Stratus Technologies International, S.a r.l. Announces Financial Results for Third Quarter Fiscal Year 2006.LUXEMBOURG Luxembourg, province, Belgium Luxembourg, Du. Luxemburg, province (1991 pop. 232,813), 1,706 sq mi (4,419 sq km), SE Belgium, in the Ardennes, bordering on the Grand Duchy of Luxembourg in the east and on France in the south. -- Stratus Technologies Stratus Technologies is a Maynard, Massachusetts based producer of fault tolerant computers. Stratus Technologies is a 1999 spinoff of Stratus Computer founded in 1980. International, S.a r.l., a global provider of fault-tolerant computer servers, technologies and services, today reported its financial results for the third quarter and nine months ended Nov. 27, 2005. For the third quarter ended Nov. 27, 2005, total revenue was $63.8 million, a decrease of $4.4 million or six percent compared to the $68.2 million attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. in the same period last year. Profit from operations was $6.8 million compared to $6.5 million for the same period last year. For the third quarter, net loss was $0.6 million compared to a net income of $1.2 million for the same period last year. Included in the third quarter net loss for fiscal 2006 was a non-cash loss of $1.0 million representing the change in the fair value of the embedded Inserted into. See embedded system. derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. in the Senior Notes as required by FAS 133. Also included in the third quarter loss was a $1.3 million loss due to the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. and retirement of $15.0 million of the $170.0 million Senior Notes due Dec. 1, 2008. The loss consisted of a $0.5 million cash premium and a $0.8 million non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. . As a result of the continued strengthening of the U.S. dollar, the third quarter net loss includes net foreign currency transaction losses of $0.1 million compared to a gain of $1.2 million for the same period last year. The Company reported EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (inclusive of inclusive of prep. Taking into consideration or account; including. the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. items), a non-GAAP financial measure, of $9.8 million compared to $12.6 million for the same period last year. Please refer to the reconciliation of EBITDA to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measures in the attached "Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Statement of Earnings." For the nine months ended Nov. 27, 2005, total revenue was $194.4 million compared to $205.2 million for the same period last year, a decrease of five percent. Profit from operations for the period was $20.8 million compared to a profit of $13.0 million, for the same period last year. Net income for the period was $2.5 million compared to a net loss of $4.6 million, for the same period last year. EBITDA for the nine month period was $36.0 million compared to EBITDA of $30.7 million, for the same period last year. Subsequent to the third quarter end, the Company repurchased an additional $5.1 million aggregate principal amount of its $155.0 million, 10.375 percent outstanding Senior Notes due Dec. 1, 2008. Third Quarter Results Conference Call A conference call to review third quarter financial results will be held today at 1:30 p.m. Eastern Time and may be accessed by calling 800-322-0079 (U.S. only) or 973-409-9258. Live listen-only access to the conference call will be available from the Stratus stratus: see cloud. (Stratus Technologies, Maynard, MA, www.stratus.com) A manufacturer of fault-tolerant computers founded in 1980. It supports both the VOS and FTX Unix operating systems on its XA/R line of i860-based systems. Web site at www.stratus.com. About Stratus Technologies Stratus Technologies is a global solutions provider focused exclusively on helping its customers achieve and sustain the availability of information systems that support their critical business processes. Based upon its 25 years of expertise in server and services technology for continuous availability, Stratus is a trusted solutions provider to customers in telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , banking, manufacturing, life sciences, public safety, transportation & logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. , and other industries. For more information, visit www.stratus.com. 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 may contain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as 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. , and Section 21E of the Securities Exchange Act of 1934, as amended). You are cautioned that such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Such risks and uncertainties include, but are not limited to, the continued acceptance of our products by the market; our ability to enter into new service agreements and to retain customers under existing service contracts; our ability to source quality components and key technologies without interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. and at acceptable prices; our reliance on sole-source manufacturers and suppliers; the presence of existing competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. and the emergence of new competitors; our financial condition and liquidity and our leverage and debt service obligations; economic conditions globally and in our most important markets; developments in the fault-tolerant and high-availability server markets; claims by third parties that we infringe in·fringe v. in·fringed, in·fring·ing, in·fring·es v.tr. 1. To transgress or exceed the limits of; violate: infringe a contract; infringe a patent. 2. upon their intellectual property rights; our success in adequately protecting our intellectual property rights; our success in maintaining efficient manufacturing and logistics operations; our ability to recruit RECRUIT. A newly made soldier. , retain and develop appropriately skilled employees; exposure for systems and service failures; fluctuations in exchange rates; current risks of terrorist activity and acts of war Tom Clancy's Op-Center: Acts of War is a technothriller by Jeff Rovin Plot introduction The mobile Regional Operations Center (ROC) in Turkey investigates a dam blown up by Kurdish terrorists. ; and the impact of changes in policies, laws, regulations or practices of foreign governments on our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. . Any forward-looking statements in this press release are made as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and Stratus undertakes no duty to further update such forward-looking statements. Stratus, Continuum Continuum (pl. -tinua or -tinuums) can refer to:
 `də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the Ltd. The Stratus Technologies logo is a
trademark of Stratus Technologies Bermuda Ltd. All other marks are the
property of their respective owners.
