MINNEAPOLIS, April 28 /PRNewswire/ -- Ancor Communications, Inc.
(Nasdaq: ANCR) today reported a net loss of $2,162,000, or $.09 per diluted
share, on net sales of $1,520,000 for the first quarter ended March 31, 1999.
In its 1998 first quarter, the company reported a net loss of $2,765,000, or
$.25 per diluted share, on net sales of $1,042,000.
Ken Hendrickson, Ancor's chairman and chief executive officer, said 1999
first quarter net sales primarily reflect shipments of the company's GigWorks
Fibre Channel switches to original equipment manufacturers (OEMs) in the
Storage Area Network (SAN) market. First quarter net sales also included fees
from INRANGE Technologies under the terms of a previously announced licensing
agreement.
"Shipments to OEM customers are slowly beginning to ramp," said
Hendrickson. "During the quarter, we continued adding technical and account
management personnel in anticipation of higher production volumes. In
addition, we continue to aggressively pursue additional OEM agreements."
Earlier this week, the company announced that Hitachi Data Systems (HDS)
has selected Ancor to provide Fibre Channel switches for its Freedom Data
Networks offering. Ancor's GigWorks switches are being used in a
Hitachi-developed SAN for a major financial services institution.
"We believe HDS's selection of our GigWorks Fibre Channel switches for
this showcase implementation of its UNITY SAN solution is a strong endorsement
of the value, reliability and technical superiority of our product," said
Hendrickson. "While revenues from this relationship will be modest in the
current year, over the longer term we expect this alliance to evolve into one
of our largest OEM relationships."
In addition to the Hitachi Data Systems agreement, Ancor also recently
signed OEM agreements with MicroNet Technology Inc., a leading supplier of
high-performance RAID disk arrays, and with nStor(TM) Corporation Inc., a
leading manufacturer of RAID and information storage solutions. MicroNet
plans to include Ancor's GigWorks MKII Fibre Channel switches in its FibreFlex
storage area network solution. nStor will also integrate GigWorks switches
into its storage area network offering.
Ancor also entered into its first distribution relationship with a major
storage integrator. CONSAN, a Gates/Arrow company, will integrate and
distribute Ancor's GigWorks Fibre Channel switches as part of a prepackaged
SAN. Under the agreement, CONSAN will package and test a SAN solution
employing Ancor's GigWorks switches and then make it available to some
5,000 value-added resellers.
"We are encouraged by our wins in the marketplace over the past two
quarters," said Hendrickson. He attributed Ancor's success to its superior
technology and product roadmap.
During the 1999 first quarter, Ancor received the final of three scheduled
$3.0 million payments from INRANGE Technologies under a licensing and royalty
agreement the companies signed in September 1998. As previously disclosed,
Ancor is recording the license fee as revenue over the five-year term of the
contract and royalty revenue as INRANGE products ship. The company's cash
position at March 31, 1999 was essentially unchanged from December 31, 1998 as
a result of the payment from INRANGE and the increase in first quarter net
sales.
Forward-Looking Statements
Information contained in this news release other than historical
information should be considered forward-looking and subject to risks and
uncertainties. Factors which may affect whether such forward-looking
statements can be achieved include: market acceptance of Fibre Channel
products in general, the timing of the adoption of Fibre Channel by the
marketplace, acceptance of Ancor's products in the marketplace, the ability of
Ancor to compete with other companies offering Fibre Channel switches and
products, the timing of customer orders, including whether customers will
purchase products from the Company at the rates and times projected by those
customers, and the ability of INRANGE to successfully market and sell Fibre
Channel products incorporating technology licensed from the Company.
Retention of $2.0 million of prepaid royalties from INRANGE is contingent on
Ancor's completion of certain deliverables defined in the contract with
INRANGE.
About Ancor Communications
Ancor Communications, Inc. provides GigWorks(TM) high-performance Fibre
Channel switches for storage and data-intensive network solutions including
storage-area networks (SANs). The company was the first to deliver a Fibre
Channel switch, and the first to top the one-gigabit performance level. Ancor
is a member of the Fibre Channel Association, the Storage Networking Industry
Alliance, the Fibre Channel Community, the ANSI Standards Committee and the
University of New Hampshire Fibre Channel Consortium to promote the
advancement of Fibre Channel standards and interoperability. Information
about Ancor is available on the World Wide Web at ancor.com .
Editors Note: GigWorks(TM), ANCOR(TM) and the Ancor logo are the marks and
property of Ancor Communications, Inc. For more information about Fibre
Channel technology and Ancor Fibre Channel solutions, call 800-342-7379 or
access World Wide Web site ancor.com . Media, contact Mary Miller,
Ancor, at 612-932-4071 or marym@ancor.com or Aaron Pearson, Shandwick, at
612-832-5000 or apearson@shandwick.com.
Forward-looking statements as defined by the Private Securities Litigation
Reform Act of 1995 are qualified by the risk factors outlined in the documents
Ancor Communications, Inc. files with the Securities and Exchange Commission.
ANCOR COMMUNICATIONS, INCORPORATED
BALANCE SHEETS
March 31, December 31,
1999 1998
ASSETS (Unaudited)
Current Assets:
Cash and cash equivalents $ 1,711,433 $ 3,477,236
Short term investments 5,977,696 3,970,137
Accounts receivable, less allowances
of $39,492 and $39,492, respectively 952,416 442,600
Inventories 1,613,249 1,288,868
Prepaid expenses and other
current assets 73,925 110,398
Total current assets 10,328,719 9,289,239
Equipment, net of accumulated
depreciation 3,092,433 3,120,618
Patents, prepaid royalties, and other
assets, net of accumulated amortization 172,717 195,668
Capitalized software development costs
net of accumulated amortization 61,293 132,568
TOTAL ASSETS $13,655,162 $12,738,093
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current maturities of long term debt $ 110,556 $ 139,791
Accounts payable 1,102,309 448,383
Accrued liabilities 779,725 955,676
Unearned revenue, current 2,061,241 2,146,936
Total current liabilities 4,053,831 3,690,786
Long-term unearned revenue, less current 6,398,020 3,727,919
Long-term debt, less current maturities 95,171 110,997
Shareholders' Equity
Capital Stock 240,714 232,660
Additional paid-in capital 46,620,342 46,566,386
Accumulated deficit (43,752,916) (41,590,655)
Total shareholders' equity 3,108,140 5,208,391
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $13,655,162 $12,738,093
ANCOR COMMUNICATIONS, INCORPORATED
STATEMENT OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
1999 1998
Net sales $1,519,713 $1,042,227
Cost of goods sold (Note 2) 664,805 699,608
Gross profit 854,908 342,619
Operating expenses
Selling, general and administrative 1,751,833 1,711,117
Research and development 1,326,587 1,449,206
Total operating expenses 3,078,420 3,160,323
Operating loss (2,223,512) (2,817,704)
Nonoperating income (expense)
Interest expense (6,183) (13,055)
Other, primarily interest income 67,435 65,739
Net loss (2,162,260) (2,765,020)
Accretion on convertible
preferred stock (7,681) (151,287)
Net loss attributable to common
shareholders $(2,169,941) $(2,916,307)
Basic and diluted net loss
per common share $ (0.09) $ (0.25)
Weighted average common shares
outstanding 24,002,103 11,884,248
SOURCE Ancor Communications, Inc.
CO: Ancor Communications, Inc.
ST: Minnesota
IN: CPR
SU: ERN
04/28/99 07:03 EDT prnewswire.com
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