ADIC today announced sales grew 46 percent to $94.8 million for the second quarter ended April 30, 2001 versus sales of $64.9 million for the same period a year ago.
Earnings were $7.9 million, or 15 cents per diluted share, for the quarter. Excluding the effect of a one-time
asset sale in the same period last year, comparable earnings for the second quarter of 2000 were $7.6
million, or 14 cents per share.
"ADIC experienced another quarter of exceptional revenue growth when
compared to both the same quarter last year and the immediately preceding
quarter," according to Chairman and Chief Executive Officer Peter van
Oppen. "After growing 41 percent in the first quarter, we are extremely
pleased to post sales growth of 46 percent for the second quarter together
with an increase in our gross profit percentage from 29.4 to 31.0 percent
between the first and second quarters of fiscal 2001," he said.
The Company attributed the increased sequential gross profit percentage to
an increased proportion of ADIC(R) branded sales versus OEM sales for the
period as well as to improved margins on OEM business. OEM sales
represented 38 percent of revenues for the second quarter, down from 45
percent in the first quarter of fiscal 2001. The gross profit percentage in the
second quarter of fiscal 2000 was 36.1 percent at a time when OEM sales,
which characteristically have a lower gross profit percentage, represented 22 percent of total sales.
"Second quarter operating expenses increased 22 percent over the same quarter last year and nearly 17
percent over the first quarter," commented van Oppen, "as the Company accelerated spending on sales and
marketing and R&D in an effort to further capitalize on its momentum in the marketplace."
"ADIC's strategy requires continued expansion of our proprietary hardware and software technologies in order
to grow both our revenues and our gross margin," said President and Chief Operating Officer Chuck
Stonecipher. "We acquired Pathlight to gain access to its existing technologies and development team," he
said. "Already, we have integrated Pathlight's intelligent connectivity and SAN management tools into ADIC
products that we expect to ship on both a branded and OEM basis in the current quarter," according to
Stonecipher. "The incorporation of new technologies, extensions of our product offerings and development of
additional branded and OEM channels are what make us confident of sales growth rates in our existing ADIC
business of 35-40 percent through fiscal 2002," he said. On May 11, 2001, ADIC completed the acquisition of
Pathlight Technology, Inc. for a total consideration of 10.3 million shares.
The Company noted that its acquisition of Pathlight will be accounted for as a pooling-of-interests transaction
and, as previously announced, will result in one-time purchase costs and associated restructuring costs of
$10-$12 million in the third quarter as well as restatement of prior period results and dilution of anticipated
results for the remainder of 2001. Reported consolidated growth rates in the second half of fiscal 2001 are
expected to be in the 30-35 percent range due to inclusion of Pathlight results for 2000 and 2001. Pathlight is
expected to have a positive effect on sales growth rates, earnings and earnings per share in fiscal 2002 when
consolidated growth rates are anticipated to revert to the range of 35-40 percent.
Cash and marketable equity securities as of April 30, 2001 were down approximately $35 million from January
31, 2001. Senior Vice President and Chief Financial Officer Jon Gacek noted, "despite the reduction in cash
and securities this quarter, the balance sheet improved over the preceding period as a result of a $27 million
reduction in current liabilities and a $4 million reduction in inventory. Finished goods inventory levels may
remain a challenge as our OEM customers continue to grow in number and breadth."
Conference Call
There will be a conference call to discuss the second quarter fiscal 2001 earnings at 8:30 a.m. Eastern Time
on May 17, 2001. The call can be accessed live on our website at www.adic.com/ir. |
