- --------
Net increase (decrease) in cash and cash equivalents 1,621 (66)
Cash and cash equivalents at beginning of period 6,413 6,377
-------- --------
Cash and cash equivalents at end of period 8,034 6,311
Marketable securities, current 13,610 13,505
Marketable securities, non-current - 5,124
-------- --------
Total cash and marketable securities $21,644 $24,940
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