Emulex Reports First Quarter Results
Business Wire - October 29, 1997 17:07
%EMULEX EMLX %CALIFORNIA %COMPUTERS %ELECTRONICS %COMED %EARNINGS V%BW P%BW
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COSTA MESA, Calif.--(BUSINESS WIRE)--Oct. 29, 1997--Emulex Corp. (NASDAQ:EMLX), a leader in fibre channel and
network access products, Wednesday announced revenues for its first fiscal quarter ended Sept. 28, 1997.
Revenues amounted to $15 million, compared with $16 million reported for the same quarter a year ago. First quarter net income
improved to $609,000, or 10 cents per share, compared with a net loss of $941,000, or 16 cents per share, for the same quarter
a year ago. In the first quarter of last fiscal year, results included non-recurring items that are detailed in the attached financial
tables. Excluding those non-recurring items, the net loss for the first quarter a year ago would have been $345,000, or 6 cents
per share.
"The company continued to focus on the growth opportunity in fibre channel during the first quarter, while continuing to
streamline the network access and printer server product offerings and diversify the OEM customer base," stated Paul F.
Folino, president and chief executive officer. "As in recent prior quarters, the improvement in profitability, compared with the
same quarter a year ago, was driven by revenue gains from our flagship LightPulse fibre channel product line, which grew more
than 300 percent from the same quarter last year."
Emulex once again expanded its LightPulse product line during the first quarter with the announcement of the LP3000 host
adapter, a low-cost Arbitrated Loop (AL) adapter that provides the gigabit performance of fibre channel at affordable SCSI
prices.
"Emulex is now positioned to address the full spectrum of fibre channel OEM interface requirements, from full-featured fibre
channel PCI bus adapter cards supporting all topologies and all classes of service, to affordable storage-centric AL
applications," noted Folino. The majority of the company's fibre channel OEM customers remain in the development stage, with
several positioned to commence production shipments of fibre channel-based systems in upcoming quarters. Having expanded
to more than one-third of corporate revenues, the fibre channel sector continues to drive the overall revenue and improved
profitability of the company.
Propelled by the growth in fibre channel revenue, gross margin improved from 34 percent in the first quarter of last year to 41
percent in the current September quarter, while operating margin also continued to benefit from the expense controls
implemented a year ago. Leveraging its return to profitable operations and improved cash management, Emulex further improved
its balance sheet as it generated $1.2 million in cash during the first quarter.
Emulex is a leading designer and manufacturer of high-performance network connectivity products including fibre channel,
printer server and network access products. The company's hardware and software-based networking solutions improve
communication in computer networks and enhance data flow between computers and peripherals.
Fibre channel is a high-performance ANSI standard interface that is supported by the 120+ worldwide member Fibre Channel
Association that includes Sun, Hewlett-Packard and Seagate. As a leading developer and supplier of fibre channel technology,
Emulex's fibre channel devices support all implementations of the fibre channel standard, including arbitrated loop, switched
fabric and point-to-point technologies.
The company markets to OEMs and end users through its own worldwide selling organization, as well as two-tier distribution
partners. Corporate headquarters are located in Costa Mesa. News releases and other information about Emulex are available via
Emulex's World Wide Web address at emulex.com .
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: With the exception of historical
information, the statements set forth above include forward-looking statements that involve risk and uncertainties. The company
wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the
forward-looking statements.
Those factors include the following: the fact that the company's markets are characterized by rapidly changing technology,
evolving industry standards and frequent introductions of new products and enhancements, and the company's ability to
respond to such changes; difficulties which the company may experience in consolidating its operations; the fact that the fibre
channel market is at an early stage of development; the highly competitive nature of the markets for the company's products; the
company's ability to attract and retain skilled personnel; the company's reliance on third party suppliers for components used in
the company's products; and the company's reliance on certain OEMs, distributors and key customers.
These and other factors which could cause actual results to differ materially from those in the forward-looking statements are
also discussed in the company's filings with the Securities and Exchange Commission, including its recent filings on Form 10-K
and Form 10-Q.
This news release refers to various products and companies by their trade names. In most, if not all cases, these designations
are claimed as trademarks or registered trademarks by their respective companies.
EMULEX CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended
Sept. 28, Sept. 29,
1997 1996
----------- -----------
Net revenues $ 15,007 $ 15,952
Cost of sales 8,836 10,482
Gross profit 6,171 5,470
Operating expenses:
Engineering and development 2,393 2,500
Selling, general and administrative 3,115 3,322
Consolidation charges --- 1,280
Total operating expenses 5,508 7,102
Operating income (loss) 663 (1,632)
Nonoperating income 14 206
Income (loss) before income taxes 677 (1,426)
Income tax provision (benefit) 68 (485)
Net income (loss) $ 609 $ (941)
Net income (loss) per common
and common-equivalent share $ 0.10 $ (0.16)
Weighted-average number of common
and common-equivalent shares 6,312 5,998
NOTE: Net loss for the quarter ended Sept. 29, 1996, included a
charge of $1,280 related to the company's consolidation of operations,
tax related interest income of $238 and a $342 income tax benefit
related to a recovery under a tax sharing agreement with QLogic
Corp., a former subsidiary of the company. Excluding these
non-recurring items, net of tax, the net loss would have been $345, or
$0.06 per share.
EMULEX CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
Sept. 28, June 29,
1997 1997
------------ ---------
Assets
Current assets:
Cash and cash equivalents $ 1,638 $ 484
Accounts and notes receivables,
net 12,513 14,785
Inventories, net 12,870 12,713
Prepaid expenses and other assets 1,771 1,346
Total current assets 28,792 29,328
Property, plant & equipment, net 6,746 6,961
Prepaid expenses and other assets 803 886
$ 36,341 $ 37,175
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,870 $ 4,294
Accrued liabilities 6,056 6,120
Current installments of
capitalized lease obligations 82 125
Deferred income taxes --- 320
Total current liabilities 9,008 10,859
Deferred income taxes and other
liabilities 2,413 2,040
Total stockholders' equity 24,920 24,276
$ 36,341 $ 37,175
CONTACT: Emulex Corp., Costa Mesa
Paul Folino, president and CEO
714/513-8172 |
