Earnings:
JTS Corporation Reports Record Results For Fourth Quarter
PR Newswire - March 05, 1997 08:59
FINANCIAL JTS CPR ERN V%PRN P%PRN
SAN JOSE, Calif., March 5 /PRNewswire/ -- JTS Corporation (AMEX: JTS)
today announced record revenues for its fourth quarter and fiscal year ended
February 2, 1997. Record unit shipments for JTS disk drives lifted the
Company's revenues for the quarter ended February 2, 1997 to $55.5 million, up
67% from the third quarter of fiscal 1997. Revenues from JTS disk drive
operations for the fourth quarter of fiscal 1997 grew 337% to $53.7 million
compared to revenues of $12.7 million for the comparable period a year ago,
For fiscal year 1997, the Company's disk drive operations generated revenue of
$119.5 million, up 560% from fiscal 1996 disk drive revenues of $18.8 million.
JTS Corporation incurred a net loss of $25.8 million for the fourth
quarter of fiscal 1997 compared with a net loss of $125 million incurred in
the third quarter of fiscal 1997. The Company reported a gross margin deficit
of $5.7 million in the fourth quarter of fiscal 1997, which was driven
primarily by inventory write-offs associated with a mix shift to its higher
performance 3.5-inch disk drive products. These new products will begin
shipping in the first quarter of fiscal 1998. The Company also wrote-off
$2.2 million of obsolete equipment associated with the initial production of
its first generation 3.5-inch disk drives.
On July 30, 1996, JTS Corporation and Atari Corporation merged, and
therefore only the third and fourth quarters of the current fiscal year
reflect the combined operations of the merged company. The third quarter net
loss included a $110 million non-cash charge for in-process research and
development resulting from the merger. In addition, $2.9 million of expenses
included in each of the third and fourth quarters of fiscal year 1997
represents amortization of other intangibles arising from the merger. Prior
to the merger, Atari's business had been downsized considerably and will not
be a significant part of the Company's operations going forward.
"We are very pleased with the record revenue results for the forth quarter
and for the 1997 fiscal year, particularly regarding the revenue growth rate
of 67% in comparing JTS' fourth quarter revenues to it's third quarter
revenues," said Tom Mitchell, President and Chief Executive Officer of JTS.
"As announced in our fourth fiscal quarter, JTS will begin shipment this month
of the latest addition to its Nordic family of hard disk drives, the
2.1GB 3.0-inch disk drive for notebook computers. In addition, the Company
will commence production of its new Champion Family of 3.5-inch performance
IDE disk drives focused on major OEMs and its existing distribution network."
In January 1997, JTS completed a $25 million private financing involving
the sale of its Series C Convertible Preferred Stock, which are non-voting
shares convertible into JTS common stock. At the end of the fiscal year, the
Company had $24.8 million in cash.
JTS Corporation, with headquarters in San Jose, California, was founded in
1994 to design, manufacture and supply enhanced-capacity hard disk drives for
the notebook and desktop personal computer market. JTS offers an innovative
line of ultra-slim 3.0-inch disk drives for portable computers that provide
80% more capacity than 2.5-inch competitive alternatives. The company employs
more than 6,800 people worldwide including manufacturing facilities in Madras,
India.
For further information, contact JTS Corporation at 166 Baypoint Parkway,
San Jose, California 95134. Phone: 408-468-1663, Fax: 408-468-1619.
Except for the historical information contained herein, the discussion in
this press release contains forward-looking statements that involve certain
risks and uncertainties. The Company's actual results could differ materially
from those discussed here. Factors that could cause or contribute to such
differences include, but are not limited to, the company's limited operating
history; the need for additional financing; the uncertainty of market
acceptance; the highly competitive market; the Company's ability to achieve
initial volume shipments of the Company's products mentioned in this press
release; the Company's dependence on its relationship with Compaq Computer
Corporation, its dependence on a single manufacturing facility and those risk
factors discussed from time to time in the Company's SEC filings, including
but not limited to the Company's Registration Statement on Form S-1
(333-17093), in addition to those discussed elsewhere in this press release.
