Crossroads Systems Reports Solid First Quarter Results; Expanded Customer Relationships Drive Revenues.Business Editors & High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers AUSTIN Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas--(BUSINESS WIRE)--Feb. 20, 2001 Crossroads Systems Inc. (Nasdaq:CRDS CRDS Contribution pour Le Remboursement de la Dette Sociale (French: Social Debt Repayment Contribution) CRDS Cavity Ring-Down Spectroscopy CRDS Community Rehabilitation and Disability Studies ), a leading provider of connectivity A generic term for connecting devices to each other in order to transfer data back and forth. It often refers to network connections, which embraces bridges, routers, switches and gateways as well as backbone networks. for storage networking solutions, today announced fiscal first quarter results for the period ending Jan. 31, 2001. An expanded relationship with Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. , a continued broadening broad·en tr. & intr.v. broad·ened, broad·en·ing, broad·ens To make or become broad or broader. broad of Crossroads' customer base and solid execution drove performance. Total revenues for the first quarter of fiscal 2001 grew 13 percent to $10.0 million over $8.8 million reported for the first quarter of fiscal 2000, and 19 percent over $8.4 million reported for the fourth quarter of fiscal 2000. Excluding amortization of goodwill and stock-based compensation, the company reported 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 net loss of $4.6 million, or $0.17 per share, for the first quarter of fiscal 2001. This compares with a pro forma net loss of $235,000, or $0.01 per share, for the comparable quarter in fiscal 2000, and a pro forma net loss of $4.8 million, or $0.18 per share, for the fourth quarter of fiscal 2000. Actual net loss for the first quarter of fiscal 2001 was $10.7 million, or $0.39 per share. This compares with a net loss of $923,000, or $0.04 per share, for the first quarter of fiscal 2000, and a net loss of $10.6 million, or $0.39 per share, for the fourth quarter of fiscal 2000. "Our solid first quarter is the result of our continuing focus on customers, quality and execution," said Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. R. Smith, Crossroads chairman and chief executive officer. "We are pleased to add Sun Microsystems to our list of 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, which continues to grow and broaden our revenue base. In the past 12 months, we have grown from two to eight the number of customers that account for approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 75 percent of our revenue, and from two to four the number of customers that individually account for at least 10 percent of our revenue. "We continue to benefit from the quality initiatives and process improvements we implemented last year by getting closer to our customers, expanding our customer base and delivering a more consistent revenue pattern," Smith said. "As we move from edge to enabling to core solutions, we continue to invest in high-growth areas to drive growth, profitability and shareholder value." Recent highlights include: -- Operational Execution: Crossroads grew total revenues 19 percent for the first quarter of fiscal 2001, and excluding amortization of stock-based compensation, recorded a gross margin of 51.5 percent. Crossroads improved the number of Day Sales Outstanding from 62 in the fourth quarter of fiscal 2000 to 48 in the first quarter of fiscal 2001, improved inventory turns and ended the quarter with $56.4 million in cash and short-term investments. This compares with $60.0 million in cash and short-term investments at the end of the fourth quarter of fiscal 2000. -- Customer Strength: During the quarter, Sun Microsystems became the most recent addition to Crossroads' list of key OEM customers. The agreement gives medium to large businesses more bandwidth for data movement between Sun servers and S/390-class mainframes, where more than half the world's data is stored and managed. -- Management Depth: Crossroads named Phillip (Randy) Bell vice president of worldwide sales and support. Prior to joining Crossroads, Bell was vice president of sales for large corporate accounts at Dell Computer Corporation and has more than 20 years of experience in similar capacities with both national and global companies including AT&T Global Information Solutions (NCR), Structural Dynamics Research Corporation and Integrated Systems. -- InfiniBand Product Development: Crossroads has moved from prototyping to product development on InfiniBand technology as Intel delivered its first InfiniBand chips to Crossroads. Crossroads will again demonstrate InfiniBand routing technology in the Intel Developer's Forum, which will start Feb. 27. "As the storage networking market grows and new protocols evolve Evolve may refer to several terms:
