Exabyte Announces First Quarter Results

Apr 17, 2001, 01:00 ET from Exabyte Corporation

    BOULDER, Colo., April 17 /PRNewswire/ -- Exabyte Corporation
 (Nasdaq:   EXBT), a performance leader in network backup systems, today reported
 revenue for the first quarter of 2001 of $49,052,000 compared to $49,576,000
 for the first quarter of 2000.  The net loss for the first quarter of 2001 was
 $17,550,000 or $0.77 per share compared to a net loss of $13,580,000 or
 $0.60 per share for the first quarter of 2000.
     Included in the net loss for the first quarter of 2001 were severance
 costs of approximately $500,000 related to the March 16th reduction in force
 and approximately $2,800,000 of reserves for inventory writedowns and rework
 charges related to efforts to improve the quality and manufacturing yields of
 the M2(TM) drive product.
     "We were gratified that the domestic distribution sell-through of
 Exabyte's products held up well in the face of a weakening U.S. economy and
 slower capital spending, actually increasing 3% from the level of the fourth
 quarter of 2000," commented Bill Marriner, Exabyte's chairman, president and
 chief executive officer.  "Our distributors significantly reduced inventories
 during this challenging period, adversely impacting our Q1 sales.  Their
 inventories are now in excellent shape and both sell-through and re-order
 activity are off to a good start in Q2."
     "A second factor which impacted sales was the fact that the demand for M2
 media had outpaced our ability to supply for several months ending in
 February.  We were able, however, to ship record levels of media in the month
 of March and significantly reduced the outstanding order backlog from our
 customers.  With media now available in quantity at all of our major
 distributors, we believe sales of M2 drives and libraries will begin to
 improve," said Marriner.
     "The gross margin for the quarter of 7% was unusually low due to the
 impact of the inventory and rework charges (approximately six margin points)
 and high fixed costs relative to the revenue level for the quarter.  Operating
 expenses, both SG&A and research and development, were down significantly from
 the year-ago levels.  The recent reduction in force is expected to result in
 approximately $20 million of annual savings and we expect significant
 improvement in the gross margin and reductions in operating expenses as a
 result beginning in Q2.  With these expense reductions, recent improvements in
 M2 production yields and costs, the planned introduction of several new
 library products in the next six months, and the continuing transfer of
 production offshore, we expect to post significantly improved bottom line
 results," stated Marriner.
     "In the announcement of fourth quarter 2000 results on February 2, 2001,
 we indicated that a number of actions were being explored in order to improve
 the company's liquidity.  With the announcement today of a $3 million
 preferred equity financing from the State of Wisconsin Investment Board, I am
 pleased with the progress that we have had in these efforts.  We have
 restructured the operations of the company, converted our ownership in
 Highground Systems to common stock of Sun Microsystems, increased our bank
 line of credit by $5 million, and issued preferred equity to a longtime
 Exabyte shareholder as we continue to explore strategic alliance, acquisition
 or merger opportunities," stated Marriner.
     On April 2, 2001, the company reported that its annual report on Form 10-K
 for the fiscal year ended December 30, 2000 would be filed late in order to
 permit the company time to review and respond to comments received from the
 SEC staff on prior reports incorporated into an S-3 registration statement.
 The company is engaged in continuing discussions with the SEC staff concerning
 these comments, including comments relating to the timing of the company's
 write-off of deferred tax assets.  The company's previously reported
 preliminary results for fiscal 2000 included the write-off of these assets
 during the fourth quarter.  The company is considering the write-off of these
 deferred tax assets in one or more earlier periods in response to comments
 received from the SEC staff.  Any such change in the timing of the write-off
 would have no impact on the company's balance sheets as of December 30, 2000
 or March 31, 2001.  Because of the time required to adequately address these
 comments, the company has not filed its 2000 10-K during the permitted
 extension period.
 
