McDATA Announces Second Quarter 2004 Results; Exceeds Non-GAAP EPS Estimates and Records 8th Consecutive Quarter of Positive Cash Flow.BROOMFIELD Broomfield can be: In the United Kingdom:
MCDT Microsoft Certified Desktop Technician ) today reported results for the second quarter ended July July: see month. 31, 2004. Revenue totaled $98.2 million, an increase of one percent over the first quarter ended April 30, 2004. The GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss for the second quarter of 2004 was $(5.4) million, or $(0.05) per basic and 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, compared to second quarter 2003 net income of $9.1 million, or $0.08 per basic and diluted share. On a non-GAAP basis, net income for the second quarter of 2004 totaled $2.0 million, or $0.02 per basic and diluted share, compared to first quarter 2004 non-GAAP net income of $1.1 million, or $0.01 per basic and diluted share. McDATA's non-GAAP results exclude charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the amortization of deferred compensation, certain restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and amortization of purchased intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . In addition, the company recorded its share of the operating loss 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. associated with McDATA's investment in Aarohi Aarohi is the annual youth festival (Culfest) of Visvesvaraya National Institute of Technology, Nagpur, India. It is organised every year during winter in December-January. Students from undergraduate institutes in the city take part in many of the events organised. , which was excluded for the purpose of the non-GAAP results. "Our positive results for the quarter demonstrate that we are meeting the needs of an expanding market," said John Kelley
Second Quarter Details Total port growth in the second quarter was up seven percent versus the prior quarter, driven by strong demand for McDATA's Intrepid Directors, FlexPort-enabled Sphereon switches and Eclipse SAN routing products. Revenue from products totaled $74.9 million in the second quarter, representing a six percent decline from the first quarter of 2004. Software revenue, which includes license and maintenance revenue, was $14.8 million, an increase of 13 percent sequentially. Software revenues were driven by another solid quarter for SANavigator sales, as well as sales of value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: software such as SANtegrity Security Suite and OpenTrunking software. Services revenue, which includes professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. and upgraded hardware warranty and maintenance revenue, was $4.6 million, up seven percent. Other revenue, which consists of service fees and product revenue from the ESCON (Enterprise Systems CONnection) An IBM S/390 fiber-optic channel that transfers 17 Mbytes/sec over distances up to 60 km depending on connection type. ESCON allows peripheral devices to be located across large campuses and metropolitan areas. business, was $4.0 million. The sequential increase in Other revenue was driven primarily by the completion of an ESCON management agreement with 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. . This agreement reflects a change, beginning in July, whereby McDATA assumes the ESCON business, and records the full impact of the business in its results. Included in Other revenue in the second quarter is a one-time benefit of $1.6 million to record a previously deferred ESCON service fee increase that was part of the agreement with EMC. Factors affecting product revenue for the second quarter 2004 included a subdued sub·due tr.v. sub·dued, sub·du·ing, sub·dues 1. To conquer and subjugate; vanquish. See Synonyms at defeat. 2. To quiet or bring under control by physical force or persuasion; make tractable. 3. IT spending environment and a continued competitive marketplace. These factors were moderated by an increasing demand for McDATA's Eclipse 1620 SAN Router router Portable electric power tool used in carpentry and furniture making that consists of an electric motor, a base, two handle knobs, and bits (cutting tools). A router can cut fancy edges for shelving, grooves for storm windows and weather stripping, circles and ovals and continued demand for McDATA's portfolio of software management tools. On a channel basis, McDATA's largest customer, EMC, represented 47 percent of total revenue in the second quarter of 2004, up four percent sequentially in revenue, and up slightly as a percentage of sales from 45 percent in the first quarter of 2004. 