JNI Corporation Announces Results for Third Quarter 2001.
SAN DIEGO--(BUSINESS WIRE)--Oct. 24, 2001
JNI (Java Native Interface) A programming interface (API) in Sun's Java Virtual Machine used for calling native platform elements such as GUI routines. RNI (Raw Native Interface) is the JNI counterpart in Microsoft's Java Virtual Machine.
JNI - Java Native Interface (R) Corporation (Nasdaq:JNIC JNIC Joint National Integration Center ):
-- Net Revenues of $18.1 Million with 58.1% Gross Margin -- Net Loss Per Share of $(0.01) Excluding Amortization -- Cash Balance of $113.7 Million or $4.19 Per Share
JNI(R) Corporation (Nasdaq:JNIC), a leading supplier of Fibre Channel host bus adapters See host adapter. (HBAs) for the enterprise storage market, today announced financial results for the third quarter ended September 30, 2001.
Third Quarter Operating Results
JNI reported net revenues of $18.1 million for the third quarter of 2001, a decrease of 40% from $30.0 million for the third quarter of 2000, and a sequential decrease of 22% from $23.1 million for the second quarter of 2001. The decrease in revenues resulted primarily from the business slowdowns of the major server and storage OEMs that drive the majority of JNI's market.
Third quarter of 2001 gross margin was 58.1%, compared to 59.3% for the third quarter of 2000, and 59.5% for the second quarter of 2001 (excluding the effect of an inventory reserve recorded during the second quarter).
"Third quarter gross margin was higher than originally anticipated at this revenue level due to ongoing strength in JNI's 1 gigabit (Gb) product suite and a slower than expected decline in average selling prices The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. ," said President and Chief Executive Officer Neal Waddington. "We expect continuing declines in gross margin due to continuing competitive pricing for the 2 Gb generation of products.
"With regard to our cost structure, we expect approximately the same operating expense Operating Expense
The essential things that a company must purchase in order to maintain business.
For example, the payment of employees wages are an operating expense.
Also known as OPEX. level during the fourth quarter, maintaining our emphasis on strategic R&D expenditure for next generation product development." JNI's operating expenses Operating expenses
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased 18% to $12.3 million for the third quarter of 2001, compared to $10.4 million for the same period last year. On a sequential basis, operating expenses decreased 11% from $13.9 million in the second quarter of 2001.
JNI reported a third quarter net loss of $(353,000), or $(0.01) per share, excluding amortization of intangibles and stock-based compensation of $1.4 million, and utilizing an effective tax rate of 35%. These results compare to net income of $5.0 million, or $0.18 per 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. share, excluding amortization of intangibles and stock-based compensation of $1.5 million and utilizing an effective tax rate of 38%, for the third quarter of 2000, and net income of $755,000 or $0.03 per diluted share for the second quarter of 2001 which excludes both an excess inventory charge of $7.7 million and amortization for intangibles and stock based compensation of $1.4 million.
Including amortization, JNI reported a net loss of $(2.0) million, or $(0.07) per share for the third quarter of 2001, compared to net income of $4.4 million, or $0.16 per diluted share, for the third quarter of 2000.
Balance Sheet Highlights
At September 30, 2001, JNI had total assets of $156.2 million, including cash and investments totaling $113.7 million or $4.19 per share. JNI repurchased 900,000 shares of its common stock in the open market in September at a cost of $5.1 million.
JNI's inventory level was $12.0 million at September 30, 2001, including $659,000 of inventory located at JNI's distributor partner locations. While inventories increased slightly from $11.6 million in net inventories last quarter, the composition of inventory remains consistent with annual demand projections. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). increased to 51 days during the third quarter of 2001, reflecting a slower customer pay cycle due to widespread economic weakness.
As of September 30, 2001, JNI had no debt and stockholders' equity Stockholders' Equity
The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $143.6 million.
"As the market begins the transition to 2 Gb data link speeds for storage area network (SAN) infrastructure, JNI is extremely well positioned," said Waddington. "Our Emerald III products are certified See certification. at all major storage OEMs and meet the needs of the majority of demand for build-out of 1 Gb infrastructure. Emerald IV has completed qualification at many storage OEMs and we expect that the remainder will be completed during the fourth quarter. In what I see as a clear recognition of JNI's outstanding reliability and strong market position, many early 2 Gb end users have installed JNI's SBus, PCI (1) (Payment Card Industry) See PCI DSS.
(2) (Peripheral Component Interconnect) The most widely used I/O bus (peripheral bus). and CompactPCI Emerald IV HBAs ahead of the completion 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 certifications. Both of these trends bode bode 1
v. bod·ed, bod·ing, bodes
1. To be an omen of: heavy seas that boded trouble for small craft.
2. well for JNI's continued success."
