Vixel Announces Third Quarter 1999 Financial Results; Revenue from SAN Systems Products Increased 167 percent
BusinessWire, Tuesday, October 26, 1999 at 16:35
BOTHELL, Wash.--(BUSINESS WIRE)--Oct. 26, 1999--Vixel Corporation
(NASDAQ:VIXL), a leading provider of Storage Area Network (SAN)
solutions, today announced financial results for its third quarter,
ended October 3, 1999.
Total revenue for the 1999 third quarter was $8.9 million, which
compares to $7.9 million in the third quarter of 1998, an increase of
13%. Revenue from the company's SAN system products, which includes
fibre channel switches and hubs, increased 167% to $6.6 million in the
third quarter 1999, compared with $2.5 million in the same period a
year ago. As anticipated, component revenue continued to decrease and
was $2.3 million in the third quarter of 1999, down from $5.4 million
in the same quarter last year.
For the nine months ended October 3, 1999, revenue increased to
$31.0 million, from $29.1 million during the comparable nine-month
period in 1998. SAN systems revenue for the nine months was up
sharply, approximately 93 percent, to $17.4 million from $9.0 million
in the same period last year.
Vixel's net loss for the third quarter of 1999 was $6.5 million,
or $0.37 per share, compared to a net loss of $4.9 million, or $0.32
per share in the third quarter of 1998. The net loss for the nine
months ended October 3, 1999 was $16.4 million, or $0.99 per share,
compared to a loss of $8.8 million, or $0.60 per share in the same
period a year ago. The 1998 results include a $9.1 million gain from
the sale of a division. All per-share amounts are computed on a pro
forma basis, which assumes conversion of all preferred stock from the
original date of issuance.
Jim McCluney, president and CEO, Vixel Corporation, commented:
"We are very pleased with our accomplishments this quarter,
particularly the positive customer response to our new Vixel(R) 8100
Fabric Switch, and Vixel(R) 2100 Zoning Managed Hub, which began
shipping in June and September, respectively. Our third quarter
revenue continued to show healthy growth in our expanding SAN system
product line. The SAN market presents a compelling market opportunity
as the typical IS manager is forced to manage substantially more and
more complex storage issues that require fully integrated, reliable,
and scalable solutions. That complexity is driving the demand for SAN
switches, hubs, and software."
The Vixel 2100 Zoning Managed Hub, supported by industry-leading
SAN InSite(TM) Management Software 2.2, allows on-the-fly creation of
up to four independent loops, each operating at 100 MB/second. The
product is designed to restrict Loop Initialization Primitives (LIP)
from traveling across loops (zones), a capability typically only
available in more expensive switches. The product allows the
development of lower cost back-up, restore and multi-media
applications. The Vixel 2100 is fully enabled by Java-based SAN InSite
2.2 which also began shipping in September.
Vixel's common stock began trading on NASDAQ on October 1, 1999
following an initial public offering of 4.3 million shares of common
stock at $18.00 per share. The offering was underwritten by BancBoston
Robertson Stephens Inc., Bear, Stearns & Co. Inc., and Needham &
Company, Inc. On October 15, 1999, the underwriters purchased an
additional 645,000 shares of common stock at $18.00 per share through
the exercise of their over-allotment option. Vixel realized total net
proceeds from the offering of $82.8 million.
Third Quarter Highlights
-- Vixel's three new product introductions in the quarter included
the unveiling of its 2100 Zoning Managed Hub. Vixel also
introduced its Java-based SAN InSite version 2.2, which can be
directly installed on Sun Solaris, Microsoft NT 4.0, and Linux.
Also introduced in the quarter was the 5100 V-GLM, providing
full-speed transport of Fibre Channel data to host bus adapters
and other Fibre Channel devices.
-- Vixel and MetaStor Storage Solutions, a division of LSI Logic
Storage Systems, announced the certification of the Vixel 8100
Fabric Switch with the MetaStor S-Class storage system. The
company also joined Legato Systems' Celestra Consortium, a forum
to facilitate open technology.
-- Vixel named two new Premier Value-Added-Resellers - Polaris, a
leading systems integrator providing solutions for IT
infrastructure reliability, enterprise relationship management,
and storage networking; and CoComp, a provider of storage
management systems, backup and archival solutions to commercial
firms and government organizations.
-- In September, the Company announced the Vixel Integration Partner
(VIP) Program, designed to increase market presence and strength
of Vixel resellers through sales training courses, competitive
information, discounted demo equipment and early access to new
products.
-- In July and August, Vixel announced the appointment of three key
vice presidents to oversee worldwide sales, customer satisfaction
and corporate quality, and marketing.
Except for historical information contained herein, this news
release contains forward-looking statements that are subject to risks
and uncertainties that may cause actual results to differ materially
from the results discussed in the forward-looking statements. Factors
that may cause such a difference include risks affecting development
of the SAN market, the competitiveness and performance of Vixel's
products in this rapidly changing market and the ability of Vixel to
meet evolving product standards required by customers and others
involved in the distribution channel for SAN products. Further
information on the factors and risks that could affect Vixel's
business, financial condition and results of operations are included
in the Risk Factors section of Vixel's public filings with the
Securities and Exchange Commission, including the Registration
Statement on Form S-1 (File No. 333-81347), that are available at
www.sec.gov.
