RDRT Blows Away Estimates:
siliconinvestor.com
Read-Rite Surges Past Analysts' Estimates With First Quarter Earnings Per Share of $0.11 and Net Profit of $12.5 Million; Positive Business Outlook Continues
FREMONT, Calif., Jan 24, 2001 /PRNewswire via COMTEX/ -- Read-Rite Corporation (Nasdaq: RDRT chart, msgs) today reported for the first fiscal quarter ended December 31, 2000, a net profit and earnings per diluted share of $12.5 million and $0.11 respectively, on revenues of $190.0 million. This represents a sequential revenue growth of 30% when compared to the fourth fiscal quarter ended September 30, 2000. Gross margins improved to 20.1%, from the prior quarter's gross margin of 5.6%, and the operating net income improved by $28.6 million from the fourth quarter. These results are considerably higher than the recently increased First Call consensus estimate of $0.03. Read-Rite's pro forma net profit amounted to $14.2 million, or $0.13 per diluted share, excluding a net loss of $1.7 million for the company's majority-owned optical components subsidiary, Scion Photonics, Inc. Read-Rite's revenue growth and profitability resulted from the company's ongoing focus on technology leadership, the performance and customer acceptance of its 20GB per platter GMR heads, continued yield and productivity improvements, and a substantial gain in market share.
"This return to profitability is a testament to the hard work and dedication of all our employees. I am grateful to each of them for the commitment they have demonstrated each and every day in making Read-Rite the clear leader in GMR technology," stated Alan S. Lowe, president and chief executive officer. He added, "Read-Rite's technology, products and financial performance have put the company in position to continue to gain market share and to grow profitability during the year. We remain focused on providing the best technology and products to give our customers a competitive advantage in the market."
Read-Rite shipped over 23 million heads, a 21% quarter-to-quarter growth. The company also nearly doubled its head stack assembly (HSA) volumes to 3.5 million. Throughout the quarter, Read-Rite improved its yields, its productivity and its cost structure due to continued deployment of automation and process improvements and higher capacity utilization.
During the quarter the company made substantial progress in improving its liquidity position. The company increased its cash position to $98.6 million from $64.4 million at the end of the previous quarter, converted its 10% bonds to equity and paid off the balance of the existing U.S. bank debt. Balance sheet debt has now been reduced by over $450 million since September 30, 1999, and at the end of the first fiscal quarter shareholders equity totaled $297.0 million compared to $39.9 million at the end of fiscal year 2000. "Our balance sheet is now in great shape and will continue to strengthen", Lowe added.
In its efforts to expand its business opportunities and lay the foundation for future growth, Scion Photonics recently announced the acquisition of Optical Systems Corporation (OSC), based in Valencia, California. OSC is a provider and manufacturer of precision automated tooling for the fiber optics component manufacturing industry.
BUSINESS OUTLOOK
The following statements are based on current expectations.
-- The company is targeting flat to modest revenue growth for the second
fiscal quarter of 2001 due to continued strong demand for its 20GB per
platter products plus the introduction and ramp of its 30GB per platter
products.
-- The company expects earnings per share for the second fiscal quarter to
be in the range of $0.11 to $0.14 per share. This expectation takes
into account an increase in the average shares outstanding from 110
million in the first fiscal quarter to an estimated 121 million in the
second fiscal quarter.
-- The company expects Scion Photonics to begin generating revenues during
the second fiscal quarter of 2001.
Read-Rite Corporation is one of the world's leading independent manufacturers of magnetic recording heads, head gimbal assemblies (HGAs) and head stack assemblies (HSAs) for disk drives and tape drives. The company is headquartered in Fremont, California and has operations in California, Thailand, the Philippines, Japan, Singapore and South Korea. The company's website is located at readrite.com . Read-Rite is also the majority shareholder of Scion Photonics, Inc. which designs, develops, manufactures and sells both custom and standard Dense Wavelength Division Multiplexers (DWDM) and other optical communication components. Scion's website is located at scionphotonics.com .
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in such forward-looking statements. The forward-looking statements in this release include statements addressing the following subjects: future financial and operating results, future demand and future market share. There can be no assurance that demand for the company's products will continue at current or greater levels, or that the company will continue to grow revenues, operating profit, market share or earnings. Factors that could cause actual results to differ include, but are not limited to: any reduction, cancellation or rescheduling of orders from the company's customers; the company's ability to sustain volume production cost-effectively and maintain satisfactory yields; the company's success in ramping production for its products; the company's ability to grow new businesses and successfully integrate and operate any acquired businesses; and the other factors described in the company's reports filed with the SEC, including, but not limited to, its Annual Report on Form 10-K for fiscal 2000. Read-Rite undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.
Read-Rite Corporation
Consolidated Balance Sheets Data
(In thousands)
December 31, September 30,
2000 2000
(Unaudited)
Assets
Cash, cash equivalents and short-term
investments $98,633 $64,462
Accounts receivable, net 84,031 87,840
Inventories 49,572 34,199
Prepaid expenses and other current
assets 6,154 5,603
Total current assets 238,390 192,104
Property, plant and equipment, net 278,751 285,053
Intangibles and other assets 11,377 16,191
Total assets $528,518 $493,348
Liabilities, Minority Interest in
Consolidated Subsidiary and Stockholders'
Equity
Current liabilities $155,714 $196,262
Long-term debt 44,602 232,712
Deferred income taxes and other
liabilities 5,060 5,102
Total liabilities 205,376 434,076
Minority interest in consolidated
subsidiary 26,177 19,341
Common stock and additional paid-in
capital 695,562 449,807
(Accumulated deficit) retained
earnings (398,597) (409,876)
Total stockholders' equity 296,965 39,931
Total liabilities, minority
interest in consolidated
subsidiary and
stockholders' equity $528,518 $493,348
Read-Rite Corporation
Consolidated Statements of Operations Data
(In thousands, except per share amounts)
Three Months Ended
December 31,
2000 1999
(Unaudited)
Net sales $189,956 $114,492
Cost of sales 151,723 145,619
Gross margin 38,233 (31,127)
Research & development 14,644 19,147
Selling, general & administrative 7,766 6,581
Total operating expenses 22,410 25,728
Operating income (loss) 15,823 (56,855)
Interest income (expense) and other,
net (3,009) (4,253)
Income (loss) before income
taxes and minority interest 12,814 (61,108)
Provision (benefit) for income taxes 291 --
Minority interest in net income
(loss) of consolidated subsidiary 22 (3,633)
Net income (loss) $12,501 ($57,475)
Earnings (loss) per share:
Basic $0.12 ($1.15)
Diluted $0.11 ($1.15)
Shares used in per share
computations:
Basic 107,919 49,834
Diluted 110,102 49,834
Source: Read-Rite Corporation
Contact:
media, John DiMatteo, 510-683-7379, or investors,
Mark Sokolowski, 510-683-7676, both of Read-Rite Corporation
URL: scionphotonics.com
readrite.com |
