Data General Reports Third Quarter 1998 Results.WESTBORO Westboro can refer to: Places
For the third quarter of fiscal 1997, the company reported net income of $14.7 million, or $.34 per share on a 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. basis, on revenues of $391.3 million. The corporate-wide restructuring, which was announced June 1, is designed to strengthen the company's focus on storage and enterprise computing Refers to information technology in the larger company. See enterprise data and enterprise networking. solutions and reduce costs in non-strategic areas. The reorganization involved all areas of the company, and included the transfer of approximately 100 people from other divisions to the CLARiiON Advanced Storage Division. Overall, the restructuring resulted in a net reduction in force of approximately 400 people. In making the announcement, Data General also said it would consolidate certain facilities and 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. non-strategic assets. As a result of the restructuring, Data General said it expects net savings in the range of $40 to $45 million annually. "With the organizational steps we have taken, we are now better positioned to compete successfully in the higher-margin enterprise marketplace where our expertise, technology and support capabilities are best suited," said Data General President and Chief Executive Officer Ronald L. Skates Skates may refer to:
Operating system for digital computers, developed by Ken Thompson of Bell Laboratories in 1969. It was initially designed for a single user (the name was a pun on the earlier operating system Multics). solutions using NUMA (Non-Uniform Memory Access) A multiprocessing architecture in which memory is separated into close and distant banks. NUMA is similar to SMP, in which multiple CPUs share a single memory. However, in SMP, all CPUs access a common memory at the same speed. technology." Commenting on the third quarter, Mr. Skates said, "CLARiiON revenues increased over the prior quarter but were down year over year due to the transition we are making from SCSI SCSI in full Small Computer System Interface Once common standard for connecting peripheral devices (disks, modems, printers, etc.) to small and medium-sized computers. SCSI has given way to faster standards, such as Firewire and USB. to fibre channel. Our full fibre channel products posted a 70 percent increase over the prior quarter and now represent more than 25 percent of our storage business," said Mr. Skates. "We are now shipping full end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. fibre channel storage systems to our resellers and channel partners. Data General is the first company to ship full fibre RAID disk arrays and is the leader in this advanced architecture, which industry analysts believe will become the dominant storage technology," said Mr. Skates. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. industry consulting group International Data Corporation (IDC) fibre channel storage will grow to a $6 billion market by the year 2000. Data General's fibre channel technology received a significant endorsement when Dell Computer Corporation (company) Dell Computer Corporation - One of the biggest US manufacturers of IBM PC compatibles. "From notebooks to networks", their slogan says. http://us.dell.com. , the industry's fastest growing server company, unveiled its high-end enterprise storage system last month. The Dell PowerVault Dell PowerVault products include disk enclosures, disk arrays, tape drives, autoloaders, tape libraries, network attached storage and storage area networks. Some of these products are provided through a partnership with EMC Corporation and are further classified as a Dell/EMC 650F is based on CLARiiON fibre technology. The introduction of the Dell PowerVault 650F is the latest step in a storage technology relationship between the companies. When the relationship was announced in April, Mike Lambert Lambert may refer to
Commenting on the company's AViiON server business, Mr. Skates noted the continuing revenue growth of its NT business, which nearly doubled from prior year levels with strong results again being posted by the company's high-end, eight-processor AV 8600 enterprise server. "NT has been our fastest growing business for the past three years and now represents more than 65 percent of our total Intel based See Intel-based system. AViiON revenues," said Mr. Skates. "With our focus on enterprise computing and our solutions and services oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. sales strategy, we expect to see our NT growth continue. The solutions sales approach has proven to be successful for us in the healthcare marketplace where our servers are used in more than 1,200 U.S. hospitals," Mr. Skates noted. Data General announced a major healthcare initiative earlier this week, teaming with Microsoft Corporation (company) Microsoft Corporation - The biggest supplier of operating systems and other software for IBM PC compatibles. Software products include MS-DOS, Microsoft Windows, Windows NT, Microsoft Access, LAN Manager, MS Client, SQL Server, Open Data Base Connectivity (ODBC), MS Mail, to promote ActiveX for Healthcare. As part of the agreement, the companies will establish Competency COMPETENCY, evidence. The