Vixel Corporation Announces Fourth Quarter and Fiscal Year-End 2001 Results; New Embedded Business Drives Gross Margin Expansion.Business Editors BOTHELL, Wash.--(BUSINESS WIRE)--Feb. 5, 2002 Vixel See VCSEL. Corporation (Nasdaq:VIXL VIXL Video Cross Links VIXL Video Image Cross Link ), a leading provider of storage networking technologies, today announced financial results for its fourth fiscal quarter and fiscal year ended December December: see month. 30, 2001. Revenue for the fourth quarter of 2001 was $4.7 million, compared with $4.6 million in the third quarter of 2001 and $9.1 million in the fourth quarter of 2000. The third and fourth quarter 2001 revenue resulted solely from SAN systems, while the fourth quarter 2000 revenue included both SAN systems and component transceiver (TRANSmitter reCEIVER) An electronic device or circuit that transmits and receives analog or digital signals. It comes in many forms; for example, a transponder on a satellite, a network adapter in the computer or the circuits in a cellphone. revenue. The company completed its transition out of component transceiver sales during the second quarter of 2001. For the year ended December 30, 2001, total revenue was $21.8 million, compared with total revenue of $33.2 million in 2000. The net loss for the quarter was $4.4 million, or $0.19 per share, compared with a net loss of $5.6 million, or $0.24 per share, in the third quarter of 2001, and $5.1 million, or $0.22 per share, in the fourth quarter of 2000. The adjusted net loss for the quarter, excluding the effects of stock-based compensation and amortization of goodwill and intangibles, was $3.9 million, or $0.17 per share, compared with an adjusted net loss of $5.1 million, or $0.22 per share, in the third quarter of 2001, and $4.0 million, or $0.18 per share, in the fourth quarter of 2000. The net loss for the twelve months ended December 30, 2001 was $21.9 million, or $0.93 per share, compared with a net loss of $23.6 million, or $1.04 per share, for 2000. The adjusted net loss for the twelve months ended December 30, 2001 was $19.7 million, or $0.84 per share, compared with an adjusted net loss of $18.5 million, or $0.81 per share, for 2000. "Vixel ended 2001 in a strong financial position and is poised for growth," said Jim McCluney, 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. of Vixel Corporation. "We are now starting to reap the benefits of our embedded Inserted into. See embedded system. strategy by leveraging our InSpeed(TM) technology and capturing new market opportunities. This, combined with our expanding traditional switch business, will help drive greater success for Vixel in 2002." Gross margin was 40% of total revenue in the fourth quarter of 2001, compared with 25% in the third quarter of 2001 and 40% in the fourth quarter of 2000. "The return of gross margin to this higher range reflects royalty-based revenue from our ASICs for 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 , a richer mix of switch sales, and a decrease in internal manufacturing overhead costs overhead costs see fixed costs. ," stated Kurt Kurt is a given name. Its principal English variant is Curt, while others include Cord, Curd, and Kort. It originated as a short form of Curtis, Konrad (Conrad), and Kunibert. Adams Adams, town (1990 pop. 9,445), Berkshire co., NW Mass., in the Berkshires, on the Hoosic River; inc. 1778. Its manufactures include chemicals, textiles, and paper products. The Berkshire region attracts tourists year-round. , CFO See Chief Financial Officer. of Vixel Corporation. "We are focused on continued cost reductions coupled with investing in key strategic areas that will provide Vixel with the ability to exit 2002 in a much stronger market position," explained Adams. "We can leverage our infrastructure as we execute on our strategies for growing revenue and driving to profitability." Cash and investments as of December 30, 2001 totaled $26.0 million. The company believes this balance is sufficient to fund operations for at least the next 12 to 18 months as the company drives its business strategies in 2002 and beyond. RECENT HIGHLIGHTS Vixel's primary focus going forward is centered in three areas: continued success in the 2 Gigabit per second (Gb/s) market, continued leadership in video and rich media markets, and the successful execution of the company's embedded strategies. Recent highlights demonstrate the company's traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in these areas. Recently, 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 Corporation, a leader in storage solutions, completed certification of a new Fibre Channel 2Gb/s infrastructure bundle, which includes the Vixel 9000 Series 2 Gb/s Fabric Switches and LSI Logic's 2Gb/s LSI44929O Fibre Channel Host Bus Adapter See host adapter. (HBA (Host Bus Adapter) See host adapter. ). This partnership will enable customers to transition their SAN environments by adding new 2Gb/s technology to their existing SAN infrastructure or replacing current 1Gb/s technology with a 2Gb/s infrastructure bundle. Vixel continues to be a leader in the high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. , high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. video market. Recent examples of this leadership include an announcement that Vixel's partner, Sobey Digital Technology Co., used Vixel switch technology to enable the networking of over 80 video servers to deliver the broadcast of Mainland China's largest sporting event, the Ninth Annual China National Athletic Events, held in Guangdong Guangdong or Kwangtung (both: gwäng`d  ng`), province (1994 est. pop. 66,910,000), c.76,000 sq mi (196,891 sq km), S China. The capital is Guangzhou. , China.
