Auspex Reports Third Fiscal Quarter 2001 Results

Apr 19, 2001, 01:00 ET from Auspex Systems, Inc.

    SANTA CLARA, Calif., April 19 /PRNewswire/ --
 Auspex Systems, Inc. (Nasdaq: ASPX), an industry leader in the Network
 Attached Storage (NAS) market, today reported results for the third quarter of
 its fiscal year 2001, ended March 31, 2001.
     Revenue for the third quarter of fiscal year 2001, ended March 31, 2001
 was $9.4 million, a 43% decline over the $16.4 in revenue in the prior
 quarter.  The net loss for the third quarter of fiscal 2001 was $14.1 million,
 a 93% increase, compared to a net loss of $7.3 million for the prior quarter.
 The loss per share in the third quarter of fiscal 2001 was $ 0.31, compared to
 $ 0.16 in the prior quarter.
     "The general downturn in global economic conditions greatly affected our
 third quarter performance.  Customers, regardless of size, are being extremely
 cautious of their spending and it has impacted all areas of the data-storage
 business.  We are seeing a significant slow down of orders and a general
 tightening of capital spending by all of our customers.  Orders that would
 have been included in our quarterly pipeline/forecast are now being pushed out
 2-4 months or are being placed indefinitely on hold until economic conditions
 improve," said Gary J. Sbona, Chairman and Chief Executive Officer.  "The
 rapid changes in market and economic conditions could not have come at a more
 inappropriate time for us based upon where we are in the cycle of rebuilding
 our product line and regenerating our company.  We were relying primarily on
 existing customers to fill our projected orders, and they did not materialize.
 We continue to focus on our market opportunity and maintain our commitment to
 developing quality products and improving our competitive position.  We have a
 stable and dedicated workforce, highly experienced, proven management team and
 the financial ability to continue to improve our company and make it through
 the difficult economic conditions of the next year.  In addition, we have
 reduced our discretionary programs and tightened up our spending in all
 functional areas, while we ride out the current adverse economic conditions."
    "Going forward, we continue to feel very positive about our new products,
 the NS3000 series, from the direct responses from our early BETA customers and
 independent industry analysts.  The feedback indicates that when we complete
 our product roadmap, according to our scheduled release dates, we will be a
 strong competitor in the NAS data-storage industry.  The initial new products
 will be released at the end of this quarter.  We anticipate that when the
 economy improves, customer demand should return and these products should
 generate revenue in subsequent quarters.  Until such time, we believe it to be
 imprudent to give forward quarterly guidance," added Sbona.
 
     Earnings Conference Call
     Auspex Systems, Inc. will conduct a public teleconference to review
 operating results for its third fiscal quarter ending March 31, 2001.  The
 conference call will be held on Thursday, April 19th, 2001 at 4:30 p.m.
 Eastern Time (1:30 p.m. Pacific Time).
     If you are calling from the East Coast, please dial 212-346-6387; and if
 you are calling from the West Coast, dial 415-908-6220.  Call between
 4:15 p.m. and 4:25 p.m. Eastern Time (1:15 p.m. and 1:25 p.m. Pacific Time) to
 allow enough time to connect into the call.  This is a regularly scheduled
 quarterly teleconference.  There will be a 7-day replay of the conference call
 beginning one hour after the conference call ends.  To access the replay, dial
 (US) 800-633-8284 or (International) 858-812-6440 and enter the reservation
 number "18424995."
 
     Auspex is also offering a web cast of our earnings call at www.auspex.com.
 
     Important Caution Concerning Forward-Looking Statements
     This press release contains forward-looking statements regarding Auspex's
 financial performance and release of new products. Actual results could differ
 materially as a result of many factors, including the following:  these
 forward-looking statements are based on assumptions that may not prove to be
 accurate, including the timing of the introduction of new product which, if
 delayed, could adversely affect revenues and margins; the future demand for
 Auspex's current and new products; many of Auspex's product orders are large
 and a delay in closing a large sale from one financial period to another could
 materially reduce Auspex's revenues for the period; transactions accounting
 for a disproportionate percentage of Auspex's quarterly revenues are
 frequently closed in the last few weeks or days of the quarter, making it
 difficult to predict revenues for a quarter; if competitors develop new
 products that compete favorably against Auspex's products, sales of Auspex's
 products will be less than projected; if  Auspex's new product introductions
 are not accepted by the market, sales of Auspex's products could be adversely
 affected; if pricing pressures are greater than expected, Auspex's revenues
 and margins could be reduced. These and other risks relating to Auspex and its
 business and products are as set forth in Auspex's Form 10-K and forms 10-Q as
 filed with the Securities and Exchange Commission.
 
