Tricord Systems, Inc. Reports Fourth Quarter Financial Results.PLYMOUTH, Minn.--(BUSINESS WIRE)--Jan. 22, 1998--Tricord Systems, Inc. (Nasdaq: TRCD TRCD Time Ras to Cas Delay ), today announced financial results for the fourth quarter and year ended December 31, 1997. Revenues for the fourth quarter were $1,894,000 compared to revenues of $10,236,000 in the fourth quarter of 1996. Revenues for the year ended December 31, 1997 were $12,660,000 compared to revenues of $51,269,000 for the same period in 1996. Fourth quarter net loss was $205,000 or 2 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. compared to a net loss of $1,607,000 or 12 cents per share in the fourth quarter of 1996. Net loss for the year ended December 31, 1997 was $10,931,000 or 81 cents per share compared to net loss of $15,204,000 or $1.14 per share for the same period in 1996. Included in the fourth quarter 1997 net loss are credits to cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold of $270,000 or 2 cents per share for a reduction in the Company's obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. and excess inventory reserves and $226,000 or 2 cents per share for a reduction to the warranty accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. . Also included is a credit to general and administrative expense of $288,000 or 2 cents per share for an adjustment to allowance for doubtful accounts Allowance for Doubtful Accounts An estimation made by a company and documented on its balance sheet for receivables that might go uncollected. Notes: It is standard practice for a company to have funds set aside for money that cannot be collected. . These adjustments were made based on analyses the Company performed in the fourth quarter. Included in the year ended December 31, 1997 net loss is a second quarter 1997 charge to cost of goods sold of $1,332,000 or 10 cents per share for the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of obsolete and excess inventory and a net charge to nonrecurring items of $864,000 or 6 cents per share including: a charge of $975,000 or 7 cents per share for the net write off of leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. at the Company's previous headquarters facility; a charge of $764,000 or 6 cents per share for the write-off of equipment; and a credit of $1,000,000 or 7 cents per share for a server related software license fee granted to an 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 . "In early 1997, Tricord made the decision to pursue a new business strategy, focusing our energies on the development of file-intelligent and distributed file system Software that keeps track of files stored across multiple networks. When the data are requested, it converts the file names into the physical location of the file so it can be found. software technology for the emerging network-attached storage See NAS. market for the 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. (R) environment," says John Mitcham, Tricord 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. . "During this transition we faced many challenges - from dramatic downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing to changing our supplier, distributor, customer, and investor relationships. We have managed through the most difficult part of the transition, kept our core team intact, remained debt free and managed cash. We continue to sell to and support our legacy server customers, while our new business benefits from the knowledge gained in supporting several thousand storage systems attached to Tricord servers." "In the past year - especially the last 6 months - we have seen increased industry understanding of the benefits of Tricord's easy-to-manage approach to scalable, reliable and cost-effective storage solutions. Tricord software offers OEMs the ability to meet customer needs -- to differentiate their products and bring new products to market faster. We are making significant development progress and are now demonstrating our software to potential OEM partners." Tricord Systems, Inc. (Nasdaq: TRCD) develops and markets distributed data access and management products for the Windows NT(R) market. Tricord File-Intelligent 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 Distributed File System software technology facilitates the transparent sharing of data on network-attached storage devices, enabling IS organizations to centralize 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. data storage functions and reduce the costs associated with data management and storage. Tricord is based in Plymouth, MN USA. For more information, call 1-800-TRICORD or 612/557-9005, or visit us at www.tricord.com. "Safe-Harbor" Statement Under Private Securities Act of 1995: The statements contained herein that are not historical facts contain forward-looking information with respect to plans, projections or future performance of the Company. There is no guarantee or assurance that these plans, projections or future performance of the Company as indicated will be achieved, and actual results could differ materially. Factors, certain risks and uncertainties which could impact the Company's future results include, without limitation, the ability of Tricord to complete development and release commercially its distributed data access and management products, the ability of Tricord to sign OEM partners, market acceptance of Tricord-enabled products, the ability of the Company to maintain its cost structure in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with its operating plan, and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Form 10K for fiscal 1996. -0-