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) accounted for 26 percent of revenue, up seven percent in absolute dollars, and up as a percentage of sales from 25 percent in the first quarter of 2004. Other OEMs, resellers, systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. , and the ESCON service fee accounted for 27 percent of total revenue, compared to 30 percent in the prior quarter. Included in Other OEMs revenue, HDS (Hitachi Data Systems, Santa Clara, CA, www.hds.com) A leading provider of high-end storage hardware, software and services. Part of the Information Systems & Telecommunications Division of Hitachi Ltd. represented approximately 10 percent of total revenue, and revenues through Dell increased 79 percent over the prior quarter. Reported gross margin was 55.8 percent in the second quarter of 2004, compared to 56.3 percent in the first quarter of 2004. Non-GAAP gross margin was 55.9 percent, down sequentially from 56.4 percent. Non-GAAP gross margins exclude charges related to amortization of deferred compensation. GAAP 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. were $60.7 million, down from $64.6 million in the first quarter of 2004, driven by the same factors affecting the change in non-GAAP expenses as well as by lower deferred compensation and no restructuring charges. Non-GAAP operating expenses were down approximately two percent sequentially at $53 million, driven primarily by lower R&D expenses. The lower expenses were a result of the company reaching some important product development milestones, which caused software capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. to be higher than expected by approximately $1.5 million. As mentioned previously, McDATA's non-GAAP results exclude charges for the amortization of deferred compensation, certain restructuring charges and purchased intangible assets. The non-GAAP results are a supplement to financial statements based on accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, (GAAP). McDATA believes this presentation provides investors with additional insight into underlying operating results and business trends. A reconciliation of GAAP and non-GAAP net income is provided in the financial statements attached to this news release. McDATA generated approximately $10 million of operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. in the second quarter. This is the eighth consecutive quarter of positive operating cash flow. Capital expenditures for the quarter were $5.4 million, and cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaled $321 million as of July 31, 2004. "McDATA is making technology simple and transparent for customers amidst a·midst prep. Variant of amid. [Middle English amiddes : amidde; see amid + -es, adverbial suffix; see -s3.] the growing complexity of the enterprise infrastructure. We are delivering significant customer value by enabling on-demand access to data, anytime, anywhere." said Kelley. Key Second Quarter Accomplishments In the second quarter, McDATA continued to grow its strategic footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. and leverage its expanding incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. opportunity with product and partner announcements, as well as with geographic expansion. During the quarter, McDATA: --Added the multi-protocol Eclipse 1620 SAN routing switch See layer 3 switch. to EMC's Connectrix family of directors and switches, and announced the inclusion of the 1620 in IBM's TotalStorage Proven Program. The Eclipse SAN routing family allows customers to distribute data stored in fibre channel SANs over IP WANs for cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. , on-demand data protection solutions. --Announced a software 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 agreement with Network Appliance (1) A specialized device for use on a network. For example, Web servers, cache servers and file servers can be implemented as general-purpose computers with the appropriate software or as network appliances, which are computers dedicated to a single function and cannot do anything , where McDATA will integrate its SANavigator network management software into Network Appliance's DataFabric Manager software. This collaboration Working together on a project. See collaborative software. will allow customers to cost-effectively unify 1. (database, product) Unify - A relational database produced by Unify Corporation. 2. (algorithm) unify - To perform unification. and consolidate their storage management, enabling both IP and Fibre-Channel based storage to be managed in one centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. location. --Announced the availability of SANtegrity Security Services Security services are state institutions for the provision of intelligence, primarily of a strategic nature, but also including protective security intelligence. Examples include the Security Service (MI5) and the Secret Intelligence Service (MI6) in the United Kingdom, and the to formally address infrastructure security. As more and more businesses realize the impact of a breach in security, McDATA's SANtegrity Security Solutions assists companies in their efforts meet compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). and to assess their existing security policies and points of vulnerability. As the only storage networking company to specifically address strengthening storage networking security with defined assessment services, customers can confidently take the necessary steps to better protect their valuable business information. --Showed the benefits of migrating intelligence