About Vixel
Vixel Corporation is a leading provider of Storage Area Network
(SAN) solutions. The company's comprehensive product portfolio of
switches, hubs and transceivers with an integrated management software
application delivers a reliable, interoperable solution to its
customers and partners. SAN InSite is Vixel's comprehensive management
software for SANs, providing remote control and diagnostics for Fibre
Channel switches, hubs and transceivers from a single console,
reducing the administration and overhead of implementing a SAN.
Established in 1991, the company continues to develop innovative Fibre
Channel products to optimize the deployment, performance and
management of SAN solutions. Vixel products are available through its
network of value-added resellers, alliances and OEMs.
For more information, visit Vixel's web site at www.vixel.com.
Vixel Corporation is headquartered at 11911 North Creek Parkway South,
Bothell, Washington 98011 and can be contacted by phone at
425/806-5509 or e-mail at marketing@vixel.com.
-tables to follow
*T
VIXEL CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
Oct. 3, Sept. 27, Oct. 3, Sept. 27,
1999 1998 1999 1998
------- -------- -------- ---------
Revenue:
SAN systems $ 6,602 $ 2,475 $ 17,408 $ 9,032
Components 2,301 5,393 13,554 20,070
------- ------ ------ -------
Total revenue 8,903 7,868 30,962 29,102
Cost of revenue 6,255 6,487 21,928 23,219
------- ------ ------ -------
Gross profit 2,648 1,381 9,034 5,883
------- ------ ------ -------
Operating expenses:
Research and
development 3,340 2,813 9,573 8,062
Acquired in-process
technology -- -- -- 5,118
Selling, general
and administrative 3,660 2,942 10,324 9,179
Amortization and
writedown of goodwill
and intangibles 340 369 1,020 980
Amortization of
deferred compensation 1,271 -- 3,054 --
------- ------ ------ -------
Total operating
expenses 8,611 6,124 23,971 23,339
------- ------ ------ -------
Loss from operations (5,963) (4,743) (14,937) (17,456)
Other (expense)
income, net (564) (158) (1,445) 8,625
------- ------ ------ -------
Net loss $ (6,527) $ (4,901) $(16,382) $ (8,831)
Net loss available
to common stockholders $ (6,576) $ (4,950) $(16,531) $ (8,979)
------- ------ ------ -------
Basic and diluted
net loss per share $ (1.36) $ (1.77) $ (4.18) $ (3.95)
------- ------ ------ -------
Weighted average
shares outstanding $ 4,841 2,795 3,957 2,271
------- ------ ------ -------
Pro forma net
loss available to common
stockholders $ (6,527) $ (4,901) $(16,382) $(8,831)
------- ------ ------ -------
Pro forma basic
and diluted net loss
per share $ (0.37) $ (0.32) $ (0.99) $ (0.60)
------- ------ ------ -------
Pro forma weighted-average
shares outstanding 17,505 15,458 16,620 14,739
------- ------ ------ -------
VIXEL CORPORATION
CONDENSED BALANCE SHEET
(in thousands)
Oct. 3, Jan. 3,
1999 1999
--------- --------
(unaudited)
Assets
Current assets
Cash and investments $ 954 $6,331
Accounts receivable, net 6,540 4,781
Accounts receivable,
Underwriters 71,982 --
Inventories 1,899 1,546
Prepaid expenses and other 2,158 1,867
------- ---------
Total current assets 83,533 14,525
Property and equipment, net 7,290 7,378
Goodwill, intangibles and
other assets, net 4,729 6,262
------- ---------
Total assets $ 95,552 $ 28,165
------- ---------
Liabilities and
stockholders' equity
Current liabilities
Line of credit $ 2,839 $ --
Current portion
of long-term debt 11,278 1,564
Accounts payable 10,067 4,821
Accrued liabilities 7,184 7,855
------- ---------
Total current liabilities 31,368 14,240
Long-term debt
and capital leases 3,721 12,856
Other long-term
liabilities 1,000 1,000
------- ---------
Total liabilities 36,089 28,096
------- ---------
Manditorily redeemable
preferred stock 20,150 19,993
------- ---------
Stockholders' equity
(deficit):
Capital stock 111,937 36,318
Accumulated deficit (72,624) (56,242)
------- ---------
Total stockholders'
equity (deficit) 39,313 (19,924)
------- ---------
Total liabilities,
manditorily redeemable
stock and stockholders'
equity $ 95,552 $ 28,165
------- ---------
*T
CONTACT: Vixel Corporation
Kurtis L. Adams, 425/806-5509
ir@vixel.com
or
Media contact -
Vixel Corporation
Christine Goetz, 425/806-4511
marketing@vixel.com
KEYWORD: WASHINGTON
INDUSTRY KEYWORD: EARNINGS COMPUTERS/ELECTRONICS SOFTWARE
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