Pinnacle Systems Reports Results for Third Quarter Fiscal 2001

Revenues of $71.4M, Net Income* $.10 per Share



Apr 26, 2001, 01:00 ET from Pinnacle Systems, Inc.

    MOUNTAIN VIEW, Calif., April 26 /PRNewswire/ --
 Pinnacle Systems, Inc. (Nasdaq:   PCLE) today announced financial results for
 the third quarter of fiscal 2001, which ended March 31, 2001.  Net sales for
 the third quarter of fiscal 2001 were $71,419,000, a 17% increase over net
 sales of $61,246,000 in the same quarter last fiscal year.  This was the
 highest fiscal Q3 revenue in the Company's history.  Net income, including
 acquisition-related charges*, for the third quarter of fiscal 2001 was a loss
 of $832,000 or $.02 per share.  Proforma net income excluding these charges*
 for the third quarter of fiscal 2001 was $5,349,000 or $.10 per share.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001027/PCLELOGO )
     "We are very pleased to report these excellent third quarter results.
 Year-over-year sales increased in all three of our business groups, and we
 finished the quarter with a strong balance sheet with over $47 million in cash
 and securities and no debt," said Mark Sanders, Pinnacle Systems' president
 and chief executive officer.  "We believe our strong performance this quarter
 together with the introduction of more than a dozen significant products at
 the National Association of Broadcasters (NAB) show in Las Vegas this week
 reflects the increasingly strong position Pinnacle Systems enjoys in the
 industry."
     The Broadcast Solutions Division, which is focused on media creation,
 storage and distribution systems for broadcast and broadband applications had
 record sales during the third quarter of fiscal 2001 of $27.9 million, a
 23% increase over the same period last year.  Major broadcast system business
 included sales to Televisa, EchoStar, and Fox Digital, and earlier this week
 the company announced a $5 million order from Time Warner Cable.  Sanders
 added, "The Company's success in providing large networked solutions to
 Broadcasters represents a turning point. Pinnacle Systems is now providing
 end-to-end solutions, allowing customers to cut costs and improve workflow at
 the same time."
     The Professional. Media Division, which provides authoring systems,
 streaming products, and OEM systems, had sales of $12.4 million, a
 25% increase over the same period a year ago.  At NAB, the Company showed
 advanced versions of the Targa 3000 video platform for both the Mac and PC,
 and new live streaming and web encoding products in the StreamGenie and
 StreamFactory family of products.
     The Personal Web Video Division, which provides products for consumer and
 video enthusiasts, had sales of $31.1 million, a 10% increase over the same
 quarter last year.  Sales growth was driven by particularly strong DV product
 sales including Studio DV and DV500, reflecting the rapid growth in DV
 camcorder sales together with increased interest in home video editing.
 During the quarter, the Company introduced DV500 Plus, which allows users to
 edit dual streams of DV video using real-time effects and transitions,
 multitrack audio mixing, real-time image corrections, and real-time titling
 with Title Deko RT.
     The company will host a financial conference call to discuss results in
 more detail today, which will be webcast live at 2 p.m. PDT, and available on
 an archival basis at www.pinnaclesys.com.
 
     About Pinnacle Systems, Inc.
     Pinnacle Systems' broadcast, professional, and consumer products provide
 video professionals and consumers cutting-edge digital video tools to create,
 store, distribute and view web enabled digital video easier and more
 affordably than ever before.  Pinnacle Systems may be reached at 650-526-1600
 or at www.pinnaclesys.com.
 
     *Charges in the third quarter of fiscal 2001 include $7,733,000 in
 amortization of acquisition-related intangible assets and a $214,000 credit to
 reflect the change in value of an agreement made with Avid Sports option
 holders.  Net income, excluding theses charges*, assumes a proforma income tax
 rate of 20% (the Company's actual tax rate this quarter was zero percent), and
 a diluted share count of 55,095,000 shares.
 
     This press release contains forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
 Exchange Act of 1934 about the Company's market opportunities in the future,
 and expected financial results for fiscal 2001.  The forward-looking
 statements are based upon current information and expectations regarding
 Pinnacle Systems and its subsidiaries.  These estimates and statements are
 made as of today, do not guarantee future performance, and involve certain
 risks, uncertainties and assumptions that are difficult to predict.
 Therefore, actual outcomes and results could materially differ from what is
 expressed, implied or forecast in these forward-looking statements.
 
     NOTE:  All trademarks and registered trademarks are the property of their
 respective owners and are used for identification or reference purposes only,
 with no intent to infringe on copyrights.
 
