Pinnacle Systems, Inc.
PINNACLE SYSTEMS REPORTS RESULTS FOR THIRD
QUARTER FISCAL 2001
Revenues of $71.4M, Net Income* $.10 Per Share
MOUNTAIN VIEW, Calif., April 26, 2001--Pinnacle Systems, Inc. (NASDAQ: PCLE)
today announced financial results for the third quarter of fiscal 2001, which
ended March 31, 2001. Net sales for the third quarter of fiscal 2001 were
$71,419,000, a 17% increase over net sales of $61,246,000 in the same quarter
last fiscal year. This was the highest fiscal Q3 revenue in the Company's
history. Net income, including acquisition-related charges*, for the third
quarter of fiscal 2001 was a loss of $832,000 or $.02 per share. Proforma net
income excluding these charges* for the third quarter of fiscal 2001 was
$5,349,000 or $.10 per share.
"We are very pleased to report these excellent third quarter results.
Year-over-year sales increased in all three of our business groups, and we
finished the quarter with a strong balance sheet with over $47 million in cash
and securities and no debt," said Mark Sanders, Pinnacle Systems' president and
chief executive officer. "We believe our strong performance this quarter
together with the introduction of more than a dozen significant products at the
National Association of Broadcasters (NAB) show in Las Vegas this week reflects
the increasingly strong position Pinnacle Systems enjoys in the industry."
The Broadcast Solutions Division, which is focused on media creation, storage
and distribution systems for broadcast and broadband applications had record
sales during the third quarter of fiscal 2001 of $27.9 million, a 23% increase
over the same period last year. Major broadcast system business included sales
to Televisa, EchoStar, and Fox Digital, and earlier this week the company
announced a $5 million order from Time Warner Cable. Sanders added, "The
Company's success in providing large networked solutions to Broadcasters
represents a turning point. Pinnacle Systems is now providing end-to-end
solutions, allowing customers to cut costs and improve workflow at the same
time."
The Professional. Media Division, which provides authoring systems, streaming
products, and OEM systems, had sales of $12.4 million, a 25% increase over the
same period a year ago. At NAB, the Company showed advanced versions of the
Targa 3000 video platform for both the Mac and PC, and new live streaming and
web encoding products in the StreamGenie and StreamFactory family of products.
The Personal Web Video Division, which provides products for consumer and video
enthusiasts, had sales of $31.1 million, a 10% increase over the same quarter
last year. Sales growth was driven by particularly strong DV product sales
including Studio DV and DV500, reflecting the rapid growth in DV camcorder sales
together with increased interest in home video editing. During the quarter, the
Company introduced DV500 Plus, which allows users to edit dual streams of DV
video using real-time effects and transitions, multitrack audio mixing,
real-time image corrections, and real-time titling with Title Deko RT.
The company will host a financial conference call to discuss results in more
detail today, which will be webcast live at 2 PM PDT, and available on an
archival basis at www.pinnaclesys.com.
About Pinnacle Systems, Inc.
Pinnacle Systems' broadcast, professional, and consumer products provide video
professionals and consumers cutting-edge digital video tools to create, store,
distribute and view web enabled digital video easier and more affordably than
ever before. Pinnacle Systems may be reached at (650) 526-1600 or at
www.pinnaclesys.com.
* Charges in the third quarter of fiscal 2001 include $7,733,000 in amortization
of acquisition-related intangible assets and a $214,000 credit to reflect the
change in value of an agreement made with Avid Sports option holders. Net
income, excluding theses charges*, assumes a proforma income tax rate of 20%
(the Company's actual tax rate this quarter was zero percent), and a diluted
share count of 55,095,000 shares.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 about the Company's market opportunities in the future, and
expected financial results for fiscal 2001. The forward-looking statements are
based upon current information and expectations regarding Pinnacle Systems and
its subsidiaries. These estimates and statements are made as of today, do not
guarantee future performance, and involve certain risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and
results could materially differ from what is expressed, implied or forecast in
these forward-looking statements.
####
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owners and are used for identification or reference purposes only, with no
intent to infringe on copyrights. All original content is copyright O
2000-20001, Pinnacle Systems.
PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, In thousands)
March 31, June 30,
2001 2000
---- ----
Assets
Current assets:
Cash and equivalents $ 47,359 $ 82,145
Accounts receivable, trade net 66,130 55,072
Inventories 47,508 36,824
Deferred income taxes 17,103 17,103
Prepaid expenses & others 3,878 4,100
--------- ---------
181,978 195,244
Property and equipment, net 15,289 16,143
Goodwill and other intangibles, net 91,611 109,810
Other assets 2,335 1,602
--------- ---------
$ 291,213 $ 322,799
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 16,797 $ 22,422
Accrued expenses 25,697 30,146
--------- ---------
Total current liabilities 42,494 52,568
--------- ---------
Deferred income taxes 10,611 10,611
--------- ---------
Total liabilities 53,105 63,179
--------- ---------
Shareholders' equity:
Common stock 273,077 257,496
Treasury stock (6,508) --
Retained earnings (accumulated deficit) (16,387) 7,198
Other cumulative comprehensive loss (12,074) (5,074)
--------- ---------
Total shareholders' equity 238,108 259,620
--------- ---------
$ 291,213 $ 322,799
========= =========
PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Nine
Months Ended Months Ended
March 31, March 31,
------------------ -----------------------------
2001 2000 2001 2000
---- ---- ---- ----
Net sales 71,419 61,246 209,227 174,254
--------- --------- --------- ---------
Cost of sales 35,537 27,960 108,986 80,674
Cost of sales - inventory write-offs -- 2,461 --
--------- --------- --------- ---------
Gross profit 35,882 33,286 97,780 93,580
--------- --------- --------- ---------
Operating expenses:
Engineering and product development 8,634 7,447 24,961 19,660
Sales and marketing 17,226 14,699 49,498 40,244
General and administrative 3,773 2,110 11,524 7,079
Acquisition expenses and one-time charges:
Amortization of goodwill and intangibles 7,733 4,757 23,055 11,839
Reorganization expenses -- 342 --
Acquisition settlement (214) -- 13,399 --
Legal settlement 2,102 2,102
In process research and development 1,100 3,100
--------- --------- --------- ---------
Total operating expenses 37,152 32,215 122,779 84,024
--------- --------- --------- ---------
Operating income (loss) (1,270) 1,071 (24,999) 9,556
Interest income and other, net 438 952 1,414 2,564
--------- --------- --------- ---------
Income before income taxes 2,023 (23,585) 12,120
(832)
Income tax expense (benefit) -- 354 -- 2,273
--------- --------- --------- ---------
Net income $ (832) $ 1,669 $ (23,585) $ 9,847
========= ========= ========= =========
Net income per share:
Basic (0.02) 0.03 (0.46) 0.21
========= ========= ========= =========
Diluted (0.02) 0.03 (0.46) 0.18
========= ========= ========= =========
Shares used to compute net income (loss) per share
Basic 51,079 48,655 50,968 47,703
========= ========= ========= =========
Diluted 51,079 56,424 50,968 54,691
========= ========= ========= =========
Pro-forma net income per share (excluding acquisition
expenses; one-time charges; inventory write off) 0.10 0.15 0.23 0.44
========= ========= ========= =========