NOTE: Crossroads will hold a conference call (415/228-4834; password A secret word or code used to serve as a security measure against unauthorized access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. See NCSC. : Crossroads) and simultaneous Webcast (www.crossroads.com) at 3:30 p.m. (CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. ) today. About Crossroads Systems Inc. With headquarters in Austin, Texas, Crossroads Systems (Nasdaq:CRDS) is a leading global provider of connectivity for storage networks regardless of technology or location. Crossroads enables protocol-independent connectivity at gigabit speeds for a wide range of devices that scale for small businesses to global enterprises. Crossroads' products are in solutions from ADIC, ATL (Active Template Library) A set of software routines from Microsoft that provide the basic framework for creating ActiveX and COM objects. Stemming from the standard template library (STL) that comes with C++ compilers, ATL includes an object wizard that sets up , Compaq (Compaq Computer Corporation, Houston, TX, www.compaq.com) Compaq was the leading PC manufacturer when it was acquired by HP in 2002. Founded in 1982 by Rod Canion, Jim Harris and Bill Murto, one year later the company shipped 53,000 PC-compatible COMPAQ Portables, resulting in $111 , Dell, Fujitsu-Siemens, Groupe Bull Groupe Bull (also known as Bull Computer or simply Bull) is a French computer company based in Les Clayes-sous-Bois, outside Paris. The company has also been known at various times as Bull General Electric, Honeywell Bull, CII Honeywell Bull , Hewlett-Packard See HP. Hewlett-Packard - (HP) Hewlett-Packard designs, manufactures and services electronic products and systems for measurement, computation and communications. The company's products and services are used in industry, business, engineering, science, medicine and , Hitachi Data Systems See HDS. , IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , McDATA, StorageTek (Storage Technology Corporation, Louisville, CO) Acquired by Sun in 2005, StorageTek had been a leading provider of disk and tape storage solutions and services that was founded in 1969. , Sun Microsystems, Unisys, ACAL ACAL Asociación de Archiveros de Castilla Y León (Castille and Leon, Spain) ACAL Academia de Ciencias de América Latina (Spanish: Academy of Sciences of Latin America, Venezuela) , Bell Micro, Cranel, Datalink and Tech Data. For employment opportunities and more information about Crossroads Systems, please visit www.crossroads.com or call 800/643-7148. 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. This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: the quarterly fluctuations of Crossroads' operating results and Crossroads' inability to accurately predict revenues and budget for expenses for future periods; the extent of Crossroads' future operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and negative cash flow; the company's ability to maintain its operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: ; the impact on Crossroads' results or operations due to changes in the Securities and Exchange Commission's accounting standards, including the implementation of SAB SAB Spontaneous abortion. See Abortion. 101 with respect to revenue recognition; the dependence of Crossroads' business on the storage area network market which is evolving and unpredictable; the possibility that the pending shareholder class action lawsuits class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax could result in an adverse outcome to the company; Crossroads' ability to develop new and enhanced products that achieve market acceptance; the effect of competition; the effect of undetected software or hardware errors, which may affect the company's results or reduce demand for Crossroads' products in the long term; Crossroads' inability to protect its intellectual property rights, including any adverse outcome in the company's pending patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with certain of its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; the continuation continuation - continuation passing style of Crossroads' successful relationships with its limited number of OEM customers, including its ability to replace revenue from Compaq Computer Corporation (company) Compaq Computer Corporation - The largest US manufacturer and vendor of IBM PC compatible personal computers and servers. Compaq was started in 1982 by three ex-Texas Instruments employees. Quarterly sales $2499M, profits $210M (Aug 1994). http://compaq.com/. ; Crossroads' ability to retain and recruit RECRUIT. A newly made soldier. key personnel to manage its business successfully; Crossroads' ability to successfully achieve the benefits of the acquisition of Polaris Polaris (pōlâr`ĭs) or North Star, star nearest the north celestial pole (see equatorial coordinate system). Communications and any subsequent acquisition or strategic relationship; and that Crossroads' stock price could be volatile With regard to computer memory, it means "temporary" and not "highly changeable," which is the usual meaning of the word. See volatile memory. 1. (programming) volatile - volatile variable. 2. (storage) volatile - See non-volatile storage. regardless of Crossroads' actual financial performance and other factors detailed in Crossroads' filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Quarterly Reports on 10-Q. -- Tables Attached --