     About Exabyte Corporation
     Exabyte Corporation is a leading supplier of tape storage devices and
 network storage solutions for the data intensive application and database
 server markets.  Exabyte engineers, manufactures and markets 8mm and
 MammothTape(TM) technology tape drives, premier storage media and libraries
 for MammothTape, DLTtape(TM) and LTO(TM) (Ultrium) tape technologies.
 NetStorM(TM), Exabyte's network storage initiative, is designed to optimize
 the performance capabilities of Exabyte's drives, autoloaders and libraries
 with other vendors' SAN offerings. The Company's products are available
 exclusively through an extensive network of OEM, distributor and reseller
 business partners worldwide, all backed by the Company's award-winning service
 and support.
     For additional information about Exabyte and for sales, call
 1-800-EXABYTE.  For support and customer service, call 1-800-445-7736.  Please
 call (+65)-271-6331 for Asia/Pacific and (+31)-30-2548800 for European
 inquiries.  To have investor information faxed, call 201-946-0091, or download
 information from the investor relations' room on the Company's Web site.  For
 investor-related questions, please call 1-888-EXABYTE, or e-mail
 investor@exabyte.com.  Visit Exabyte on the World Wide Web at www.exabyte.com
 and www.m2wins.com.
 
     The foregoing includes forward-looking statements related to the company's
 business prospects. Such statements are subject to one or more risks.  Words
 such as "believes," "anticipates," "expects," "intends," "plans," "positions"
 and similar expressions are intended to identify forward-looking statements,
 but are not the exclusive means of identifying such statements.  The actual
 results that the company achieves may differ materially from such
 forward-looking statements due to risks and uncertainties related to equity
 and financing arrangements, media availability and dependence, M2(TM)
 dependence, product development, manufacturing, market demand, management of
 business and product transitions and other such risks as noted in the
 company's 1999 Form 10-K and Form 10-Q for the quarter ending September 30,
 2000.  Please refer to the company's Form 8-K, Form 10-K and Forms 10-Q for a
 description of such risks.
 
     EDITOR'S NOTES Exabyte is a registered trademark, and M2, MammothTape,
 SmartClean and NetStorM are trademarks of Exabyte Corp. LTO and Ultrium are US
 trademarks of HP, IBM and Seagate.  DLTtape is a trademark of Quantum Corp.
 All other trademarks are the property of their respective owners.
 
 
                        EXABYTE CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (Unaudited)
                       (In thousands, except per share data)
 
                                                        Three Months Ended
                                                     March 31,       April 1,
                                                        2001           2000
 
     Net sales                                        $49,052        $49,576
     Cost of sales                                     45,558         39,363
 
     Gross profit                                       3,494         10,213
 
     Operating expenses:
       Selling, general and administrative             11,333         13,436
       Research and development                         8,901         10,360
 
     Loss from operations                             (16,740)       (13,583)
 
     Other income (expense), net                         (460)            45
 
     Loss before income taxes                         (17,200)       (13,538)
 
     Provision for income taxes                            (7)           (42)
     Equity in loss of investee                          (343)            --
 
     Net loss                                        ($17,550)      ($13,580)
 
     Basic:
       Net loss per share                              ($0.77)        ($0.60)
       Weighted average number of
        common shares outstanding                      22,779         22,454
 
     Diluted:
       Net loss per share                              ($0.77)        ($0.60)
       Weighted average number of
        common and potential common
        shares outstanding                             22,779         22,454
 
 
                        EXABYTE CORPORATION AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                    (Unaudited)
                                   (In thousands)
 
                                       ASSETS
 
                                                     March 31,   December 30,
                                                        2001         2000
     Current assets:
       Cash and investments                            $2,843       $3,249
       Accounts receivable, net                        29,153       37,412
       Inventories                                     39,588       40,143
       Other current assets                             2,208        2,807
         Total current assets                          73,792       83,611
 
     Property and equipment, net                       17,154       18,754
     Other assets                                         998        1,427
                                                      $91,944     $103,792
 
 
                        LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities:
       Accounts payable                               $32,138      $26,944
       Accruals and other liabilities                  14,137       17,337
       Line of credit                                  14,544       12,307
         Total current liabilities                     60,819       56,588
 
     Long-term liabilities                              9,617        8,146
 
     Stockholders' equity:
       Common stock                                        23           23
       Capital in excess of par value                  69,154       69,154
       Treasury stock, at cost                         (2,742)      (2,742)
       Retained earnings                              (44,927)     (27,377)
         Total stockholders' equity                    21,508       39,058
                                                      $91,944     $103,792
 
 

