Emulex reports fiscal 1995 profits, revenue growth.COSTA MESA Costa Mesa (kŏs`tə mā`sə), city (1990 pop. 96,357), Orange co., S Calif., on the Pacific south of Santa Ana; inc. 1953. It is a transportation, residential, and light industrial center. , Calif.--(BUSINESS WIRE)--Aug. 3, 1995--Emulex Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :EMLX) Thursday Thursday: see week. announced that sales for its fourth fiscal quarter ended July 2, 1995, rose to a record $19.6 million, up from $18.3 million from the same quarter a year ago. Fourth quarter net income expanded 44% to $1,099,000, or $0.17 per share, compared to $765,000, or $0.13 per share, for the same quarter a year ago. Fourth quarter results included both a non-recurring charge and a tax recovery which are discussed further below. During the fourth quarter, the company elected to discontinue dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: sales efforts for its Leverage Gateway Services product, a software package which offers Novell client services to Digital Equipment LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. environments. As a result, the capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. software and goodwill associated primarily with this product line were written off in the fourth quarter, amounting to $685,000 and $785,000, respectively. In addition, Emulex recorded a $1,581,000 tax recovery during the fourth quarter, which arose from a federal tax refund Tax refund Money back from the government when too much tax has been paid or withheld from a salary. pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to prior years' income. This refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies was received during the fiscal year and was recognized during the fourth quarter after the company's internal tax review of prior years was completed. Excluding the $1,470,000 capitalized software and goodwill write-offs, as well as the $1,581,000 tax recovery, the company's net income was $988,000, or $0.16 per share. Revenues for the fiscal year 1995 grew 23% to $75.5 million, generating net income of $3.9 million, or $0.64 per share. In fiscal 1994, the company reported a loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $7.7 million, or $1.39 per share, and a net loss of $15.2 million , or $2.75 per share. The fiscal 1994 results included a $3.0 million loss on disposal of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , $4.6 million in losses from discontinued operations, and consolidation charges of $2.4 million as the company completed its 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 operations and the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. of its wholly owned QLogic Corporation subsidiary. "In fiscal 1995, Emulex benefited from the recently streamlined organization and the expanded 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 and distribution channels that were established by our new management team in the previous year," noted Paul F. Folino, 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. . "The company's net income improved greatly from a significant loss position in fiscal 1994 to approximately 5% of revenue in fiscal 1995. "Though much of fiscal 1995's revenue growth was derived from networking product lines established prior to Emulex's restructuring, we continue to believe that 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. growth will be generated by our success in developing and marketing new networking products," stated Folino. "As a result, we substantially increased our investment in R&D throughout fiscal 1995, exiting the fourth quarter at approximately 15% of revenue, in order to create th new products that are essential to Emulex's long-term growth." During the fourth quarter, Emulex extended its new product introduction agenda with new product shipments in all three sectors of its business: network access, printer servers and Fibre Channel. "In the fourth quarter, Emulex continued to benefit from growth in the printer server sector, particulartly in units purchased by end-users through distribution," noted Folino. Shipments of NETJet and NETQue printer servers to distributors rose over 75% compared to the prior year. Printer server shipments to OEMs more than doubled during fiscal 1995, primarily due to large shipments concentrated in the first half of the fiscal year. "An OEM printer server order will typically ship in large quantity at the beginning of a new printer's product life cycle, and such was the case with some of our largest printer server OEMs in the early quarters of fiscal 1995," explained Folino. "We are very pleased to have achieved new printer server design wins with OEMs such as Xerox and Ricoh for their new generation printers that will commence shipment in fiscal 1996. In addition, we have recently established a new joint development project with one of the world's leading manufacturers of computer hardware, software and peripherals that is expected to provide a new source of OEM printer server revenue in the second half of fiscal 1996." These printer servers will also include a graphical user interface graphical user interface (GUI) Computer display format that allows the user to select commands, call up files, start programs, and do other routine tasks by using a mouse to point to pictorial symbols (icons) or lists of menu choices on the screen as opposed to having to that has been developed by Emulex for network printer configuration and management. Also in the fourth quarter, Emulex announced the NETQue PRO 2, a new high-end external device featuring two bi-directional parallel ports and a single high-speed serial port. The NETQue PRO 2 commenced shipment early in the new fiscal year. In the network access product segment, Emulex recorded its first revenues from its new remote access server (RAS (1) See network access server. (2) (Remote Access Service) A Windows NT/2000 Server