TRICORD SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, Three Months Twelve Months
except Ended December 31, Ended December 31,
per share data) 1997 (a) 1996 (c) 1997 (a)(b) 1996 (c)(d)
(unaudited) (unaudited) (unaudited)
Revenues $ 1,894 10,236 12,660 51,269
Cost of goods sold 1,198 6,013 12,525 35,416
Gross margin 696 4,223 135 15,853
Operating expenses:
Research and development 673 1,615 3,981 7,264
Sales and marketing 290 3,608 4,312 18,395
General and administrative (14) 601 1,697 5,578
Nonrecurring items, net -- -- 864 --
949 5,824 10,854 31,237
Operating loss (253) (1,601) (10,719) (15,384)
Other income (expense):
Interest, net 63 67 204 385
Other, net (15) (73) (192) (205)
48 (6) 12 180
Loss before income taxes (205) (1,607) (10,707) (15,204)
Provision for
income taxes -- -- 224 --
Net loss $ (205) (1,607) (10,931) (15,204)
Net loss per share ($ 0.02) ($ 0.12) ($ 0.81) ($ 1.14)
Average common shares
outstanding 13,460 13,402 13,447 13,357
(a) Includes fourth quarter 1997 credits to cost of goods sold of $270, or $.02 per share, for an adjustment to inventory reserves and $226, or $.02 per share, for an adjustment to the warranty accrual. Also includes a credit to general and administrative of $288, or $.02 per share, for an adjustment to allowance for doubtful accounts. These adjustments were made based on analyses the Company performed in the fourth quarter of 1997. (b) Includes a third quarter 1997 charge to general and administrative of $350, or $.03 per share, for the settlement of the Memorex Telex bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most preferential pref·er·en·tial adj. 1. Of, relating to, or giving advantage or preference: preferential treatment. 2. claim; a charge to provision for income taxes of $224, or $.02 per share, for the reserve of a deferred tax asset related to the Company's alternative minimum tax credit carryforwards; and a credit to general and administrative of $367, or $.03 per share, for the decrease in the allowance for doubtful accounts related to the Memorex Telex bankruptcy filing. Includes a second quarter 1997 charge to cost of goods sold of $1,332, or $.10 per share, for the write-down of obsolete and excess inventory; a charge to nonrecurring items of $975, or $.07 per share, for the net value of leasehold improvements written off due to the termination of the Company's lease at its headquarters facility; a charge to nonrecurring items of $764, or $.06 per share, for the write-off of equipment; and a credit to nonrecurring items of $1,000, or $.07 per share, for a server-related software license fee granted to an OEM. Includes a first quarter 1997 charge to other expense of $247, or $.02 per share, for the disposal of certain assets no longer required due to the Company's new business model. (c) Includes a fourth quarter 1996 credit of $1,848, or $.14 per share, for the reduction of a reserve taken in the second quarter of 1995 relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the disposal and write-down of obsolete and excess inventory, an increase in the allowance for doubtful accounts and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when . A breakdown of the credit in the Consolidated Statement of Operations See Income statement. is as follows: cost of goods sold - $(1,360), research and development - $10, sales and marketing - $(130) and general and administrative - $(368). (d) Includes a third quarter 1996 charge to general and administrative of $1,700, or $.13 per share, for an increase in the allowance for doubtful accounts relating to the Chapter 11 bankruptcy filing by Memorex Telex and a charge to research and development of $310, or $.02 per share, related to the acquisition of the assets of RDI RDI - Receiver Data Interface Corporation. Includes a second quarter 1996 charge to general and administrative of $400, or $.03 per share, for the expected resolution of an outstanding securities class action matter. -0-
TRICORD SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(In thousands) December 31, December 31,
1997 1996
(unaudited)
Current assets:
Cash and cash equivalents $ 3,713 5,711
Accounts receivable, net 681 4,636
Inventories, net 1,497 4,984
Other current assets 174 572
Total current assets 6,065 15,903
Equipment and improvements, net 565 5,717
Other assets 125 318
Total Assets $ 6,755 21,938
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 3,088 7,763
Stockholders' equity
Common stock 135 134
Additional paid-in capital 77,606 77,522
Cumulative translation adjustments 82 (256)
Accumulated deficit (74,156) (63,225)
Total stockholders' equity 3,667 14,175
Total Liabilities and
Stockholders' Equity $ 6,755 21,938
CONTACT: Tricord Systems, Inc., Plymouth Jeff Stewart Jeff Stewart can either refer to:
or Liz Hersey, 612/551-6609 lhersey@tricord.com |
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