SOURCE Exabyte Corporation
    BOULDER, Colo., April 17 /PRNewswire/ -- Exabyte Corporation
 (Nasdaq:   EXBT), a performance leader in network backup systems, today reported
 revenue for the first quarter of 2001 of $49,052,000 compared to $49,576,000
 for the first quarter of 2000.  The net loss for the first quarter of 2001 was
 $17,550,000 or $0.77 per share compared to a net loss of $13,580,000 or
 $0.60 per share for the first quarter of 2000.
     Included in the net loss for the first quarter of 2001 were severance
 costs of approximately $500,000 related to the March 16th reduction in force
 and approximately $2,800,000 of reserves for inventory writedowns and rework
 charges related to efforts to improve the quality and manufacturing yields of
 the M2(TM) drive product.
     "We were gratified that the domestic distribution sell-through of
 Exabyte's products held up well in the face of a weakening U.S. economy and
 slower capital spending, actually increasing 3% from the level of the fourth
 quarter of 2000," commented Bill Marriner, Exabyte's chairman, president and
 chief executive officer.  "Our distributors significantly reduced inventories
 during this challenging period, adversely impacting our Q1 sales.  Their
 inventories are now in excellent shape and both sell-through and re-order
 activity are off to a good start in Q2."
     "A second factor which impacted sales was the fact that the demand for M2
 media had outpaced our ability to supply for several months ending in
 February.  We were able, however, to ship record levels of media in the month
 of March and significantly reduced the outstanding order backlog from our
 customers.  With media now available in quantity at all of our major
 distributors, we believe sales of M2 drives and libraries will begin to
 improve," said Marriner.
     "The gross margin for the quarter of 7% was unusually low due to the
 impact of the inventory and rework charges (approximately six margin points)
 and high fixed costs relative to the revenue level for the quarter.  Operating
 expenses, both SG&A and research and development, were down significantly from
 the year-ago levels.  The recent reduction in force is expected to result in
 approximately $20 million of annual savings and we expect significant
 improvement in the gross margin and reductions in operating expenses as a
 result beginning in Q2.  With these expense reductions, recent improvements in
 M2 production yields and costs, the planned introduction of several new
 library products in the next six months, and the continuing transfer of
 production offshore, we expect to post significantly improved bottom line
 results," stated Marriner.
     "In the announcement of fourth quarter 2000 results on February 2, 2001,
 we indicated that a number of actions were being explored in order to improve
 the company's liquidity.  With the announcement today of a $3 million
 preferred equity financing from the State of Wisconsin Investment Board, I am
 pleased with the progress that we have had in these efforts.  We have
 restructured the operations of the company, converted our ownership in
 Highground Systems to common stock of Sun Microsystems, increased our bank
 line of credit by $5 million, and issued preferred equity to a longtime
 Exabyte shareholder as we continue to explore strategic alliance, acquisition
 or merger opportunities," stated Marriner.
     On April 2, 2001, the company reported that its annual report on Form 10-K
 for the fiscal year ended December 30, 2000 would be filed late in order to
 permit the company time to review and respond to comments received from the
 SEC staff on prior reports incorporated into an S-3 registration statement.
 The company is engaged in continuing discussions with the SEC staff concerning
 these comments, including comments relating to the timing of the company's
 write-off of deferred tax assets.  The company's previously reported
 preliminary results for fiscal 2000 included the write-off of these assets
 during the fourth quarter.  The company is considering the write-off of these
 deferred tax assets in one or more earlier periods in response to comments
 received from the SEC staff.  Any such change in the timing of the write-off
 would have no impact on the company's balance sheets as of December 30, 2000
 or March 31, 2001.  Because of the time required to adequately address these
 comments, the company has not filed its 2000 10-K during the permitted
 extension period.
 
