Possibly bigger news, any comments?--July 7 JTS Corporation (AMEX: JTS),
today announced that revenue for the second quarter of fiscal 1998 ending
August 2, 1997 is expected to be lower than the prior quarter's level. JTS
reported revenues of $73.4 million and a net loss of $11.8 million, or a
$0.11 per slide loss based on 105.8 million shares, for the first quarter of
fiscal 1998. The company plans to announce its second quarter financial
results during the later part of August 1997.
Second Quarter Results:
"Similar to our competitors, our business has slowed based on
industry-wide weakness in the disk drive market. The softness in demand for
disk drives is a result of comparatively weak consumer demand for desktop
personal computers, a disappointing upgrade market for disk drives due to the
absence of a major software operating system upgrade cycle, lower than
forecast sales to Europe, a slowly recovering portable consumer market, all of
which is further compounded by above average inventories in the distribution
channel. As a result of the softness in demand, actual units shipments in the
month of June fell short of our earlier expectations. In order to prevent
excessive inventory build-up, we have reduced our production volumes. We
expect that second quarter units shipped will fall below first quarter levels
of 540,000 disk drives. Our current facility in India is equipped to produce
approximately 70,000 drives per week; however, our future growth is dependent
on current and future original equipment manufacturer (OEM) contracts. As we
strategically focus on building a stronger business based on a higher
concentration of OEM customers, it is likely that our future growth will
initially be slower than historical levels," said Tom Mitchell, president and
chief executive officer of JTS.
"As a result of the lower-than-expected sales and production levels, the
gross margin for the second quarter is expected to fall below the 4.4% gross
margin reported for the first quarter of fiscal 1998. We, however, have taken
measures to reduce our operating expenses in the second quarter from first
quarter levels," said Mitchell.
"Despite the slowdown in industry demand, we have ramped the production of
our 3.0-inch Nordic disk drives above first quarter levels. Since May, we
have added two OEM customers for our 3.0-inch Nordic disk drives, bringing the
number of OEM customers for these drives to five," commented Mitchell.
Recent Trading Volume in JTS Stock:
"We are concerned about the above-average trading volume in our stock. We
are working closely with our American Stock Exchange representatives to
monitor the situation," remarked Mitchell.
About JTS Corporation:
JTS Corporation, with headquarters in San Jose, Calif., was founded in
1994 to design, manufacture and supply enhanced-capacity hard disk drives for
the notebook and desktop personal computer market, JTS offers an innovative
line of ultra-slim 3.0-inch disk drives that provide higher capacity and lower
cost per megabyte than competitive alternatives in the portable computer
markets. The president and chief executive offer of JTS, Tom Mitchell, was
formerly the president and chief operating officer of Conner Peripherals and
co-founder, president and chief operating officer of Seagate Technology.
For further information, contact JTS Corporation at 166 Baypointe Parkway,
San Jose, California 95134, Phone: 408-468-1800, Fax: 408-468-1619. Website:
www.jtscorp.com
Except for the historical information contained herein, the discussion in
this press release contains forward-looking statements that involve certain
risks and uncertainties. The Company's actual results could differ materially
from those discussed here. Factors that could cause or contribute to such
variances include, but are not limited to, the Company's limited operating
history; the need for additional financing; the uncertainty of market
acceptance of the Company's products; the highly competitive market; the
Company's ability to achieve and maintain volume shipments of products
mentioned in this press release; the Company's dependence on its relationship
with Compaq Computer; its dependence on a single manufacturing facility and
those additional risk factors discussed from time to time in the Company's SEC
reports, including but not limited to the Company's Annual Report on form 10K
for the year ended February 2, 1997.
SOURCE JTS Corporation
CONTACT: Gretchen Lium, Director of Investor Relations, 510-939-1010, or
Kimberly Toney, Investor Relations Representative, 408-468-1621, both of JTS
Corporation |