Waddington noted significant progress and success with respect to JNI's 2 Gb product introduction. He stated, "JNI was first-to-market with both 2 Gb SBus and PCI, single and dual port Solaris HBAs during the second quarter of this year, and announcement and shipment of our new 2 Gb - Ready(TM) CompactPCI product family began in August. To me, these events demonstrated our continued leadership position in SAN connectivity for Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. full line of servers. We achieved strong partner endorsement for our Emerald IV suite with certification from StorageTek(R) and qualification by Hewlett-Packard for our 2 Gb PCI and SBus HBAs for both 1 and 2 Gb connections, and we have additional qualifications in process with other storage leaders for our 2 Gb technology.
"During the third quarter, we also previewed JNI's roadmap for future technology development, which builds on our core Fibre Channel business, including 10 Gb data link speeds and pioneering solutions for emerging technologies such as InfiniBand and iSCSI. Going forward, these are the areas of primary focus for R&D and other resource allocation resource allocation Managed care The constellation of activities and decisions which form the basis for prioritizing health care needs ," Waddington concluded.
Conference Call and Webcast
Management will host a conference call with a simultaneous Webcast at 5:00 p.m. Eastern (2:00 p.m. Pacific) today to discuss JNI's third quarter operating performance and to offer outlook for the fourth quarter and beyond. The conference call, featuring President and Chief Executive Officer Neal Waddington and Chief Financial Officer Gloria Purdy, can be accessed live via the Internet at www.jni.com or at CCBN's www.StreetEvents.com and www.companyboardroom.com. The conference call can also be accessed by phone at 703-871-3026. Please dial in at least five minutes before start time, or if listening via the Internet, please go to the Web sites at least fifteen minutes early to register, download, and install any necessary audio software.
For those who cannot listen to the live broadcast, an audio replay will be available through October 31, 2001 by calling (888) 266-2086 and entering the passcode 5586247. The Webcast will be available for 90 days.
About JNI Corporation
JNI Corporation is a leading manufacturer of enterprise-level products used to create storage networks, and is the dominant manufacturer of host bus adapters (HBAs) for the Solaris environment. JNI offers a broad line of FibreStar(R) HBAs, Emerald(TM) ASICs, and EZ Fibre(TM) and DriverSuite(TM) software for SANs. JNI's products operate on Solaris, Windows 2000, Windows NT (Windows New Technology) A 32-bit operating system from Microsoft for Intel x86 CPUs. NT is the core technology in Windows 2000 and Windows XP (see Windows). Available in separate client and server versions, it includes built-in networking and preemptive multitasking. , HP-UX HP's version of Unix that runs on its 9000 family. It is based on SVID and incorporates features from BSD Unix along with several HP innovations.
(operating system) HP-UX - The version of Unix running on Hewlett-Packard workstations. , AIX (Advanced Interactive eXecutive) IBM's Unix-based operating system which runs on its Intellistation workstations and pSeries, p5, iSeries and i5 server families. , Novell, Linux and Mac OS systems. JNI customers, distributors and strategic partners include Acal FCS FCS - Frame Check Sequence , Avid, Bell Microproducts, Brocade brocade (brōkād`), fabric, originally silk, generally reputed to have been developed to a high state of perfection in the 16th and 17th cent. in France, Italy, and Spain. , Chaparral chaparral (chăpərăl`), type of plant community in which shrubs are dominant. It occurs usually in regions having from 10 to 20 in. (25–50 cm) of rainfall annually and with a Mediterranean-type climate. , Compaq StorageWorks, Consan, Crossroads, EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. , Eurologic, Gadzoox, GE Access, Hewlett-Packard, 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) , Info X, LSI LSI: see integrated circuit.
(Large Scale Integration) Between 3,000 and 100,000 transistors on a chip. See SSI, MSI, VLSI and ULSI. Logic, McDATA, Nishan Systems, StorageTek, Sun Microsystems, TidalWire and Veritas. Company headquarters are in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. , with offices throughout the U.S. and Munich (Munchen), Germany. www.jni.com.
JNI - enterprising en·ter·pris·ing
Showing initiative and willingness to undertake new projects: The enterprising children opened a lemonade stand. solutions(TM)
Disclosure and Forward Looking Statements
FRB/Weber Shandwick serves as financial relations counsel to this company, is acting on the company's behalf in issuing this bulletin and receiving compensation therefor there·for
For that: ordering goods and enclosing payment therefor.
Adv. 1. therefor . The information contained herein is furnished for information purposes only and is not to be construed as an offer to buy or sell securities.