into the network and over distances with its upcoming intelligent switch platform. The demonstration during Storage Networking World Storage Networking World (commonly called SNW) is a for data storage professionals in the United States. Sponsored by Computerworld and the Storage Networking Industry Association, SNW is held twice each year. showcased McDATA's ability to deliver volume management, snapshot (1) A saved copy of memory including the contents of all memory bytes, hardware registers and status indicators. It is periodically taken in order to restore the system in the event of failure. (2) A saved copy of a file before it is updated. , mirroring, data replication In database management, the ability to keep distributed databases synchronized by routinely copying the entire database or subsets of the database to other servers in the network. There are various replication methods. and migration solutions for disaster recover and business protection applications. --Continued to expand its EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. presence to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the region's market potential, and provide critical support to the company's OEMs, resellers and customers with key office openings and key personnel appointments in the Netherlands, Germany, Italy and Spain. --Established a Technology Office chartered with defining and developing emerging McDATA technologies of the future, while creating and executing on an architectural framework (internally developed and acquired) that leverages common technology building blocks that span multiple product lines. Outlook McDATA anticipates revenue in a range of $98 to $102 million for the third quarter ending October 31, 2004. Diluted non-GAAP EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for the third quarter is expected to be in a range of breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations to $0.01, based on a 34 percent non-GAAP tax rate, and excluding anticipated deferred and acquisition-related compensation charges, amortization charges related to purchased intangible assets and McDATA's share of the estimated operating loss associated with its investment in Aarohi. GAAP EPS, which include these charges and an approximately zero percent tax rate, are expected to be approximately $0.07 lower than the company's non-GAAP EPS. This outlook excludes future acquisitions, asset impairments, restructurings or other unanticipated events, which may or may not be significant. Finally, McDATA anticipates filing an amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. 2003 Form 10-K/A and an amended Q1 2004 Form 10-Q/A upon completion of a routine SEC review of disclosures that were made in the original filings. The SEC routinely reviews public company filings from time to time. The company's previously reported results will not be affected by any supplements to its disclosures. The company will reschedule re·sched·ule tr.v. re·sched·uled, re·sched·ul·ing, re·sched·ules To schedule again or anew: rescheduled the meeting for the following week; rescheduled the debts of many developing nations. its September 8th Stockholder meeting for a later date in order to incorporate the revised filings into its Proxy Statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. . McDATA will hold a conference call to discuss second quarter results on August 19, 2004, at 3:00 p.m. MT. The conference call will be simultaneously webcast on the company's website. The webcast presentation will include slides containing additional detailed information of interest to investors. About McDATA (www.mcdata.com) McDATA (Nasdaq: MCDTA)(Nasdaq:MCDT) is the expert provider of Multi-Capable Storage Networking Solutions(TM) -- hardware, software and services -- that enable partners and customers around the world to reduce the total cost of storage management today, and be ready to adapt to the real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. information demands of tomorrow. Entrenched en·trench also in·trench v. en·trenched, en·trench·ing, en·trench·es v.tr. 1. To provide with a trench, especially for the purpose of fortifying or defending. 2. in over 8,000 data centers worldwide, McDATA solutions are at the heart of more than 80 percent of Fortune 100 storage network data centers, powering the latest e-business applications, customer databases, financial traffic and other mission-critical data. Customers leverage McDATA's multi-capable solutions to realize immediate cost savings, reduce their investment risk, ensure the continuity of their operations and adapt to changing business requirements. 