Mylex Posts Third Quarter 1998 Profit Before Restructuring Charge
Revenue Up Over Prior Year and Prior Quarter
FREMONT, Calif.--(BUSINESS WIRE)--Oct. 22, 1998--Mylex Corporation
(Nasdaq:MYLX - news) today announced results for the third quarter and nine months
ended Sept. 26, 1998.
Third quarter sales were $36.2 million, up 23% from $29.4 million reported in the third
quarter of 1997 and up 13%, sequentially from the $32.1 million reported for the second
quarter of 1998.
Excluding the $4.3 million non-recurring charges announced in July 1998, the company
would have reported a net profit of $0.6 million, or $0.03 a share, for the third quarter.
This compares with a net loss of $1.1 million, or ($0.05) per share, for the same quarter
in the prior year and a loss of $2.1 million, or ($0.10) a share, for the immediately
preceding quarter of 1998.
Including the charge, the company reported a net loss for the third quarter of $2.1 million,
or ($0.11) per share.
The financial impact of all restructuring actions was recorded in the third quarter of 1998
and resulted in non-recurring charges of $4.3 million. The $3.1 million restructuring
charge to operating expenses includes the cost of severance compensation, facilities
consolidation, and the write-off of assets utilized in affected operations.
The remaining charge of $1.2 million was for the write-off of associated Network Power
& Light(TM) inventory and is included in cost of sales.
The year-over-year improvement in sales is primarily attributable to the growth in sales to
existing OEM customers, as well as increased acceptance, and resulting sales, of Mylex's
new RAID controller product portfolio. While the return to profitability in the third
quarter of 1998 was partially due to this sales growth and an improvement in gross
margins, the substantial reduction in operating expenses resulting from the previously
announced restructuring also contributed significantly to the company's profitable
quarter.
Specifically, Mylex terminated its Network Power & Light development activities and
streamlined its organizational infrastructure. These actions produced an over $2 million
reduction in operating expense reductions for the third quarter as compared with the
second quarter of 1998, before the one-time charge to cover restructuring costs.
''I am pleased to report that Mylex returned to profitability in the third quarter,'' said Al
Montross, president and CEO. ''We believe this quarter's results mark an important first
step towards improved financial performance for Mylex and sends a strong message to
our stockholders and customers.''
Montross continued, ''We experienced strong sales growth in Europe, the Pacific Rim,
and through domestic distribution channels. We are also encouraged by customer
acceptance of our newer product lines.''
''During the quarter, Mylex successfully delivered two new products to market, each
focusing on unique business segments. The products: AcceleRAID 250, an aggressively
priced entry-level RAID adapter for servers and workstations; and eXtremeRAID, a RAID
controller that significantly eliminates I/O bottlenecks in mid-range and enterprise-class
storage systems.''
Colleen Gray, Mylex's VP Finance and CFO, stated, ''We ended the third quarter with
over $40 million in cash and cash equivalents and short-term investments after
repurchasing $0.8 million of Mylex's stock and satisfying approximately $1.0 million of
restructuring obligations. The increase in third quarter sales, combined with
improvements in inventory turns, has contributed to maintaining our strong cash
position.''
In the third quarter, the company repurchased a total of 135,000 shares of common stock
at a cost of $0.8 million. To date, the company has repurchased a total of 1.4 million
shares at a cost of $12 million.
Sales for the nine months were $96.6 million, compared with $92.3 million for the same
period last year. The net loss for the nine months was $6.1 million, or ($0.31) per share,
in comparison to a net loss of $5.3 million, or ($0.26) per share, for the same nine
months of 1997.
This looks good so far: Sales up 23% from q3 97! Expenses, costs down. Looking forward to brighter days ahead. |
