EXHIBIT 99.1
MTI Technology Corporation Reports Fiscal 2005 Second Quarter &
Six Months Financial Results;
Revenues Surge 54 Percent from Prior Year
TUSTIN, Calif.--(BUSINESS WIRE)--Nov. 15, 2004--MTI Technology
Corporation (NASDAQ:MTIC), a multi-national total storage solutions
and services company, today announced financial results for its fiscal
2005 second quarter ended October 2, 2004.
For the second quarter of fiscal 2005, the Company reported total
revenues of $31.5 million, an increase of 54 percent compared to $20.5
million in the same quarter of the prior year, and an increase of 21
percent compared to $26.0 million in the prior quarter. Product
revenue for the second quarter 2005 was $22.3 million, an increase of
99 percent compared to $11.2 million in the same quarter of the prior
year, and an increase of 30 percent compared to $17.2 million in the
prior quarter. Service revenues for the second quarter 2005 were $9.2
million compared to $9.3 million in the same quarter of the prior
year, and compared to $8.8 million in the prior quarter. Product gross
margins were 25 percent. Service gross margins were 18 percent as
compared to 30 percent in the same period of the prior year, as we
invested in growing our professional services organization, ahead of
expected revenue growth. Expenses grew 24 percent from the most recent
quarter as the Company executed its growth strategy with the addition
of sales personnel.
"MTI continues its dramatic growth with revenues increasing for
the fifth consecutive quarter and product revenue doubling over the
past year. This is particularly rewarding as our growth substantially
outpaces the storage market which clearly demonstrates that our
strategy is working," said Tom Raimondi, MTI president and chief
executive officer. "This is clear validation that our continued
commitment will enable us to be one of the industry's leading
multi-national data storage management integrators."
The Company reported results of operations for the second quarter
of fiscal 2005 as follows (in thousands, except per share data):
THREE MONTHS ENDED
October 2, 2004 October 4, 2003
---------------- ----------------
Amount Per Amount Per
Share Share
---------------------------------
Net loss $(2,478) $(0.07) $(1,725) $(0.05)
-------- ------- -------- -------
Preferred stock dividends:
Beneficial conversion feature (203) --
Dividend payable (300) --
-------- ------- -------- -------
$(503) $(0.02) $-- $--
-------- ------- -------- -------
Net loss applicable to common
shareholders $(2,981) $(0.09) $(1,725) $(0.05)
======== ======= ======== =======
For the six months ended October 2, 2004, the Company reported
total revenues of $57.5 million, an increase of 50 percent compared to
$38.3 million for the comparable period of fiscal 2004. Product
revenue was $39.5 million for the first six months of fiscal 2005, an
increase of 102 percent compared to $19.5 million for the comparable
period of fiscal 2004. Service revenues for the first six months of
fiscal year 2004 were $18.0 million, a decrease from $18.8 million in
the comparable period of fiscal 2004. Gross profit margin for the
first six months of fiscal 2005 was 23 percent compared to 24 percent
in the same period last year.
The Company reported results of operations for the six months of
fiscal 2005 compared to the same period last year as follows (in
thousands, except per share data):
SIX MONTHS ENDED
October 2, 2004 October 4, 2003
---------------- ----------------
Amount Per Amount Per
Share Share
---------------------------------
Net loss $(4,267) $(0.12) $(4,582) $(0.14)
-------- ------- -------- -------
Preferred stock dividends:
Beneficial conversion feature (280) --
Dividend payable (353) --
-------- ------- -------- -------
$(633) $(0.02) $-- $--
-------- ------- -------- -------
Net loss applicable to common
shareholders $(4,900) $(0.14) $(4,582) $(0.14)
======== ======= ======== =======
The Company had $13.5 million in cash and cash equivalents and
$1.5 million available under a $7.0 million line of credit as of
October 2, 2004.
Conference Call Information
MTI Technology Corporation will hold its quarterly conference call
on Monday, November 15, 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) 561-2813 pass code 84385304 (international callers, please call
617-614-3529 pass code 84385304), or via webcast at www.mti.com. The
webcast will be available for 45 days in the Investor Relations
section of 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 23568060
(international callers, please call 617-801-6888 pass code 23568060).
About MTI Technology Corporation
MTI is a multi-national provider of professional services and
comprehensive data storage solutions for mid- to large-sized
organizations. With more than 20 years of expertise as a storage
technology innovator, MTI is uniquely qualified to assess, design,
implement and support whole-office data storage and backup
initiatives. MTI offers the best data storage, protection and
management solutions available today, and employs a strategic,
consultative approach providing a single point of contact that
eliminates complexities while delivering competitive advantages and
operational efficiencies for its customers. MTI currently serves more
than 3,000 customers throughout North America and Europe.
