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EXHIBIT 99.1
COMPANY CONTACT: ANITA BUCHANAN
IPL SYSTEMS, INC.
(508) 461-1090
FOR IMMEDIATE RELEASE
IPL SYSTEMS AND ANDATACO ANNOUNCE SIGNING
OF A DEFINITIVE AGREEMENT TO MERGE
MAYNARD, MA (March 3, 1997) -- IPL SYSTEMS INC. (NASDAQ/NMS:IPLS) and ANDATACO
jointly announced today the execution of a definitive agreement to merge the two
companies, following the February 10, 1997 announcement of a letter of intent.
Under the terms contemplated, the shareholders of ANDATACO would receive
approximately three shares for each share of IPL deemed to be outstanding on a
fully diluted basis (currently 6,246,219 shares), resulting in the principal
shareholder of ANDATACO becoming the controlling shareholder of the combined
companies. The merger is subject to various conditions, including approval by
the shareholders of IPL and other regulatory and third party approvals. This
agreement also anticipates that Harris Ravine, an outside director of IPL, will
become the CEO of the combined companies, effective after the closing, and is
conditioned upon his entering into a long-term employment contract. It is
expected that the merger would be accounted for as a purchased business
combination. IPL expects the transaction to be submitted to shareholders for
approval in the second quarter.
Both companies are computer storage providers, focusing on complementary
segments of the open systems market. Massachusetts-based IPL Systems designs,
manufactures, sells and services computer storage solutions for users of UNIX
platforms, including Hewlett Packard, Sun Microsystems, IBM and DEC Alpha. In
business for 24 years, IPL is best known as a designer and developer of premier
controller technology, and currently targets its Database RAIDTM and dual-active
controller RAIDTower II storage subsystems to the specific needs of large
relational database users.
ANDATACO is an 11 year-old privately-held corporation headquartered in San
Diego, California, with annual sales of approximately $100 million. ANDATACO
manufactures RAID and non-RAID storage products featuring its intelligent ESP
(Enterprise Storage Packaging) self-monitoring enclosure technology, and
distributes selected products from other manufacturers through its nationwide
network of sales offices.
IPL and ANDATACO also announced that they have entered into an OEM agreement
which permits ANDATACO to sell IPL's products prior to completion of the merger.
W. David Sykes, president and CEO of ANDATACO, commented, "The process of
finalizing the
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definitive agreement has reinforced our belief in the compatibility of the two
companies. In particular, we expect that the integration of IPL products into
our product lines will create a broad range of storage offerings attractive to a
wide spectrum of customers in today's open systems market. As we work toward
integrating the companies, the OEM agreement allows IPL products to be sold
through ANDATACO'S 56-member sales force throughout the U.S."
Ronald J. Gellert, president and CEO of IPL, stated, "The opportunity to combine
ANDATACO's distribution capability with IPL's research and development continues
to drive this plan to merge our companies. We've made steady progress because of
our common goal to create a strong new company capable of technical leadership
and growth in the fast-growing market for open systems storage."
In a separate announcement, IPL reported final fourth quarter and year-end 1996
results which were consistent with its February 10, 1997 announcement of
preliminary results. Revenues for the quarter ending December 31,1996 were
$2,422,000, with a net loss of $996,000, or $0.18 per share, compared to
revenues of $7,016,000, with a net loss of $380,000, or $0.07 per share, for the
fourth quarter of 1995.
Revenues for the year ending December 31,1996 were $17,064,000, with a net loss
of $2,142,000, or $0.38 per share, compared to revenues of $24,764,000, with a
net loss of $3,464,000, or $0.63 per share, for 1995. Gross profits for the
fourth quarter of 1996 and 1995 included $386,000 and $287,000, respectively,
attributable to partial recovery of a bad debt reserved before 1995.
IPL Systems, Inc., founded in 1973, is traded on the Nasdaq Stock Market under
the symbol "IPLS." IPL provides open-architecture database storage solutions for
Hewlett Packard, Sun Microsystems, DEC Alpha, and IBM RS/6000 and AS/400
business servers, as well as Novell NetWare and Windows NT environments. IPL
designs, manufactures, services and sells its products through direct, indirect
STAR and OEM sales and service channels worldwide.
ANDATACO, headquartered in San Diego, California, designs and manufactures
network storage solutions for the UNIX and Windows NT client/server enterprise.
ANDATACO's solutions are marketed from 13 sales offices across the United
States, through business affiliates in Europe, Asia, Latin America, Canada and
Australia, and through the worldwide WEB.
DEC Alpha is a trademark of Digital Equipment Corporation. RS/6000 and AS/400
are trademarks of International Business Machines Corporation. NetWare is a
trademark of Novell, Inc. Windows NT is a trademark of Microsoft Corporation.
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IPL SYSTEMS, INC.
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(In thousands of dollars, except share and per share amounts)
Three Months Ended Twelve Months Ended
12/31/96 12/31/95 12/31/96 12/31/95
--------- --------- --------- ---------
Revenues $ 2,422 $ 7,016 $ 17,064 $ 24,764
Cost of Sales 1,043 4,244 9,489 15,252
--------- --------- --------- ---------
Gross Profit 1,379 2,772 7,575 9,512
Expenses:
Selling, General & Administrative 1,995 2,855 8,501 11,436
Engineering & Development 383 352 1,439 1,317
Restructuring Expense -- -- (100) 497
--------- --------- --------- ---------
Operating Loss (999) (435) (2,265) (3,738)
Other Income, Net 3 55 123 274
--------- --------- --------- ---------
Loss Before Income Taxes (996) (380) (2,142) (3,464)
Income Taxes -- -- -- --
--------- --------- --------- ---------
Net Loss $ (996) $ (380) $ (2,142) $ (3,464)
========= ========= ========= =========
Net Loss Per Common and
Common Equivalent Share $ (0.18) $ (0.07) $ (0.38) $ (0.63)
========= ========= ========= =========
Common & Common Equivalent
Shares used in Calculation
of Loss Per Share 5,633,819 5,587,519 5,617,926 5,469,177
========= ========== ========== ==========
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IPL SYSTEMS, INC.
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CONSOLIDATED CONDENSED BALANCE SHEETS
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(In thousands of dollars)
12/31/96 12/31/95
-------- --------
Assets
- ------
Current Assets:
Cash and Equivalents $ 2,274 $ 3,595
Accounts Receivable, Net 2,391 4,019
Inventories 3,892 3,375
Other Current Assets 428 405
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Total Current Assets 8,985 11,394
Property and Equipment, Net 1,629 2,348
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Total Assets $10,614 $13,742
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Liabilities and Shareholders' Equity
- ------------------------------------
Current Liabilities
Accounts Payable & Accrued Expenses $ 4,064 $ 5,199
Shareholders' Equity 6,550 8,543
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Total Liabilities & Shareholders' Equity $10,614 $13,742
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