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 press release contains statements about expected future events that are forward-looking and subject to risks and uncertainties. Readers are urged to consider statements that include the terms "believes", "belief", "expects", "plans", "objectives", "estimates", "anticipates", "intends", "targets", or the like to be uncertain and forward-looking. Factors that could cause actual results to differ materially from expectations include: changes in our relationship with EMC Corporation EMC Corporation (NYSE: EMC) is an American Fortune 500 and S&P 500 manufacturer of software and systems for information management and storage. It is headquartered in Hopkinton, Massachusetts, USA. , or EMC, International Business Machines Corporation, or IBM, and Hitachi Data Systems See HDS. , or HDS, and the level, timing and terms of their orders; our ability to successfully increase sales of McDATA's multi-protocol network switches and management software, and to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. our revenue base; the impact of a highly competitive market that is expected to lead to longer sales cycles and continued pricing pressures; additional manufacturing and component costs and production delays that we may experience as we continue the transition to new products; a loss of any of our key customers (and our OEMs' key customers), distributors, resellers or our manufacturers; our ability to expand our product offerings and any transition to new products (including higher port density products and Multi-protocol and intelligent products); any change in business conditions, our business and sales strategy or product development plans, and our ability to attract and retain highly skilled individuals; competition in the Multi-protocol (Fibre Channel and IP) network market (including competitive pricing pressures and product give-aways) by our competitors, including but not limited to, 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. Communication Systems, Inc., or Brocade, QLogic Corp, or QLogic., Computer Network Technology Corporation, or CNT (Carbon NanoTube) See nanotube. , Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , Inc., or Cisco, and other IP and Multi-protocol switch suppliers; delays and changes in the development of new products and new technology and component quality and availability; any industry or technology changes that cause obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. of our products or components of those products; and one-time events and other important risks and factors disclosed previously and from time to time in our filings with the U.S. Securities and Exchange Commission, or SEC, including the risk factors discussed in this Quarterly Report. These cautionary statements by us should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by us. We cannot always predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. All cautionary statements should be read as being applicable to all forward-looking statements wherever they appear. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
McDATA CORPORATION
CONDENSED REPORTED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31, July 31, July 31,
2003 2004 2003 2004
---- ---- ---- ----
Revenue $107,014 $98,221 $210,193 $195,450
Cost of revenue 43,707 43,377 88,295 85,864
---------------------------------------
Gross profit 63,307 54,844 121,898 109,586
Operating expenses
(recoveries):
Research and development 18,156 22,107 36,975 47,204
Selling, general and
administrative 30,680 37,102 61,591 73,006
Restructuring costs
(recoveries) - (27) - 1,318
Amortization of deferred
compensation 1,490 1,489 2,901 3,747
---------------------------------------
Operating expenses
(recoveries) 50,326 60,671 101,467 125,275
Income (loss) from operations 12,981 (5,827) 20,431 (15,689)
Interest and other income, net 401 1,060 1,372 2,196
---------------------------------------
Income (loss) before income
taxes 13,382 (4,767) 21,803 (13,493)
Income tax expense 4,249 117 7,358 658
---------------------------------------
Income (loss) before equity in
net loss of affiliated company 9,133 (4,884) 14,445 (14,151)
Equity in net loss of
affiliated company - (541) - (1,118)
---------------------------------------
Net income (loss) $9,133 $(5,425) $14,445 $(15,269)
=======================================
Basic net income (loss) per
share $0.08 $(0.05) $0.13 $(0.13)
=======================================
Shares used in computing basic
net income (loss) per share 114,606 115,551 114,462 115,253
=======================================
Diluted net income (loss) per
share $0.08 $(0.05) $0.12 $(0.13)
=======================================
Shares used in computing
diluted net income (loss) per
share 118,500 115,551 118,096 115,253
=======================================
McDATA CORPORATION
CONDENSED NON-GAAP CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31, July 31, July 31,
2003 2004 2003 2004
---- ---- ---- ----
Revenue $107,014 $98,221 $210,193 $195,450
Cost of revenue 43,574 43,309 88,485 85,688
--------------------------------------
Gross profit 63,440 54,912 121,708 109,762
Operating expenses:
Research and development 18,156 21,760 36,975 46,162
Selling, general and
administrative 30,155 31,232 60,541 61,079
Restructuring costs - - - -
Amortization of deferred
compensation - - - -
--------------------------------------
Operating expenses 48,311 52,992 97,516 107,241
Income from operations 15,129 1,920 24,192 2,521
Interest and other income, net 401 1,060 1,372 2,196
--------------------------------------
Income before income taxes 15,530 2,980 25,564 4,717