feature that allows remote users access to the network from their Windows laptops or desktops via modem. See RRAS and network access server. ) product line during the fourth quarter, initiating shipment of the recently introduced two-port ConnectPlus LT. Emulex's RAS products enable a remotely located laptop Same as laptop computer. laptop - portable computer or home PC to communicate with a corporate local area network as if it were locally attached Refers to disks, printers and other peripheral devices that are connected directly to a computer via USB or FireWire. Such devices may be designed for desktop use or portability. For example, a locally-attached, stationary hard drive may weigh three to five pounds, while one made for . Also, during the quarter Emulex expanded its new RAS product line with the introduction of the eight-port ConnectPlus Pro which is targeted to commence shipment later this summer. The ConnectPlus Pro is an innovative eight-port unit based on the popular PCMCIA (Personal Computer Memory Card International Association, San Jose, CA, www.pcmcia.org) An international standards body and trade association that was founded in 1989 to establish a standard for connecting peripherals to portable computers. PCMCIA created the PC Card. See PC Card. (PC Card) technology deployed in laptop computers A portable computer that has a flat LCD screen and usually weighs less than eight pounds. Often called just a "laptop," it uses batteries for mobile use and AC power for charging the batteries and desktop use. Today's high-end laptops provide all the capabilities of most desktop computers. . This expandable unit accommodates up to 8 PCMCIA modems, providing dial-in access for multiple remote users to TCP/IP TCP/IP in full Transmission Control Protocol/Internet Protocol Standard Internet communications protocols that allow digital computers to communicate over long distances. and NetWare LANs. Other products in the network access sector continued the pattern of recent quarters, as growth in intelligent WAN adapter A device that allows one system to connect to and work with another. An adapter is often a simple circuit that converts one set of signals to another; however, the term often refers to devices which are more accurately called "controllers. sales offset maturation maturation /mat·u·ra·tion/ (mach-u-ra´shun) 1. the process of becoming mature. 2. attainment of emotional and intellectual maturity. 3. in the communications server See network access server, modem server, terminal server and communications controller. (operating system) Communications Server - IBM's rebranding of ACF. sector. After more than two years of intensive development, Emulex commenced initial shipments of the first member of is Fibre Channel chipset A group of chips designed to work as a unit to perform a function. For example, a modem chipset contains all the primary circuits for transmitting and receiving. A PC chipset provides the electronic interfaces between all subsystems (see PC chipset for illustration). , the encoder/decoder, or ENDEC chip in the fourth quarter. "In the past year, all of the major storage manufacturers have committed to Fibre Channel, planning initial product launches before the end of 1996," noted Folino. "Because of the dual I/O (Input/Output) The transfer of data between the CPU and a peripheral device. Every transfer is an output from one device and an input to another. See PC input/output. I/O - Input/Output and LAN capability of Fibre Channel, the accelerating Fibre Channel momentum in storage and clustering applications is also providing the foundation for new networking opportunities as the market evolves," said Folino. Emulex is a leading developer of Fibre Channel technology, a high-performance ANSI (American National Standards Institute, New York, www.ansi.org) A membership organization founded in 1918 that coordinates the development of U.S. voluntary national standards in both the private and public sectors. It is the U.S. member body to ISO and IEC. standard interface that is supported by the growing 72-member Fibre Channel Association which includes Sun, 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) , Hewlett-Packard and Seagate. Fibre Channel is uniquely architected to serve both local area networking and peripheral I/O communications needs and solves the industry's performance bottleneck A lessening of throughput. It often refers to networks that are overloaded, which is caused by the inability of the hardware and transmission lines to support the traffic. It can also refer to a mismatch inside the computer where slower-speed peripheral buses and devices prevent the CPU problems with its I Gbps transmission speeds over distances up to 10 kilometers. Emulex's Fibre Channel devices support all implementations of the Fibre Channel standard, including arbitrated loop A ring topology used in Fibre Channel. Up to 127 devices may be attached in the loop, but only two can communicate at the same time, reflecting the channel nature of Fibre Channel technology. , switched fabric and point-to-point technologies, as well as scaleable transmission speeds from 266 Mbps to 1.062 Gbps. The company selectively licenses its Fibre Channel technology in addition to developing its own end-user solutions. Emulex Corp. is a leading designer and manufacturer of both software and hardware based network access products, supplying high performance communications solutions for managing the flow of time-critical data between computers and peripheral equipment. The company markets to OEMs and end-users through its own worldwide selling organization, as well as two-tier distibution partners. Corporate headquarters are located in Costa Mesa, Calif. Note To Editors: This news release refers to various products and companies by their trade names. In most, if not all, cases these designations are claimed as trademarks or registered trademarks by their respective companies.