Vixel's Fibre Channel switches Major manufacturers of Fibre Channel switches are: Brocade, Cisco, McData and Qlogic.
Avid Technology, Inc NASDAQ: AVID is an American company specializing in video and audio production technology; specifically, digital non-linear media editing (NLE) will integrate Vixel's 9000 Series 2 Gigabit per second (2 Gb/s) Fibre Channel Switches into its next generation of industry leading solutions. As a result, end users can benefit from the increased speed and efficiency offered by 2Gb/s SAN technology, which can improve productivity and help reduce costs in this labor-intensive application environment. Avid's products are used to make more television and news shows, commercials, music videos and CDs, corporate/industrial productions and major motion pictures combined than any other non-linear editing manufacturer in the world. Vixel has also demonstrated execution of its embedded strategy by recognizing its first royalty revenue from its ASIC (Application Specific Integrated Circuit) Pronounced "a-sick." A chip that is custom designed for a specific application rather than a general-purpose chip such as a microprocessor. development agreement with Network Appliance. Further underscoring continued traction in this area, Vixel recently announced 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 agreement with BlueArc Corporation, provider of the world's highest performance enterprise-class network attached storage (NAS (1) See network access server. (2) (Network Attached Storage) A specialized file server that connects to the network. A NAS device contains a slimmed-down operating system and a file system and processes only I/O requests by supporting the popular ) systems. With this new agreement, BlueArc's Si7500 Storage System will incorporate Vixel's Fibre Channel switches to provide high-speed connectivity and path redundancy between servers and storage arrays. Q4 01 RESULTS CONFERENCE CALL Vixel Corporation will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on February 5, 2002 to discuss its fourth quarter and fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. 2001 results. The call will feature remarks by Jim McCluney, president and CEO, and Kurt Adams, Chief Financial Officer. The dial-in number is 800-322-0079 or 973-321-2000 for international callers. A live webcast of the call may be found in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website, www.vixel.com. A replay will also be available following the conclusion of the call. Except for historical information contained herein, this news release contains 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. that are subject to risks and uncertainties that may cause actual results to differ materially from the results discussed in the forward-looking statements. Factors that may cause such a difference include risks affecting performance and market acceptance of Vixel's products, Vixel's ability to meet its quality and performance standards, development of the storage area network, or SAN market, the competitiveness and performance of Vixel's products in the rapidly changing SAN market, the ability of Vixel to meet evolving product standards required by customers and others involved in the distribution channel for SAN products and the demand of users of Vixel's embedded products. Further information on the factors and risks that could affect Vixel's business, financial condition and results of operations, are contained in Vixel's Annual Report on 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. Form 10-K See 10-K. and most recent Form-10Q, which are available at www.sec.gov. About Vixel Corporation Vixel Corporation is creating disruptive disruptive /dis·rup·tive/ (-tiv) 1. bursting apart; rending. 2. causing confusion or disorder. storage networking technologies that consistently deliver easily managed, easily integrated, high-performance interconnectivity at highly competitive prices. Vixel's InSpeed(TM) technology is a unique switching architecture designed from the ground-up as an effortlessly ef·fort·less adj. Calling for, requiring, or showing little or no effort. See Synonyms at easy. ef  fort·less·ly adv. managed