Income tax expense 4,007 1,013 7,312 1,603
--------------------------------------
Income before equity in net loss
of affiliated company 11,523 1,967 18,252 3,114
Equity in net loss of affiliated
company - - - -
--------------------------------------
Net income (loss) $11,523 $1,967 $18,252 $3,114
======================================
Basic net income per share $0.10 $0.02 $0.16 $0.03
======================================
Shares used in computing basic
net income per share 114,606 115,551 114,462 115,253
======================================
Diluted net income per share $0.10 $0.02 $0.15 $0.03
======================================
Shares used in computing diluted
net income per share 118,500 116,494 118,096 117,007
======================================
McDATA CORPORATION
RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME (LOSS) (Note 1)
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31, July 31, July 31,
2003 2004 2003 2004
---- ---- ---- ----
GAAP net income (loss) $9,133 $(5,425) $14,445 $(15,269)
Adjustments:
Inventory-related charges,
net - - (460) -
Amortization of deferred
compensation and
acquisition-related
compensation 1,623 2,013 3,171 5,319
Amortization of intangible
assets 525 5,761 1,050 11,573
Restructuring costs
(recoveries) - (27) - 1,318
Income tax effect 242 (896) 46 (945)
Equity in net loss of
affiliated company - 541 - 1,118
--------------------------------------
Non-GAAP net income $11,523 $1,967 $18,252 $3,114
GAAP net loss per share - basic
and diluted $0.08 $(0.05) $0.13 $(0.13)
Non-GAAP net income per share -
diluted $0.10 $0.02 $0.15 $0.03
Shares used in non-GAAP per
share calculation - diluted 118,500 116,494 118,096 117,007
Note (1) - The condensed non-GAAP consolidated income statements
for all periods presented are for illustrative purposes only and are
not prepared in accordance with generally accepted accounting
principles. The following is provided as a supplement to the non-GAAP
reconciliation above:
Three Months Ended Six Months Ended
------------------ ----------------
July 31, July 31, July 31, July 31,
Non-GAAP Adjustments 2003 2004 2003 2004
-------------------- ---- ---- ---- ----
Cost of revenue:
Inventory-related charges,
net $- $- $(460) $-
Deferred compensation and
acquisition-related
compensation 133 68 270 176
Other - - - -
--------------------------------------
Cost of revenue subtotal 133 68 (190) 176
Operating expenses:
Research and development:
Acquisition-related
compensation - 347 - 1,042
Selling, general and
administrative:
Acquisition-related
compensation - 109 - 354
Amortization of
intangible assets 525 5,761 1,050 11,573
Termination of synthetic
lease - - - -
Other - - - -
Restructuring costs
(recoveries) - (27) - 1,318
Amortization of deferred
compensation 1,490 1,489 2,901 3,747
--------------------------------------
Operating expenses subtotal 2,015 7,679 3,951 18,034
--------------------------------------
Total non-GAAP Adjustments 2,148 7,747 3,761 18,210
Income tax expense (benefit): (242) 896 (46) 945
Equity in net loss of affiliated
company - 541 - 1,118
--------------------------------------
After-tax impact of non-GAAP
adjustments $2,390 $7,392 $3,807 $18,383
======================================
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
April 30, July 31,
2004 2004
---- ----
Assets
Cash and short term investments $211,185 $216,783
Securities lending collateral 117,931 123,916
Accounts receivable, net 58,224 53,541
Inventories, net 14,085 12,648
Other current assets 6,272 5,236
------------------------
Total current assets 407,697 412,124
Property and equipment, net 97,229 98,002
Long-term investments 101,872 99,245
Goodwill 78,693 78,693
Intangible assets, net 105,603 98,793
Other assets, net 23,688 26,905
------------------------
Total assets $814,782 $813,762
========================
Liabilities and Stockholders' Equity
Current liabilities 207,823 209,763
Long-term liabilities 194,821 195,974
Stockholders' equity 412,138 408,025
------------------------
Total liabilities and stockholders' equity $814,782 $813,762
========================
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended
July 31, July 31,
2003 2004
---- ----
Net cash provided by operating activities $40,675 $15,471
========================
Cash flows from investing activities:
Purchases of property and equipment (6,811) (9,815)
Net purchases of investments (156,188) (17,743)
------------------------
Net cash used by investing activities $(162,999) $(27,558)
========================
Cash flows from financing activities:
Net proceeds for issuance of convertible
subordinated debt 166,947 -
Net purchase of share option transactions (20,510) -
Cash restricted pursuant to interest rate
swap transaction (5,000) -
Payment of obligations under notes payable
and capital leases (1,812) (1,796)
Proceeds from the exercise of stock options 3,285 2,874
------------------------
Net cash provided by financing activities $142,910 $1,078
========================
Net increase in cash and cash equivalents $20,586 $(11,009)
========================
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