JNIC responds to, corrects negative press reports (would be nice if this provides a boost today)...
===================
Monday November 13, 8:50 am Eastern Time
JNI Corporation Issues Prepared Statement From Today's Conference Call Regarding News Reports From Nov. 10
SAN DIEGO--(BUSINESS WIRE)--Nov. 13, 2000--JNI®Corporation (Nasdaq:JNIC - news) today issued the following prepared statements for today's conference call regarding news reports that appeared Friday, Nov. 10 on JNI Corporation.
Chris Wildermuth, director of corporate communications, issued the following statement: ``We are holding this conference call today because two articles appeared on Friday that we believe had a negative effect on our stock price.
``The first article, from The Street.com, included quotes taken out of context from JNI's CEO and quotes from an individual identified in the article as a short-seller, who we believe reaches erroneous conclusions about JNI's business.
``The second was a series of articles by Dow Jones Newswire which erroneously stated that JNI was concerned about revenue from SBus because Sun Microsystems was planning to discontinue the SBus interface; and that the company was replacing CEO Terry Flanagan. Following the publication of this article, the stock began dropping faster than the overall market, which was in a selloff over worries about technology sector earnings and uncertainty in the Presidential Election. Regrettably, Dow Jones published their stories before they called JNI to independently verify the information.
``Before the company could effectively address the stories, there was a run on the stock, we believe largely led by momentum-oriented day-traders, sending the stock down 38 points for the day. At that point, Nasdaq agreed to our request that trading be halted.
``We contacted Dow Jones Newswire to inform them the information they portrayed as news had in fact been discussed previously in disclosure documents and in our Third Quarter Conference Call. While Dow Jones included some of JNI's comments, they also misrepresented a fund manager's position about not knowing the information, causing further confusion about what was known by investors.
``Dow Jones issued a correction to their story, replacing four earlier stories. Regrettably, this was after the close of deadline for most financial publications and news services. The correction, issued at 5:44 p.m. Eastern Time, reads in part: ''Those items mistakenly implied that the company was reporting for the first time information about risks associated with Sun Microsystems products and CEO Flanagan. The 2:44 p.m. item also misrepresented comments by a fund manager.``
``That summarizes Friday's events. Dr. Flanagan would now like to address the substantive issues brought up by Friday's stories.
Terry M. Flanagan, Ph.D, president and CEO, made the following statement: ``First, I'd like to address my planned retirement. This is not a story. It has been disclosed in the secondary, and in our third quarter conference call, and was well known by analysts and investors who follow the company on a regular basis. This is a planned succession, and even though I will be 63 years old in January, I will stay on forever if necessary, until we find what we are looking for: an extraordinarily talented CEO who will take JNI to the next level. The challenges JNI faces in the future involve managing rapid growth amid rapid technological change, in an international arena. While I am confident in my abilities, we have had a search in process to find a CEO experienced in these areas, and that search is narrowing. My sweet spot of experience was helping identify the Fibre Channel market opportunity and leading the team through product development and deployment of our first and second-generation products. I intend to remain available to the company for all matters, but in particular in this area of my expertise. In addition, I will continue to serve as an active member of the Board of Directors.
``Let me emphasize again, I am not abandoning JNI. Rather, we intend to add experience and leadership to our already talented management team.
``Second, about the assertion that Sun Microsystems will eventually phase out the SBus interface from its servers. This was excerpted from our ''risk factors disclosure.`` We have consistently identified this as a risk in every document we have ever filed with the SEC.
``Sun Microsystems has never, and I repeat, never, made any kind of announcement that they would eliminate the SBus from their Enterprise Servers. On Saturday, Sun spokesperson Elizabeth McNichols told the San Diego Union-Tribune, quote: ''We have used JNI's interface for a number of years and our enterprise servers are still using it.``
``Sun's Web site promotes the SBus interface, stating that more than 3 million SBus slots have been shipped as of 1999. In addition, Sun has recently introduced an updated line of their Enterprise servers that include up to 64 SBus slots. From all indications in the market today, from Sun, our major OEMs and our key customers, SBus is strong and growing.
``Addressing a growing PCI market has been central to JNI's strategy for several years. Our goal has been to build a strong base of products using the PCI bus, and to eventually migrate from SBus to PCI bus as the market dictates. In addition, PCI supports all types of operating systems, whereas SBus runs only under Solaris operating system. By introducing PCI products, JNI has been able to broaden its support to servers running all the major operating systems used in storage networks today: Solaris, Windows NT and Windows 2000, HP-UX, AIX, Novell NetWare, and Mac OS.
``Which leads to a final point about the SBus report from Friday, which implied that Sun is our major customer and that they buy 80% of our HBAs, such that a decision by Sun not to purchase our products would make this business go away. Nothing could be further from the truth. Sun is an OEM customer, but not a major customer for JNI. We have OEM contracts with all of the major storage system vendors in the world.
``In summary, nothing has fundamentally changed concerning the SBus market since we went public. If anything, the market has outperformed our expectations.
``Finally, I know that some of you have asked for additional guidance for the quarter. As we had previously planned, we will update investors on the business for the fourth quarter in early December, and therefore won't be providing additional guidance at this time. It would be imprudent of us to allow erroneous reports to dictate our investor communications policy.''
A complete replay of the statement, along with the question and answer session, will be available today after 11:00 a.m. EST by calling 800/633-8284 or 858/812-6440 and entering the reservation number 16939299 or via Webcast at www.vcall.com or www.jni.com.
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 1999 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, HP-UX, AIX, Novell, Linux and Mac OS 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, StorageTek and Sun Microsystems. Company headquarters are in San Diego, with offices throughout the U.S. and Munich (Munchen), Germany. www.jni.com. |
