MCDT...a short group from BRCD insiders relative beat it down but I'm in here
McDATA Reports Record Quarterly Revenues and Net Income, Enterprise Product Revenue Surges 215% Over Third Quarter 1999
BROOMFIELD, Colo., Oct. 19 /PRNewswire/ -- Driven by accelerating sales of its market-leading ED-5000 Director, McDATA Corporation (Nasdaq: MCDT - news), a leading storage area network (SAN) company, today reported record revenues and record net income for the third quarter ended September 30, 2000.
Revenue for the quarter totaled $66.8 million, a 195% increase over the third quarter of 1999 and an 18% increase over the second quarter of 2000. Revenue from products, made up primarily of the ED-5000 Director, reached $60.1 million, a 215% increase over the third quarter of 1999 and a 19% increase over the second quarter of 2000. Revenue from software and professional services totaled $2.9 million, increasing 477% over the third quarter of 1999 and increasing 87% over the second quarter of 2000.
Proforma Net Income for the third quarter, excluding non-cash charges related to stock options was $10.8 million, a significant improvement compared to the $0.8 million proforma loss reported for the year ago quarter. Proforma Net Income increased 64% on a sequential basis over the second quarter of 2000. On a diluted basis, proforma earnings per share were $0.10 in the quarter, a significant improvement compared to the proforma loss of $0.01 in the third quarter of 1999 and a 43% increase over the second quarter of 2000.
Proforma Gross Margins increased to 54.2% during the third quarter, showing a 690 basis point improvement over the proforma third quarter of 1999 and a 230 basis point improvement over the proforma second quarter of 2000. McDATA's balance sheet remained solid. Cash, cash equivalents and short-term marketable securities totaled $364 million at quarter end.
Reported Net Income for the third quarter was $9.0 million or $0.08 per share on a diluted basis, compared with a loss of $1.6 million or $0.02 per share for the same period last year.
``It's clear from our performance in the third quarter -- our first as a publicly traded company -- that we have extended our leading position in the expanding storage area networking space,'' said Jack McDonnell, Chairman, Chief Executive Officer and President of McDATA. ``Increasingly, customers with mission critical data are realizing that our director-class products are at the core of a new standard in enterprise storage solutions. It's a solution that is unmatched in terms of availability, scalability, and manageability.''
McDATA's enterprise-class products, anchored by its ED-5000 Director, are part of the driving force behind a fundamental shift in how data is managed within an enterprise. Most other vendors in the switching market have been focusing on smaller scale configurations featuring mid-level products with limits to their scalability and manageability. With McDATA's core to edge products, software and services solution -- solving the hardest storage networking problems first with superior director class products -- the data center can be scaled and managed centrally and in a more efficient manner. In today's mission critical environment, customers increasingly understand that true high-availability, with no tolerated downtime, can only be achieved through a director-class switch configuration.
``Our technology leadership was further underscored during the third quarter with the ED-5000 Director being qualified for use in Hewlett-Packard's HP-UX SAN solution and McDATA's role as part of Microsoft's Trusted Solutions Platform,'' added McDonnell.
Other recent highlights include the announcement of: a partnership with Veritas Software corporation to integrate VERITAS's SANPoint Control (TM) SAN management software with McDATA's ED-5000 Director and ES-1000 switch to improve enterprise-wide SAN management; the McDATA ED-5000 Director now supports FICON attachments to IBM S/390 and z900 enterprise servers hosts and devices with native FICON; and the introduction of the Fabricenter (R) FC-512, which can accommodate two McDATA ED-5000 directors and related equipment while optimizing space in an enterprise's IT environment. Collectively, the highlights underscore the attractiveness of McDATA's product offerings to many of the leading suppliers in the SAN market, and emphasize the dedication to customer service that has been a hallmark of the company for the last 18 years.
``The truly satisfying aspect of the initial public offering process was gaining the ability to communicate openly and aggressively with those in the industry about our status as a leader in one of the fastest growing markets today,'' added McDonnell. ``We believe that all the pieces are in place to take advantage of the opportunity that lies in front of us.''
About McDATA
McDATA (Nasdaq: MCDT - news) specializes in providing highly available, scalable and centrally managed SAN solutions. Our goal is to deliver SAN solutions that address the storage problems of the enterprise. McDATA offers end-to-end SAN solutions designed to improve the reliability and availability of data, greatly simplify SAN management, and reduce the total cost of ownership. McDATA's solutions give IT enterprise administrators the ability to connect and manage multiple SANs from data centers to edge servers-eliminating previously independent islands of corporate information. These enterprise SAN solutions provide IT organizations with comprehensive tools and methodologies, and support to implement robust SANs. McDATA distributes its products through its OEMs, its network of resellers and its Elite Solution Partners. For more information about the company, please visit the McDATA web site at mcdata.com .