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
July 2, July 3,
Assets 1995 1994
Current assets:
Cash and cash equivalents $10,308 $ 6,772
Accounts and notes receivable,
net 12,896 9,756
Inventories, net 14,261 8,938
Prepaid and other assets 1,549 686
Total current assets 39,014 26,152
Property, plant, equipment and other assets, net 8,536 8,614 Intangible assets, net -- 2,588
$47,550 $37,354
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 8,371 $ 3,015
Accrued liabilities 5,282 5,433
Current installments of
capitalized lease
obligations 243 251
Net liabilities-discontinued
operations 74 524
Total current liabilities 13,970 9,223
Deferred income taxes and other liabilities 2,902 2,572 Total stockholders' equity 30,678 25,559
$47,550 $37,354
-0-
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except share and per-share data)
(unaudited)
Three Months Ended
July 2, July 3,
1995 1994
Net revenues $19,583 $18,323 Cost of sales 11,211 10,417 Capitalized software impairment 685 -- Gross profit 7,687 7,906
Operating expenses:
Engineering and development 2,893 2,336
Selling, general and
administrative 4,495 4,719
Goodwill amortization and
impairment 870 85
Total operating expenses 8,258 7,140
Operating income(loss) (571) 766
Nonoperating income 199 80
Income(loss) before income
taxes (372) 846
Provision for (benefit from) income taxes (1,471) 81
Net income $ 1,099 $ 765
Net income per common and common-equivalent share $0.17 $ 0.13 Weighted-average number of common and common-equivalent shares 6,340,000 5,720,000 Note To Editors: The quarter ended July 2, 1995 includes a non-recurring charge for the complete impairment of capitalized software of $685 and goodwill of $785 included in cost of sales and operating expenses, respectively. As a result of this impairment, the company has no intangible assets as of July 2, 1995. -0-
EMULEX CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share and per-share data)
(Unaudited)
Twelve Months Ended
July 2, July 3,
1995 1994
Net revenues $ 75,475 $ 61,558 Cost of sales 43,727 38,248 Capitalized software impairment 685 - Gross profit 31,063 23,310 Operating expenses: Engineering and development 10,674 8,498 Selling, general and administrative 17,605 18,754 Goodwill amortization and impairment 1,122 1,468 Consolidation charges - 2,413 Total operating expenses 29,401 31,133 Operating income (loss) 1,662 (7,823) Non-operating income 1,120 123 Income (loss) from continuing operations before income taxes 2,782 (7,700) Benefit from income taxes (1,156) (23) Income (loss) from continuing operations 3,938 (7,677) Discontinued operations: Loss from discontinued operations, net of income tax - (4,558) Loss on disposal of discontinued operations, net of income tax - (2,994) Net income (loss) $ 3,938 $(15,229) Income (loss) from continuing operations per common and common-equivalent share $ 0.64 $ (1.39) Loss from discontinued operations and disposal of discontinued operations, net of income tax, per common and common-equivalent share - (1.36) Net income (loss) per common and common-equivalent share $ 0.64 $ (2.75) Weighted-average number of common and common-equivalent shares 6,172,000 5,537,000 -0- CONTACT: Emulex Corporation, Costa Mesa Chuck McBride, 714/513-8180 |
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