Lexar Media Reports Second Quarter Results
Thursday July 15, 4:30 pm ET
Revenues of $163.2 Million Grow 100% Year Over Year
FREMONT, Calif., July 15 /PRNewswire-FirstCall/ -- Lexar Media, Inc. (Nasdaq: LEXR - News), a leading manufacturer and marketer of high-performance digital media and accessories, today reported financial results for the second quarter ended June 30, 2004.
Total second quarter revenues of $163.2 million increased 100% from $81.5 million in the same period last year and decreased 1% sequentially from $164.7 million in the preceding quarter. Product revenues of $162.1 million increased 110% from $77.2 million in the same period last year and increased 1% from $161.1 million in the preceding quarter. The Company reported a net loss of $18.1 million, or $(0.23) per diluted share, as compared to net income of $7.0 million, or $0.09 per diluted share, in the same period last year and net income of $9.4 million, or $0.11 per diluted share, in the first quarter of 2004.
"Our second quarter results reflect greater than anticipated price reductions and price protection obligations that negatively impacted product revenues and gross margins, coupled with the inability to fully recognize the benefits of lower costs achieved during the quarter due to the timing of cost reductions, component purchases and product shipments," said Eric Stang, Lexar Media's chairman, CEO and president. "We continue to believe that market dynamics will become increasingly favorable for our business model over the second half of the year as new flash suppliers stimulate further cost reductions. In addition, we are excited about the potential created by our recently announced agreement with Kodak, and expect to begin introducing products under the KODAK brand in July."
Corporate Highlights
Lexar Media recently:
* Announced an exclusive multi-year agreement with Eastman Kodak whereby
Lexar will manufacture and distribute a full range of KODAK branded
memory cards and will work with Kodak to provide consumers with a wide
variety of reliable, high quality, mass-market memory cards worldwide.
* Grew its total number of storefronts during the quarter to over 55,000
from approximately 48,000 in the preceding quarter.
* Increased its presence in Australia and New Zealand with the opening of
a regional sales and marketing office in Sydney, Australia. The
Company also expanded its Australian distribution channel by naming
Tech Pacific Australia PTY. and WestGroup International as distributors
of Lexar Media's complete line of products and accessories.
* Received recognition for its JumpDrive(R) family of USB flash drives as
the "Best Digital Accessory" introduced in Europe in the past 12 months
by the Technical Image Press Associate (TIPA).
* Served as a sponsor of the 13th annual Microsoft Windows Hardware
Engineering Conference (WinHEC) conference, at which Lexar demonstrated
several uses of its JumpDrive products beyond simple storage. The
Company also provided JumpDrive USB flash drives to all attendees,
allowing them to configure their computers to access the Internet
through the wireless LAN at the event.
* Appointed Charles Levine to its Board of Directors. Mr. Levine has held
a variety of senior leadership positions in telecommunications
companies over the past 10 years including Sprint PCS, Octel
Communications and AT&T.
Financial Outlook
Mr. Stang continued, "In factoring in our expectations for additional flash cost reductions in the second half and expectations for continued price declines in the third quarter and moderate price declines in the fourth quarter, our current business outlook calls for third quarter revenues of $175 million or more, with a net loss in the range of $(0.01) to $(0.05) per share. We expect to return to profitability in the fourth quarter." |
