EMC Reports Continued Growth Acceleration for Record Fourth Quarter and Year
Business/Technology Editors
HOPKINTON, Mass.--(BUSINESS WIRE)--Jan. 23, 2001--
50% Revenue Growth in Information Storage, 49% Increase in Net Income
Highlighted By Rising Demand for EMC Networked Storage
Systems and Software
EMC Corporation (NYSE:EMC) today reported that revenue growth
continued to accelerate and net income increased 49% for the fourth
quarter of 2000, as organizations around the world invest aggressively
in networked information infrastructures from the world leader in
information storage.
Information storage revenue for the fourth quarter grew 50%
compared with the fourth quarter of 1999 to $2.5 billion. This
accelerated quarterly growth was achieved by strong performance across
all geographies and major product areas, including more than 250%
year-to-year revenue growth in networked information storage systems
and 72% year-to-year revenue growth in software. Information
storage-related revenue represented 95% of EMC's total consolidated
revenue during the quarter.
Total consolidated results for the fourth quarter and the full
2000 fiscal year represented all-time record performance for EMC.
Total revenue for the fourth quarter was $2.62 billion, 40% higher
than the fourth quarter of 1999. Net income for the fourth quarter was
$563 million, up 49% compared with the fourth quarter of 1999
(excluding a one-time acquisition-related restructuring charge taken
in the fourth quarter of 1999). On a diluted basis, earnings per share
were $0.25 in the quarter, 47% higher than the fourth quarter of 1999
(adjusted for a 2-for-1 stock split effective June 2, 2000; and
excluding the 1999 charge).
For the full 2000 fiscal year, EMC's total revenue was $8.87
billion, up 32% over 1999. Net income for the full 2000 fiscal year
was $1.78 billion, up 51% over 1999 (excluding the 1999 charge). On a
diluted basis, earnings per share were $0.79 for the year, compared
with $0.54 for 1999 (adjusted for the June 2, 2000, stock split; and
excluding the 1999 charge).
Mike Ruettgers, EMC's Executive Chairman, said, "We closed an
extraordinary year with a bang - four straight quarters of
accelerating growth rates, and our highest quarterly storage growth
rate in nearly six years. It's clear we gained share in every major
segment of our addressable market, and our competitive lead has never
been stronger. Customers are investing in EMC solutions in record
numbers because our complete networked information storage
infrastructures are by far the most interoperable, functionally rich,
scalable and reliable solutions available."
"We said at the start of 2000 that information, and access to it,
had become the currency of the global economy," Ruettgers continued.
"As I look at the dynamics of EMC's 2000 performance, that premise
becomes even more apparent. Daily life today is a trail of digital
transactions for each and every one of us, transcending
socio-economic, industry or geographic boundaries. The simple acts of
using a telephone or an ATM, buying groceries, or sending mail create
more digital information, every minute of every day. The consistent
growth of EMC's information storage business reflects the way we live
today. Speculation over the effects of slowing economic growth on U.S.
IT spending should not blur the fact that, in every industry and in
every economic mood, information is where competitive advantage lies.
And EMC is where information lives."
The quarter featured strength across all geographies and
industries. The investments EMC has made internationally continue to
pay off, with international revenue representing 41% of EMC's total in
the fourth quarter and 39% for the year. The superior fourth-quarter
international results were highlighted by a 134% year-to-year increase
in Asia Pacific storage revenue and a 54% year-to-year increase in
EMEA (Europe, Middle East and Africa) storage revenue.
Revenue from networked information storage systems grew more than
250% to $770 million in the fourth quarter, compared with $214 million
in the year-ago period, as EMC further widened its lead in deploying
SAN (storage area network) and NAS (network-attached storage)
environments. For the year, EMC shipped $2.1 billion in networked
information storage. Software revenue grew 72% to $483 million in the
fourth quarter. For the year, software revenue was $1.44 billion, up
75% compared with 1999.
EMC's balance sheet also continued to strengthen, with cash and
investments increasing to $4.75 billion at the end of the quarter.
Other highlights of the quarter included the introduction of EMC
CLARiiON(R) IP4700 networked storage systems and EMC Celerra(TM) with
HighRoad(TM) software, extending the reach of the world's most trusted
information storage technology by bringing NAS and SANs into a unified
network; the acquisition of CrosStor Software, a leader in
high-performance software for networked storage systems; the formation
of the xSPerience(TM) Provider Program, a tiered service, support and
consultation program that enables service providers to fully leverage
EMC technology to achieve their business goals; EMC's #1 ranking by
customers ahead of all other storage providers in six different
categories in a major independent survey conducted by InformationWeek;
and EMC's ranking among "The 100 Best Places To Work" by FORTUNE
Magazine.
EMC Corporation (NYSE:EMC) is the world leader in information
storage systems, software, networks and services, providing the
information infrastructure for a connected world. Information about
EMC's products and services can be found at emc.com.
