Exhibit 99.1
MTI Technology Corporation Reports Fourth Quarter and Fiscal Year 2004 Financial
Results
TUSTIN, Calif.--(BUSINESS WIRE)--June 22, 2004--
MTI Continues to Report Revenue Growth and Secures $15 Million
in Funding to Expand Market Opportunity
MTI Technology Corporation (Nasdaq:MTIC), a global provider of data storage
products, data management and protection solutions, professional services and
support, today announced its financial results for the fourth quarter and year
ended April 3, 2004.
For the fourth quarter of fiscal year 2004, the Company reported total
revenues of $23.6 million, compared to $22.4 million in the prior year's
quarter, an increase of 6%, and $21.2 million in the prior quarter, an increase
of 12%. Product revenue for the fourth quarter of fiscal year 2004 was $14.6
million, compared to $12.4 million in the prior year's quarter, an increase of
18%, and $12.3 million in the prior quarter, an increase of 19%. Service
revenues for the fourth quarter of fiscal year 2004 were $9.0 million, compared
to $10.0 million in the prior year's quarter, a decrease of 9%, and $8.9 million
in the prior quarter, an increase of 1%. Gross profit margin for the fourth
quarter of fiscal year 2004 was 23.2%, compared to 34.7% in the prior year's
quarter and 22.0% in the prior quarter.
The Company reported a net loss for the fourth quarter of fiscal year 2004
of $0.7 million, or $0.02 per share, compared to net income of $0.6 million, or
$0.02 per diluted share, in the prior year's quarter, and reported net income of
$1.5 million, or $0.04 per diluted share, in the prior quarter.
The Company today announced that it has raised $15 million, before
consideration of professional fees, in a private placement equity financing
transaction led by Advent International. In connection with the financing, MTI
issued 566,797 shares of Series A Convertible Preferred Stock at $26.46 per
share and warrants to purchase 1,624,308 shares of Common Stock of MTI with an
exercise price of $3.10 per share.
"Our relationship with EMC has been very positive. We have experienced
revenue growth in every quarter since the inception of our EMC partnership in
March 2003," said Tom Raimondi, President and Chief Executive Officer. "The
Company's total revenue growth quarter-over-quarter of 12% is very encouraging.
With the additional funding, we are now well positioned to add professional
services and sales resources to further grow the opportunity we have with our
EMC partnership."
For fiscal year 2004, the Company reported total revenues of $83.2 million,
compared to $82.4 million in fiscal year 2003. Product revenues for fiscal year
2004 were $46.5 million, compared to $40.1 million in fiscal year 2003, a 16%
increase. Service revenues for fiscal year 2004 were $36.7 million, compared to
$42.3 million in fiscal year 2003, a decrease of 13%. Gross profit margin for
fiscal year 2004 was 23.2%, compared to 26.5% in fiscal year 2003. Operating
expenses for fiscal year 2004 were $27.0 million, compared to $34.5 million for
fiscal 2003, a decrease of 22%.
The Company reported a net loss for fiscal year 2004 of $3.9 million, or
$0.12 per share, compared to a net loss of $11.2 million, or $0.34 per share, in
fiscal year 2003.
The significant improvement in profitability is due primarily to revenue
growth and cost reductions during fiscal 2004 and the favorable resolution of
income tax matters related to prior years.
The Company settled certain tax matters with the IRS during the third
quarter of fiscal 2004. These settlements allowed us to reverse $1.5 million of
previously recorded tax liabilities, to record an income tax receivable of $1.7
million, and record $0.7 million in accrued interest resulting in additional net
income of $3.2 million in fiscal year 2004.
As of April 3, 2004, the Company had $3.0 million in cash and cash
equivalents, $3.9 million in bank borrowings under the Company's $7.0 million
line of credit with Comerica Bank, and $2.7 million in working capital. The
Company's line of credit with Comerica Bank was extended to May 31, 2005.
Conference Call Information
MTI Technology Corporation will hold its quarterly conference call on
Tuesday, June 22, 2004, 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
49163616 (international callers, call 617-786-2962, pass code 49163616), or via
webcast at www.mti.com. The webcast will be available on MTI's website for 45
days 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 13560451 (international callers, please call
617-801-6888, pass code 13560451).