     About Auspex
     Auspex is the Network Attached Storage (NAS) server choice of Fortune 1000
 customers in the semiconductor, software development, oil and gas exploration,
 automotive, aerospace, communications, publishing, entertainment, animation,
 and financial services industries. Its products are designed for storage
 applications requiring secure NT and UNIX data sharing from a single data
 image, server consolidation or continuous network data availability. The
 company excels in enterprise-level [multi-terabyte] NAS solutions and
 services. Visit the company's web site at www.auspex.com.
 
                              Auspex Systems, Inc.
                    Condensed Consolidated Statements of Income
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                       Three Months Ended   Nine Months Ended
                                       March 31, March 31,  March 31, March 31,
                                         2001     2000        2001      2000
     Revenues
       Product revenue                  $3,468   $14,501    $23,665   $49,158
       Service revenue                   5,903     6,861     18,201    20,980
         Total revenues                  9,371    21,362     41,866    70,138
 
     Cost of Revenues
       Cost of product revenue           3,189    12,087     15,602    32,113
       Cost of service revenue           5,126     7,622     14,829    20,828
         Total cost of revenues          8,315    19,709     30,431    52,941
         Gross margin                    1,056     1,653     11,435    17,197
 
     Operating Expenses
       Selling, general and
        administrative                  10,696    15,567     29,891    43,759
       Research and development          5,580     8,578     14,487    24,858
       Restructuring                        --    17,642        --     17,642
         Total operating expenses       16,276    41,787     44,378    86,259
 
         Income / (loss) from
          operations                   (15,220)  (40,134)   (32,943)  (69,062)
     Other income (expense), net         1,259       555      3,355     1,088
         Income / (loss) before
          provision for  income taxes  (13,961)  (39,579)   (29,588)  (67,974)
     Provision for income taxes            165       279        720       429
     Net income / (loss)              $(14,126) $(39,858)  $(30,308) $(68,403)
 
     Preferred stock dividend
      requirement                           --     1,175      5,174     1,175
     Net income/ (loss) available to
      common stockholders             $(14,126) $(41,033)  $(35,482) $(69,578)
 
     Net income / (loss) per share
       Basic                            $(0.31)   $(1.45)    $(0.87)   $(2.51)
       Diluted                          $(0.31)   $(1.45)    $(0.87)   $(2.51)
 
     Number of shares used in per share
      computations
       Basic                            45,081    28,254     40,770    27,672
       Diluted                          45,081    28,254     40,770    27,672
 
                                Auspex Systems, Inc.
                        Condensed Consolidated Balance Sheets
                                   (In thousands)
 
                                               March 31,            June 30,
                                                 2001                 2000
                                              (Unaudited)
     Assets
     Current Assets
        Cash and short-term investments              $93,459        $29,286
        Accounts receivable, net                       7,759          6,728
        Inventories                                    2,586          5,095
        Prepaid and other                              2,836          4,115
          Total current assets                       106,640         45,224
 
     Property and Equipment, net                      12,589         15,059
     Other Assets                                        772          1,715
          Total assets                              $120,001        $61,998
 
 
     Liabilities and Stockholders' Equity
     Current Liabilities
        Accounts payable                              $6,834         $8,053
        Accrued liabilities                           14,700         14,440
        Deferred revenue                               9,535          7,907
          Total current liabilities                   31,069         30,400
 
        Deferred revenue                                 453            954
     Total long-term liab.                               453            954
 
     Stockholders' Equity                             88,479         30,644
          Total liabilities and
           stockholders' equity                     $120,001        $61,998
 
 