Stratus Technologies International, S.a r.l.
Consolidated Condensed Statement of Earnings
(Unaudited)
(In thousands)
Three months ended Nine months ended
Nov. 27, Nov. 28, Nov. 27, Nov. 28,
2005 2004 2005 2004
-------------------------- -------------------
Revenue
Product $26,391 $28,329 $80,294 $85,653
Service 37,441 39,900 114,062 119,566
---------------- --------- --------- ---------
Total revenue 63,832 68,229 194,356 205,219
Cost of revenue
Product 15,312 14,395 45,284 48,956
Service 15,842 17,163 47,448 53,368
Amortization of
intangibles 502 502 1,506 1,506
---------------- --------- --------- ---------
Total cost of revenue 31,656 32,060 94,238 103,830
Gross profit 32,176 36,169 100,118 101,389
Operating expenses
Research and development 9,562 11,988 30,016 36,877
Sales, marketing,
general and
administrative 14,667 16,556 45,625 48,069
Amortization of
intangibles 1,150 1,150 3,450 3,450
Restructuring charges - 186 (10)
---------------- --------- --------- ---------
Total operating expenses 25,379 29,694 79,277 88,386
---------------- --------- --------- ---------
Profit from operations 6,797 6,475 20,841 13,003
Interest expense, net (5,063) (5,626) (15,993) (16,079)
Other income (expense),
net (2,334) 152 (1,284) (597)
---------------- --------- --------- ---------
Profit (loss) before
taxes (600) 1,001 3,564 (3,673)
Tax provision 8 (209) 1,098 967
---------------- --------- --------- ---------
Net income (loss) $(608) $1,210 $2,466 $(4,640)
================ ========= ========= =========
----------------------------------------------------------------------
EBITDA TABLE
Net income (loss) $(608) $1,210 $2,466 $(4,640)
Add
Interest expense,
net 5,063 5,626 15,993 16,079
Provision for
income taxes 8 (209) 1,098 967
Depreciation and
amortization 5,336 6,003 16,446 18,330
---------------- --------- --------- ---------
EBITDA (A) $9,799 $12,630 $36,003 $30,736
================ ========= ========= =========
(A) EBITDA is a non-GAAP financial measure, which represents net
income (loss) before interest, taxes, depreciation and
amortization. We present EBITDA because we consider it an
important supplemental measure of our performance and believe it
is frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in our industry.
We also use EBITDA for the following purposes: Our credit
agreement and our indenture use EBITDA (with additional
adjustments) to measure our compliance with covenants such as
interest coverage and debt incurrence. EBITDA is also used by us
and others in our industry to evaluate and price potential
acquisition candidates.
EBITDA has limitations as an analytical tool, and you should not
consider it in isolation, or as a substitute for analysis of our
results as reported under GAAP. Some of these limitations are:
EBITDA does not reflect our cash expenditures, or future
requirements for capital expenditures, or contractual commitments;
EBITDA does not reflect changes in, or cash requirements for, our
working capital needs;
EBITDA does not reflect the significant interest expense, or the
cash requirements necessary to service interest or principal
payments, on our debts;
Although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized will often have to be
replaced in the future, and EBITDA does not reflect any cash
requirements for such replacements;
EBITDA does not reflect the impact of earnings or charges
resulting from matters we consider not to be indicative of our
ongoing operations.
Other companies in our industry may calculate EBITDA differently
than we do, limiting its usefulness as a comparative measure.
Because of these limitations, EBITDA should not be considered as a
measure of discretionary cash available to us to invest in the
growth of our business.
We compensate for these limitations by relying primarily on our
GAAP results and using EBITDA only supplementally.
EBITDA is a measure of our performance that is not required by, or
presented in accordance with, GAAP. EBITDA is not a measurement of
our financial performance under GAAP and should not be considered
as an alternative to net income, operating income or any other
performance measures derived in accordance with GAAP or as an
alternative to cash flow from operating activities as a measure of
our liquidity.
Stratus Technologies International, S.a r.l.
Consolidated Condensed Balance Sheet
(unaudited)
(In thousands)
November 27, February 27,
2005 2005
------------- --------------
ASSETS
Current assets
Cash and cash equivalents $23,965 $34,751
Accounts receivable, net 39,979 60,577
Inventory 21,070 32,512
Prepaid expenses and other current assets 7,290 7,222
------------- --------------
Total current assets 92,304 135,062
Property, plant & equipment, net 33,774 35,250
Other assets 35,686 41,850
------------- --------------
Total assets $161,764 $212,162
============= ==============
LIABILITIES & STOCKHOLDER'S EQUITY
(DEFICIT)
Current liabilities
Current term debt $- $10,943
Accounts payable 14,773 15,903
Accrued expenses 33,587 40,298
Deferred revenue 33,617 49,741
Other current liabilities 5,142 7,437
------------- --------------
Total current liabilities 87,119 124,322
------------- --------------
Long-term liabilities
Long-term debt 150,101 163,292
Other liabilities 5,360 6,872
------------- --------------
Total stockholder's equity (deficit): (80,816) (82,324)
------------- --------------
------------- --------------
Total liabilities and stockholder's
equity: $161,764 $212,162
============= ==============
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