JTS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)
February 2, January 28, Dec. 31,
1997 1996 1995
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
(including $1,800, $700
and $700 held as restricted
balances at February 2, 1997,
January 28 1996, and December 31
1995, respectively) $24,766 $31,790 $28,941
Marketable securities -- 16,460 21,649
Accounts receivable (less
allowances for returns and
doubtful accounts:
February 2, 1997 $1,615;
January 28, 1996 $5,390;
December 31, 1995 $4,221) 21,445 2,784 2,468
Inventories 17,750 5,666 10,934
Other current assets 2,341 1,895 1,134
Total current assets 66,302 58,595 65,126
Equipment and Leasehold
Improvements 27,674 599 1,429
Real estate held for sale -- 10,443 10,468
Acquired Technology 20,068 -- --
Goodwill 16,673 -- --
Other assets -- 538 546
TOTAL ASSETS $130,717 $70,175 $77,569
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank Line of Credit $10,540 $ -- $ --
Accounts Payable 33,327 4,316 4,954
Other Accrued Liabilities 20,593 5,862 5,088
TOTAL CURRENT LIABILITIES 64,460 10,178 10,042
LONG-TERM OBLIGATIONS 53,851 42,354 42,354
REDEEMABLE PREFERRED STOCK:
$.01 Par value - authorized
9,960,000 shares; none outstanding;
$.01 par value Series B
convertible preferred - authorized
15,000 shares: 15,000 shares
outstanding; $.01 par value
Series C convertible preferred
- authorized 25,000 shares;
25,000 shares outstanding 40,000 -- --
COMMON STOCK, $.01 par value
-- authorized, 150,000,000
shares; (outstanding: February
1997, 104,744,765; January 1996,
63,690,418; December 1995,
63,687,118) 1,047 637 637
ADDITIONAL PAID-IN CAPITAL 311,046 196,213 196,209
NOTES RECEIVABLE FROM
STOCKHOLDER (2,510) -- --
UNREALIZED GAIN ON MARKETABLE
SECURITIES -- 3,930 7,088
ACCUMULATED TRANSLATION
ADJUSTMENTS -- (694) (663)
ACCUMULATED DEFICIT (337,177) (182,443) (178,098)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 130,717 $ 70,175 $ 77,569
JTS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Three Months and Fiscal Year Ended February 2, 1997 and
December 31, 1995 and For The One Month Transition Period Ended
January 28, 1996
(Amounts in Thousands, Except Per Share Amounts)
One Month
Three Months Ended Fiscal Year Ended Period Ended
Feb 2, Dec 31, Feb 2, Dec 31, Jan 28,
1997 1995 1997 1995 1996
(Unaudited)
NET SALES $ 55,474 $ 2,802 $90,530 $14,626 $735
COST AND EXPENSES:
Cost of sales 61,206 25,700 100,328 44,234 6,156
Acquired in-process
research and
development -- -- 110,012 -- --
Amortization of existing
technology 1,961 -- 3,923 -- --
Research and
development 6,587 858 12,849 5,410 161
Selling, general and
administrative 7,362 6,060 13,067 18,647 1,089
Total operating
expenses 15,910 6,918 139,851 24,057 1,250
OPERATING LOSS (21,642) (29,816) (149,649) (53,665) (6,671)
Exchange gains (loss) 14 15 (590) 13 (115)
Other income
(loss), net (3,313) 1,496 394 2,670 2,533
Interest income 222 597 895 3,133 112
Interest expense (1,130) (569) (3,545) (2,309) (189)
LOSS BEFORE
EXTRAORDINARY
CREDIT (25,849) (28,277) (152,495) (50,158) (4,330)
Extraordinary credit -
gain on entinguishment
of 5-1/4 convertible
subordinated
debentures -- 582 -- 582 --
NET LOSS $(25,849) $(27,695) $(152,495) $(49,576) $(4,330)
LOSS PER COMMON SHARE:
Loss before extraordinary
credit (0.25) (0.44) $(1.81) (0.79) (0.07)
Net loss (0.25) (0.43) $(1.81) (0.78) (0.07)
Number of shares used
in computations 104,707 63,857 84,322 63,697 63,687
SOURCE JTS Corporation
CONTACT: Kimberly Toney, Investor Relations Rep, 408-468-1663, or
Virginia Walker, Chief Financial Officer, 408-468-1800, both of JTS
Corporation |
