Exhibit 99.1
ADIC First Quarter Revenues Climb 22% to Record $118.3 Million; Net
Income up 191%; Pathlight VX Ships
REDMOND, Wash.--(BUSINESS WIRE)--Feb. 12, 2004--Advanced Digital
Information Corporation (Nasdaq:ADIC) today announced sales for its
first quarter ended January 31, 2004, were a record for any quarter at
$118.3 million, up 22 percent from the same quarter last year. Net
income for the period increased 191 percent to $4.9 million, or eight
cents per share, versus $1.7 million, or three cents per share, a year
ago.
"We are gratified to report first quarter results showing large
increases in both revenue and earnings over the same quarter last
year," according to Chairman and Chief Executive Officer Peter van
Oppen. "Our growth over the last few quarters has been among the best
in the industry and we continue to expect acceptance of our new
Intelligent Storage Solutions(TM) (ISS) and expanded sales channels in
an improving economy will result in good gross margins and increasing
profitability through the remainder of fiscal 2004," he said.
"The Company also began shipments of a new ISS product during the
quarter with the introduction of the Pathlight VX disk-to-tape backup
solution," van Oppen said. With Pathlight VX, users are able to
achieve disk performance and RAID reliability using serial ATA disk
for primary backup and restore while maintaining an integrated path to
tape for extended data retention and disaster recovery. ADIC's own
proven tape emulation, disk file system, policy based data management
tools and tape library technology give Pathlight VX unique performance
advantages.
On a sequential basis, sales were up slightly from $118.0 million
in the preceding fourth quarter of fiscal 2003, operating profit was
up four percent and pre-tax income was up 23 percent. Sequential net
income was down 15 percent due to a higher effective tax rate in the
first quarter of 2004.
Gross margin as a percentage of sales declined in the first
quarter to 29.0 percent versus 30.7 percent during first quarter of
fiscal 2003. The Company attributed this decline to a lower proportion
of sales of ISS products and a moderately higher proportion of OEM
sales. ISS products include elements of ADIC software and connectivity
technology and are sold through both branded and OEM sales channels.
ISS sales were approximately 35 percent of total sales in the first
quarter, down from 41 percent of total sales in the first quarter of
fiscal 2003. As previously described, the Company believes gross
margin as a percentage of sales typically correlates with the
proportion of ISS products sold in the period and will generally
increase over time. ISS sales were 17, 30 and 37 percent of total
sales in fiscal years 2001, 2002 and 2003, respectively.
OEM sales were 50 percent of total revenues for the quarter versus
48 percent during the same period last year. A higher percentage of
OEM sales generally reduces overall gross margin as a percentage of
sales because gross margins for OEM products are typically lower than
for comparable branded products, reflecting lower required sales and
product development costs.
First quarter gross margin as a percentage of sales also declined
approximately 200 basis points from 31.0 percent reported in the
immediately preceding fourth quarter despite a relatively equal
proportion of ISS sales and only a modest increase in the proportion
of OEM sales. This sequential gross margin decline is primarily
attributable to a changing order mix within a particular OEM customer
and a shift in the mix of business among OEM customers. Neither factor
appears to reflect a fundamental change in pricing or costs on
specific products.
Total operating expenses remained virtually flat compared to first
quarter 2003 and declined over seven percent when compared to the
preceding fourth quarter, principally due to reduced bonus plan
accruals during the just completed period. Other income of $2.2
million includes foreign currency gains, gains from the sales of
investments and interest income.
Cash and marketable securities, net of debt, totaled $222 million
as of January 31, an increase of approximately $22 million from the
end of fiscal 2003. Approximately $15.2 million of this increase
reflects proceeds from the sale of inventory and fixed assets, the
majority of which were leasehold improvements, related to an
outsourcing agreement completed during the period.
Exchange rate fluctuations, primarily the recent appreciation of
the European euro currency, accounted for approximately three percent
sales growth over the same period a year ago. Using constant dollars,
sales grew at a rate of approximately 19 percent between first quarter
2003 and first quarter 2004.
About ADIC
Advanced Digital Information Corporation (Nasdaq:ADIC) is a
leading provider of Intelligent Storage Solutions(TM) to the open
systems marketplace. ADIC is the world's largest supplier of automated
tape systems using the drive technologies most often employed for
backing up open system, client-server networks.(1) The Company's
storage management software and storage networking appliances provide
IT managers innovative tools for storing, managing and protecting
their most valuable digital assets in a variety of disk and tape
environments. ADIC storage products are available through a worldwide
sales force and a global network of resellers and OEMs, including
Cray, Dell, Fujitsu-Siemens, HP, IBM and Sun. Further information
about ADIC is available at www.adic.com.
Conference Call
There will be a conference call to discuss first quarter results
as well as estimates for the second quarter of fiscal 2004 at 1:30
p.m. PT (4:30 p.m. ET) on February 12, 2004. The call can be accessed
live on our website at www.adic.com/ir.
