EXHIBIT 99.1
FOR FURTHER INFORMATION CONTANCT:
DANIEL REED/MICHAEL MATTINGLY
SMARTDISK CORPORATION
941-436-2540/2528
DANIEL.REED@SMARTDISK.COM
MICHAEL.MATTINGLY@SMARTDISK.COM
SMARTDISK REPORTS THIRD CONSECUTIVE QUARTER OF RECORD REVENUE AND
EARNINGS; REVENUE OF $17.4 MILLION AND OPERATIONAL EARNINGS OF
$0.07 PER SHARE EXCEED EXPECTATIONS
Naples, Fla. -- May 4, 2000 -- SmartDisk Corporation (Nasdaq: SMDK), a company
whose products simplify the digital lifestyle, today reported record results for
its first quarter 2000.
The Company concluded its acquisition of VST Technologies, Inc. during the first
quarter. Because the acquisition was accounted for as a purchase, the Company's
first quarter results include VST's revenue and earnings for the period from
March 6, 2000 through March 31, 2000.
For the first quarter ended March 31, 2000, SmartDisk reported revenue of $17.4
million, which represented a 216% increase over revenue of $5.5 million for the
first quarter ended March 31, 1999.
Net income for the quarter ended March 31, 2000, excluding amortization of
goodwill and other intangibles related to the acquisition of VST, was $1.3
million or $0.07 per diluted share compared with a net loss of $2.0 million or
$0.22 per share for the same period in 1999. Including amortization of goodwill
and other intangibles related to the VST acquisition, the Company's net loss was
$0.5 million or $0.03 per share in the quarter ended March 31, 2000.
The Company reported an increase in first quarter 2000 gross profit to $6.1
million or 35% of revenue, from $0.8 million or 15% in the first quarter 1999.
"The Company's first quarter results exceeded our expectations," said Michael S.
Battaglia, President and CEO, SmartDisk. "The growth in revenue and operating
earnings reflected both the strength of SmartDisk's historical operations and
the favorable impact of the VST acquisition."
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First quarter and recent highlights also included significant strategic
achievements, as well as accomplishments in sales, marketing and new product
releases:
/bullet/ The Company acquired VST on March 6, 2000. Boston area-based VST
designs, develops, manufactures and markets FireWire (IEEE 1394) and
USB (Universal Serial Bus) flash memory readers and high-performance
personal storage systems.
/bullet/ In the first quarter of 2000, the Company began shipments of the newest
version of FlashPath for Sony's Memory Stick and of the FlashPath for
SanDisk's MultiMediaCard.
/bullet/ In the first quarter of 2000, the Company announced its FlashTrax
digital audiocassette adapter and the VST portable 100 GB FireWire RAID
(Redundant Array of Independent Disks).
/bullet/ Subsequent to March 31, 2000, the Company acquired both El Gato
Software, a California-based company whose products include USB and
FireWire software and firmware, and Impleo, a European-based
manufacturer and marketer of digital connectivity and personal storage
products.
ABOUT SMARTDISK CORPORATION
SmartDisk designs, develops, manufactures and markets digital connectivity
products and personal storage systems that allow consumers to easily access and
exchange digital data. The company is using its proprietary and patented
technologies to capitalize on the growing demand for digital applications and
increased usage of the Internet. SmartDisk's investors and partners include
Apple, Hitachi, IBM, NEC, SanDisk, Sony, Toshiba and others.
THIS PRESS RELEASE INCLUDES STATEMENTS, WHICH MAY CONSTITUTE FORWARD-LOOKING
STATEMENTS MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. ALTHOUGH SMARTDISK CORPORATION BELIEVES THE
EXPECTATIONS CONTAINED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, IT CAN
GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE CORRECT. THESE STATEMENTS
MAY INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THE EXPECTED RESULTS. SUCH RISKS INCLUDE, BUT ARE NOT LIMITED TO
OUR DEPENDENCE ON A LIMITED NUMBER OF CONTRACT AND OFFSHORE MANUFACTURERS, OUR
DEPENDENCE ON OEMS TO PROMOTE OUR PRODUCTS, OUR ABILITY TO DEVELOP COMMERCIALLY
VIABLE PRODUCTS ON A TIMELY BASIS AND THE OTHER RISK FACTORS ALL AS MORE FULLY
DESCRIBED IN SMARTDISK'S REGISTRATION STATEMENT ON FORM S-1 AND IN OTHER REPORTS
AND PERIODIC FILINGS MADE FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE
COMMISSION.
###
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SMARTDISK CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, MARCH 31,
1999 2000
--------- ---------
ASSETS
Current assets:
Cash, cash equivalents and short-term investments $ 45,720 $ 22,067
Restricted cash 1,050 1,050
Accounts and notes receivable, net 10,168 15,138
Inventories, net 1,474 14,730
Prepaid expenses and other current assets 1,353 2,948
--------- ---------
Total current assets 59,765 55,933
Property and equipment, net 2,624 3,568
Goodwill and other intangible assets, net 883 91,340
Deposits and other assets 172 403
--------- ---------
TOTAL ASSETS $ 63,444 $ 151,244
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,330 $ 11,994
Bank line of credit 4,895 1,884
Other accrued liabilities 3,125 5,569
Deferred revenue 308 --
--------- ---------
Total current liabilities 13,658 19,447
Deferred income taxes and other -- 13,248
Stockholders' equity:
Common stock 71,204 140,761
Accumulated other comprehensive income 712 629
Notes receivable from stockholders (387) (594)
Accumulated deficit (21,743) (22,247)
--------- ---------
Total stockholders' equity 49,786 118,549
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 63,444 $ 151,244
========= =========
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SMARTDISK CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED
MARCH 31,
----------------------
1999 2000
-------- --------
Total revenues $ 5,507 $ 17,383
Cost of revenues 4,671 11,331
-------- --------
Gross profit 836 6,052
PERCENT OF REVENUES 15% 35%
Operating expenses
Research and development 881 2,004
Sales and marketing 385 808
General and administrative 1,565 2,169
Amortization of goodwill and other intangible assets -- 2,238
-------- --------
Total operating expenses 2,831 7,219
-------- --------
Operating loss (1,995) (1,167)
Interest and other income, net 46 671
-------- --------
Loss before income taxes (1,949) (496)
Income tax expense 17 8
-------- --------
Net loss $ (1,966) $ (504)
======== ========
Net loss per share
Basic and diluted $ (0.22) $ (0.03)
Shares used in computing net loss per share
Basic and diluted 8,965 16,005
RESULTS ADJUSTED FOR AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS
Net loss $ (1,966) $ (504)
Adjustment for amortization of goodwill and other intangible assets,
net of tax -- 1,779
-------- --------
Net income (loss), as adjusted (operational earnings) $ (1,966) $ (1,275)
======== ========
Net income (loss) per share, as adjusted (operational earnings per
share)
Basic $ (0.22) $ (0.08)
Diluted $ (0.22) $ (0.07)
Shares used in computing net income (loss) per share, as adjusted
(operational earnings per share)
Basic 8,965 16,005
Diluted 8,965 17,756
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