Maxtor(R) Corporation Announces First Quarter Earnings Results; Newly Merged Company Positioned to Exploit Emerging Growth Opportunities

Apr 25, 2001, 01:00 ET from Maxtor Corporation

    MILPITAS, Calif., April 25 /PRNewswire/ --
 Maxtor Corporation (Nasdaq:   MXTR) today announced its financial results for
 the first quarter ended March 31, 2001.  Net income was $1.3 million, or
 $0.01 per diluted share, compared with $27.6 million, or $0.23 per diluted
 share, in the first quarter of 2000.  Revenue for the recent quarter was
 $630.8 million, 8.7% below revenue of $691.3 million in the 2000 first
 quarter.
     "We are pleased with Maxtor's first quarter performance, achieved during a
 very challenging period, not only for the hard disk drive industry, but for
 the technology sector as a whole," said Mike Cannon, president and CEO.
 "Softening demand for PC systems affected the demand for hard drives and made
 inventory management especially critical.  Despite the environment, Maxtor
 shipped 6.7 million hard drives during the first quarter and achieved a gross
 profit margin of 14.1%, largely the result of a favorable product mix and
 continued strong operational execution.  Inventory was $110 million at the end
 of March and cash and marketable securities totaled $349 million at
 quarter-end.
     "We are extremely excited about the progress we've made in extending the
 use of Maxtor hard drives in the consumer electronics market.  During the
 first quarter, we introduced the Maxtor 531DX, the first of a new family of
 simpler, smaller, highly reliable hard drives, ideal for use in entry PCs and
 consumer electronics applications.  We were also pleased to announce recently
 that we have begun volume shipments of hard drives for use in the DISH Network
 advanced digital satellite television receivers manufactured by Echostar.
 DISH Network is the fastest growing satellite TV service provider in the US
 and the world's largest provider of satellite set-top boxes.  These
 accomplishments further establish Maxtor as a major participant in emerging
 consumer electronics applications.
     "The strength of our hard drive business was masked somewhat by our
 continued investments in building our network attached storage business.  In
 the first quarter, the NAS business generated revenue of $4.3 million and a
 net loss of $(12.2) million.  These results reflected in part a marketing
 strategy for transitioning to our new MaxAttach NAS 4100 introduced in early
 March.  The MaxAttach NAS 4100 is a new, broadly interoperable and highly
 manageable NAS file server that is based on Microsoft Windows Powered software
 that we believe better serves the storage needs of IT managers.  The alliance
 with Microsoft has significantly enhanced the features and functionality of
 our NAS products.  We continue to believe that NAS represents a significant
 growth and profit opportunity for Maxtor and we remain committed to making the
 necessary investments to ensure our success in this emerging market."
     On April 2, 2001, Maxtor completed its merger with Quantum Corporation's
 Hard Disk Drive Group, a transaction that created the world's largest hard
 disk drive company in terms of units shipped in 2000 and a leader in the
 delivery of storage solutions and technology.  Combined revenues from Maxtor
 and Quantum HDD were approximately $6 billion in 2000.
 
     About Maxtor
     Maxtor Corporation (www.maxtor.com) is the world's largest hard disk drive
 manufacturer and a leading provider of information storage solutions.  The
 company has an expansive line of storage products for desktop computers,
 network storage, high-performance Intel-based servers, and consumer
 electronics.  Maxtor has a reputation as a proven market leader built by
 providing consistent high-quality products, and service and support for its
 customers.  Maxtor and its products can be found at www.maxtor.com or by
 calling toll-free (800) 2-MAXTOR.  Maxtor is traded on the NASDAQ under the
 MXTR symbol.  Maxtor will transfer its listing to the New York Stock Exchange
 (NYSE) under the MXO symbol effective April 30, 2001.
 
     This release contains forward-looking statements concerning the hard disk
 drive and related storage industries and Maxtor's execution.  These statements
 are based on current expectations and are subject to risks and uncertainties
 which could materially affect the company's results, including, but not
 limited to, market demand for hard disk drives and server appliances, market
 acceptance of the company's products, the company's ability to execute future
 production ramps and utilize manufacturing assets efficiently, changes in
 product and customer mix, pricing trends, actions by competitors, the ability
 to successfully integrate Quantum HDD operations and Maxtor, and costs related
 to the merger.  These and other risk factors are contained in periodic reports
 filed with the SEC, including, but not limited to, the Form 10-K for fiscal
 2000, recent 10-Qs and the recent registration statement on Form S-4 related
 to the combination with Quantum HDD.  Maxtor is under no obligation to (and
 expressly disclaims any obligation to) update or alter its forward-looking
 statements, whether as a result of new information, future events or
 otherwise.
 
