FOR IMMEDIATE RELEASE
INVESTOR CONTACT: MEDIA CONTACT:
Kelly Beavers, VP of Business Development Bill Marino, Managing Partner
Exabyte Corporation Trippe-Marino, Inc. (PR for Exabyte)
303-417-7225 303-988-5133
kjb@exabyte.com bmarino@trippemarino.com
EXABYTE REPORTS DECREASED LOSS
FOR 2nd QUARTER
Success of New VXA-2 Automation Product Contributes to Improved Results
BOULDER, COLO. — July 28, 2004 — Exabyte Corporation (OTCBB: EXBT), the leading innovator in tape backup, restore and archival systems, today announced revenue of $26.6 million and a net loss of $456 thousand for the second quarter ended June 30, 2004. Revenue and net loss for the first quarter of 2004 were $26.1 million and $3.3 million, respectively, and revenue and net loss for the second quarter of 2003 totaled $22.7 million and $5.0 million. Revenue from the Company’s new, VXA-2 PacketLoader automation product, which was introduced in February 2004, totaled $4.9 million for the second quarter, and was a key contributor to the Company’s growth in revenue. In addition, sales of VXA and other products to OEM customers continued to increase during the second quarter. These factors offset declining legacy product revenue in the quarter. Revenue from OEMs increased to 22.2% of total revenue for the second quarter, compared to 17.4% in the first quarter of 2004. Overall, revenue from VXA-related products, including drives, automation, and media, represented approximately 59% of total revenue in the second quarter of 2004, compared to 56 % in the first quarter of 2004. The U.S. dollar strengthened in value versus the Japanese yen in the second quarter of 2004, and net loss for the quarter included a non-cash gain of $1.1 million, relating to the re-measurement of liabilities payable in yen, including a note payable to a supplier.
The Company continued to realize improved gross margins, with an increase to 28.0% in the second quarter compared to 23.3% in the first quarter of 2004 and 18.1 % in the fourth quarter of 2003. Lower costs on VXA drive products, increased revenue from higher margin automation products, including the VXA-2 PacketLoader, and increased efficiencies resulting from the manufacturing of certain products in China during 2004, contributed to the overall improvement in gross margin.
Loss from operations for the second quarter of 2004 was $1.1 million, versus a loss of $2.1 million in the first quarter of 2004 and an operating loss of $4.0 million for the fourth quarter of 2003. Operating expenses totaled 32.2% of revenue in the quarter compared to 31.4% in the first quarter of 2004 and 33.5% in the fourth quarter of 2003. Sales and marketing costs increased in the second quarter of 2004, as the Company initiated various marketing programs to increase market awareness of its VXA Packet Technology. Research and development costs were also higher, as new product development activities increased during the second quarter.
As of June 30, 2004, the Company had working capital of $9.4 million, compared to a working capital deficit of $10.2 million at March 31, 2004, and had no borrowings outstanding on its bank line of credit. On May 3, 2004, the Company completed the sale of Series AA preferred stock and common stock purchase warrants for total net proceeds of approximately $23.8 million. The proceeds from this transaction were used to repay the outstanding balance on the Company’s bank line of credit and general working capital purposes. Cash in bank totaled $7.7 million at June 30, 2004, and $413 thousand at March 31, 2004. Accounts receivable decreased to $15.7 million at June 30, 2004 as compared to $18.6 million at March 31, 2004 due to improved collections and lower days sales outstanding.
“For the fourth consecutive quarter, we’ve achieved growth in sales of our VXA-2 product line, particularly to OEM customers,” said Tom Ward, President and CEO of Exabyte. “Continued growth in VXA sales and increased revenue in the OEM channel were both clearly articulated goals over the past year. Our second quarter results demonstrate the continued strong progress we are making toward our objectives. In addition, our VXA-2 PacketLoader, introduced in February, has been a stellar performer, becoming the most successful automation product in the Company’s 19-year history. The PacketLoader is a landmark product, making tape automation affordable for thousands of companies who have growing data storage needs. Its success in the marketplace reflects the fact that the PacketLoader sets new benchmarks for capacity, speed and price for this class of automation along with the high standard of data reliability that customers expect from Exabyte storage products.”
The Company will hold a conference call to discuss the second quarter results on Thursday, July 29 at 9:00 a.m. MDT. Interested parties can join the call by dialing 800-237-9752 in the U.S. or 617-847-8706 internationally and entering the conference call ID: 27028432. The call also will be webcast from the Company web site; for information, visithttp://www.exabyte.com/company/investors/media.cfm. In addition, the call will be recorded and available on the Company’s web site after 5:00 p.m. on July 29.
About Exabyte Corporation
Exabyte Corporation (OTCBB: EXBT), now in its 20th year, is a recognized pioneer and leading innovator in tape storage. Its heritage comprises an impressive list of industry “firsts,” including the first manufacturer of tape drives to break the 1, 2, and 5 GB capacity barriers, the first to introduce 8mm tape drives and libraries, the first to offer native Fibre Channel drives and libraries, the first to offer FireWire drives and libraries and the first and only manufacturer to offer VXA Packet Technology, which enables its VXA Packet drives, autoloaders and tapes to read and write data in packets like the Internet, enabling far superior restore integrity, exceptional transfer speeds and scalable tape capacities. With award-winning VXA Packet Technology, patented ExaBotics™ and its innovative engineering approach, Exabyte delivers new VXA™ and LTO™ (Ultrium™) products that consistently raise the bar for industry standards in engineering, quality and data reliability. The company’s product suite is ideally suited for SMB and departmental servers, workstations, LANs, and SANs, providing dramatically higher capacity, speed and reliability at competitive prices. Exabyte has a worldwide network of OEMs, distributors and resellers that share the company’s commitment to innovation and customer service, including IBM, HP, Fujitsu Siemens, Apple, Imation, Bull, Toshiba, Logitec, Kontron, Tech Data, Ingram Micro, CDW and Arrow Electronics. For additional information, call 1-800-EXABYTE or visit www.exabyte.com. For investor relations inquiries, contact Kelly Beavers at investor@exabyte.com.
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The foregoing contains forward-looking statements related to the company’s products and business prospects. Such statements are subject to one or more risks, including product sales, customer dependence and others. The actual results that the company achieves may differ materially from such forward-looking statements due to risks and uncertainties related to customer dependence, competition, product development, market demand, management of business and product transitions and other such risks as noted in the Company’s Form10-K and Forms 10-Q.
Exabyte, VXA and VXA-2 are registered trademarks, and PacketLoader and ExaBotics are trademarks of Exabyte Corp. All other trademarks are the property of their respective owners.
