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DIGITAL EQUIPMENT CORPORATION REPORTS SIX PERCENT REVENUE GROWTH AND IMPROVED OPERATING RESULTS FOR THIRD QUARTERS

 MAYNARD, Mass., April 14 /PRNewswire/ -- Digital Equipment Corporation (NYSE:DEC), the leading worldwide supplier of networked computer systems and services, today reported results for its third quarter, which ended March 27, 1993.
 For the quarter, the Corporation reported total operating revenues of $3,453,676,000, up 6 percent from the $3,252,514,000 of the comparable quarter a year ago. The Corporation reported a net loss for the quarter of $30,121,000, compared with a net loss of $311,306,000 for the comparable quarter a year ago. Per share results for the quarter were a loss of $.23 versus a loss of $2.50 for the third quarter of fiscal 1992.
 For the nine months ended March 27, 1993, the Corporation reported total operating revenues of $10,457,418,000, up 4 percent from the $10,025,088,000 of the comparable period a year ago. Net loss for the first nine months of fiscal 1993 was $364,526,000, versus a loss for the similar period a year ago of $940,375,000, which includes a $485,495,000 charge for a change in accounting principles related to postretirement health benefits. Per share results were a loss of $2.81 versus a loss of $7.55 for the first nine months of fiscal 1992.
 "We are meeting the goals we have set for ourselves in returning Digital to profitability and growth," said Robert B. Palmer, Digital President and Chief Executive Officer. "Our overall operating results continue to show improvement, quarter to quarter. For the first time in six quarters, we generated positive cash flow from operations and investments, even with restructuring activities and the loss. While maintaining our focus on costs we must continue the changes underway both in our organization and our product offerings, which are designed to restore revenue growth."
 "We are encouraged by our transformation to a market driven, customer focused company. We are confident that our strategy -- to provide customers with the best solutions and to provide the best technology in core areas of competence -- is the right strategy for our customers, partners, shareholders,