(1) IDC 2001 worldwide revenue and unit market share data for all
automated systems using DLT, SDLT, LTO, 8mm or AIT drives; Gartner
Dataquest, 2002 Market Shares and Forecasts for Tape Automation
Systems, F. Yale, August 2002; and, Gartner Dataquest, Tape Automation
Systems Market Shares, 2002, F. Yale, April 2003.
This release contains forward-looking statements relating to the
Company's future products and services and future operating results
that are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. The words "expect",
"anticipate", and similar expressions identify forward-looking
statements, but their absence does not mean that the statement is not
forward-looking. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Factors that could affect
the Company's actual results include general economic trends, purchase
deferrals by customers, technical competition or obsolescence, supply
constraints, changes in market pricing and production problems.
Reference is made to the Company's Annual Report on Form 10-K for the
year ended October 31, 2003 for a more detailed description of factors
that could affect the Company's actual results. Readers are cautioned
not to place undue reliance on these forward-looking statements, which
speak only as of the date of this release. The Company undertakes no
obligation to update publicly any forward-looking statements to
reflect new information, events or circumstances after the date of
this release or to reflect the occurrence of unanticipated events.
ADIC and Scalar are registered trademarks and Intelligent Storage
and Intelligent Storage Solutions are trademarks of Advanced Digital
Information Corporation. All other product or company names should be
considered the property of their owners.
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share amounts)
(Unaudited)
Three months ended
January 31,
2004 2003
------------- -----------
Net sales $ 118,305 $ 97,096
Cost of sales 83,986 67,240
------------- -----------
Gross profit 34,319 29,856
Sales and marketing 14,072 13,141
General and administrative 6,204 5,975
Research and development 9,380 10,304
------------- -----------
Operating profit 4,663 436
Other income, net 2,201 2,179
------------- -----------
Income before provision for income taxes 6,864 2,615
Provision for income taxes 1,960 929
------------- -----------
Net income $ 4,904 $ 1,686
============= ===========
Basic net income per share $ 0.08 $ 0.03
============= ===========
Diluted net income per share $ 0.08 $ 0.03
============= ===========
Shares used in computing basic
net income per share 63,815 61,874
============= ===========
Shares used in computing diluted
net income per share 65,270 62,691
============= ===========
ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
January 31, 2004 October 31,
(Unaudited) 2003
------------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $213,202 $180,401
Accounts receivable, net 104,538 100,391
Inventories, net 37,565 35,736
Marketable securities 9,576 20,788
Assets held for sale -- 12,384
Other current assets 20,194 21,514
--------- --------
Total current assets 385,075 371,214
Property, plant and equipment, net 44,719 45,505
Service parts for maintenance, net 29,422 28,427
Investments 4,021 3,728
Other non-current assets 4,172 4,298
-------- --------
$467,409 $453,172
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 98,185 $ 94,852
Deferred income taxes 2,492 2,507
Long-term debt 934 967
Shareholders' equity 365,798 354,846
-------- --------
$467,409 $453,172
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ADVANCED DIGITAL INFORMATION CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended
January 31,
------------------
2004 2003
-------- --------
Cash flows from operating activities:
Net income $ 4,904 $ 1,686
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,164 4,878
Allowance for doubtful accounts receivable 72 127
Inventory obsolescence 884 1,551
Gain on securities transactions (871) (712)
Deferred income taxes (93) (63)
Tax benefit from exercise of stock options 1,289 246
Change in assets and liabilities:
Accounts receivable (4,546) (5,451)
Inventories (3,889) (2,943)
Prepaid expenses and other assets 220 (152)
Income taxes receivable 1,174 727
Service parts for maintenance (2,623) (1,422)
Accounts payable 1,271 (1,659)
Accrued liabilities (2,778) 3,696
Deferred revenue 2,754 775
-------- --------
Net cash provided by operating activities 3,932 1,284
-------- --------
Cash flows from investing activities:
Purchase of property, plant and equipment (2,498) (3,149)
Proceeds from assets held for sale 15,117 --
Purchase of marketable securities (4,005) (1,224)
Proceeds from securities transactions 16,064 7,885
Purchase of other investments (364) --
Return of investment on other investments 71 --
-------- --------
Net cash provided by investing activities 24,385 3,512
-------- --------
Cash flows from financing activities:
Repayment of bank lines of credit and long-term
debt (51) (612)
Proceeds from short-term borrowings -- 781
Repurchase of common stock -- (697)
Proceeds from issuance of common stock for stock
options 3,888 569
-------- --------
Net cash provided by financing activities 3,837 41
-------- --------
Effect of exchange rate changes on cash 647 940
-------- --------
Net increase in cash and cash equivalents 32,801 5,777
Cash and cash equivalents at beginning of period 180,401 150,741
-------- --------
Cash and cash equivalents at end of period $213,202 $156,518
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CONTACT: ADIC
Jon Gacek or Stacie Timmermans, 425-881-8004