Exhibit 99.1
MTI Technology Corporation Reports Fiscal 2004 First Quarter Financial Results
TUSTIN, Calif.--(BUSINESS WIRE)--Aug. 18, 2003--MTI Technology
Corporation (Nasdaq:MTIC) (the "Company"), a global provider of data
storage, storage management and data protection solutions for more
than two decades, today announced financial results for its fiscal
2004 first quarter ended July 5, 2003.
For the fiscal year 2004 first quarter ended July 5, 2003, MTI
reported total revenue of $17.8 million, compared to $18.0 million in
the first quarter of fiscal year 2003 and $22.4 million in the fourth
quarter of fiscal year 2003. Net product revenue for the first quarter
of fiscal year 2004 was $8.3 million, compared to $7.1 million in the
first quarter of fiscal year 2003 and $12.4 million in the fourth
quarter of fiscal year 2003, which included a $2.7 million receipt of
royalty income. After adjusting for the royalty income in fiscal 2003,
the first quarter net product revenues for fiscal 2004 represent an
increase of 16.7% over the same quarter of the prior year and a 13.9%
decrease from the fourth quarter of fiscal 2003. Generally, the fourth
quarter of a fiscal year is stronger than the first quarter of a
fiscal year in product revenues for the Company. Service revenue for
the first quarter of fiscal year 2004 was $9.5 million, compared to
$10.9 million in the first quarter of fiscal year 2003 and $10.0
million in the fourth quarter of fiscal year 2003. Gross profit margin
for the first quarter of fiscal year 2004 was 26.4%, compared to 5.8%
in the first quarter of fiscal year 2003 and 34.7% in the fourth
quarter of fiscal year 2003. Adjusting the gross profit of the fourth
quarter of fiscal 2003 by reducing the amount for actual royalties
received in the period would result in an adjusted gross margin of
25.6%.
Excluding restructuring charges, operating expenses for the first
quarter of fiscal year 2004 were $7.2 million, compared to $10.6
million in the first quarter of fiscal year 2003 and $7.3 million in
the fourth quarter of fiscal year 2003.
The Company reported a net loss for the first quarter of fiscal
year 2004 of $2.9 million, or $0.09 per share, compared to a net loss
of $10.6 million, or $0.32 per share, in the first quarter of fiscal
2003 and a net income of $602,000, or $0.02 per share, in the fourth
quarter of fiscal 2003.
As of July 5, 2003, the Company had $6.6 million in cash and cash
equivalents and $5.3 million in unrestricted bank borrowing
availability under the Company's $7.0 million line of credit with
Comerica Bank. The Company's line of credit with Comerica Bank was
extended to May 31, 2004.
"The first quarter of fiscal year 2004 was a transition quarter
for MTI in which we shifted a vast amount of our efforts into the new
partnership with EMC. We are pleased with our initial results in the
first quarter of EMC-related sales since we started from a base of
zero revenues on April 6, 2003," said Tom Raimondi, President and
Chief Executive Officer. "Additionally, in Q1 we expanded our sales
force from 49 to 57. We are now 90 days into the relationship with EMC
and have a strong backlog that we will benefit us in Q2 and beyond."
Conference Call Information
MTI Technology Corporation will hold its quarterly conference call
on Monday, August 18, 2003, at 11:00 a.m. Pacific Time/2:00 p.m.
Eastern Time. The call will be accessible live by dialing toll free
800-901-5259, pass code 90257030 (international callers, call
617-786-4514, pass code 90257030), or via webcast at www.mti.com. The
webcast will be available for 45 days on MTI's website at
www.mti.com/company/ir_calls.asp.
A replay of the call will be available for 48 hours by dialing
toll free 888-286-8010 and entering pass code 82649449
(international callers, call 617-801-6888, pass code 82649449).