Headquartered in Tustin, California, MTI can be reached by telephone
at 800-999-9MTI (toll free) or 714-481-7800, or by fax at
714-481-4135. For additional information visit 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)
October 2, April 3,
2004 2004
----------- ---------
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents $13,478 $3,017
Accounts receivable, less allowance for doubtful
accounts and sales returns of $440 and $437 at
October 2, 2004 and April 3, 2004, respectively 28,834 22,734
Inventories, net 7,012 6,186
Income tax refund and interest receivable 107 2,464
Prepaid expenses and other receivables 6,180 5,792
----------- ---------
Total current assets 55,611 40,193
Property, plant and equipment, net 1,248 1,401
Goodwill, net 5,184 5,184
Other 218 216
----------- ---------
Total assets $62,261 $46,994
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $5,550 $3,933
Current portion of capital lease obligations 186 176
Accounts payable 17,280 13,650
Accrued liabilities 8,660 6,479
Accrued restructuring charges 1,492 1,830
Deferred revenue 9,376 11,382
----------- ---------
Total current liabilities 42,544 37,450
Capital lease obligations, less current portion 17 95
Deferred revenue 3,411 2,308
----------- ---------
Total liabilities 45,972 39,853
----------- ---------
Redeemable convertible preferred stock, 567 and 0
shares issued and outstanding at October 2, 2004
and April 3, 2004, respectively 6,445 --
Commitments and contingencies -- --
Stockholders' equity:
Preferred stock, $.001 par value; authorized
5,000 shares; issued and outstanding 567 and 0
shares at October 2, 2004 and April 3, 2004,
respectively, included in redeemable
convertible preferred stock above -- --
Common stock, $.001 par value; authorized 80,000
shares; issued and outstanding 34,664 and
34,473 shares at October 2, 2004 and April 3,
2004, respectively 35 34
Additional paid-in capital 144,305 136,549
Accumulated deficit (131,046) (126,149)
Accumulated other comprehensive loss (3,285) (3,060)
Deferred compensation (165) (233)
----------- ---------
Total stockholders' equity 9,844 7,141
----------- ---------
Total liabilities and stockholders'
equity $62,261 $46,994
=========== =========
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
2, 2004 4, 2003 2, 2004 4, 2003
--------- -------- -------- --------
Net product revenue $22,320 $11,208 $39,523 $19,536
Service revenue 9,180 9,318 18,012 18,768
--------- -------- -------- --------
Total revenue 31,500 20,526 57,535 38,304
--------- -------- -------- --------
Product cost of revenue 16,774 8,826 29,871 14,808
Service cost of revenue 7,513 6,565 14,405 12,949
--------- -------- -------- --------
Total cost of revenue 24,287 15,391 44,276 27,757
--------- -------- -------- --------
Gross profit 7,213 5,135 13,259 10,547
--------- -------- -------- --------
Operating expenses:
Selling, general and
administrative. 9,621 7,154 17,365 14,298
Research and development -- -- -- 776
Restructuring charges -- (251) -- (211)
--------- -------- -------- --------
Total operating expenses 9,621 6,903 17,365 14,863
--------- -------- -------- --------
Operating loss (2,408) (1,768) (4,106) (4,316)
--------- -------- -------- --------
Interest and other expense, net (101) (34) (248) (64)
Gain (loss) on foreign currency
transactions 39 77 92 (196)
--------- -------- -------- --------
Loss before income taxes (2,570) (1,725) (4,262) (4,576)
Income tax expense 8 -- 5 6
--------- -------- -------- --------
Net loss $(2,478) $(1,725) $(4,267) $(4,582)
Accretion of beneficial
conversion related to preferred
stock (203) -- (280) --
Dividend on preferred stock (300) -- (353) --
--------- -------- -------- --------
Net loss applicable to common
shareholders (2,981) (1,725) (4,900) (4,582)
========= ======== ======== ========
Net loss per share:
Basic and diluted $(0.09) $(0.05) $(0.14) $(0.14)
========= ======== ======== ========
Weighted-average shares used in
per share computations:
Basic and diluted 34,641 33,151 34,598 33,063
========= ======== ======== ========
CONTACT: MTI Technology Corporation
Scott Poteracki, 714-481-7878
spoteracki@mti.com
or
Independent Marketing (Public Relations)
Pamela Jacques, 626-432-4705
pamela@independentmktg.com