     Conference Call
     Maxtor has scheduled a conference call for financial analysts and
 investors today, Wednesday, April 25, 2001 at 2:30 p.m. PST to discuss the
 first quarter results and to provide an outlook on the second quarter 2001.
 The dial-in number for the live call is (800) 553-2165.  The call will be
 webcast on the company's site at www.maxtor.com.  There will be a replay
 available shortly following the call through May 1, 2001.  The dial-in number
 for the replay is (800) 625-5288, access code 998338.
 
 
                               MAXTOR CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                    March 31,     December 30,
                                                       2001           2000
                                                   (Unaudited)      (Audited)
     ASSETS
 
     Current assets:
       Cash                                          $180,178       $193,228
       Marketable securities                         $168,431       $182,949
       Accounts receivable, net                       202,537        284,253
       Inventories, net                               110,102        106,405
       Prepaid expenses and other                      39,744         34,577
         Total current assets                         700,992        801,412
 
     Property, plant and equipment, net               188,508        165,926
     Goodwill and other intangible assets, net         41,797         44,237
     Other assets                                      14,041         13,344
         Total assets                                $945,338     $1,024,919
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities:
       Short-term borrowings, including
        current portion of long-term debt             $13,385        $15,432
       Accounts payable                               390,589        421,338
       Accrued and other liabilities                  145,632        192,152
         Total current liabilities                    549,606        628,922
 
     Long-term debt                                    85,522         92,259
         Total liabilities                            635,128        721,181
     Total stockholders' equity                       310,210        303,738
         Total liabilities and
          stockholders' equity                       $945,338     $1,024,919
 
 
                               MAXTOR CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands except share and per share amounts)
 
                                                       Three months ended
                                                    March 31,       April 1,
                                                       2001           2000
                                                   (Unaudited)     (Unaudited)
 
     Total revenue                                   $630,821       $691,286
     Total cost of revenue                            541,805        582,456
     Gross profit                                      89,016        108,830
 
     Operating expenses:
       Research and development                        58,974         55,362
       Selling, general and administrative             27,512         25,318
       Amortization of goodwill and
        intangible assets                               2,487          2,520
         Total operating expenses                      88,973         83,200
 
     Income from operations                                43         25,630
 
     Interest expense / other charges                  (4,224)        (3,863)
     Interest and other income                          5,756          7,287
 
     Income before income taxes                         1,575         29,054
     Provision for income taxes                          (236)        (1,453)
 
     Net Income                                        $1,339        $27,601
 
     Net income per share - basic                       $0.01          $0.24
 
     Net income per share - diluted                     $0.01          $0.23
 
     Shares used in per share calculation
       -basic                                     114,865,211    114,029,979
       -diluted                                   118,901,084    118,037,206
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X54665464
 
 

SOURCE Maxtor Corporation
    MILPITAS, Calif., April 25 /PRNewswire/ --
 Maxtor Corporation (Nasdaq:   MXTR) today announced its financial results for
 the first quarter ended March 31, 2001.  Net income was $1.3 million, or
 $0.01 per diluted share, compared with $27.6 million, or $0.23 per diluted
 share, in the first quarter of 2000.  Revenue for the recent quarter was
 $630.8 million, 8.7% below revenue of $691.3 million in the 2000 first
 quarter.
     "We are pleased with Maxtor's first quarter performance, achieved during a
 very challenging period, not only for the hard disk drive industry, but for
 the technology sector as a whole," said Mike Cannon, president and CEO.
 "Softening demand for PC systems affected the demand for hard drives and made
 inventory management especially critical.  Despite the environment, Maxtor
 shipped 6.7 million hard drives during the first quarter and achieved a gross
 profit margin of 14.1%, largely the result of a favorable product mix and
 continued strong operational execution.  Inventory was $110 million at the end
 of March and cash and marketable securities totaled $349 million at
 quarter-end.
     "We are extremely excited about the progress we've made in extending the
 use of Maxtor hard drives in the consumer electronics market.  During the
 first quarter, we introduced the Maxtor 531DX, the first of a new family of
 simpler, smaller, highly reliable hard drives, ideal for use in entry PCs and
 consumer electronics applications.  We were also pleased to announce recently
 that we have begun volume shipments of hard drives for use in the DISH Network
 advanced digital satellite television receivers manufactured by Echostar.
 DISH Network is the fastest growing satellite TV service provider in the US
 and the world's largest provider of satellite set-top boxes.  These
 accomplishments further establish Maxtor as a major participant in emerging
 consumer electronics applications.
     "The strength of our hard drive business was masked somewhat by our
 continued investments in building our network attached storage business.  In
 the first quarter, the NAS business generated revenue of $4.3 million and a
 net loss of $(12.2) million.  These results reflected in part a marketing
 strategy for transitioning to our new MaxAttach NAS 4100 introduced in early
 March.  The MaxAttach NAS 4100 is a new, broadly interoperable and highly
 manageable NAS file server that is based on Microsoft Windows Powered software
 that we believe better serves the storage needs of IT managers.  The alliance
 with Microsoft has significantly enhanced the features and functionality of
 our NAS products.  We continue to believe that NAS represents a significant
 growth and profit opportunity for Maxtor and we remain committed to making the
 necessary investments to ensure our success in this emerging market."
     On April 2, 2001, Maxtor completed its merger with Quantum Corporation's
 Hard Disk Drive Group, a transaction that created the world's largest hard
 disk drive company in terms of units shipped in 2000 and a leader in the
 delivery of storage solutions and technology.  Combined revenues from Maxtor
 and Quantum HDD were approximately $6 billion in 2000.
 