SOURCE Auspex Systems, Inc.
    SANTA CLARA, Calif., April 19 /PRNewswire/ --
 Auspex Systems, Inc. (Nasdaq: ASPX), an industry leader in the Network
 Attached Storage (NAS) market, today reported results for the third quarter of
 its fiscal year 2001, ended March 31, 2001.
     Revenue for the third quarter of fiscal year 2001, ended March 31, 2001
 was $9.4 million, a 43% decline over the $16.4 in revenue in the prior
 quarter.  The net loss for the third quarter of fiscal 2001 was $14.1 million,
 a 93% increase, compared to a net loss of $7.3 million for the prior quarter.
 The loss per share in the third quarter of fiscal 2001 was $ 0.31, compared to
 $ 0.16 in the prior quarter.
     "The general downturn in global economic conditions greatly affected our
 third quarter performance.  Customers, regardless of size, are being extremely
 cautious of their spending and it has impacted all areas of the data-storage
 business.  We are seeing a significant slow down of orders and a general
 tightening of capital spending by all of our customers.  Orders that would
 have been included in our quarterly pipeline/forecast are now being pushed out
 2-4 months or are being placed indefinitely on hold until economic conditions
 improve," said Gary J. Sbona, Chairman and Chief Executive Officer.  "The
 rapid changes in market and economic conditions could not have come at a more
 inappropriate time for us based upon where we are in the cycle of rebuilding
 our product line and regenerating our company.  We were relying primarily on
 existing customers to fill our projected orders, and they did not materialize.
 We continue to focus on our market opportunity and maintain our commitment to
 developing quality products and improving our competitive position.  We have a
 stable and dedicated workforce, highly experienced, proven management team and
 the financial ability to continue to improve our company and make it through
 the difficult economic conditions of the next year.  In addition, we have
 reduced our discretionary programs and tightened up our spending in all
 functional areas, while we ride out the current adverse economic conditions."
    "Going forward, we continue to feel very positive about our new products,
 the NS3000 series, from the direct responses from our early BETA customers and
 independent industry analysts.  The feedback indicates that when we complete
 our product roadmap, according to our scheduled release dates, we will be a
 strong competitor in the NAS data-storage industry.  The initial new products
 will be released at the end of this quarter.  We anticipate that when the
 economy improves, customer demand should return and these products should
 generate revenue in subsequent quarters.  Until such time, we believe it to be
 imprudent to give forward quarterly guidance," added Sbona.
 
     Earnings Conference Call
     Auspex Systems, Inc. will conduct a public teleconference to review
 operating results for its third fiscal quarter ending March 31, 2001.  The
 conference call will be held on Thursday, April 19th, 2001 at 4:30 p.m.
 Eastern Time (1:30 p.m. Pacific Time).
     If you are calling from the East Coast, please dial 212-346-6387; and if
 you are calling from the West Coast, dial 415-908-6220.  Call between
 4:15 p.m. and 4:25 p.m. Eastern Time (1:15 p.m. and 1:25 p.m. Pacific Time) to
 allow enough time to connect into the call.  This is a regularly scheduled
 quarterly teleconference.  There will be a 7-day replay of the conference call
 beginning one hour after the conference call ends.  To access the replay, dial
 (US) 800-633-8284 or (International) 858-812-6440 and enter the reservation
 number "18424995."
 
     Auspex is also offering a web cast of our earnings call at www.auspex.com.
 
     Important Caution Concerning Forward-Looking Statements
     This press release contains forward-looking statements regarding Auspex's
 financial performance and release of new products. Actual results could differ
 materially as a result of many factors, including the following:  these
 forward-looking statements are based on assumptions that may not prove to be
 accurate, including the timing of the introduction of new product which, if
 delayed, could adversely affect revenues and margins; the future demand for
 Auspex's current and new products; many of Auspex's product orders are large
 and a delay in closing a large sale from one financial period to another could
 materially reduce Auspex's revenues for the period; transactions accounting
 for a disproportionate percentage of Auspex's quarterly revenues are
 frequently closed in the last few weeks or days of the quarter, making it
 difficult to predict revenues for a quarter; if competitors develop new
 products that compete favorably against Auspex's products, sales of Auspex's
 products will be less than projected; if  Auspex's new product introductions
 are not accepted by the market, sales of Auspex's products could be adversely
 affected; if pricing pressures are greater than expected, Auspex's revenues
 and margins could be reduced. These and other risks relating to Auspex and its
 business and products are as set forth in Auspex's Form 10-K and forms 10-Q as
 filed with the Securities and Exchange Commission.
 