Forward-Looking Statements
This press release contains statements about expected future events that are forward-looking and subject to risks and uncertainties. For these statements, we claim the safe harbor for ``forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. Factors that could cause actual results to differ and vary materially from expectations include, but are not limited to, our relationship with EMC Corporation and IBM, a loss of any of our key customers, distributors, resellers or our manufacturer, our ability to expand our product offerings and any transition to new products, component quality and availability, the development of the storage area network and switch markets, any change in business conditions, changes in our sales strategy and product development plans, competition in the storage area network and switch markets, competitive pricing pressures, continued market acceptance of our products, name recognition of our products, delays in the development of new technology, changes in customer buying patterns, one-time events and other important factors and risks disclosed previously and from time to time in our filings with the U.S. Securities and Exchange Commission. These cautionary statements by us should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by us. We cannot always predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. In addition, readers are urged to consider statements that include the terms ``believes'', ``belief'', ``expects'', ``plans'', ``objectives'', ``anticipates'', ``intends'', ``targets'', or the like to be uncertain and forward-looking. All cautionary statements should be read as being applicable to all forward- looking statements wherever they appear. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
McDATA and the McDATA logo are registered trademarks of McDATA Corporation. All other trademarks and product names are the property of their respective owners.
McDATA CORPORATION
CONDENSED PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS (Note 1)
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 2000 1999 2000
Revenue $ 22,661 $66,760 $ 56,851 $170,355
Cost of revenues (Note 1) 11,949 30,599 28,226 79,927
Gross profit 10,712 36,161 28,625 90,428
Operating expenses:
Research and development 6,529 10,650 16,850 27,844
Selling, general and
administrative 4,804 11,223 13,738 28,120
Amortization of deferred
compensation (Note 1) - - - -
Operating expenses 11,333 21,873 30,588 55,964
Income (loss) from
operations (621) 14,288 (1,963) 34,464
Interest income, net (284) 3,119 (709) 3,158
Income (loss) before income
taxes (905) 17,407 (2,672) 37,622
Income tax expense
(benefit) (Note 1) (113) 6,606 (316) 13,817
Net income (loss) $(792) $ 10,801 $(2,356) $23,805
Basic net income (loss)
per share $(0.01) $0.10 $(0.03) $0.25
Shares used in computing
basic net income (loss)
per share 92,002 102,902 91,356 96,721
Diluted net income (loss)
per share $ (0.01) $0.10 $(0.03) $0.23
Shares used in computing
diluted net income
(loss) per share 92,002 112,357 91,356 104,514
Note (1) - The condensed proforma consolidated statements of operations
for all periods presented are for illustrative purposes only and are not
prepared in accordance with generally accepted accounting principles.
These proforma statements show the operating results of the Company,
excluding amortization of deferred compensation of $871 and $2,121 for
the three month periods ended September 30, 1999 and 2000 and $1,375 and
$6,058 for the nine month periods ending September 30, 1999 and 2000.
The after tax impact of these adjustments are $795 and $1,843 for the
three month periods ended September 30, 1999 and 2000 and $1,278 and
$5,291 for the nine month periods ending September 30, 1999 and 2000.
McDATA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 2000 1999 2000
Revenue $ 22,661 $66,760 $ 56,851 $170,355
Cost of revenues 12,218 31,099 28,523 81,363
Gross profit 10,443 35,661 28,328 88,992
Operating expenses:
Research and development 6,529 10,650 16,850 27,844
Selling, general and
administrative 4,804 11,223 13,738 28,120
Amortization of deferred
compensation 602 1,621 1,078 4,623
Operating expenses 11,935 23,494 31,666 60,587
Income (loss) from
operations (1,492) 12,167 (3,338) 28,405
Interest income, net (284) 3,119 (709) 3,158
Income (loss) before
income taxes (1,776) 15,286 (4,047) 31,563
Income tax expense
(benefit) (189) 6,328 (413) 13,050
Net income (loss) $(1,587) $8,958 $(3,634) $18,513
Basic net income (loss)
per share $(0.02) $0.09 $(0.04) $0.19
Shares used in computing
basic net income (loss)
per share 92,002 102,902 91,356 96,721
Diluted net income (loss)
per share $ (0.02) $0.08 $(0.04) $0.18
Shares used in computing
diluted net income
(loss) per share 92,002 112,357 91,356 104,514
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
(unaudited)
December 31, September 30,
1999 2000
Assets
Cash and short term investments $6,897 $363,889
Accounts receivable, net 9,993 10,559
Receivable from Parent 3,591 45,726
Inventories, net 6,952 11,315
Other current assets 5,730 10,112
Total current assets 33,163 441,601
Property and equipment, net 13,800 21,891
Long-term investments - 11,721
Other assets, net 1,461 1,914
Total assets $48,424 $477,127
Liabilities and Stockholders' Equity
Current liabilities $17,350 $42,380
Obligations under capital leases and other 1,450 1,676
Stockholders' equity 29,624 433,071
Total liabilities and stockholders' equity $48,424 $477,127
SOURCE: McDATA Corporation |
