Conner reports fourth quarter profit.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--Jan. 16, 1995--Conner Peripherals Inc. (NYSE NYSE See: New York Stock Exchange : CNR See riser card. CNR - Communication and Network Riser ) Monday Monday: see week. reported net income of $44.2 million on net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $591.6 million for the fourth quarter ended Dec. 31. Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings for the quarter were $0.66 per share on 74.9 million shares. These results compare with fourth quarter 1993 net income of $8.5 million, or $0.17 a fully diluted share on net revenues of $574.4 million. For the year, the company reported net income of $109.7 million on net revenues of $2.4 billion, compared to a 1993 net loss of $445.3 million on revenues of $2.2 billion. The results for 1993 include $338.4 million in unusual items related to restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , end-of-life end-of-life Cardiac pacing noun The point at which a pacemaker signals need for replacement, as its battery is nearing depletion Medtalk adjective reserves and the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. associated with the acquisition of Archive Corp. at the end of 1992. Net Income for the quarter and for the year was significantly affected by three unusual events: -0- -- The reduction in reserves established at the end of the third quarter of 1993 related to the 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). of manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. -- a $38.0 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta income adjustment included in "Unusual Items" in the income statement. As a result of changing business conditions and modifications of some of its operating plans, the company lowered its estimate of the costs associated with the restructuring during the fourth quarter. -- The 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 $5 million of in-process R&D associated with the acquisition of Quest Development Corp. earlier in 1994 (included in "Unusual Items" in the income statement). Quest was merged with the software operations of Conner con 1 adv. In opposition or disagreement; against: debated the issue pro and con. n. 1. An argument or opinion against something. 2. to form Arcada Software Arcada Software was a computer software company that was formed in early 1994 by the merger of Conner Software (the software division of Conner Peripherals) of Lake Mary, Florida, and Astora Software, formerly Quest Development Corporation, of San Luis Obispo, California. Inc., which is approximately 78 percent owned by Conner. In the fourth quarter of 1994, Arcada generated $9.5 million in revenues, 75 percent of which came from third party customers not affiliated with Conner. -- The sale of 1.3 million shares of Read Rite common stock the company received in exchange for stock it held in Sunward Technologies, which was merged into Read Rite earlier in 1994. This sale produced a pre-tax gain of approximately $22.3 million, which is included in the category of "Other Income/(Expense), Net" in the income statement. Approximately $18.7 million of the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from this sale are not included in the cash section of the balance sheet because they were not received until after the books were closed at year end. -0- Excluding the impact of the unusual items discussed above, the company's ongoing operations achieved operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $9.5 million and net income of $1 million for the quarter ended Dec. 31, 1994, which was slightly better than the modest net loss it had anticipated at the time of its December December: see month. press release. "The fourth quarter was a special challenge for the company," said Finis Conner, chairman and chief executive officer of Conner Peripherals Conner Peripherals was a company that manufactured hard drives for personal computers. Conner Peripherals was founded in 1986 by Seagate Technology co-founder Finis Conner, as a merger between a company of his and another started by MiniScribe founders John Squires and Terry . "At the same time the company was encountering delays in new product introductions, one of its major customers returned a number of older disk and tape products from its inventories. These returns caused the company to delay shipments of new products that had been launched on schedule. The effect of these two events occurring in combination was to reduce revenues and gross margins until the company could ship the new, lower cost products in volume. "I am pleased to report that the company has dealt successfully with the returned products, and virtually all of the product has been reshipped or is covered by orders already on the books for shipment this quarter," Conner said. "This includes orders from the same customer for a greater number of some tape products than the number it returned last quarter. "More important, the company has with one exception overcome the delays it experienced in some of its new product introductions and successfully launched those products during the quarter," Conner said. "These new products are already ramping in volume and contributing to the company's strategy to increase profitability and market share with leading computer system manufacturers. Several of the new products launched during the quarter have already been qualified at three of the world's largest computer system manufacturers and are already being shipped in production quantities." The company reported that its cash position increased from $401 million to $443 million during the quarter, excluding $18.7 million in net proceeds related to the Read Rite stock sale, which was received in early January January: see month. , and excluding $10 million also received in early January in the repayment of a note due to the company. Inventory levels decreased from $296 million at the end of the third quarter to $256 million at year end. Founded in 1986, Conner sells, designs and builds a comprehensive line of information storage equipment, including disk drives, tape drives, storage management software and disk array storage systems for a wide range of computer applications. -0-
Conner Peripherals Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended Twelve months ended
Dec. 31, Dec. 31,
--------------------- ----------------------
1994 1993 1994 1993
--------------------- ----------------------
Net sales $591,611 $574,449 $2,365,152 $2,151,672
Cost of sales 494,185 486,577 1,896,503 1,913,718
--------------------- ----------------------
Gross profit 97,426 87,872 468,649 237,954
Operating expenses:
Selling, general
and administrative 48,498 40,376 189,237 186,269
Research &
development 35,576 28,796 130,771 137,465
Amortization of
goodwill and other
intangibles 3,824 3,190 15,096 22,248
Unusual items (33,019) --- (33,019) 338,402
------- ------- ------- -------
Total operating
expenses 54,879 72,362 302,085 684,384
Income/(loss) from
operations 42,547 15,510 166,564 (446,430)
Other income/
(expense), net 14,310 (7,055) (12,013) (24,546)
Income/(loss) before
income taxes 56,857 8,455 154,551 (470,976)
Benefit/(provision)
for income taxes (12,674) --- (44,864) 25,662
------- ------ -------- ---------
Net income/(loss) $44,183 $8,455 $109,687 $(445,314)
Net income/(loss) per share: Primary $0.84 $0.17 $2.10 $(9.03) Fully diluted $0.66 $0.17 $1.77 $(9.03) Weighted average shares: Primary 52,556 50,733 52,253 49,339 Fully diluted 74,863 51,116 74,558 49,339
Conner Peripherals Inc.
Condensed Consolidated Balance Sheets
(Dollars in Thousands)
(Unaudited)
Dec. 31, Dec. 31,
1994 1993
ASSETS -----------------------
Currents assets:
Cash and short-term investments $443,239 $517,547
Accounts receivable, net 307,454 333,416
Inventory 255,880 173,860
Deferred income taxes 51,950 54,944
Vendor receivables and other 111,187 87,348
-------- --------
Total current assets 1,169,710 1,167,115
Property, plant and equipment, net 237,066 231,337
Goodwill and other intangibles, net 39,255 42,944
Other 15,398 22,655
---------- ---------
$1,461,429 $1,464,051
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 139,559 $ 229,721
Accrued expenses 190,372 217,060
Current portion of long-term debt 34,922 43,112
---------- ----------
Total current liabilities 364,853 489,893
Long-term debt, less current portion 627,059 660,606 Deferred income taxes and other 131,193 102,171 Minority interest 1,648 2,530
Stockholders' equity:
Common stock and paid-in-capital 260,592 242,454
Retained earnings/(deficit) 76,084 (33,603)
---------- ----------
Total stockholders' equity 336,676 208,851
---------- ----------
$1,461,429 $1,464,051
CONTACT: Conner Peripherals Jack Bell, 408/456-3770 (Analysts) Kevin KEVIN Keepers of the Eternal Vigilance of the Islamic Nation (fictional, from White Teeth by Zadie Smith) Burr burr (bur) bur. burr n. Variant of bur. burr 1. a plant seed capsule carrying many hooked structures which catch in animal coats thus promoting dissemination of the plant. or Mike Seither, 408/456-3134 or 408/456-3743 (Media) |
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