     About Maxtor
     Maxtor Corporation (www.maxtor.com) is the world's largest hard disk drive
 manufacturer and a leading provider of information storage solutions.  The
 company has an expansive line of storage products for desktop computers,
 network storage, high-performance Intel-based servers, and consumer
 electronics.  Maxtor has a reputation as a proven market leader built by
 providing consistent high-quality products, and service and support for its
 customers.  Maxtor and its products can be found at www.maxtor.com or by
 calling toll-free (800) 2-MAXTOR.  Maxtor is traded on the NASDAQ under the
 MXTR symbol.  Maxtor will transfer its listing to the New York Stock Exchange
 (NYSE) under the MXO symbol effective April 30, 2001.
 
     This release contains forward-looking statements concerning the hard disk
 drive and related storage industries and Maxtor's execution.  These statements
 are based on current expectations and are subject to risks and uncertainties
 which could materially affect the company's results, including, but not
 limited to, market demand for hard disk drives and server appliances, market
 acceptance of the company's products, the company's ability to execute future
 production ramps and utilize manufacturing assets efficiently, changes in
 product and customer mix, pricing trends, actions by competitors, the ability
 to successfully integrate Quantum HDD operations and Maxtor, and costs related
 to the merger.  These and other risk factors are contained in periodic reports
 filed with the SEC, including, but not limited to, the Form 10-K for fiscal
 2000, recent 10-Qs and the recent registration statement on Form S-4 related
 to the combination with Quantum HDD.  Maxtor is under no obligation to (and
 expressly disclaims any obligation to) update or alter its forward-looking
 statements, whether as a result of new information, future events or
 otherwise.
 
     Conference Call
     Maxtor has scheduled a conference call for financial analysts and
 investors today, Wednesday, April 25, 2001 at 2:30 p.m. PST to discuss the
 first quarter results and to provide an outlook on the second quarter 2001.
 The dial-in number for the live call is (800) 553-2165.  The call will be
 webcast on the company's site at www.maxtor.com.  There will be a replay
 available shortly following the call through May 1, 2001.  The dial-in number
 for the replay is (800) 625-5288, access code 998338.
 
 
                               MAXTOR CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
 
                                                    March 31,     December 30,
                                                       2001           2000
                                                   (Unaudited)      (Audited)
     ASSETS
 
     Current assets:
       Cash                                          $180,178       $193,228
       Marketable securities                         $168,431       $182,949
       Accounts receivable, net                       202,537        284,253
       Inventories, net                               110,102        106,405
       Prepaid expenses and other                      39,744         34,577
         Total current assets                         700,992        801,412
 
     Property, plant and equipment, net               188,508        165,926
     Goodwill and other intangible assets, net         41,797         44,237
     Other assets                                      14,041         13,344
         Total assets                                $945,338     $1,024,919
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current liabilities:
       Short-term borrowings, including
        current portion of long-term debt             $13,385        $15,432
       Accounts payable                               390,589        421,338
       Accrued and other liabilities                  145,632        192,152
         Total current liabilities                    549,606        628,922
 
     Long-term debt                                    85,522         92,259
         Total liabilities                            635,128        721,181
     Total stockholders' equity                       310,210        303,738
         Total liabilities and
          stockholders' equity                       $945,338     $1,024,919
 
 
                               MAXTOR CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands except share and per share amounts)
 
                                                       Three months ended
                                                    March 31,       April 1,
                                                       2001           2000
                                                   (Unaudited)     (Unaudited)
 
     Total revenue                                   $630,821       $691,286
     Total cost of revenue                            541,805        582,456
     Gross profit                                      89,016        108,830
 
     Operating expenses:
       Research and development                        58,974         55,362
       Selling, general and administrative             27,512         25,318
       Amortization of goodwill and
        intangible assets                               2,487          2,520
         Total operating expenses                      88,973         83,200
 
     Income from operations                                43         25,630
 
     Interest expense / other charges                  (4,224)        (3,863)
     Interest and other income                          5,756          7,287
 
     Income before income taxes                         1,575         29,054
     Provision for income taxes                          (236)        (1,453)
 
     Net Income                                        $1,339        $27,601
 
     Net income per share - basic                       $0.01          $0.24
 
     Net income per share - diluted                     $0.01          $0.23
 
     Shares used in per share calculation
       -basic                                     114,865,211    114,029,979
       -diluted                                   118,901,084    118,037,206
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X54665464
 
 SOURCE  Maxtor Corporation