Exhibit 99.1
MTI Technology Corporation Reports 46 Percent Revenue Increase in
Fiscal 2005 First Quarter Financial Results
TUSTIN, Calif.--(BUSINESS WIRE)--Aug. 9, 2004--
Leading Global Storage Solutions Provider Shows Fourth Consecutive
Quarter of Revenue Growth
MTI Technology Corporation (Nasdaq:MTIC), a global integrator of
end-to-end storage solutions, today announced financial results for
its fiscal 2005 first quarter ended July 3, 2004, continuing
significant revenue growth for the fourth consecutive quarter.
For the first quarter of fiscal year 2005, the Company reported
total revenues of $26.0 million, an increase of 46 percent compared to
$17.8 million in the same quarter of the prior year, and an increase
of 10 percent compared to $23.6 million in the prior quarter. Product
revenue for the first quarter of fiscal year 2005 was $17.2 million,
an increase of 107 percent compared to $8.3 million in the same
quarter of the prior year, and an increase of 18 percent compared to
$14.6 million in the prior quarter. Service revenues for the first
quarter of fiscal year 2005 were $8.8 million, a decrease of 7 percent
compared to $9.5 million in the same quarter of the prior year, and a
decrease of 2 percent compared to $9.0 million in the prior quarter.
Gross profit margin for the first quarter of fiscal year 2005 was 23.2
percent compared to 30.4 percent in the same quarter of the prior year
and 25.3 percent in the prior quarter.
"We are extremely pleased with our continued revenue growth, and
based on an aggressive investment in our sales infrastructure, we
expect to continue this growth going forward," said Thomas P.
Raimondi, Jr., President and Chief Executive Officer. "MTI remains
focused on strengthening its professional services organization to
support our strategy as a global integrator of complete data storage
management solutions. We are driven by a strategic, customer-focused,
consultative approach that has made us an industry leader."
The Company reported results of operations as follows (in
thousands, except per share data):
Q1 FY 2005 Q1 FY 2004
---------------- ----------------
Amount Per Amount Per
Share Share
---------------------------------
Net loss $(1,789) $(0.05) $(2,857) $(0.09)
-------- ------- -------- -------
Deemed preferred stock dividends:
Beneficial conversion (5,471) --
Dividend payable (53) --
-------- ------- -------- -------
$(5,524) $(0.16) $-- $--
-------- ------- -------- -------
Net loss applicable to common
shareholders $(7,313) $(0.21) $(2,857) $(0.09)
======== ======= ======== =======
The $5.5 million beneficial conversion is a non-cash item related
to the Series A Convertible Preferred Stock.
On June 17, 2004, the Company raised $15 million, before
consideration of professional fees, in a private placement equity
financing led by Advent International. As of July 3, 2004, the Company
had $15.8 million in cash and cash equivalents, $3.9 million in bank
borrowings under the Company's $7.0 million Comerica Bank line of
credit, and $14.9 million in working capital.
Conference Call Information
MTI Technology Corporation will hold its quarterly conference call
on Monday, August 9, 2004 at 10:00 a.m. Pacific Time/1:00 p.m. Eastern
Time. The call will be accessible live by dialing toll free
800-510-0146 pass code 72996071 (international callers, please call
617-614-3449 pass code 72996071), or via webcast at www.mti.com.
A replay of the conference call will be available beginning at
12:00 p.m. Pacific Time/3:00 p.m. Eastern Time on August 9, 2004 for
48 hours. To access the replay, please call 888-286-8010, pass code
number 61738066 (international callers, please call 617-801-6888 pass
code 61738066). The webcast will be available for 45 days on MTI's
website at www.mti.com/company/ir_calls.asp.
About MTI Technology Corporation
MTI is a leading global storage solutions provider, delivering
superior business value to customers in support of their data storage
and enhanced data protection needs. With more than 20 years of
experience providing a full range of solutions, including: design,
integration, delivery, support and professional services, MTI is the
clear choice for midrange to Global 2000 companies. 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 and operating results, as well as statements
regarding the Company's access to credit and its financial resources,
the potential growth of the storage industry and MTI, 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, we cannot assure you that MTI will improve
revenues, margins, operating efficiencies or operating results, or be
successful with its new strategy. In addition, we cannot assure you
that MTI will be able to borrow under its line of credit or have
sufficient financial 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, as amended, for the year ended April 3, 2004.
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)
(UNAUDITED)
July 3, April 3,
2004 2004
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $15,752 $3,017
Accounts receivable, less allowance for doubtful
accounts and sales returns of $440 and $437 at
July 3, 2004 and April 3, 2004, respectively 19,998 22,352
Inventories 6,839 6,186
Income tax refund and interest receivable 55 2,464
Prepaid expenses and other receivables 6,346 5,792
--------- ---------
Total current assets 48,990 39,811
Property, plant and equipment, net 1,223 1,401
Goodwill, net 5,184 5,184
Other 221 216
--------- ---------
$55,618 $46,612
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $3,933 $3,933
Current portion of capital lease obligations 181 176
Accounts payable 12,702 13,650
Accrued liabilities 5,553 6,097
Accrued restructuring charges 1,649 1,830
Deferred revenue 10,119 11,382
--------- ---------
Total current liabilities 34,137 37,068
Capital lease obligations, less current portion 44 95
Deferred revenue 2,685 2,308
--------- ---------
Total liabilities 36,866 39,471
--------- ---------
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $.001 par value; authorized
5,000 shares; issued and outstanding 568 and 0
shares at July 3, 2004 and April 3, 2004,
respectively 1 --
Common stock, $.001 par value; authorized
80,000 shares; issued (including treasury
shares) and outstanding 34,582 and 34,473
shares at July 3, 2004 and April 3, 2004,
respectively 34 34
Additional paid-in capital 155,354 136,316
Accumulated deficit (133,461) (126,149)
Accumulated other comprehensive loss (3,176) (3,060)
--------- ---------
Total stockholders' equity 18,752 7,141
--------- ---------
$55,618 $46,612
========= =========
MTI TECHNOLOGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
--------------------
JULY 3, JULY 5,
2004 2003
----------- --------
Net product revenue $17,204 $8,328
Service revenue 8,832 9,450
----------- --------
Total revenue 26,036 17,778
----------- --------
Product cost of revenue 13,096 5,982
Service cost of revenue 6,893 6,384
----------- --------
Total cost of revenue 19,989 12,366
----------- --------
Gross profit 6,047 5,412
----------- --------
Operating expenses:
Selling, general and administrative 7,744 7,144
Research and development -- 776
Restructuring charges -- 40
----------- --------
Total operating expenses 7,744 7,960
----------- --------
Operating loss (1,697) (2,548)
Interest and other expense, net (147) (30)
Gain (loss) on foreign currency transactions 53 (273)
----------- --------
Loss before income taxes (1,791) (2,851)
Income tax expense (benefit) (2) 6
----------- --------
Net loss (1,789) (2,857)
=========== ========
Value of beneficial conversion related to
preferred stock (5,471) --
Dividend on preferred stock (53) --
----------- --------
Net loss applicable to common shareholders $(7,313) $(2,857)
=========== ========
Net loss per share applicable to common
shareholders:
Basic and diluted $(0.21) $(0.09)
=========== ========
Weighted-average shares used in per share
computations:
Basic and diluted 34,555 32,974
=========== ========
CONTACT: MTI Technology Corporation
Todd Schaeffer, 714-481-7808
tschaeffer@mti.com
or
Independent Marketing
Pamela Jacques (Public Relations), 626-432-4594 ext. 110
pamela@independentmktg.com