My Vixl is flying in after hrs
Vixel Corporation Announces Third Quarter 2000 Financial Results
Quarterly Net Loss Better Than Expected
Gross Margin Increases to 36%
Revenue Grows 9% Sequentially
BOTHELL, Wash.--(BUSINESS WIRE)--Oct. 24, 2000--Vixel Corporation (Nasdaq:VIXL - news) announced today financial results for the third quarter ended Oct. 1, 2000.
Total revenue for the third quarter was $8.5 million, compared with $7.8 million in the second quarter of 2000 and $8.9 million in the third quarter of 1999.
``This was a positive quarter for us in all areas of our business, with the exception of our U.S. indirect channel sales,'' commented Jim McCluney, president and chief executive officer of Vixel. ``Earlier this month, we restructured our worldwide sales organization by appointing a new head of sales for the Americas. With this change in place, we are putting a renewed and aggressive focus on U.S. indirect channel sales and marketing, and we are optimistic that we can regain momentum in this area of our business.''
Third-quarter SAN systems revenue increased to $8.0 million from $7.4 million in the third quarter of 1999. For the third quarter, SAN systems comprised 95% of total revenue compared with 83% of total revenue in the year ago third quarter. Component revenue was $0.5 million as compared with $1.5 million in the third quarter of 1999.
For the nine months ended Oct. 1, 2000, total revenue was $24.1 million, compared with $31.0 million in the first nine months of 1999. SAN systems revenue increased to $22.7 million, or 95% of total revenue as compared with $19.0 million or 61% of total revenue in the prior year nine-month period. Gross margin increased to 36.2% of total revenue, compared with 32.1% in the second quarter of 2000 and 29.7% in the third quarter of 1999. The increase in gross margin reflects the company's shift to higher margin SAN systems revenue.
Adjusted net loss for the quarter, which excludes the effects of stock-based compensation and amortization of goodwill and intangibles, was $4.8 million, or $0.21 per share, compared with an adjusted net loss of $5.1 million, or $0.23 per share in the second quarter of 2000 and $4.9 million, or $0.28 per share in the third quarter of 1999.
Actual net loss for the quarter, including the effects of stock-based compensation and amortization of goodwill and intangibles, was $5.8 million, or $0.25 per share, compared with a net loss of $6.3 million, or $0.28 per share in the second quarter of 2000 and $6.5 million, or $0.37 per share in the third quarter of 1999.
Adjusted net loss for the first nine months of 2000 was $14.5 million, or $0.64 per share, compared with an adjusted net loss of $12.3 million, or $0.74 per share, for the first nine months of 1999. Actual net loss for the first nine months of 2000 was $18.4 million, or $0.82 per share, compared with a net loss of $16.4 million, or $0.99 per share, for the first nine months of 1999
The 1999 per share amounts are computed on an as-if-converted basis, which assumes conversion of all preferred stock from the original date of issue.
``Vixel's products, particularly the new full-fabric 7000 series of switches, are being well received in the market. Our switch ports sold in the third quarter were 24% above the prior quarter and almost four times the third quarter of last year,'' commented McCluney. ``Users are looking to fully leverage Fibre Channel and Storage Area Networks while demanding ease of deployment; sophisticated management tools; lower cost of ownership; and protection of their legacy environments. Our market strategy, hardware and software products, and the solutions we are developing are in direct response to these needs.''
Recent Highlights
Vixel has recently collaborated with other storage vendors to develop two new Fibre Channel solutions. Exabyte Corporation and LAN-5 Corporation plan to bring a cost-effective SAN backup appliance to market using the Vixel 7100 Fibre Channel switch. In addition, Vixel has teamed with LSI Logic Storage Systems, Inc. to deliver a Fibre Channel SAN-based server clustering solution for Windows 2000/NT based environments. This solution will use the Vixel 2100 Zoning Managed Hub along with LSI Logic's MetaStor® E2400 entry-level Fibre Channel storage system and QLogic's QLA2200 series host bus adapter.
On Oct. 10, 2000, Vixel announced the appointment of Joseph Colgate to the position of Vice President, Sales, the Americas. In his new capacity, Colgate has overall responsibility for Vixel's North and South American OEM, reseller and distributor sales initiatives. With this new appointment, Vixel is now comprised of three sales regions: The Americas, Asia Pacific, and Europe, Middle East and Africa.
On Sept. 12, 2000, Vixel announced that it increased its worldwide base of resellers and distributors by over 30 percent during the prior four months. With the approach of Fibre Channel Switch Interoperability, Vixel has aggressively targeted key new resellers and distributors to increase market penetration for its storage networking products. Vixel supports its resellers by certifying solutions with its industry leading Storage Area Network (SAN) vendor partners to streamline the implementation of its products at end user sites.
On Aug. 18, 2000, Vixel announced immediate availability of full fabric services on its 7000 Series switches. The Vixel 7000 Series includes the 7100 8-port and 7200 16-port switches, which fully support ANSI SW-1 standards and are upgradeable to the proposed ANSI SW-2 standards that enable true multivendor switch-to-switch interoperability, allowing customers flexibility when choosing the best solutions for their data storage requirements.
During the third quarter, the United States Patent Office awarded Vixel U.S. Patent No. 6,118,776 relating to its private loop switching technology. The Patent, entitled ``Methods and Apparatus for Fibre Channel Interconnection of Private Loop Devices,'' defines a number of ways to interconnect private loop devices with a Fibre Channel switch. Using this technology, Vixel has developed a switch product family that provides users with a cost-effective alternative that provides the ease of use of arbitrated loops and the high performance of switching environments.
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 performance and market acceptance of Vixel's products, Vixel's ability to hire and retain key employees, Vixel's ability to meet its quality and performance standards, development of the storage area network, or SAN market, the competitiveness and performance of Vixel's products in the rapidly changing SAN 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 contained in Vixel's Annual Report on Form 10-K and most recent report on Form 10-Q, which are available at www.sec.gov.
Vixel will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) today to discuss its third quarter 2000 results. The call will feature remarks by Jim McCluney, president and chief executive officer and Kurt Adams, chief financial officer. A live broadcast of the call may be heard by dialing 888/633-8342 or via web cast in the Investor Relations section of the corporate web site at www.vixel.com. A replay will also be available following the conclusion of the call in the Investor Relations section of the corporate web site at www.vixel.com.
About Vixel Corporation
Vixel Corporation offers customers real world solutions for storage networking. As a leading provider of Storage Area Network (SAN) solutions, the company's comprehensive portfolio of multivendor certified solutions, switches, hubs, transceivers and integrated management software delivers reliable, interoperable solutions to its customers and partners. SAN InSite is Vixel's comprehensive open 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. Vixel products and technology are used by major system suppliers including IBM, Compaq, Sun Microsystems, Network Appliance, Unisys, Avid and Lucent. Products are available worldwide through its network of value-added resellers, alliances and OEMs. Vixel is an ISO 9001 certified company.
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.
Vixel Corporation
Statement of Operations Adjusted to Exclude the Effects of
Stock-Based Compensation and Amortization of Goodwill
and Intangible Assets
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
------------------------------------------
Oct. 1, Oct. 3, Oct. 1, Oct. 3,
2000 1999 2000 1999
------------------------------------------
Revenue:
SAN systems $ 8,048 $ 7,389 $ 22,743 $ 18,999 |
