Earnings - Monday August 4 6:30 PM EDT
Company Press Release
SyQuest Reports Substantially Improved Financial Results
Strong Quarterly Revenue Increase Over Preceding Quarter
Net Losses Declined Both Year-to-Year and Sequentially
FREMONT, Calif.--(BUSINESS WIRE)--Aug. 4, 1997--SyQuest Technology Inc. (NASDAQ:SYQT), today reported net revenue for the third fiscal quarter ended June 30, 1997 of $31.7 million, compared to $29.5 million in the same period a year ago and $16.8 million in the immediately preceding quarter.
The increase represented an improvement of $14.9 million, or 90% over the immediately preceding fiscal quarter ended March 31, 1997 and was primarily attributable to significant shipments of the company's award-winning SyJet product during the quarter.
The net loss for the third fiscal quarter ended June 30, 1997 was $10.7 million, or $.80 net loss per share, compared with a net loss of $41.3 million, or $3.61 net loss per share, in the comparable 1996 period and $33.7 million, or $1.31 net loss per share, in the immediately preceding quarter. The net loss for the current quarter represented a reduction in net loss of $23.0 million over the immediately preceding fiscal quarter ended March 31, 1997. The reduction in net loss is primarily attributable to increased revenues, improved gross profit, and lower operating expenses.
For the nine months ended June 30, 1997, the company reported net revenue of $96.8 million and a net loss of $51.2 million, or $3.06 net loss per share compared to net revenue of $155.6 million and a net loss of $126.2 million or $11.09 net loss per share for the comparable prior year period.
``We are pleased with the initial shipments of our award-winning SyJet product. The improved gross profit was partially off-set during the quarter by manufacturing start-up costs as we continued to ramp SyJet production to meet the product demand,'' said Ed Marinaro, chairman of the board. ``While we further reduced operating expenses during the third quarter, we will increase future spending beyond the current levels on marketing and sales programs which are targeted at increasing revenue growth,'' added Marinaro.
During the current third fiscal quarter ended June 30, 1997, the company also raised additional financing through a $33.0 million private stock offering and successfully converted an additional $2.8 million of Vendor Notes Payable to equity. The company's financial condition as of June 30, 1997, reflected an improved cash position of approximately $7.5 million resulting from the additional equity financing completed during the quarter, dramatic improvements in the days sales in accounts receivable over the preceding quarter to 89 days in the current quarter, and consistent inventory turn over at approximately 5 turns.
About SyQuest
Based in Fremont, SyQuest Technology Inc. invented the high performance cartridge category. Founded in 1982, the company has shipped more than 16 million cartridges which customers use to hold their ideas and creations. SyQuest (SYQT) is publicly traded on the NASDAQ's National Market System. SyQuest is located at 47071 Bayside Parkway, Fremont, Calif. 94538-6517. Phone: 510/226-4000. URL: syquest.com .
This news release contains forward-looking statements that involve risks and uncertainties, including competition in the marketplace for the company's products, and other risks detailed from time to time in the SEC reports filed by SyQuest including its most recent reports on Forms 8K, 10K and 10Q.
Note to Editors: SyQuest and the SyQuest logo are registered trademarks and SyJet is a trademark of SyQuest Technology Inc. All other brands or trademarks are the property of their respective companies.
SYQUEST TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended
June 30, March 31,
1997 1996 1997
Net revenue $31,709 $29,459 $16,786
Cost of revenue 30,829 46,635 30,051
Provision for losses on
purchase commitments -- 6,523 --
Gross Profit (loss) 880 (23,699) (13,265)
Operating Expenses:
Selling, general and
administrative 6,941 10,113 12,730
Research and development 3,712 5,932 6,617
Restructuring cost -- 1,860 --
Total operating expenses 10,653 17,905 19,347
Loss from operations (9,773) (41,604) (32,612)
Net interest expense (899) (425) (1,106)
Other income -- 712 --
Loss before income taxes (10,672) (41,317) (33,718)
Provision for income taxes -- -- --
Net Loss $(10,672) $(41,317) $(33,718)
Net Loss per share: $(0.80) $(3.61) $(1.31)
Common and common equivalent
shares used in computing
per share amounts 44,054 11,450 26,206
-0-
Nine months ended
June 30,
1997 1996
Net revenue $96,806 $155,571
Cost of revenue 98,146 195,728
Provision for losses on
purchase commitments -- 18,195
Gross Profit (loss) 1,340 (58,352)
Operating Expenses:
Selling, general and
administrative 30,998 38,928
Research and development 15,430 20,452
Restructuring cost -- 5,460
Total operating expenses 46,428 64,840
Loss from operations (47,768) (123,192)
Net interest expense (3,437) (743)
Other income -- 712
Loss before income taxes (51,205) (123,223)
Provision for income taxes -- 3,000
Net Loss $(51,205) $(126,223)
Net Loss per share: $(3.06) $(11.09)
Common and common equivalent
shares used in computing per
share amounts 28,415 11,386
The computation of loss per share for the quarter ended June 30,
1997, includes adjustments which increase the loss applicable to
common stockholders by $0.4 million representing preferred stock
dividends and $24.0 million representing value assigned to warrants
issued in conjunction with the Series 3 and Series 4 Convertible
Preferred Stock, respectively. The computation of loss per share
for the nine months ended June 30, 1997, also includes adjustments
of $1.3 million representing preferred stock dividends, a one-time
adjustment of $5.3 million for the "embedded yield" representing the
discount on the assumed potential conversion of the 7% Cumulative
Convertible Preferred Stock, and $4.9 million representing the value
assigned to warrants issued in conjunction with the Series 1
Convertible Preferred Stock and the Series 2 Cumulative Convertible
Preferred Stock.
-0-
SYQUEST TECHNOLOGY INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
June 30, Sept. 30,
1997 1996
(Unaudited) (Note)
ASSETS
Current assets:
Cash and cash equivalents
and short-term investments $ 7,471 $ 3,670
Accounts receivable, net 24,083 30,341
Inventories, net 24,931 10,538
Prepaid expenses and deferred
income taxes 4,788 2,471
Total current assets 61,273 47,020
Net plant, property and equipment 19,387 27,180
Other assets 0 981
-------- --------
$ 80,660 $ 75,181
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Bank borrowings $ 22,229 $ 19,268
Accounts payable 13,878 23,917
Accrued compensation and other
liabilities 17,499 18,671
Provision for losses on purchase
commitments -- 1,966
Current portion of long-term debt 5,444 20,549
Total current liabilities 59,050 84,371
Long-term debt and other long-term
liabilities 8,131 21,163
Stockholder's equity (deficit):
Preferred stock -- --
Common stock 48 14
Additional paid in capital 197,762 102,598
Treasury stock (12,855) (12,855)
Retained earnings (deficit) (171,476) (120,110)
Total stockholders' equity
(deficit) 13,479 (30,353)
-------- --------
$ 80,660 $ 75,181
Note: The consolidated condensed balance sheet at Sept. 30, 1996
has been derived from the audited financial statements at that date.
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Contact:
SyQuest Technology Inc.
Bob L. Corey, 510/226-4000 (CFO)
or
Miller Shandwick Technologies
Fred Hoar, 415/962-9550
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