BEAVERTON, Ore.--(BUSINESS WIRE)--July 22, 1999--Sequent Computer
Systems (Nasdaq:SQNT.O) today reported a net loss of $16.5 million
($0.39 per share) on revenue of $143.5 million for the second quarter
of 1999, ended July 3.
Senior vice president of finance and chief financial officer Bob
Gregg said the quarter's poor showing was a direct result of confusion
among customers, partners and the Sequent sales force caused by early
press reports of the company's pending merger with IBM. "Faced with
uncertainty about the company's immediate future, many customers --
including several with large projects -- simply postponed planned
purchases. We specifically identified over $50 million in forecasted
transactions that did not close as a consequence of rumors and news
stories that circulated during the last three critical weeks of the
quarter. The level of uncertainty on both sides of these transactions
was heightened by our inability to comment on the deal while
negotiations were underway. The good news is that we believe the
majority of those transactions were merely deferred, not lost."
Following formal announcement of the proposed merger on July 12,
the reaction of customers has been overwhelmingly positive, said
Sequent president and chief operating officer John McAdam. "Sequent's
current product and service offerings represent some of the best UNIX
and Windows NT solutions on the planet. As a relatively small player,
it has become increasingly difficult to maintain the support of
independent software vendors and to win new business, even among our
installed base. Our work with IBM on Project Monterey and our
subsequent negotiations with them to resell our Merced-based systems
were aimed specifically at raising awareness of Sequent and our
products, broadening our distribution channels and providing a
compelling 64-bit migration path for our customers and partners.
Within the past few months, these efforts led to the realization that
there is the potential for enormous synergy between Sequent and IBM
that could best be realized by combining the two companies.
"As we prepare to merge our organizations, we are excited about
the prospect of adding our expertise in building and selling scalable,
Intel-based servers to the breadth of skills and offerings in IBM's
server division. Until the merger is completed, however, we remain
focused on our current business opportunities and continue to be
cautious about the company's near-term prospects," McAdam said.
Forward-Looking Statements
Information in this press release relating to the company's
expectations as to future products and results and anticipated
benefits from the merger constitute forward-looking statements that
involve a number of risks and uncertainties that could cause actual
results to differ materially from the forward-looking statements.
These factors include potential delays in product development,
competitive factors in the market and difficulties in completing the
merger. Reference is made to the company's Annual Report on Form 10-K
and other filings with the Securities and Exchange Commission for a
discussion of these and other factors that could cause actual results
to differ materially from the forward-looking statements.
About Sequent Computer Systems, Inc.
Sequent Computer Systems (Nasdaq:SQNT.O), the leader in Intel-based
solutions for the data center, is committed to the success of its
end-user and system integrator customers. Sequent's platform
architectures and services are optimized for the scalability,
availability and manageability requirements of large, growing
corporate infrastructures leveraging Internet technologies, database
technologies and best-of-breed partnerships.
Sequent supports more than 10,000 installations worldwide,
including many of the world's largest and most sophisticated
e-commerce, CRM and business intelligence environments. For further
information, phone Sequent at 503/626-5700 or 800/257-9044, visit our
Web site at www.sequent.com or purchase products at
www.sequent.com/direct.
-0-
*T
Three Months Ended Six Months Ended
July 3 July 4 July 3 July 4
1999 1998 1999 1998
-------- -------- -------- --------
Revenue(A) $143,517 $185,677 $337,496 $368,745
Net income (loss)(A) $(16,528) $(58,752) $(15,308) $(54,730)
Net income (loss)
per share - basic $ (0.39) $ (1.34) $ (0.36) $ (1.26)
Net income (loss)
per share - diluted $ (0.39) $ (1.34) $ (0.36) $ (1.26)
Note A: Amounts in Thousands
*T
All brand and product names appearing in this release are
registered trademarks or trademarks of their respective holders.
--30--CER/se*
CONTACT: Sequent Computer Systems, Inc.
Investor Relations:
John Eldridge, 503/578-4155, johne@sequent.com
or
Corporate Communications
Mike Fay, 212/317-5710, mikefay@sequent.com
businesswire.com
KEYWORD: OREGON
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS EARNINGS
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