     About Auspex
     Auspex is the Network Attached Storage (NAS) server choice of Fortune 1000
 customers in the semiconductor, software development, oil and gas exploration,
 automotive, aerospace, communications, publishing, entertainment, animation,
 and financial services industries. Its products are designed for storage
 applications requiring secure NT and UNIX data sharing from a single data
 image, server consolidation or continuous network data availability. The
 company excels in enterprise-level [multi-terabyte] NAS solutions and
 services. Visit the company's web site at www.auspex.com.
 
                              Auspex Systems, Inc.
                    Condensed Consolidated Statements of Income
                      (In thousands, except per share amounts)
                                    (Unaudited)
 
                                       Three Months Ended   Nine Months Ended
                                       March 31, March 31,  March 31, March 31,
                                         2001     2000        2001      2000
     Revenues
       Product revenue                  $3,468   $14,501    $23,665   $49,158
       Service revenue                   5,903     6,861     18,201    20,980
         Total revenues                  9,371    21,362     41,866    70,138
 
     Cost of Revenues
       Cost of product revenue           3,189    12,087     15,602    32,113
       Cost of service revenue           5,126     7,622     14,829    20,828
         Total cost of revenues          8,315    19,709     30,431    52,941
         Gross margin                    1,056     1,653     11,435    17,197
 
     Operating Expenses
       Selling, general and
        administrative                  10,696    15,567     29,891    43,759
       Research and development          5,580     8,578     14,487    24,858
       Restructuring                        --    17,642        --     17,642
         Total operating expenses       16,276    41,787     44,378    86,259
 
         Income / (loss) from
          operations                   (15,220)  (40,134)   (32,943)  (69,062)
     Other income (expense), net         1,259       555      3,355     1,088
         Income / (loss) before
          provision for  income taxes  (13,961)  (39,579)   (29,588)  (67,974)
     Provision for income taxes            165       279        720       429
     Net income / (loss)              $(14,126) $(39,858)  $(30,308) $(68,403)
 
     Preferred stock dividend
      requirement                           --     1,175      5,174     1,175
     Net income/ (loss) available to
      common stockholders             $(14,126) $(41,033)  $(35,482) $(69,578)
 
     Net income / (loss) per share
       Basic                            $(0.31)   $(1.45)    $(0.87)   $(2.51)
       Diluted                          $(0.31)   $(1.45)    $(0.87)   $(2.51)
 
     Number of shares used in per share
      computations
       Basic                            45,081    28,254     40,770    27,672
       Diluted                          45,081    28,254     40,770    27,672
 
                                Auspex Systems, Inc.
                        Condensed Consolidated Balance Sheets
                                   (In thousands)
 
                                               March 31,            June 30,
                                                 2001                 2000
                                              (Unaudited)
     Assets
     Current Assets
        Cash and short-term investments              $93,459        $29,286
        Accounts receivable, net                       7,759          6,728
        Inventories                                    2,586          5,095
        Prepaid and other                              2,836          4,115
          Total current assets                       106,640         45,224
 
     Property and Equipment, net                      12,589         15,059
     Other Assets                                        772          1,715
          Total assets                              $120,001        $61,998
 
 
     Liabilities and Stockholders' Equity
     Current Liabilities
        Accounts payable                              $6,834         $8,053
        Accrued liabilities                           14,700         14,440
        Deferred revenue                               9,535          7,907
          Total current liabilities                   31,069         30,400
 
        Deferred revenue                                 453            954
     Total long-term liab.                               453            954
 
     Stockholders' Equity                             88,479         30,644
          Total liabilities and
           stockholders' equity                     $120,001        $61,998
 
 SOURCE  Auspex Systems, Inc.