ZOOX one to watch:
Gadzoox Networks Takes Significant Steps Towards Reorganization
Gadzoox Networks Takes Significant Steps Towards Reorganization and Debt
Control
Company Voluntarily Petitions for Reorganization Under Chapter 11
SAN JOSE, Calif., Aug. 23 /PRNewswire-FirstCall/ --
Gadzoox Networks, Inc. (OTC Bulletin Board: ZOOX), a global supplier of
innovative Storage Area Network (SAN) products, today took significant steps
towards reorganization while continuing day-to-day business operations without
interruption. The Company's initial steps include the filing of a voluntary
petition under Chapter 11 of the Bankruptcy Code.
"Filing for Chapter 11 alleviates some business distractions while giving
us the opportunity to close new business deals with our FabriCore Engines'
customers and continue to focus on supporting our new and existing OEM
customers," said Steve Dalton, Gadzoox Networks' President and CEO. "This
also gives us the ability to continue our day-to-day operations, without
interruption, including our commitments to our dedicated employees and
world-class suppliers, all of whom recognize Gadzoox Networks has a unique
technology to offer this industry."
Chapter 11 enables a company to get relief from its creditors while it
restructures its business and improves its financial stability. Once in
Chapter 11, the Company will continue to operate its day-to-day business as a
"Debtor-in-Possession" under the supervision of the Bankruptcy Court. In
connection with the Chapter 11 filing, the Company is exploring the
possibility of obtaining additional or replacement financing. However, the
Company believes that the relief the bankruptcy process provides, with respect
to existing obligations, and assuming that sufficient transactions close with
respect to our FabriCore Engine products and services, the Company will be
able to continue to operate, pay all post-petition obligations and service all
of their customers.
New Revenue Streams:
During the past quarter Gadzoox Networks announced the availability of
FabriCore Engines, the industry's only intellectual property Fibre Channel
cores. Based on discussions with potential FabriCore Engine customers, the
Company believes that the new FabriCore Engines products have been well
received in the industry. There are currently over 25 companies engaged in
FabriCore Engines' discussions with Gadzoox Networks. Additionally, Gadzoox
Networks' Slingshot switches were selected by another large OEM (see "Acer
Chooses Gadzoox Networks in Multimillion Dollar OEM Deal" 7/8/02) as the 2Gb
fabric switch for their soon to be announced storage networking solution.
Cost Reduction and Actions:
According to the Company, the current economic environment has created
excess availability of properties in the area, and one of the Company's first
actions to remove debt, will be to relocate its headquarters to a location
with more attractive pricing. The Company expects to announce details on the
move soon.
"Gadzoox Networks is emerging as a new company; we have added a new OEM
partner and launched a new product line, FabriCore Engines, which has already
yielded new customers for the Company," stated Barbara Velline, Gadzoox
Networks' Chief Financial Officer. "Over the last couple of quarters we have
undertaken extensive cost cutting measures and engaged in daily operations
reviews to monitor our financial position. However, while we have been making
progress with our new strategic direction, we have been dealing with liquidity
issues resulting from carrying a balance sheet that reflects the former
infrastructure of the company. Gadzoox Networks is in a position to succeed
and this filing enables us to capitalize on those opportunities that we have
been developing over the last 10 weeks. We are now taking action to build
financial strength as we move forward," Velline added.
The Company filed its Chapter 11 Bankruptcy petition with the
United States Bankruptcy Court for the Northern District of California.
(San Jose Division). The Company's petition listed assets of approximately
$10 million and liabilities of approximately $14 million. For more
information Customers, Investors and Suppliers can call, toll free,
888-391-7362 or visit the Gadzoox Networks web site at www.gadzoox.com/reorg/,
which is a separate web page that is devoted to answering questions and
providing up-to-date information on the status of the Company's
reorganization. Gadzoox Networks is represented by Levene, Neale, Bender,
Rankin & Brill L.L.P., Los Angeles, CA.
About Gadzoox Networks
Since 1996 Gadzoox Networks has led the industry in market "firsts" and
continues to drive the Storage Area Network (SAN) edge market with innovative
Fibre Channel switching technology. The company has consistently delivered a
time to market advantage to major OEM customers enabling them to create clear
business value for their customer base. Gadzoox Networks is a voting member of
the Storage Networking Industry Association (SNIA), with corporate
headquarters located in San Jose, California. For more information about
Gadzoox Networks' products and technology advancements in the SAN industry,
visit the company's Web site at gadzoox.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995. Specifically,
statements concerning the likelihood of success of our reorganization efforts,
our ability to obtain additional or replacement financing, our ability to
support our OEM customers, our ability to close new business with respect to
our FabriCore Engines products and services, our ability to be successful and
capitalize on business opportunities, including our ability to grow our
business and successfully develop the new revenue streams, FabriCore Engines
and Acer, are forward-looking statements within the meaning of the Safe
Harbor. Actual results could differ materially from those anticipated in
these forward-looking statements as a result of various factors, including but
not limited to the evolution of the SAN market, growth rates of the market
segment within which the Company participates; market acceptance of the
Company's new products, in particular the Slingshot Family of Switches, the
Slingshot-ES Embedded platform, and the FabriCore Engines suite of technology,
and the speed at which customers adopt current and new products for SANs; the
Company's dependence on a limited number of products, a significant portion of
which are sold to a limited number of partners including OEM and distribution
channel partners; the availability of capital and the Company's ability to
meet future capital requirements; competition in the Company's industry and
the timing of new technology and product introductions, and the additional
development and deployment of embedded fabric switches and other future
products; the ability to retain and hire skilled personnel; and the Company's
dependence on its contract manufacturer. These risks and uncertainties along
with others are available and discussed in detail in Gadzoox Networks' SEC
filings, including the Company's Form 10K for the year ended March 31st, 2002,
as amended. Gadzoox Networks undertakes no obligation to release publicly any
revisions to any forward-looking statements contained herein to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
MAKE YOUR OPINION COUNT - Click Here
tbutton.prnewswire.com
SOURCE Gadzoox Networks, Inc.
-0- 08/23/2002
/CONTACT: press, Kellie DiNaro, kdinaro@gadzoox.com, or Investor
Relations, +1-888-391-7362, or investors-relations@gadzoox.com, both of
Gadzoox Networks/
/Web site: http;//www.gadzoox.com/reorg/
/Web site: gadzoox.com
(ZOOX) |