storage interconnect (1) To attach one device to another.(2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. solution. Optimized for the needs and price requirements of storage and server suppliers, InSpeed has been designed to overcome the cost/performance barriers inhibiting in·hib·it tr.v. in·hib·it·ed, in·hib·it·ing, in·hib·its 1. To hold back; restrain. See Synonyms at restrain. 2. To prohibit; forbid. 3. broad storage networking adoption. Vixel is an industry leader in providing a new breed of embedded storage switch products that improve data access and availability to business applications - regardless of scale. Vixel also offers a new generation of high-performance storage switches designed for businesses of all sizes that need affordable and simple Storage Area Networks (SANs). As a leading provider of SAN solutions, Vixel's comprehensive portfolio of technology offerings also includes multivendor certified See certification. solutions, Fibre Channel switches, hubs and SAN management software that deliver reliable, interoperable The ability for one system to communicate or work with another. See interoperability. solutions to its customers and partners. Vixel products and technologies are used by major system suppliers including Avid Technologies, BlueArc, Compaq, Fujitsu Softek, 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) , Lucent, Network Appliance and Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. and are available worldwide through its network of value-added resellers A value-added reseller (VAR) is a company that adds some feature(s) to an existing product(s), then resells it (usually to end-users) as an integrated product or complete "turn-key" solution. , alliances and OEMs. Vixel is an ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001 certified company. For more information, visit Vixel's web site at www.vixel.com. Vixel Corporation is headquartered at 11911 North Creek Parkway South, Bothell, Washington Bothell is a city located in the state of Washington. The population was 30,150 at the time of the 2000 census. Prior to annexation and the 2000 census, the northern portions of Bothell which lie in Snohomish County were considered a part of the Alderwood Manor-Bothell North 98011 and can be contacted by phone at 425-806-5509 or e-mail at marketing@vixel.com.
Vixel Corporation
Statement of Operations Adjusted to Exclude the Effects of
Stock-Based Compensation and Amortization of
Goodwill and Intangible Assets
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
Dec. 30, Dec. 31, Dec. 30, Dec. 31,
2001 2000 2001 2000
Revenue:
SAN systems $ 4,652 $ 6,867 $ 16,769 $ 29,610
Components -- 2,282 5,034 3,599
------- ------- -------- --------
Total revenue 4,652 9,149 21,803 33,209
Cost of revenue 2,789 5,465 14,041 21,732
------- ------- -------- --------
Gross profit 1,863 3,684 7,762 11,477
------- ------- -------- --------
Adjusted operating expenses:
Research and
development 3,288 3,868 14,657 15,570
Selling, general and
administrative 2,723 4,603 14,423 17,437
------- ------- -------- --------
Total adjusted
operating expenses 6,011 8,471 29,080 33,007
------- ------- -------- --------
Adjusted loss from
operations (4,148) (4,787) (21,318) (21,530)
Other income
(expense), net 226 738 1,591 3,024
------- ------- -------- --------
Adjusted net loss $ (3,922) $ (4,049) $ (19,727) $ (18,506)
========= ========= ========== ==========
Basic and diluted
adjusted net loss
per share $ (0.17) $ (0.18) $ (0.84) $ (0.81)
========= ========= ========== ==========
Weighted-average
shares outstanding 23,614 23,130 23,504 22,710
========= ========= ========== ==========
This statement of operations information for the three and twelve
month periods ended December 30, 2001 and December 31, 2000 is for
illustrative purposes only and is not prepared in accordance with
generally accepted accounting principles. It has been adjusted to
eliminate the effect of stock-based compensation and amortization of
goodwill and purchased intangible assets. Stock-based compensation
expense was $283 and $1,381 for the three and twelve months ended
December 30, 2001, respectively, and $532 and $2,892 for the three and
twelve months ended December 31, 2000, respectively. Amortization of
goodwill and other intangibles was $191 and $820 for the three and
twelve months ended December 30, 2001, respectively, and $540 and
$2,159 for the three and twelve months ended December 31, 2000,
respectively.
