Emulex Reports Record Fourth Quarter Results; Acceleration in Fibre Channel Orders Generates Operating Income Expansion of More Than 350%
COSTA MESA, Calif.--(BUSINESS WIRE)--Aug. 3, 2000--Emulex Corp. (Nasdaq:EMLX), the world’s largest supplier of fibre channel adapters, Thursday announced results for its fourth fiscal quarter ended July 2, 2000.
Revenues expanded to a record $40.8 million, up 99% from the $20.5 million reported for the same quarter a year ago. Net income for the fourth quarter of fiscal 2000 rose to a record $9.6 million, or $0.25 per diluted share, compared with net income of $3.0 million, or $0.10 per diluted share, for the same quarter a year ago. Net income for the fourth quarter of the prior fiscal year benefited from a nominal effective tax rate(1), while the recorded effective tax rate for the fourth quarter of fiscal 2000 amounted to 35%. Assuming a 35% tax rate for both fiscal years, net income for the fourth quarter of fiscal 2000 expanded more than 380% from net income of $2.0 million, or $0.06 per diluted share, for the same quarter a year ago. Fibre Channel order momentum accelerated during the quarter, generating a 26% sequential increase in Fibre Channel host bus adapter (HBA) revenues and a 42% sequential increase in total Fibre Channel backlog.
Paul F. Folino, president and chief executive officer, stated: “Three major sources of strength are driving demand for Emulex Fibre Channel products, which grew to 94% of fourth quarter revenue. First, growth in Windows solutions has been expanding, fueled by a new round of key OEM design wins, including Emulex’s most recent qualification from Compaq to provide Fibre Channel connectivity for Compaq’s ProLiant servers. Secondly, the Network Attached Storage (NAS) market is now providing strong incremental growth, as high-end NAS solutions deploy Emulex Fibre Channel adapters for back-end connectivity to SAN resources.”
In June, Emulex announced EMC had selected the LightPulse™ LP8000DC dual channel Fibre Channel host adapter to provide Fibre Channel connectivity for its Celerra NAS system. Folino continued: “Third, Emulex’s unique ability among Fibre Channel HBA suppliers to support the FICON protocol is gaining in significance as major storage vendors prepare to launch native FICON storage solutions for the mainframe environment in the second half of the calendar year.”
According to IDC, 25% of all SAN Storage system revenue in 2001 will be comprised of ESCON/FICON interconnected systems. “Fueled by these multiple sources of demand, fourth quarter unit shipments of Emulex HBAs expanded 44% sequentially from the third fiscal quarter, led by expanding demand for our new-generation LP8000 adapter,” concluded Folino. “With the accelerating deployment of storage area networks (SANs) and the emergence of storage virtualization, we believe requirements for heterogeneous Fibre Channel connectivity are escalating,” noted Folino. “Emulex’s unmatched breadth of support for both SBus and PCI interfaces; FCP, IP, VI and FICON protocols; and a wide variety of standard platform and customized operating systems continue to form the foundation for the most comprehensive heterogeneous connectivity offering in the Fibre Channel host bus adapter market.”
Emulex’s traditional networking product sector, which is comprised of network access products and printer servers, continued to mature and collectively declined 55% sequentially from the third quarter to 6% of revenue. Driven by an increasing mix of Fibre Channel revenue and efficiencies of scale, both operating margin and operating income expanded sequentially in the fourth quarter to a record 29% and $11.9 million, respectively, compared with 26% and $9.4 million in the third quarter of fiscal 2000. For the year ended July 2, 2000, Emulex’s revenues totaled $139.8 million, up 104% compared with the $68.5 million reported a year ago. Net income for fiscal 2000 expanded to $32.8 million or $0.86 per diluted share, compared with $5.3 million or $0.19 per diluted share for the same period a year ago.
Excluding consolidation related charges in the prior year and assuming a 35% tax rate for both fiscal years(2), net income for the year ended July 2, 2000, would have amounted to $28.5 million, or $0.75 per diluted share, an expansion of more than 650% compared with the $3.8 million, or $0.13 per diluted share, reported for the prior year. Emulex is a leading designer, developer and supplier of a broad line of Fibre Channel host adapters, hubs, ASICs and software products that provide connectivity solutions for Fibre Channel storage area networks (SANs), network attached storage (NAS) and RAID. The company’s products are based on internally developed ASIC technology, and are deployable across a variety of SAN configurations and operating systems, enhancing data flow between computers and peripherals.
Emulex’s products offer customers the unique combination of critical reliability, scalability and high performance, and can be customized for mission-critical server and storage system applications. Emulex products have been selected by the world’s leading server and storage providers, including Compaq, EMC, Fujitsu-Siemens, Groupe Bull, Hewlett-Packard, Hitachi Data Systems, IBM, NEC and Unisys. In addition, Emulex includes industry leaders Brocade, Intel, McData, Microsoft, Legato and VERITAS among its strategic partners.
Emulex markets to OEMs and end users through its own worldwide selling organization, as well as two-tier distribution partners. Corporate headquarters are located in Costa Mesa. News releases and other information about Emulex are available via the Internet at www.emulex.com.
EMULEX—the fibre channel company
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:
With the exception of historical information, the statements set forth above include forward-looking statements that involve risk and uncertainties. The company wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include the following: the fact that the company’s markets are characterized by rapidly changing technology, evolving industry standards and frequent introductions of new products and enhancements, and the company’s ability to respond to such changes; maturation in the network access server and printer server products; the fact that the fibre channel market is at an early stage of development; the highly competitive nature of the markets for the company’s products; the company’s ability to attract and retain skilled personnel; the company’s reliance on third party suppliers for components used in the company’s products and on manufacturing subcontractors that assemble and distribute the company’s products; the company’s reliance on certain OEMs, distributors and key customers; and potential fluctuations in the company’s future effective tax rate. These and other factors which could cause actual results to differ materially from those in the forward-looking statements are also discussed in the company’s filings with the Securities and Exchange Commission, including its recent filings on Form 10-K and Form 10-Q. |