About MTI Technology Corporation
MTI's mission as a global solutions provider is to deliver
superior business value to its customers in support of their data
storage and enhanced data protection needs. MTI has more than 20 years
of experience in delivering a full range of storage solutions --
including design, engineering, professional services and third-party
maintenance -- from midrange to Global 2000 customers. MTI is a
premier systems integrator, focusing on providing end-to-end business
solutions in the storage marketplace. Headquartered in Tustin, MTI may
be reached by telephone at 800-999-9MTI (toll free) or 714-481-7800,
or by fax at 714-481-4135. Web address is www.mti.com.
MTI is a registered trademark of MTI Technology Corporation.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements include information regarding the Company's expectations,
goals or intentions regarding the future, including but not limited to
statements regarding the Company's strategy, capital position,
anticipated cost savings, operating results and the effects of
additional headcount reductions on the Company's business, as well as
statements regarding the Company's line of credit and its financial
resources, the potential growth of the storage industry and MTI, the
new commercial relationship between MTI and EMC, and EMC's product
offerings and solutions, all of which are subject to change. The
actual results may differ materially from those described in any
forward-looking statement. In particular, there can be no assurance
that MTI will improve revenues, margins, operating efficiencies,
operating results, or be successful with its new strategy. In
addition, there can be no assurance that MTI will be able to borrow
under the line of credit, have sufficient resources or that it or the
industry will grow. Important factors that may cause actual results to
differ include competition, evolving technology, and the economy and
other world events. Other important factors are set forth in the
Company's periodic filings with the U.S. Securities and Exchange
Commission, including its Form 10-K for the year ended April 5, 2003.
All forward-looking statements speak as of the date made and MTI
undertakes no obligation to update any such statement.
MTI TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
July 5, 2003 July 6, 2002
Unaudited
Net product revenue $8,328 $7,134
Service revenue 9,450 10,905
Total revenue, including $58
and $26 from related parties
in the first quarter of fiscal
2004 and 2003, respectively 17,778 18,039
Product cost of revenue 6,702 9,842
Service cost of revenue 6,384 7,159
Total cost of revenue 13,086 17,001
Gross profit 4,692 1,038
Operating expenses:
Selling, general and
administrative 6,424 7,825
Research and development 776 2,743
Restructuring charges 40 1,046
Total operating expenses 7,240 11,614
Operating loss (2,548) (10,576)
Interest and other income
(expense), net (30) 29
Gain (loss) on foreign currency
transactions (273) 8
Loss before income taxes (2,851) (10,539)
Income tax expense 6 26
Net loss $(2,857) $(10,565)
Net loss per share:
Basic and diluted $(0.09) $(0.32)
Weighted-average shares used in
per share computations:
Basic and diluted 32,974 32,742
MTI TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
July 5, April 5,
2003 2003
unaudited
ASSETS
Current assets:
Cash and cash equivalents $6,640 $9,833
Accounts receivable, less allowance
for doubtful accounts and sales
returns of $925 and $2,266 at July 5,
2003, and April 5, 2003, respectively 12,464 13,913
Inventories 7,829 8,297
Prepaid expenses and other receivables 4,542 4,330
Total current assets 31,475 36,373
Property, plant and equipment, net 2,332 2,833
Goodwill, net 5,184 5,184
Other 228 166
$39,219 $44,556
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $1,740 $1,740
Current portion of capital lease
obligations 165 161
Accounts payable 5,887 8,006
Accrued liabilities 8,644 8,014
Accrued restructuring charges 2,713 2,931
Deferred income 12,326 13,450
Total current liabilities 31,475 34,302
Capital lease obligations, less
current portion 240 286
Other 901 994
Total liabilities 32,616 35,582
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value;
authorized 5,000 shares; issued
and outstanding, none -- --
Common stock, $.001 par value;
authorized 80,000 shares; issued
(including treasury shares) and
outstanding 33,016 and 32,969
shares at July 5, 2003, and April
5, 2003, respectively 33 33
Additional paid-in capital 134,959 134,931
Accumulated deficit (125,139) (122,282)
Accumulated other comprehensive
loss (3,250) (3,708)
Total stockholders' equity 6,603 8,974
$39,219 $44,556
CONTACT: MTI Technology Corporation
Mark A. Franzen, 714-481-7802
mfranzen@mti.com