7/17 ..JNIC.. Reports Record Second Quarter
Continues Strong Revenue and Earnings Momentum
SAN DIEGO--(BUSINESS WIRE)--July 17, 2000--JNI Corporation:
Highlights -- Revenues Increase 181% to $24.0 Million Over Q2'99;
Up 30% Over First Quarter 2000 -- Net Income (Excluding Charges) Grows to $3.1 Million -- Earnings Per Share Equal $0.12
JNI Corporation (Nasdaq:JNIC - news), the fastest growing Fibre Channel host bus adapter company, today reported continued strong revenue and earnings growth for the second quarter ended June 30, 2000.
For the second quarter, revenues grew to a record $24.0 million, representing a 181% increase from $8.5 million in the 1999 second quarter. Sequentially, revenues in the second quarter increased 30% from $18.5 million in the 2000 first quarter. The company's PCI bus products grew 107% over the first quarter, comprising 24% of second quarter revenues, while its SBus host bus adapter (HBA) business remained strong, growing 20% over the first quarter.
Net income for the quarter was $3.1 million, equal to $0.12 per share (excluding a quarterly charge for amortization of intangibles and stock based compensation, taxed at statutory rates), a 621% increase from $433,000, equal to $0.02 per share, in the comparable period last year. Including these charges, net income for the second quarter was $2.3 million, equal to $0.09 per share.
Revenues for the six-month period ended June 30, 2000, increased 185% to $42.5 million from $14.9 million for the first half of 1999. Net income, excluding the aforementioned charges, was $5.3 million, equal to $0.20 per share, compared with $524,000, equal to $0.02 per share, in the same period last year. Including these charges, net income for the six-month period ended June 30, 2000 was $3.6 million, equal to $0.13 per share.
The company said that in the second quarter and going forward, due to its changing product mix it began recognizing revenue to its distribution channel upon shipment by the distributors to their end-user customers. This is consistent with Securities and Exchange Commission (SEC) Staff Accounting Bulletin 101 -- Revenue Recognition in Financial Statements. (A detailed description of SAB 101 can be found at www.sec.gov). Had the company recognized revenue upon shipment to the distributors, the revenue growth in the quarter would have been 34%.
Terry M. Flanagan, Ph.D., president and chief executive officer of JNI, said the company's revenue growth of 30% reflected continued strong demand for its Unix and PC suite of products and the result of the company's aggressive market expansion initiatives. ``Our HBAs continue to dominate in the Fibre Channel storage area network sector at the high-end of the market, especially within multimillion-dollar SAN configurations,'' said Flanagan. ``We are also particularly pleased with our sales of PCI-based HBAs, which validates our position as a dominant supplier in the Solaris and Unix market.'' Flanagan noted that backlog, which stood at $12.1 million at June 30, 2000, increased nearly 50% from the first quarter.
``This quarter we launched several major marketing and sales initiatives that we believe are contributing to our continued strong growth,'' continued Flanagan. ``In addition to innovative programs aimed at reinforcing brand awareness in our target markets, we formalized and broadened our OEM relationships; expanded our channel presence and sales through our FibreStars(TM) program; and, initiated the SANpartners(TM) program to work with leading SAN and Fibre Channel vendors on interoperability and compatibility.
``We also are extremely pleased with our recent alliance with Brocade Communications, the leading switch vendor in the Fibre Channel market, and believe it is testament to the collaborative environment that exists for companies seeking to provide open, end-to-end SAN connectivity solutions for the growing enterprise computing market,'' Flanagan said. ``Finally, on the OEM front, we have established a number of long-term agreements with major storage and systems vendors. These include a global value-added reseller agreement with Hewlett-Packard to supply our FibreStar(TM) HBAs for HP servers and storage systems; an agreement with Compaq Computer Corp. to supply FibreStar HBAs for their Solaris-based storage products; a contract to supply EMC Corporation with adapter cards for EMC CLARiiON® storage systems; and a long-term deal with StorageTek to be the exclusive provider of HBAs for many of the company's new SANaps line of products.''
Gross margins in the current quarter declined slightly to 59% of revenues from 60% as reported in the first quarter. The decrease was principally due to increasing material costs associated with current industry component availability and increases in inventory reserves. For the six-month period, gross margins as a percent of revenues for 2000 and 1999 were 59% and 63%, respectively.
Research and development expenses to support the company's aggressive new product development programs for the quarter grew 19% over the first quarter. As in the first quarter, operating costs increased with higher selling and marketing expenses related to expanding the company's premium brand through advertising, trade show participation and hiring related personnel.
Second Quarter Highlights
In June, the company joined EMC Corporation's E-Infostructure
Interoperability Program and qualified several of its Fibre
Channel HBAs for the new ``EMC E-Lab Tested'' product designation.
Seeking to accelerate interoperability and compatibility
between JNI products and multi-vendor SAN components, JNI launched
its SANpartners(TM) program in June.
The company's Fibre Channel HBAs received certification for the
latest versions of Microsoft Windows NT/2000, Novell Netware and
Sun Microsystems Solaris, the most popular operating systems used
by Fibre Channel-based products in SANs.
Bolstering its international presence, JNI in May opened its
new European headquarters in Munich, Germany.
In May, JNI appointed John Stiska to the Board of Directors,
replacing Thomas J. Bernard, who retired.
In April, JNI announced the Unix DriverSuite, including
development of HP-UX and AIX drivers, and a new version of
Solaris, all of which are expected to enter first customer
shipment during the third quarter of 2000.
About JNI Corporation
JNI Corporation is the fastest-growing Fibre Channel host bus adapter company and the No. 2 manufacturer of Fibre Channel HBAs (non-captive) in revenue according to IDC (3/00). JNI offers a broad line of HBAs, ASICs and software for storage area networks (SANs). JNI's PCI products operate on Solaris, Windows 2000, Windows NT, Novell, Linux and MacOS systems. JNI's SBus products run on Solaris. Customers include Amdahl, Avid, Chaparral, Compaq StorageWorks, Consan, EMC, Eurologic, Hewlett-Packard, Hitachi Data Systems, IBM, LSI Logic, McData, MTI, StorageTek and Sun Microsystems. Company headquarters are in San Diego, with offices throughout the U.S. and Munich (Munchen), Germany. www.jni.com. JNI - First in Fibre Channel(TM) |
