1
John Nesbett - Investor Relations Contact J. Richard Ellis
Lippert/Heilshorn & Associates President & CEO
(212) 838-3777, ext. 121 (408) 934-7000
(E-MAIL: JGN@LHAI.COM)
DISC, INC. ANNOUNCES FOURTH QUARTER
AND TWELVE MONTH RESULTS
MILPITAS, CALIFORNIA, FEBRUARY 19, 1998 -- DISC, INC. (NASDAQ Symbols:
DCSR, DCSRW) today announced financial results for the fourth quarter and twelve
months ended December 31, 1997.
For the fourth quarter ended December 31, 1997, net sales increased 4%
to $2,502,000 compared to net sales of $2,406,000 reported for the same quarter
last year. For the fourth quarter of 1997, the Company reported a net loss of
$(575,000), or $(0.17) per share, compared to a net loss of $(682,000), or
$(0.21) per share, for the comparable 1996 quarter.
For the twelve months ended December 31, 1997, net sales increased 12%
to $8,655,000 compared to net sales of $7,761,000 reported for the twelve months
of 1996. Net loss for 1997 was $(2,489,000), or $(0.75) per share, compared to a
net loss of $(3,342,000), or $(1.08) per share, for 1996.
Commenting on the results, J. Richard Ellis, President and Chief
Executive Officer of DISC, Inc. stated, "DISC continues to focus on the
fundamentals of the business in an effort to move the company into
profitability. The revenue for the fourth quarter and for the year both
represent records for the company. These results are beginning to reflect our
focus on, and the investments in sales and marketing to address various vertical
markets where nearline archival of information is critical. During 1997, we
announced several OEM purchase agreements with resellers primarily in the
medical and banking markets where fast access to data and permanence of that
data are important factors."
- more -
2
"Our customer base in these vertical markets doubled in this past year;
better than 50% of our shipments were generated by new vertical market accounts.
We feel that with these market initiatives, we have begun to lay the foundation
for future products and technologies that are in development at DISC."
"We also saw significant improvement in our margins in 1997 which were
up seven percentage points for the year as the impact of improvements in product
cost and increased volume were realized. Furthermore, we were able to reduce
overall operating expenses by 3% year to year while increasing spending on
product development. We will soon be introducing new products to the market as a
result of these investments and look forward to continued improvements in 1998."
DISC is the industry leader in high capacity automated 5.25-inch and CD optical
storage libraries. DISC markets products ranging in capacity from over 150 to
over 1,450 cartridges in several models, many of which are field upgradeable to
higher capacities. All models share a common architecture and modular design
oriented toward higher performance and reliability. DISC libraries are sold with
system solutions by OEMs, System Integrators, VARs and Distributors in North and
South America, Europe and the Far East.
"Safe Harbor" Statement under the private Securities Litigation Reform Act of
1995: The statements which are not historical facts contained in this release
are forward looking statements that involve risks and uncertainties, including,
but not limited to, product demand and market acceptance risks, the effect of
economic conditions, the impact of competitive products and pricing, product
development, commercialization and technological difficulties, capacity and
supply constraints or difficulties, the results of financing efforts, actual
purchases under agreements, the effect of the Company's accounting policies, and
other risks detailed in the Company's Securities and Exchange Commission
filings.
-table follows-
3
DISC, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------------- --------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
Net sales $ 2,502,000 $ 2,406,000 $ 8,655,000 $ 7,761,000
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 1,962,000 1,908,000 6,704,000 6,549,000
Research and development 400,000 321,000 1,439,000 1,297,000
Marketing and sales 449,000 572,000 1,960,000 2,155,000
General and administrative 236,000 255,000 924,000 984,000
------------ ------------ ------------ ------------
3,047,000 3,056,000 11,027,000 10,985,000
------------ ------------ ------------ ------------
Loss from operations (545,000) (650,000) (2,372,000) (3,224,000)
Interest and other expense (30,000) (32,000) (117,000) (118,000)
Net loss $ (575,000) $ (682,000) $ (2,489,000) $ (3,342,000)
============ ============ ============ ============
Net loss per share $ (.17) $ (.21) $ (.75) $ (1.08)
============ ============ ============ ============
Weighted average common
shares and equivalents 3,334,000 3,179,000 3,308,000 3,106,000
============ ============ ============ ============
###