and employees," Palmer continued.
 "The rollout of our Alpha AXP program continues on schedule. This is a major program that will take several quarters to fully implement, but this past quarter we passed several significant milestones. We launched our unified UNIX operating system program, including commercial availability of OSF/1 on the AXP platform. We announced availability of mixed cluster capability nine months ahead of our schedule. Mitsubishi Electronics announced that they will be a second source for Alpha AXP chips, and Novell announced that its network operating system, NetWare, will run in native mode on Alpha AXP systems in the future. In addition, five major database vendors have announced availability of their databases under UNIX on the Alpha AXP architecture. More than 500 Alpha AXP applications from partners and 50 layered software products from Digital are available today. In total, more than 1000 vendors are moving more than 2000 applications to this next generation, 64-bit computing environment," Palmer concluded.
 "Total revenues were up 6 percent from the comparable quarter last year," said William M. Steul, Vice President and Chief Financial Officer. "Without the favorable impact of foreign exchange rate movements our revenues would have been essentially flat. Our PC business doubled year over year, as we expanded our presence at the desktop. Our service revenues grew 12 percent driven by strength in our systems integration business around the world. Customers increasingly rely on us for consulting expertise in helping them apply technology solutions to their business problems. Even with the competitive environment we were able to ship substantially more units, keeping our product revenues essentially flat."
 "Our strong cost control efforts continue to be reflected in our operating results. Research and engineering spending declined by 19 percent from the comparable quarter a year ago and sales, general and administrative spending declined 8 percent from the comparable period as we continue to move to a competitive business model. In addition, total worldwide population declined by 4,000 to 98,100 at the end of the third quarter. Total population has declined by nearly 16,000 since the beginning of this fiscal year. Our balance sheet remains strong with a low debt ratio, substantial cash balance of $1.6 billion and total asset turns continuing to improve," Steul concluded.
 After the end of the quarter, the Company issued $250M in 30 year debentures at 7 3/4%, priced to yield 7.88% to maturity. This debt offering represented the remaining unissued amount under the Company's $1 billion shelf registration filed last August. The debt was rated A2 by Moody's Investor Services and A+ by Standard & Poors.
 Digital Equipment Corporation, headquartered in Maynard, Mass., is the leading worldwide supplier of networked computer systems, software and services. Digital pioneered and leads the industry in interactive, distributed and multivendor computing. Digital and its business partners deliver the power to use the best integrated solutions - from desktop to data center - in open information environments.
 Note to Editors: Alpha AXP is a trademark of Digital Equipment CorporationNetWare is a registered trademark of Novell, Inc.OSF/1 is a registered trademark of Open Software Foundation, Inc.UNIX is a registered trademark of UNIX System Laboratories,Inc.
 DIGITAL EQUIPMENT CORPORATION THIRD QUARTER RESULTS
 THREE MONTHS ENDED
 MARCH 27, 1993 MARCH 28, 1992
 PRODUCT SALES $1,767,372,000 $1,750,448,000
 SERVICE & OTHER REVENUES 1,686,304,000 1,502,066,000
 TOTAL OPERATING REVENUES 3,453,676,000 3,252,514,000
 COST OF PRODUCT SALES 1,049,969,000 1,022,790,000
 SERVICE EXPENSE 1,030,728,000 961,272,000
 TOTAL COST OF SALES 2,080,697,000 1,984,062,000
 GROSS MARGIN 39.8% 39.0%
 RESEARCH & ENGINEERING 350,423,000 32,701,000
 SELLING, GENERAL &
 ADMINISTRATIVE 1,050,600,000 1,138,603,000
 OPERATING LOSS (28,044,000) (302,852,000)
 OPERATING MARGIN (.8)% (9.3)%
 INTEREST INCOME 16,325,000 16,846,000
 INTEREST EXPENSE 16,402,000 5,300,000
 LOSS BEFORE INCOME TAXES (28,121,000) (291,306,000)
 PRE-TAX MARGIN (.8)% (9.0)%
 PROVISION FOR INCOME TAXES 2,000,000 20,000,000
 NET LOSS $(30,121,000) $ (311,306,000)
 WEIGHTED AVERAGE
 SHARES OUTSTANDING 131,553,881 124,671,305
 NET LOSS PER SHARE $ (.23) $ (2.50)
 NINE MONTHS ENDED
 MARCH 27, 1993 MARCH 28,1992
 PRODUCT SALES $5,502,427,000 5,552,684,000
 SERVICE & OTHER REVENUES 4,954,991,000 4,472,404,000
 TOTAL OPERATING REVENUES 10,457,418,000 10,025,088,000
 COST OF PRODUCT SALES 3,186,464,000 3,028,059,000
 SERVICE EXPENSE 3,106,648,000 2,798,286,000
 TOTAL COST OF SALES 6,293,112,000 5,826,345,000
 GROSS MARGIN 39.8% 41.9%
 RESEARCH & ENGINEERING 1,160,743,000 1,268,657,000
 SELLING, GENERAL &
 ADMINISTRATIVE 3,359,093,000 3,377,688,000
 OPERATING LOSS (355,530,000) (447,602,000)
 OPERATING MARGIN (3.4)% (4.5)%
 INTEREST INCOME 43,750,000 71,729,000
 INTEREST EXPENSE 32,746,000 27,853,000
 LOSS BEFORE INCOME
 TAXES & CUMULATIVE
 EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE (344,526,000) (403,726,000)
 PRE-TAX MARGIN (3.3)% (4.0)%
 PROVISION FOR INCOME TAXES 20,000,000 51,154,000
 LOSS BEFORE CUMULATIVE EFFECT
 OF CHANGE IN ACCOUNTING
 PRINCIPLE (364,526,000) (454,880,000)
 CUMULATIVE EFFECT OF CHANGE
 IN ACCOUNTING PRINCIPLE,
 NET OF TAX --- 485,495,000
 NET LOSS $(364,526,000) $(940,375,000)
 WEIGHTED AVERAGE SHARES
 OUTSTANDING 129,570,101 124,588,374
 LOSS PER SHARE AFTER TAXES
 BEFORE CUMULATIVE EFFECT
 OF CHANGE IN ACCOUNTING
 PRINCIPLE $ (2.81) $(3.65)
 LOSS PER SHARE ON CUMULATIVE
 EFFECT OF CHANGE IN
 ACCOUNTING PRINCIPLE --- (3.90)
 NET LOSS PER SHARE $ (2.81) $(7.55)
 BALANCE SHEET - Q3 FY93
 CASH & CASH EQUIVALENTS.................. DLRS 1,552,087,000
 ACCOUNTS RECEIVABLE, NET................. 3,009,314,000
 A.R. DAYS SALES OUTSTANDING 78 DAYS
 INVENTORIES: RAW MATERIALS......... 358,128,000
 WORK IN PROCESS....... 569,258,000
 FINISHED GOODS........ 887,490,000
 TOTAL............. DLRS 1,814,876,000
 PREPAID EXPENSES......................... 368,514,000
 DEFERRED INCOME TAX CHARGES, NET......... 222,794,000
 TOTAL CURRENT ASSETS..................... 6,967,585,000
 NET PROPERTY, PLANT & EQUIPMENT.......... 3,239,999,000
 TOTAL ASSETS............................. 10,944,959,000
 BANK LOANS & CURRENT PORTION OF LTD...... 40,164,000
 TOTAL CURRENT LIABILITIES................ 4,215,514,000
 DEFERRED TAX CREDITS, NET................ 23,033,000
 LONG-TERM DEBT........................... 77,326,000
 POSTRETIREMENT BENEFITS.................. 1,223,046,000
 TOTAL LIABILITIES........................ 6,238,919,000
 STOCKHOLDERS' EQUITY..................... 4,706,040,000
 BOOK VALUE PER SHARE..................... 35.75
 CAPITAL SPENDING (INVESTMENT IN PP&E)- Q3 101,956,000
 DEPRECIATION & AMORTIZATION......... - Q3 215,070,000
 CAPITAL SPENDING (INVESTMENT IN PP&E)-YTD 358,419,000
 DEPRECIATION & AMORTIZATION......... -YTD 629,233,000
 NON U.S. REVENUES - QTR.................. 2,241,096,000
 or 65%
 NON U.S. REVENUES - YTD.................. 6,714,782,000
 or 64%
 TOTAL EMPLOYEE POPULATION APPROXIMATELY.. 98,100
 -0- 4/14/93
 /CONTACT: Bradley D. Allen, 508-493-7182 or James Chiafery 508-493-8009 of Digital Equipment Corporation)
 (DEC)


CO: Digital Equipment Corporation ST: Massachusetts IN: CPR SU: ERN

TM -- NE002 -- 5527 04/14/93 08:31 EDT
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