$0.35 - $0.02 below concensus
WESTBORO, Mass.--(BUSINESS WIRE)--Oct. 30, 1997 --
Fourth quarter net income rises seventy percent
Data General Corporation announced today that it has concluded a
record breaking year with the highest fiscal year revenues in its 29
year history. Net income for the year was double the income that was
reported for fiscal 1996.
For the fourth quarter of fiscal 1997, which ended September 27,
the company reported net income of $17 million, or $.35 per share, on
its highest quarterly revenues ever of $404.1 million.
During last year's fourth quarter, the company reported net
income of $9.9 million, or $.24 per share, on revenues of $336.2
million.
For its fiscal 1997 year, the company reported net income of
$55.9 million, or $1.26 per share on its highest ever annual revenues
of $1.53 billion. During fiscal 1996, the company reported net income
of $28.1 million, or $.68 per share on revenues of $1.32 billion.
"Fiscal 1997 was an outstanding year for Data General, as both of
our primary businesses, AViiON servers and CLARiiON storage, have
grown to $500 million," said Data General President and Chief
Executive Officer Ronald L. Skates. "This is solid affirmation that
our strategy and products are in line with the needs of the enterprise
computing marketplace."
Data General has now reported increased earnings per share for
nine consecutive quarters. During this period, the company also has
reported higher year-over-year revenues in each quarter.
Total revenues for the AViiON line during the fourth quarter grew
by 15 percent compared with the prior year quarter. Revenues from
products based on Intel technology more than doubled in the quarter
reflecting strong growth in the NT marketplace, improved channel
business and good customer acceptance of NUMA-based systems. The Intel
growth more than offset the revenue decline of 53 percent from AViiON
systems based on the older Motorola 88K technology.
That success has positioned Data General as the worldwide Windows
NT marketshare leader in enterprise class systems that sell for
between $50,000 and $100,000, according to recently announced 1996
shipment revenue figures from International Data Corporation. The
company also is second in larger NT systems that sell between $100,000
and $250,000.
"The NT market has become our fastest growing business and an
area where our growth has consistently out-performed the market," said
Mr. Skates.
"Our UNIX based AViiON business also produced strong results with
significant contributions during the fourth quarter coming from the
ramp up in shipments of our new AV 20000 NUMA based servers," said Mr.
Skates. "The AV 20000, which uses Non-Uniform Memory Access
technology, is not only being very well received by our existing
customers but has also opened up additional opportunities for Data
General in new growth markets such as data warehousing."
Included among the AV 20000 shipments is a high-end system that
is the industry's first 32-processor NUMA system to be installed and
running at a customer site.
Complementing the AViiON business, Data General's industry
leading CLARiiON storage family also posted solid growth, showing an
increase of 52 percent over last year's fourth quarter revenues.
Data General announced a number of new products during the
quarter. Included among them was the introduction of the SiteStak web
host, the first in the company's planned family of "Internet
appliances" from the THiiN Line business unit.
Last week the company further expanded its NT based AViiON line
with systems ranging from entry-level to enterprise servers. The AV
3650 and AV 6600 servers can be used with up to three of the company's
powerful new fibre-channel CLARiiON disk arrays. Data General is the
first systems vendor to provide NT server users with fibre-channel
based storage.
Data General's financial position was strengthened during the
quarter as it completed the conversion of its $125 million 7 3/4
percent Convertible Subordinated Debentures due 2001. The debentures
were converted by holders into the company's common stock at a rate of
$19.20 per share, effective August 18.
"With cash and marketable securities of $368 million, Data
General is well positioned to support its AViiON, CLARiiON and
Internet growth strategy," said Mr. Skates.
"Entering a new fiscal year for AViiON, we look for improving
overall revenue growth, as the drag of older 88K based AViiON
diminishes. As for CLARiiON, many of our customers have made the
strategic decision to commit to fibre channel technology. As is often
the case, complex technology transitions can take longer than expected
with different development and testing required for each new platform.
We believe these transition issues impacted our fourth quarter
CLARiiON growth, and based on recent forecasts from our resellers, may
also impact our first fiscal quarter. However, having the only full
fibre channel disk array platform on the market should position us for
excellent growth in traditional markets as well as in new storage
markets such as video, multi-media, scientific and imaging," said Mr.
Skates.
"Going forward, with our growing AViiON server and CLARiiON
storage businesses, and the potential we see from our new THiiN Line
appliances for the Internet, we are confident that we are on course
for continued revenue growth and profitability," Mr. Skates concluded.
Statements concerning the company's business outlook, anticipated
profitability, revenues or expenses, and product line growth, together
with other statements made in this press release which are not
historical facts, are "forward-looking statements," as that term is
defined under the Federal Securities Laws. Such statements are subject
to risks and uncertainties which could cause actual results to differ
materially from those projected. Such risks and uncertainties include,
but are not limited to, fluctuations in customer demand, order
patterns and inventory levels, changes and delays in product
development plans and schedules, customer acceptance of new products,
changes in pricing or other actions by competitors, general economic
conditions, as well as other risks detailed in the company's filings
with the Securities and Exchange Commission, including Data General's
Report on Form 10-K for the 1996 fiscal year which ended September 28,
1996, and Form 10-Q for the third quarter of fiscal year 1997 which
ended June 28, 1997.
NOTE - Information on Data General, its products and services,
can be accessed on the Internet at dg.com . Additional
information on the CLARiiON Business Unit can be accessed at
clariion.com . Additional THiiN Line information can be
found at thiin.com
AViiON and CLARiiON are registered trademarks and THiiN Line is a
trademark of Data General Corporation. |
