Exhibit 99.1
MTI Technology Corporation Reports Fiscal 2004 Second Quarter and Six
Months Financial Results
TUSTIN, Calif.--(BUSINESS WIRE)--Nov. 17, 2003--
Second Quarter Revenues Increase by 15% from First Quarter of FY2004
and Net Loss Decreases by 56% in the First Six Months of FY2004
Compared to the Same Period of the Prior Year
MTI Technology Corporation (Nasdaq:MTIC), a global provider of
data storage, storage management and data protection solutions, today
announced financial results for its fiscal 2004 second quarter ended
October 4, 2003.
For the fiscal 2004 second quarter ended October 4, 2003, MTI
reported total revenue of $20.5 million, compared to $22.3 million for
the fiscal second quarter last year and $17.8 million for the first
quarter of fiscal 2004. Net product revenue for the second quarter
2004 was $11.2 million, compared to $11.1 million in the year ago
period and $8.3 million in the immediately preceding quarter. Service
revenue for the second quarter 2004 was $9.3 million, compared to
$11.2 million in the year ago period and $9.5 million in the first
quarter of fiscal 2004. Gross profit margin for the second quarter of
fiscal year 2004 was 21.6% compared to 31.5% in the same period last
year and 26.4% for the first quarter of fiscal 2004. Operating
expenses were $6.2 million for the second quarter of fiscal 2004
compared to $7.9 million for the comparable period of fiscal 2003 and
$7.2 million in the immediately preceding quarter.
"Our relationship with EMC continues to gain momentum as evident
by the increase in product revenues from the first quarter of fiscal
2004 to the second quarter of fiscal 2004," said Tom Raimondi,
President and Chief Executive Officer. "The marketplace is accepting
this relationship and we believe revenue will continue to grow in the
third and fourth quarters of fiscal 2004."
The Company reported a net loss of $1.7 million or $0.05 per share
in the second quarter of fiscal year 2004, compared to a net profit of
$0.1 million or $0.00 per share for the same quarter of the prior year
and a net loss of $2.9 million or $0.09 per share in the first quarter
of fiscal 2004.
For the six months ended October 4, 2003, MTI reported total
revenue of $38.3 million, compared to $40.4 million for the comparable
period of fiscal 2003. Net product revenue was $19.5 million for the
six months ended October 4, 2003 of fiscal 2004, compared to $18.3
million for the comparable period of fiscal 2003. Service revenue for
the first six months of fiscal year 2004 was $18.8 million, compared
to $22.1 million in the comparable period of fiscal 2003. Gross profit
margin for the first six months of fiscal 2004 was 24% compared to
20.0% in the same period last year. Operating expenses were $13.4
million for the first six months of fiscal 2004 compared to $19.5
million for the comparable period of fiscal 2003.
The Company reported a net loss for the six months of fiscal year
2004 of $4.6 million, or $0.14 per share, compared to net loss of
$10.4 million, or $0.32 per share in the comparable period of fiscal
2003, a 56% reduction in the net loss.
"It's very gratifying to see the marked improvement in operating
leverage as a result of our on-going restructuring efforts. The
Company's shift in strategy from a manufacturer to a global solutions
provider enabled the Company to significantly reduce its fixed
infrastructure costs and allowed the Company to greatly reduce its
operating loss during the first six months of fiscal 2004," said
Raimondi.
As of October 4, 2003, the Company had $3.5 million in cash and
cash equivalents and $5 million available under a $7.0 million line of
credit with Comerica Bank.
Conference Call Information
MTI Technology Corporation will hold its quarterly conference call
on Monday, November 17, 2003 at 11:00 a.m. Pacific Time/2:00 p.m.
Eastern Time. The call will be accessible live by dialing toll free
800-901-5213 pass code 66304725 (international callers, call
617-786-2962 pass code 66304725), 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 13242897 (international
callers, call 617-801-6888 pass code 13242897).
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,
California, 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 (the
"Company").
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, 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, and 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 BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
October 4, April 5,
2003 2003
---------- ----------
ASSETS UNAUDITED
Current assets:
Cash and cash equivalents $3,509 $9,833
Accounts receivable, less allowance for doubtful
accounts and sales returns of $1,091 and $2,266
at October 4, 2003 and April 5, 2003,
respectively 18,045 13,913
Inventories 6,256 8,297
Prepaid expenses and other receivables 4,552 4,330
---------- ----------
Total current assets 32,362 36,373
Property, plant and equipment, net 2,019 2,833
Goodwill, net 5,184 5,184
Other 230 166
---------- ----------
Total assets $39,795 $ 44,556
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable $2,000 $1,740
Current portion of capital lease obligations 169 161
Accounts payable 10,401 8,562
Accrued liabilities 7,322 7,321
Accrued restructuring charges 2,256 2,931
Deferred income 11,494 13,587
---------- ----------
Total current liabilities 33,642 34,302
Capital lease obligations, less current portion 193 286
Other 947 994
---------- ----------
Total liabilities 34,782 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 33,291 and 32,969
shares at October 4, 2003 and April 5, 2003,
respectively 33 33
Additional paid-in capital 135,111 134,931
Accumulated deficit (126,864) (122,282)
Accumulated other comprehensive loss (3,267) (3,708)
---------- ----------
Total stockholders' equity 5,013 8,974
---------- ----------
Total liabilities and stockholders'
equity $ 39,795 $44,556
========== ==========
MTI TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
------------------- -------------------
OCTOBER OCTOBER OCTOBER OCTOBER
4, 2003 5, 2002 4, 2003 5, 2002
--------- --------- --------- ---------
Net product revenue $11,208 $11,140 $19,536 $18,274
Service revenue 9,318 11,180 18,768 22,085
--------- --------- --------- ---------
Total revenue, including
$26 and $13 from related
parties in the second
quarter of fiscal 2004 and
2003, respectively, and
$84 And $39 from related
parties in the first six
months of fiscal 2004 and
2003, respectively 20,526 22,320 38,304 40,359
--------- --------- --------- ---------
Product cost of revenue 9,533 8,026 16,235 17,868
Service cost of revenue 6,565 7,269 12,949 14,428
--------- --------- --------- ---------
Total cost of revenue 16,098 15,295 29,184 32,296
--------- --------- --------- ---------
Gross profit 4,428 7,025 9,120 8,063
--------- --------- --------- ---------
Operating expenses:
Selling, general and
administrative 6,447 7,079 12,871 14,904
Research and development -- 828 776 3,571
Restructuring charges (251) -- (211) 1,046
--------- --------- --------- ---------
Total operating expenses 6,196 7,907 13,436 19,521
--------- --------- --------- ---------
Operating loss (1,768) (882) (4,316) (11,458)
--------- --------- --------- ---------
Interest and other income
(loss), net (34) 1,022 (64) 1,051
Gain (loss) on foreign
currency transactions 77 16 (196) 24
--------- --------- --------- ---------
Income (loss) before income
taxes (1,725) 156 (4,576) (10,383)
Income tax expense -- 23 6 49
--------- --------- --------- ---------
Net income (loss) $(1,725) $133 $(4,582) $(10,432)
========= ========= ========= =========
Net income (loss) per share:
Basic and diluted $(0.05) $0.00 $(0.14) $(0.32)
========= ========= ========= =========
Weighted-average shares used
in per share computations:
Basic 33,151 32,815 33,063 32,778
========= ========= ========= =========
Diluted 33,151 32,829 33,063 32,778
========= ========= ========= =========
CONTACT: MTI Technology Corporation
Todd Schaeffer, 714-481-7808
tschaeffer@mti.com