With the exception of historical information, the statements set forth above include 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. (including but not limited to, operating expense levels, inventory demand projections, our positioning in the market, OEM certification completion dates, projections for future periods and statements about JNI's product and technology development efforts including expectations about growth in the market for such products and technologies) that involve risk and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include: the timing of the achievement of OEM certifications; the effect of a continuation of the decline in information technology spending by customers in our target markets; our dependence on a small number of OEM and
distribution channel customers; potential delays in product development; our dependence on sole source and limited source suppliers for key components; our dependence on growth in the market for servers utilizing the Solaris operating system operating system (OS)
Software that controls the operation of a computer, directs the input and output of data, keeps track of files, and controls the processing of computer programs. ; increasing competition in the Fibre Channel market; our exclusive focus on Fibre Channel products; rapid technological change in our industry; changes in the storage area networks market; our reliance on manufacturers in other countries; potential 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. involving intellectual property and other issues; and other risk factors discussed in the company's reports on Forms 10-K, 10-Q and other reports filed with the Securities and Exchange Commission, including the Company's most recent 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.
See 10-K. filed on March 23, 2001.
JNI, JNIC, Emerald, FibreStar, DriverSuite, 2 Gb - Ready, EZ Fibre and `enterprising solutions' are trademarks or registered trademarks of JNI Corp. All other trademarks are the property of their respective holders.
JNI Corporation Income Statement Three Months and Nine Months Ended September 30, 2001 and 2000 (in thousands, except per share amounts) 3 months 3 months 9 months 9 months ended ended ended ended 9/30/01 9/30/00 9/30/01 9/30/00 Net revenues $ 18,080 30,013 $ 62,279 $ 72,514 Cost of revenues 7,581 12,201 33,240 29,436 Gross margin 10,499 17,812 29,039 43,078 Operating expenses: Research and development 6,329 5,016 18,945 13,836 Selling and marketing 3,612 3,268 12,105 8,523 General and administrative 2,371 2,109 7,204 5,505 Total operating expenses before amortization 12,312 10,393 38,254 27,864 Operating income (loss) before amortization (1,813) 7,419 (9,215) 15,214 Amortization of intangible assets 1,339 1,340 4,018 4,019 Amortization of stock-based compensation 107 161 335 502 Total amortization 1,446 1,501 4,353 4,521 Operating income (loss) after amortization (3,259) 5,918 (13,568) 10,693 Interest income 1,270 578 4,026 1,636 Income (loss) before income taxes (1,989) 6,496 (9,542) 12,329 Income tax provision 0 2,143 0 4,360 Net income (loss) $ (1,989) $ 4,353 $ (9,542) $ 7,969 Earnings (loss) per share (excl excess inventory reserve and amort)(1)(a) $ (0.01) $ 0.18 $ 0.06 $ 0.39 Earnings (loss) per share (excluding amortization charges)(2) $ (0.01) $ 0.18 $ (0.12) $ 0.39 Earnings (loss) per share $ (0.07) $ 0.16 $ (0.35) $ 0.30 Number of shares for diluted EPS 27,149 27,106 27,088 26,712 (1) Earnings per share excluding excess inventory reserve and amortization Operating income (loss) before amortization $ (9,215) Interest income 4,026 (5,189) Excess inventory reserve recorded 7,731 2,542 Tax provision at 35% 890 Net income excluding excess inventory reserve and amortization $ 1,652 Earnings per share (excluding excess inventory reserve and amortization) $ 0.06 (2) Earnings (loss) per share excluding amortization charges Operating income (loss) before amortization $ (1,813) $ 7,419 $ (9,215) $ 15,214 Interest income 1,270 578 4,026 1,636 (543) 7,997 (5,189) 16,850 Tax provision at 35% and 38%, respectively (190) 3,039 (1,816) 6,403 Net income (loss) excluding amortization charges $ (353) $ 4,958 $ (3,373) $ 10,447 Earnings (loss) per share (excluding amortization charges) $ (0.01) $ 0.18 $ (0.12) $ 0.39 (a) Reflects earnings per share for the nine months ended September 30, 2001 excluding the excess inventory reserve of $7.7 million recorded in the second quarter. JNI Corporation Balance Sheet September 30, 2001 and December 31, 2000 (in thousands) Balance at Balance at ASSETS: 9/30/01 12/31/00 Cash and investments $ 113,664 $ 116,445 Accounts receivable, net 11,008 21,635 Inventories 12,009 19,262 Property and equipment, net 13,111 8,995 Intangible assets, net 670 4,688 Other assets 5,739 7,069 $ 156,201 $ 178,094 LIABILITIES & EQUITY: Accounts payable and accrued liabilities $ 10,949 $ 16,701 Deferred revenue 1,606 4,704 Total stockholders' equity 143,646 156,689 $ 156,201 $ 178,094