                    PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                           (UNAUDITED, In thousands)
 
 
                                                     March 31,      June 30,
                                                       2001           2000
 
     Assets
 
     Current assets:
         Cash and equivalents                         $47,359        $82,145
         Accounts receivable, trade net                66,130         55,072
         Inventories                                   47,508         36,824
         Deferred income taxes                         17,103         17,103
         Prepaid expenses & others                      3,878          4,100
                                                      181,978        195,244
 
     Property and equipment, net                       15,289         16,143
     Goodwill and other intangibles, net               91,611        109,810
     Other assets                                       2,335          1,602
                                                     $291,213      $ 322,799
 
 
     Liabilities and Shareholders' Equity
 
     Current liabilities:
         Accounts payable                             $16,797        $22,422
         Accrued expenses                              25,697         30,146
                     Total current liabilities         42,494         52,568
 
     Deferred income taxes                             10,611         10,611
                     Total liabilities                 53,105         63,179
 
     Shareholders' equity:
          Common stock                                273,077        257,496
          Treasury stock                              (6,508)             --
          Retained earnings (accumulated deficit)    (16,387)          7,198
          Other cumulative comprehensive loss        (12,074)        (5,074)
                     Total shareholders' equity       238,108        259,620
                                                     $291,213      $ 322,799
 
                    PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
 
                                         Three                   Nine
                                     Months Ended            Months Ended
                                       March 31,               March 31,
                                   2001        2000        2001        2000
     Net sales                    $71,419    $61,246     $209,227   $174,254
     Cost of sales                 35,537     27,960      108,986     80,674
     Cost of sales -
      inventory write-offs             --      2,461           --         --
          Gross profit             35,882     33,286       97,780     93,580
 
     Operating expenses:
          Engineering and
           product development      8,634      7,447       24,961     19,660
          Sales and marketing      17,226     14,699       49,498     40,244
          General and
           administrative           3,773      2,110       11,524      7,079
          Acquisition expenses
           and one-time charges:
          Amortization of goodwill
           and intangibles          7,733      4,757       23,055     11,839
          Reorganization expenses                 --          342         --
          Acquisition settlement    (214)         --       13,399         --
          Legal settlement                     2,102                   2,102
          In process research
           and development                     1,100                   3,100
          Total operating
           expenses                37,152     32,215      122,779     84,024
          Operating income
           (loss)                 (1,270)      1,071     (24,999)      9,556
     Interest income
      and other, net                  438        952        1,414      2,564
          Income before
           income taxes             (832)      2,023     (23,585)     12,120
     Income tax expense (benefit)     354         --        2,273
          Net income               $(832)     $1,669    $(23,585)     $9,847
     Net income per share:
          Basic                    (0.02)       0.03       (0.46)       0.21
          Diluted                  (0.02)       0.03       (0.46)       0.18
     Shares used to compute
      net income (loss)
      per share
          Basic                    51,079     48,655       50,968     47,703
          Diluted                  51,079     56,424       50,968     54,691
 
     Pro-forma net income
      per share (excluding
      acquisition expenses;
      one-time charges;
      inventory write off)           0.10       0.15         0.23       0.44
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X56588071
 
 

SOURCE Pinnacle Systems, Inc.
    MOUNTAIN VIEW, Calif., April 26 /PRNewswire/ --
 Pinnacle Systems, Inc. (Nasdaq:   PCLE) today announced financial results for
 the third quarter of fiscal 2001, which ended March 31, 2001.  Net sales for
 the third quarter of fiscal 2001 were $71,419,000, a 17% increase over net
 sales of $61,246,000 in the same quarter last fiscal year.  This was the
 highest fiscal Q3 revenue in the Company's history.  Net income, including
 acquisition-related charges*, for the third quarter of fiscal 2001 was a loss
 of $832,000 or $.02 per share.  Proforma net income excluding these charges*
 for the third quarter of fiscal 2001 was $5,349,000 or $.10 per share.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20001027/PCLELOGO )
     "We are very pleased to report these excellent third quarter results.
 Year-over-year sales increased in all three of our business groups, and we
 finished the quarter with a strong balance sheet with over $47 million in cash
 and securities and no debt," said Mark Sanders, Pinnacle Systems' president
 and chief executive officer.  "We believe our strong performance this quarter
 together with the introduction of more than a dozen significant products at
 the National Association of Broadcasters (NAB) show in Las Vegas this week
 reflects the increasingly strong position Pinnacle Systems enjoys in the
 industry."
     The Broadcast Solutions Division, which is focused on media creation,
 storage and distribution systems for broadcast and broadband applications had
 record sales during the third quarter of fiscal 2001 of $27.9 million, a
 23% increase over the same period last year.  Major broadcast system business
 included sales to Televisa, EchoStar, and Fox Digital, and earlier this week
 the company announced a $5 million order from Time Warner Cable.  Sanders
 added, "The Company's success in providing large networked solutions to
 Broadcasters represents a turning point. Pinnacle Systems is now providing
 end-to-end solutions, allowing customers to cut costs and improve workflow at
 the same time."
     The Professional. Media Division, which provides authoring systems,
 streaming products, and OEM systems, had sales of $12.4 million, a
 25% increase over the same period a year ago.  At NAB, the Company showed
 advanced versions of the Targa 3000 video platform for both the Mac and PC,
 and new live streaming and web encoding products in the StreamGenie and
 StreamFactory family of products.
     The Personal Web Video Division, which provides products for consumer and
 video enthusiasts, had sales of $31.1 million, a 10% increase over the same
 quarter last year.  Sales growth was driven by particularly strong DV product
 sales including Studio DV and DV500, reflecting the rapid growth in DV
 camcorder sales together with increased interest in home video editing.
 During the quarter, the Company introduced DV500 Plus, which allows users to
 edit dual streams of DV video using real-time effects and transitions,
 multitrack audio mixing, real-time image corrections, and real-time titling
 with Title Deko RT.
     The company will host a financial conference call to discuss results in
 more detail today, which will be webcast live at 2 p.m. PDT, and available on
 an archival basis at www.pinnaclesys.com.
 