CROSSROADS SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In Thousands, Except Share and Per Share Data)
Three Months Ended
Jan. 31,
--------------------------------------------
2000 2001
-------------------- --------------------
Revenue:
Product revenue $ 8,692 $ 9,824
Other revenue 101 150
-------------------- --------------------
Total revenue 8,793 9,974
Cost of revenue(1) 4,724 4,876
-------------------- --------------------
Gross profit 4,069 5,098
-------------------- --------------------
Operating expenses(1):
Sales and marketing 2,404 4,068
Research and development 2,145 4,302
General and
administrative 1,566 4,716
Amortization of
intangibles -- 3,596
Stock-based compensation
(1) -- --
-------------------- --------------------
Total operating expenses 6,115 16,682
-------------------- --------------------
Loss from operations (2,046) (11,584)
Other income, net 1,123 974
-------------------- --------------------
Net loss before cumulative
effect of accounting
change (923) (10,610)
Cumulative effect of
accounting change(2) -- (130)
-------------------- --------------------
Net loss $ (923) $ (10,740)
==================== ====================
Basic and diluted net loss per share:
Before cumulative effect
of accounting change $ (0.04) $ (0.38)
Cumulative effect of
accounting change(2) -- (0.01)
Basic and diluted net
loss per share $ (0.04) $ (0.39)
==================== ====================
Shares used in computing
basic and diluted net
loss per share 25,629,217 27,284,797
==================== ====================
(1) During the fiscal quarter ended Jan. 31, 2001, the Company
allocated stock-based compensation to specific line items within
the statement of operations based on the classification of the
employees who received the benefit. Stock-based compensation for
prior periods has been reclassified to conform to the Jan. 31,
2001 presentation. Stock-based compensation for the periods
indicated was allocated as follows:
Three Months Ended
Jan. 31,
--------------------------------------------
2000 2001
-------------------- --------------------
Cost of revenue $ 86 $ 39
Sales and marketing 192 48
Research and development 161 265
General and administrative 249 2,222
-------------------- --------------------
Total stock-based
compensation $ 688 $ 2,574
==================== ====================
(2) Effective Nov. 1, 2000, the Company adopted the provisions of
Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements." The effect of the change was to increase
income $130 (or one cent per share) with an increase to total
revenue and cost of revenue of $207 and $77, respectively.
--
CROSSROADS SYSTEMS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
Oct. 31, Jan. 31,
2000 2001
-------------------- --------------------
ASSETS
Current assets:
Cash and cash equivalents $ 42,447 $ 46,394
Short-term investments 17,591 10,000
-------------------- --------------------
Total cash, cash
equivalents and
short-term investments 60,038 56,394
Accounts receivable, net 5,590 5,108
Inventories, net 3,918 3,872
Prepaids and other current
assets 2,037 1,872
-------------------- --------------------
Total current assets 71,583 67,246
Notes receivable from
related party, net 159 162
Property and equipment, net 10,062 10,180
Intangibles, net 35,686 32,088
Other assets 558 562
-------------------- --------------------
Total assets $ 118,048 $ 110,238
==================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,852 $ 5,515
Accrued liabilities 2,933 2,606
Accrued warranty costs 414 434
Deferred revenue 1,097 772
-------------------- --------------------
Total current liabilities 9,296 9,327
Stockholders' equity:
Common stock 27 28
Additional paid-in capital 183,391 184,905
Deferred stock-based
compensation (9,734) (8,345)
Notes receivable from
stockholders (249) (235)
Accumulated deficit (64,448) (75,188)
Treasury stock at cost (235) (254)
-------------------- --------------------
Total stockholders'
equity 108,752 100,911
-------------------- --------------------
Total liabilities and
stockholders' equity $ 118,048 110,238
==================== ====================
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