Vixel Corporation
Statement of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Twelve Months Ended
Dec. 30, Dec. 31, Dec. 30, Dec. 31,
2001 2000 2001 2000
Revenue:
SAN systems $ 4,652 $ 6,867 $ 16,769 $ 29,610
Components -- 2,282 5,034 3,599
------- ------- -------- --------
Total revenue 4,652 9,149 21,803 33,209
Cost of revenue (1) 2,794 5,477 14,069 21,799
------- ------- -------- --------
Gross profit 1,858 3,672 7,734 11,410
------- ------- -------- --------
Operating expenses:
Research and
development (2) 3,288 3,868 14,657 15,570
Selling, general and
administrative (3) 2,723 4,603 14,423 17,437
Amortization of
goodwill and
other intangibles 191 540 820 2,159
Amortization of
stock-based
compensation 278 520 1,353 2,825
------- ------- -------- --------
Total operating
expenses 6,480 9,531 31,253 37,991
------- ------- -------- --------
Loss from operations (4,622) (5,859) (23,519) (26,581)
Other income
(expense), net 226 738 1,591 3,024
------- ------- -------- --------
Net loss $ (4,396) $ (5,121) $ (21,928) $ (23,557)
========= ========= ========== ==========
Basic and diluted net
loss per share $ (0.19) $ (0.22) $ (0.93) $ (1.04)
========= ========= ========== ==========
Weighted-average
shares outstanding 23,614 23,130 23,504 22,710
========= ========= ========== ==========
(1) Includes amortization of stock-based compensation of $5 and $12
for the three months ended December 30, 2001 and December 31,
2000, respectively, and $28 and $67 for the twelve months ended
December 30, 2001 and December 31, 2000, respectively.
(2) Excludes amortization of stock-based compensation of $7 and $12
for the three months ended December 30, 2001 and December 31,
2000, respectively, and $32 and $111 for the twelve months ended
December 30, 2001 and December 1, 2000, respectively.
(3) Excludes amortization of stock-based compensation of $271 and
$508 for the three months ended December 30, 2001 and December
31, 2000, respectively, and $1,321 and $2,714 for the twelve
months ended December 30, 2001 and December 31, 2000,
respectively.
Vixel Corporation
Balance Sheet
(in thousands)
Dec. 30, Dec. 31,
2001 2000
Assets
Current assets:
Cash and investments $ 25,978 $ 42,702
Accounts receivable, net 2,995 7,344
Inventory 2,951 1,415
Prepaid expenses and other 1,271 2,129
-------- --------
Total current assets 33,195 53,590
Property and equipment, net 4,299 7,307
Goodwill, intangibles and
other assets, net 1,271 2,034
-------- --------
Total assets $ 38,765 $ 62,931
======== ========
Liabilities and stockholders' equity Current liabilities:
Current portion of long-term
debt and capital leases $ 1,340 $ 2,466
Accounts payable 4,046 5,083
Accrued liabilities 4,022 6,627
Deferred revenue 1,147 300
-------- --------
Total current liabilities 10,555 14,476
Long-term debt and capital leases,
net of current portion 184 1,510
-------- --------
Total liabilities 10,739 15,986
-------- --------
Stockholders' equity:
Capital stock 152,100 149,091
Accumulated deficit (124,074) (102,146)
-------- --------
Total stockholders' equity 28,026 46,945
-------- --------
Total liabilities and
stockholders' equity $ 38,765 $ 62,931
======== ========
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