     About Pinnacle Systems, Inc.
     Pinnacle Systems' broadcast, professional, and consumer products provide
 video professionals and consumers cutting-edge digital video tools to create,
 store, distribute and view web enabled digital video easier and more
 affordably than ever before.  Pinnacle Systems may be reached at 650-526-1600
 or at www.pinnaclesys.com.
 
     *Charges in the third quarter of fiscal 2001 include $7,733,000 in
 amortization of acquisition-related intangible assets and a $214,000 credit to
 reflect the change in value of an agreement made with Avid Sports option
 holders.  Net income, excluding theses charges*, assumes a proforma income tax
 rate of 20% (the Company's actual tax rate this quarter was zero percent), and
 a diluted share count of 55,095,000 shares.
 
     This press release contains forward-looking statements within the meaning
 of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
 Exchange Act of 1934 about the Company's market opportunities in the future,
 and expected financial results for fiscal 2001.  The forward-looking
 statements are based upon current information and expectations regarding
 Pinnacle Systems and its subsidiaries.  These estimates and statements are
 made as of today, do not guarantee future performance, and involve certain
 risks, uncertainties and assumptions that are difficult to predict.
 Therefore, actual outcomes and results could materially differ from what is
 expressed, implied or forecast in these forward-looking statements.
 
     NOTE:  All trademarks and registered trademarks are the property of their
 respective owners and are used for identification or reference purposes only,
 with no intent to infringe on copyrights.
 
                    PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                           (UNAUDITED, In thousands)
 
 
                                                     March 31,      June 30,
                                                       2001           2000
 
     Assets
 
     Current assets:
         Cash and equivalents                         $47,359        $82,145
         Accounts receivable, trade net                66,130         55,072
         Inventories                                   47,508         36,824
         Deferred income taxes                         17,103         17,103
         Prepaid expenses & others                      3,878          4,100
                                                      181,978        195,244
 
     Property and equipment, net                       15,289         16,143
     Goodwill and other intangibles, net               91,611        109,810
     Other assets                                       2,335          1,602
                                                     $291,213      $ 322,799
 
 
     Liabilities and Shareholders' Equity
 
     Current liabilities:
         Accounts payable                             $16,797        $22,422
         Accrued expenses                              25,697         30,146
                     Total current liabilities         42,494         52,568
 
     Deferred income taxes                             10,611         10,611
                     Total liabilities                 53,105         63,179
 
     Shareholders' equity:
          Common stock                                273,077        257,496
          Treasury stock                              (6,508)             --
          Retained earnings (accumulated deficit)    (16,387)          7,198
          Other cumulative comprehensive loss        (12,074)        (5,074)
                     Total shareholders' equity       238,108        259,620
                                                     $291,213      $ 322,799
 
                    PINNACLE SYSTEMS, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (In thousands, except per share data)
 
                                         Three                   Nine
                                     Months Ended            Months Ended
                                       March 31,               March 31,
                                   2001        2000        2001        2000
     Net sales                    $71,419    $61,246     $209,227   $174,254
     Cost of sales                 35,537     27,960      108,986     80,674
     Cost of sales -
      inventory write-offs             --      2,461           --         --
          Gross profit             35,882     33,286       97,780     93,580
 
     Operating expenses:
          Engineering and
           product development      8,634      7,447       24,961     19,660
          Sales and marketing      17,226     14,699       49,498     40,244
          General and
           administrative           3,773      2,110       11,524      7,079
          Acquisition expenses
           and one-time charges:
          Amortization of goodwill
           and intangibles          7,733      4,757       23,055     11,839
          Reorganization expenses                 --          342         --
          Acquisition settlement    (214)         --       13,399         --
          Legal settlement                     2,102                   2,102
          In process research
           and development                     1,100                   3,100
          Total operating
           expenses                37,152     32,215      122,779     84,024
          Operating income
           (loss)                 (1,270)      1,071     (24,999)      9,556
     Interest income
      and other, net                  438        952        1,414      2,564
          Income before
           income taxes             (832)      2,023     (23,585)     12,120
     Income tax expense (benefit)     354         --        2,273
          Net income               $(832)     $1,669    $(23,585)     $9,847
     Net income per share:
          Basic                    (0.02)       0.03       (0.46)       0.21
          Diluted                  (0.02)       0.03       (0.46)       0.18
     Shares used to compute
      net income (loss)
      per share
          Basic                    51,079     48,655       50,968     47,703
          Diluted                  51,079     56,424       50,968     54,691
 
     Pro-forma net income
      per share (excluding
      acquisition expenses;
      one-time charges;
      inventory write off)           0.10       0.15         0.23       0.44
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X56588071
 
 SOURCE  Pinnacle Systems, Inc.

RELATED LINKS

http://www.pinnacle.com