legal fitness or ability of a witness to be heard on the trial of a cause. This term is also applied to written or other evidence which may be legally given on such trial, as, depositions, letters, account-books, and the like. 2. Centers where software developers will test their applications for the interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. requirements of ActiveX. With ActiveX compliant software, healthcare providers will be able to implement fully integrated information systems that will run "best-of-breed" applications from different software companies. The company also strengthened its AViiON NUMA line in June, as it unveiled a powerful new high-end server that will support up to 64 processors. The announcement was made in concert with Intel's introduction of its Pentium II Xeon (processor) Pentium II Xeon - The successor to Intel Corporation's Pentium II processor. The Xeon has the same P6 core as existing Pentium Pro/Pentium II units, but it supports a 100 MHz system bus and offers as much as 2 MB of level 2 cache. http://intel. processor. The AV 25000 server family will begin shipping in late summer. For the first three quarters of fiscal 1998, Data General reported a net loss of $156.1 million or $3.19 per share. This includes the charge of $135 million, or $2.76 per share related to the worldwide corporate restructuring. For the same period last year, the company reported net income of $38.9 million, or $.91 per share on a diluted basis. Revenues for the first three quarters of fiscal 1998 totaled $1.08 billion, compared to $1.13 billion for the first nine months of fiscal 1997. Mr. Skates concluded, "We believe we are on track for a return to stronger revenues and more positive results, as we implement our enterprise solutions strategy and benefit from a growing market for our fibre channel storage systems." Statements concerning the company's business outlook, anticipated profitability, revenues or expenses, and product line growth, together with other statements made in this press release which are not historical facts, are "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. ," as that term is defined under the Federal Securities Laws. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, fluctuations in customer demand, order patterns and inventory levels, changes and delays in product development plans and schedules, customer acceptance of new products, changes in pricing or other actions by competitors, general economic conditions, as well as other risks detailed in the company's filings with the Securities and Exchange Commission, including Data General's 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. for the 1997 fiscal year which ended September 27, 1997 and second quarter 10-Q. NOTE - Information on Data General, its products and services, can be accessed on 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 http://www.dg.com. Additional information on the CLARiiON Advanced Storage Division can be accessed at http://www.clariion.com. AViiON and CLARiiON are registered trademarks of Data General Corporation. All other brand and product names appearing in this press release may be trademarks or registered trademarks of their respective holders. -0-
DATA GENERAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions except per share amounts)
Quarter Ended Nine Months Ended
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
Revenues:
Product $ 253.8 $ 294.2 $ 784.7 $ 836.0
Service 97.5 97.1 293.7 293.1
Total revenues 351.3 391.3 1,078.4 1,129.1
Costs and expenses:
Cost of product revenues(1) 244.3 199.4 624.2 563.2
Cost of service revenues 59.9 61.5 183.2 188.0
Research and development 31.7 27.8 88.0 81.1
Selling, general, and
administrative 84.7 85.5 254.2 251.5
Restructuring charge 82.4 -- 82.4 --
Total costs and expenses 503.0 374.2 1,232.0 1,083.8
Income (loss) from
operations (151.7) 17.1 (153.6) 45.3
Interest income 3.2 2.7 10.1 6.3
Interest expense 3.6 4.5 10.8 10.9
Other expense (income), net 2.0 -- (.2) --
Income (loss) before
income taxes (154.1) 15.3 (154.1) 40.7
Income tax provision 1.0 .6 2.0 1.8
Net income (loss) (155.1) 14.7 (156.1) 38.9
Basic income (loss)
per share $ (3.15) $ .36 $ (3.19) $ .97
Weighted average shares
outstanding - Basic 49.2 40.6 48.9 40.2
Diluted income (loss)
per share $ (3.15) $ .34 $ (3.19) $ .91
Weighted average shares
outstanding - Diluted 49.2 43.6 48.9 42.9
(1) Included in the quarter and nine-months period ended June 27,
1998, is a one-time restructuring related charge of $52.6.
DATA GENERAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
June 27, Sept. 27,
1998 1997
Assets:
Current assets:
Cash and temporary cash investments $ 112.1 $ 216.8
Marketable securities 175.5 151.4
Receivables, net 270.3 296.4
Inventories 145.4 166.0
Other current assets 34.2 27.6
Total current assets 737.5 858.2
Property, plant, and equipment, net 184.7 180.4
Other assets 66.3 96.3
$ 988.5 $1,134.9
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable $ 130.7 $ 154.6
Other current liabilities 256.7 237.2
Total current liabilities 387.4 391.8
Long-term debt 212.8 212.8
Other liabilities 9.2 11.5
Total stockholders' equity 379.1 518.8
$ 988.5 $1,134.9
-0- CONTACT: Data General Corporation Jim Dunlap, 508/898-6546 jim_dunlap@dg.com |
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