     About Exabyte Corporation
     Exabyte Corporation is a leading supplier of tape storage devices and
 network storage solutions for the data intensive application and database
 server markets.  Exabyte engineers, manufactures and markets 8mm and
 MammothTape(TM) technology tape drives, premier storage media and libraries
 for MammothTape, DLTtape(TM) and LTO(TM) (Ultrium) tape technologies.
 NetStorM(TM), Exabyte's network storage initiative, is designed to optimize
 the performance capabilities of Exabyte's drives, autoloaders and libraries
 with other vendors' SAN offerings. The Company's products are available
 exclusively through an extensive network of OEM, distributor and reseller
 business partners worldwide, all backed by the Company's award-winning service
 and support.
     For additional information about Exabyte and for sales, call
 1-800-EXABYTE.  For support and customer service, call 1-800-445-7736.  Please
 call (+65)-271-6331 for Asia/Pacific and (+31)-30-2548800 for European
 inquiries.  To have investor information faxed, call 201-946-0091, or download
 information from the investor relations' room on the Company's Web site.  For
 investor-related questions, please call 1-888-EXABYTE, or e-mail
 investor@exabyte.com.  Visit Exabyte on the World Wide Web at www.exabyte.com
 and www.m2wins.com.
 
     The foregoing includes forward-looking statements related to the company's
 business prospects. Such statements are subject to one or more risks.  Words
 such as "believes," "anticipates," "expects," "intends," "plans," "positions"
 and similar expressions are intended to identify forward-looking statements,
 but are not the exclusive means of identifying such statements.  The actual
 results that the company achieves may differ materially from such
 forward-looking statements due to risks and uncertainties related to equity
 and financing arrangements, media availability and dependence, M2(TM)
 dependence, product development, manufacturing, market demand, management of
 business and product transitions and other such risks as noted in the
 company's 1999 Form 10-K and Form 10-Q for the quarter ending September 30,
 2000.  Please refer to the company's Form 8-K, Form 10-K and Forms 10-Q for a
 description of such risks.
 
     EDITOR'S NOTES Exabyte is a registered trademark, and M2, MammothTape,
 SmartClean and NetStorM are trademarks of Exabyte Corp. LTO and Ultrium are US
 trademarks of HP, IBM and Seagate.  DLTtape is a trademark of Quantum Corp.
 All other trademarks are the property of their respective owners.
 
 
                        EXABYTE CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (Unaudited)
                       (In thousands, except per share data)
 
                                                        Three Months Ended
                                                     March 31,       April 1,
                                                        2001           2000
 
     Net sales                                        $49,052        $49,576
     Cost of sales                                     45,558         39,363
 
     Gross profit                                       3,494         10,213
 
     Operating expenses:
       Selling, general and administrative             11,333         13,436
       Research and development                         8,901         10,360
 
     Loss from operations                             (16,740)       (13,583)
 
     Other income (expense), net                         (460)            45
 
     Loss before income taxes                         (17,200)       (13,538)
 
     Provision for income taxes                            (7)           (42)
     Equity in loss of investee                          (343)            --
 
     Net loss                                        ($17,550)      ($13,580)
 
     Basic:
       Net loss per share                              ($0.77)        ($0.60)
       Weighted average number of
        common shares outstanding                      22,779         22,454
 
     Diluted:
       Net loss per share                              ($0.77)        ($0.60)
       Weighted average number of
        common and potential common
        shares outstanding                             22,779         22,454
 
 
                        EXABYTE CORPORATION AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                    (Unaudited)
                                   (In thousands)
 
                                       ASSETS
 
                                                     March 31,   December 30,
                                                        2001         2000
     Current assets:
       Cash and investments                            $2,843       $3,249
       Accounts receivable, net                        29,153       37,412
       Inventories                                     39,588       40,143
       Other current assets                             2,208        2,807
         Total current assets                          73,792       83,611
 
     Property and equipment, net                       17,154       18,754
     Other assets                                         998        1,427
                                                      $91,944     $103,792
 
 
                        LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities:
       Accounts payable                               $32,138      $26,944
       Accruals and other liabilities                  14,137       17,337
       Line of credit                                  14,544       12,307
         Total current liabilities                     60,819       56,588
 
     Long-term liabilities                              9,617        8,146
 
     Stockholders' equity:
       Common stock                                        23           23
       Capital in excess of par value                  69,154       69,154
       Treasury stock, at cost                         (2,742)      (2,742)
       Retained earnings                              (44,927)     (27,377)
         Total stockholders' equity                    21,508       39,058
                                                      $91,944     $103,792
 
 SOURCE  Exabyte Corporation

RELATED LINKS

http://www.exabyte.com