Maxtor announces 8 cents profit. Reports that conditions are getting better in the sector. Anyone have a CC replay number and code? I'd like to listen to Mr. Cannon, if possible.
One thing I find strange in this report is that, if my memory isn't playing tricks on me, they had about 91 million shares outstanding as of their offering just a few short months ago. Now they report that they have about 77 million diluted shares. What happened? Or am I losing my memory even faster than I previously believed?
Maxtor Announces Financial Results for
Third Fiscal 1998 Quarter
MILPITAS, Calif., Oct. 27 /PRNewswire/ -- Maxtor Corp. (Nasdaq: MXTR - news) today announced sales of
$599.8 million for its third fiscal quarter ended September 26, 1998. Net income was $6.1 million or 8 cents per
share, diluted, based on weighted average shares outstanding of 76.9 million. Both sales and earnings increased
from the company's results for the prior quarter. Sales for the company's second quarter ended June 27, 1998
were $531.3 million with net income of $5.4 million or 12 cents per share, diluted, based on weighted average
shares outstanding of 44.8 million prior to the company's IPO in August, 1998.
According to Mike Cannon, Maxtor's Chief Executive Officer, the company distinguished itself in its third
quarter by improving profitability while continuing to build its market position. ''In what has been a
challenging period for our industry, we increased our gross margin and improved our earnings while
increasing unit shipments from the prior quarter,'' said Cannon. Maxtor's unit shipments increased 15%
sequentially to over 4.3 million units in the September quarter.
''Demand for our products was strong this quarter, especially from our OEM customers,'' said Cannon. ''An
important factor underlying our success in the marketplace has been our ability to bring leadership products to
market early and into volume production quickly. Our rigor in maintaining commonality in core technologies
across product lines and our flexible, cell-based manufacturing strategy have contributed to our time-to-market
and time-to- volume leadership,'' said Cannon.
Cannon commented that conditions in the desktop hard disk drive industry appeared to improve during the
quarter, with both company-held and channel inventories down across the industry and pricing pressures
easing toward the end of the quarter.
''Maxtor's goal is to build a profitable business with an operating model that will be viable over a range of
industry conditions. To that end, consistent execution, maintaining a lean expense model, and continuing to
increase the efficiency of our asset utilization are key priorities as we move forward,'' Cannon said. Maxtor's
operating expenses were 10% of sales for the quarter, inventories were down sequentially, and the company
generated cash from operations for the fourth consecutive quarter.
Maxtor Corp. (Nasdaq: MXTR - news) develops, manufactures and markets hard disk drives for desktop
computer systems. Maxtor's current product line includes the DiamondMax 4320, the DiamondMax 3400, the
DiamondMax Plus 2500 and the DiamondMax 2880 series of drives. Maxtor can be reached by phone at (800)2-
MAXTOR or on the Internet at maxtor.com.
Note: This release contains forward-looking statements concerning the hard disk drive industry and Maxtor's
execution. These statements are based on current expectations and are subject to risks and uncertainties which
could materially affect the company's results, including, but not limited to, market demand for hard disk
drives, the company's ability to execute future production ramps and utilize manufacturing assets efficiently,
pricing, and actions by competitors. These and other risk factors are contained in Maxtor's Prospectus as well as
in its 10-K and 10-Qs.
MAXTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share amounts)
(Unaudited)
Three months Nine months
ended ended
Sept. 26, Sept. 27, Sept. 26, Sept. 27,
1998 1997 1998 1997
Revenue $599,165 $383,363 $1,674,482 $895,381
Revenue from
affiliates 632 8,863 6,197 26,947
Total revenue 599,797 392,226 1,680,679 922,328
Cost of revenue 525,933 362,659 1,477,510 880,489
Cost of revenue
from affiliates 667 8,020 5,241 24,633
Total cost
of revenue 526,600 370,679 1,482,751 905,122
Gross profit (loss) 73,197 21,547 197,928 17,206
Operating expenses:
Research and
development 40,189 26,714 110,285 78,631
Selling, general
and administrative 18,643 15,536 52,958 45,944
Stock compensation
expenses 1,160 -- 11,068 --
Total operating
expenses 59,992 42,250 174,311 124,575
Income (loss) from
operations 13,205 (20,703) 23,617 (107,369)
Interest expense (6,573) (10,856) (24,109) (27,480)
Interest and
other income 1,537 395 3,936 2,592
Income (loss) before
provision for
income taxes 8,169 (31,164) 3,444 (132,257)
Provision for
income taxes 2,091 199 2,269 700
Net Income (loss) 6,078 (31,363) 1,175 (132,957)
Net income (loss)
per share - basic $0.08 $(1) $.02 $(1)
Net income (loss)
per share - diluted $0.08 $-- $.02 $--
Shares used in per
share calculation
- basic 75,660,033 -- 54,760,218 --
- diluted 76,860,814 -- 55,491,542 --
(1) There were no common shares outstanding during the three and nine
month periods ended September 27,1997.
MAXTOR CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share amounts)
September 26, December 27,
ASSETS 1998 1997
(Unaudited)
Current assets:
Cash and cash equivalents $162,225 $16,925
Accounts receivable, net 283,537 247,647
Inventories 151,952 155,312
Prepaid expenses and other 22,245 20,814
Total current assets 619,959 440,698
Net property, plant and equipment 112,008 99,336
Other assets 11,201 15,438
Total Assets $743,168 $555,472
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $-- $100,057
Short-term borrowings due
to affiliates -- 65,000
Accounts payable 371,830 231,585
Accrued and other liabilities 105,869 155,563
Total current liabilities 477,699 552,205
Long-term debt and capital lease
obligations due after one year 145,051 224,313
Total Liabilities 622,750 776,518
Total Stockholders' Equity
(deficit) 120,418 (221,046)
Total Liabilities and
Stockholders' Equity $743,168 $555,472
SOURCE: Maxtor Corp.
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