October 25, 1999 16:48
Gadzoox Networks Reports Record Results for Second Quarter
SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 25, 1999--Gadzoox Networks, Inc. (Nasdaq:ZOOX), a leading provider of SAN (storage area
network) products, today reported record results for the second quarter of fiscal 2000 ended September 30, 1999.
For the quarter, the Company recorded net revenues of $11.1 million, an 89 percent increase over net revenues of $5.9 million reported for
the quarter ended September 31, 1998.
The Company reported a net loss of $1.9 million for the quarter ended September 30, 1999, an improvement of $1.7 million over the $3.6
million loss in the comparable period of the prior year. The Company's pro-forma net loss for the quarter ended September 30, 1999 was
$0.08 per share compared with a pro-forma net loss of $0.21 per share for the comparable period of the prior year.
The Company's gross margin also improved to 43% for the quarter ended September 30, 1999, up from 25% for the same quarter in fiscal
1999 and up from 41% for the quarter ended June 30, 1999, the Company's first fiscal quarter of fiscal 2000. On July 20, 1999, Gadzoox
completed its initial public offering of 4,025,000 shares of its common stock from which the Company received net proceeds of
approximately $77.5 million.
"We are extremely pleased with our second quarter results," said Bill Sickler, Gadzoox president and chief executive officer. "In addition
to posting record revenues, we made significant strides in three other key areas: increased gross margin, increased manufacturing
capacity and commencement of shipments of our Capellix switch product. With the addition of the Capellix switch, Gadzoox' products
address the widest range of market requirements from entry-level hubs to high-end switches."
The Company began shipment of its Capellix modular SAN switch. With the ability to be configured with up to 34-ports, the Capellix
switch offers the industry's highest port density to support large server clusters, such as the 32-node clusters enabled by Novell's
NetWare Cluster Services (NCS) and Microsoft's Windows 2000 operating system. In conjunction with the launch of NCS, Novell
approved the Capellix product for use as a reference switch for NCS clusters. The NCS product, powered by a Gadzoox SAN, was
awarded Best-of-Show honors at the Network+Interop show that took place in Atlanta, Georgia from September 15 through 17. In
conjunction with the availability of the Capellix switch, Gadzoox is actively working to qualify the product at leading system and storage
OEMs.
The Company also announced that it has maintained its leading position in SAN management with the release of its Ventana SAN
Manager version 3.0 software product. The Ventana SAN management product is the first to comply with a new SAN management
specification that was recently made available by the Internet Engineering Task Force (IETF). Working in concert with industry leaders
such as EMC Corporation, Gadzoox contributed to the efforts of the FibreAlliance group to accelerate the development of and
deployment of products to the new specification.
To assist in the assessment of trends and opportunities in the dynamic environment of the SAN market, the Company has formed a
Technical Advisory Board. The new group is tasked with providing strategic guidance to the Company in the areas of new technologies
and business development. The Technical Advisory Board will be chaired by Alistair Black, founder and chief technical officer, and will
include Howey Chin, chief strategy officer and Wayne Rickard, senior vice president of research and development. To focus on their new
roles, Dr. Black and Mr. Chin will transition out of their day-to-day responsibilities at the company.
The statements in this news release relating to future events or predictions involve known and unknown risks and uncertainties which
may cause Gadzoox' actual results in future periods to be materially different from any performance suggested in this release. Such factors
may include, but may not necessarily be limited to, fluctuations in customer demand, both in timing and in volume, the fact that the SAN
market is new and evolving, the Company's dependence on a limited number of products, a significant portion of which are sold to a
limited number of partners, the Company's dependence on its contract manufacturer, competition in the Company's industry and the
timing of new technology and product introductions. Further, the Company operates in an industry sector where securities values are
highly volatile and may be influenced by economic and other factors beyond the Company's control. In the context of forward looking
information provided in this news release, reference is made to the discussion of risk factors detailed in the Company's registration
statement on Form S-1 filed with the Securities and Exchange Commission which became effective on July 19, 1999, as well as subsequent
filings.
Gadzoox Networks Offers Broad Line of SAN Products
Gadzoox, a leader in the SAN market, offers a broad range of advanced products including Bitstrip(tm) (gigabit Fibre Channel hub),
Gibraltar(tm) (managed Fibre Channel hub), Ventana(tm) (SAN management software application), Denali(tm) (switch supporting
embedded backup agent), and Capellix(tm) (modular and highly scalable switch).
About Gadzoox Networks, Inc.
Gadzoox Networks, Inc. (Nasdaq:ZOOX) is a leader in SAN (storage area network) products. The Company provides networking
solutions for enterprise storage with scalable, managed SAN solutions based on Gadzoox' Fibre Channel hubs, switches and management
products. Serving as modular building blocks, Gadzoox' products are designed to address the growth in enterprise data through the
evolving capabilities of SANs. According to the most recent Fibre Channel report from market research firm International Data
Corporation dated January 1999, Gadzoox is the market share leader in combined hub and switch port shipments in 1997 and 1998.
Gadzoox is an ISO 9001 certified Company. Gadzoox corporate headquarters is located at: 5850 Hellyer Avenue, San Jose, CA 95138. For
more information, visit the company's Web site at www.gadzoox.com or call 888/423-3222.
Condensed Statements of Operations
(In thousands)
(Unaudited)
Three Months Ended Six Months Ended
Sept. 30, Sept 30, Sept. 30, Sept 30,
1999 1998 1999 1998
Net revenues $ 11,081 $ 5,851 $ 20,292 $ 11,257
Cost of revenues 6,325 4,412 11,740 8,593
Gross margins 4,756 1,439 8,552 2,664
Operating expenses:
Research and development 4,540 3,411 8,458 6,523
Sales and marketing 1,914 1,240 3,802 2,587
General and administrative 866 301 1,629 563
Amortization of deferred
compensation 321 87 643 115
Total operating expenses 7,641 5,039 14,532 9,788
Loss from operations (2,885) (3,600) (5,980) (7,124)
Net loss $ (1,949) $ (3,640) $ (5,185) $ (7,185)
Basic net loss per share $ (0.09) $ (0.75) $ (0.39) $ (1.56)
Weighted average shares
used in computing net
loss per share 21,199 4,730 13,455 4,600
Pro-forma basic net loss
per share $ (0.08) $ (0.21) $ (0.24) $ (0.42)
Weighted average shares
used in computing
pro-forma basic net
loss per share 24,222 17,051 21,891 17,202
Selected Balance Sheet Data
September 30, March 31,
1999 1999
(unaudited)
Cash and short-term investments $ 82,996 $ 12,202
Total current assets 97,196 23,794
Total assets $102,168 $ 28,598
Current liabilities $ 8,112 $ 7,882
Total liabilities 13,548 22,939
Total equity $ 88,620 $ 5,659
Note to Editors: Gadzoox and the Gadzoox logo are registered trademark of Gadzoox Networks, Inc. Bitstrip, Denali, Gibraltar, Ventana and
Capellix are trademarks of Gadzoox Networks, Inc. All other trademarks are property of their respective owners. |