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 assessment, design, integration,
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 (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 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
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
April 3, April 5,
2004 2003
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $3,017 $9,833
Accounts receivable, less allowance for doubtful
accounts and sales returns of $437 in 2004 and
$476 in 2003 22,352 13,913
Inventories 6,186 8,297
Income tax and interest receivable 2,464 --
Prepaid expenses and other receivables 5,792 4,330
--------- ---------
Total current assets 39,811 36,373
Property, plant and equipment, net 1,401 2,833
Goodwill, net 5,184 5,184
Other 216 166
--------- ---------
$46,612 $44,556
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $3,933 $1,740
Current portion of capital lease obligations 176 161
Accounts payable 13,650 8,006
Accrued liabilities 6,097 8,014
Accrued restructuring charges 1,830 2,931
Deferred revenue 11,382 13,450
--------- ---------
Total current liabilities 37,068 34,302
Capital lease obligations, less current portion 95 286
Deferred revenue 2,308 994
--------- ---------
Total liabilities 39,471 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 34,473 and 32,969
shares in 2004 and 2003, respectively 34 33
Additional paid-in capital 136,316 134,931
Accumulated deficit (126,149) (122,282)
Accumulated other comprehensive loss (3,060) (3,708)
--------- ---------
Total stockholders' equity 7,141 8,974
--------- ---------
$46,612 $44,556
========= =========
MTI TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FISCAL YEARS ENDED APRIL 3, 2004, APRIL 5, 2003, AND APRIL 6, 2002
(IN THOUSANDS, EXCEPT PER SHARE DATA)
2004 2003 2002
--------- --------- ----------
Net product revenue $46,442 $40,101 $69,519
Service revenue 36,723 42,285 48,399
--------- --------- ----------
Total revenue, including $85, $104
and $836 from related parties in
2004, 2003 and 2002, respectively 83,165 82,386 117,918
--------- --------- ----------
Product cost of revenue 37,499 32,948 56,466
Service cost of revenue 26,390 27,640 29,751
--------- --------- ----------
Total cost of revenue 63,889 60,588 86,217
--------- --------- ----------
Gross profit 19,276 21,798 31,701
Operating expenses:
Selling, general and administrative 26,405 27,754 43,211
Research and development 776 5,238 12,742
Restructuring charges (211) 1,467 4,911
--------- --------- ----------
Total operating expenses 26,970 34,459 60,864
--------- --------- ----------
Operating loss (7,694) (12,661) (29,163)
Other income (expense):
Interest expense (242) (299) (236)
Interest income 865 76 514
Gain (loss) on foreign currency
transactions 29 639 (542)
Other income, net 8 1,231 3,904
Equity in net loss and write-down of
net investment of affiliate -- -- (9,504)
--------- --------- ----------
Loss before income taxes (7,034) (11,014) (35,027)
Income tax expense (benefit) (3,168) 205 24,598
--------- --------- ----------
Net loss $(3,866) $(11,219) $(59,625)
========= ========= ==========
Net loss per share:
Basic and diluted $(0.12) $(0.34) $(1.83)
========= ========= ==========
Weighted average shares used in per
share computations:
Basic and diluted 33,482 32,852 32,548
========= ========= ==========
MTI TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
FY 2004 FY 2003 FY 2004
Q4 Q4 Q3
-------- -------- --------
Net product revenue $14,625 $12,414 $12,281
Service revenue 9,026 9,969 8,929
-------- -------- --------
Total revenue 23,651 22,383 21,210
-------- -------- --------
Product cost of revenue 11,371 7,741 9,894
Service cost of revenue 6,799 6,864 6,642
-------- -------- --------
Total cost of revenue 18,170 14,605 16,536
-------- -------- --------
Gross profit 5,481 7,778 4,674
Operating expenses:
Selling, general and administrative 7,003 6,406 6,531
Research and development -- 907 --
Restructuring charges -- 200 --
-------- -------- --------
Total operating expenses 7,003 7,513 6,531
-------- -------- --------
Operating income (loss) (1,522) 265 (1,857)
Interest and other income (expense), net 735 9 (40)
Gain (loss) on foreign currency
transactions (1) 459 225
-------- -------- --------
Income (loss) before income taxes (788) 733 (1,672)
Income tax expense (benefit) (44) 131 (3,130)
-------- -------- --------
Net income (loss) $(744) $602 $1,458
======== ======== ========
Net income (loss) per share:
Basic and diluted $(0.02) $0.02 $0.04
======== ======== ========
Weighted average shares used in per share
computations:
Basic 34,200 32,969 33,602
======== ======== ========
Diluted 34,200 33,403 35,482
======== ======== ========
CONTACT: MTI Technology Corporation
Todd Schaeffer, 714-481-7808
tschaeffer@mti.com