EMC, CLARiiON and CrosStor are registered trademarks, and Celerra,
HighRoad and xSPerience Provider Program are trademarks of EMC
Corporation. Other trademarks are the property of their respective
owners.
This release contains "forward-looking statements" as defined
under the Federal Securities Laws. Actual results could differ
materially from those projected in the forward-looking statements as a
result of certain risk factors, including but not limited to: (i)
component quality and availability; (ii) rapid technological and
market change and the transition to new products; (iii) competitive
factors, including but not limited to pricing pressures, in the
computer storage and server markets; (iv) the relative and varying
rates of product price and component cost declines; (v) economic
trends in various geographic markets and fluctuating currency exchange
rates; (vi) the ability to attract and retain highly qualified
employees; (vii) the uneven pattern of quarterly sales; (viii) risks
associated with strategic investments and acquisitions; (ix) the
Company's ability to execute on its plans; and (x) other one-time
events and other important factors disclosed previously and from time
to time in EMC's filings with the U.S. Securities and Exchange
Commission.
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EMC CORPORATION
(in thousands, except per share amounts)
(unaudited)
2000 Actual Consolidated Statement of Income and 1999
Pro Forma Consolidated Statement of Income Excluding One-time Charge
Three Months Ended Twelve Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2000 1999 2000 1999
Revenues:
Net sales $2,355,482 $1,674,666 $7,966,974 $5,983,009
Service and rental 265,804 201,087 905,842 732,601
2,621,286 1,875,753 8,872,816 6,715,610
Cost and expenses:
Cost of products 904,772 700,064 3,125,908 2,736,008
Cost of service 164,906 142,759 603,857 506,885
Research and
development 222,293 154,017 783,166 572,517
Selling, general and
administrative 615,590 424,814 2,102,982 1,435,508
Operating income 713,725 454,099 2,256,903 1,464,692
Investment income 63,176 39,375 206,240 131,911
Interest expense (2,581) (8,678) (14,604) (33,490)
Other
income/(expense), net (3,261) 17,210 (7,341) 17,650
Income before taxes 771,059 502,006 2,441,198 1,580,763
Income tax provision 208,186 125,502 659,123 400,295
Net income $ 562,873 $ 376,504 $1,782,075 $1,180,468
Net income per
weighted average
share, basic $ 0.26 $ 0.18 $ 0.82 $ 0.57
Net income per
weighted average
share, diluted $ 0.25 $ 0.17 $ 0.79 $ 0.54
Weighted average
shares, basic 2,192,537 2,074,237 2,164,180 2,061,101
Weighted average
shares, diluted 2,252,834 2,227,476 2,245,203 2,219,065
As a % of total
revenue:
Gross margin 59.2% 55.1% 58.0% 51.7%
Selling, general and
administrative 23.5% 22.6% 23.7% 21.4%
Research and
development 8.5% 8.2% 8.8% 8.5%
Operating income 27.2% 24.2% 25.4% 21.8%
Net income 21.5% 20.1% 20.1% 17.6%
Note:
The three months and twelve months ended December 31, 1999 exclude a
one-time restructuring, merger and other related charge of $223,598
(pre-tax). The after-tax impact of the charge is $169,898 or $.08 per
diluted weighted average share for the three and twelve months ended
December 31, 1999.
EMC CORPORATION
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, December 31,
2000 1999
Assets:
Cash and short-term investments $ 2,656,952 $ 1,824,139
Accounts and notes receivable 2,114,368 1,625,438
Inventories 1,024,964 618,885
Other current assets 303,767 251,934
Total current assets 6,100,051 4,320,396
Long-term investments 2,088,379 1,349,599
Property, plant and equipment 1,510,088 1,023,179
Other assets 929,824 480,114
Total assets $ 10,628,342 $ 7,173,288
Liabilities and equity:
Current liabilities $ 2,113,647 $ 1,397,915
Deferred income taxes 191,456 125,353
Convertible notes - 673,149
Other long-term liabilities 146,030 25,085
Stockholders' equity 8,177,209 4,951,786
Total liabilities
and equity $ 10,628,342 $ 7,173,288
EMC Corporation
Supplemental Financial Data
Revenue Analysis
(in millions)
(unaudited)
Revenue analysis - historic format
Q1 1999 Q2 1999 Q3 1999 Q4 1999 YTD 1999
Storage Revenue
Enterprise Systems $ 861 $ 986 $1,014 $1,146 $4,006
Software 155 179 207 281 822
ESCON, misc.
(by McData) 39 46 24 34 143
Subtotal 1,056 1,210 1,244 1,461 4,971
Service/Rental 72 82 89 107 350
Base EMC 1,128 1,292 1,334 1,568 5,322
Midrange (CLARiiON)
Product and Service 106 108 118 96 427
Total Storage Revenue 1,233 1,400 1,451 1,664 5,748
Data General
Data General Systems 155 154 167 121 596
Data General Service 95 94 91 91 371
Total Data General 250 248 257 212 967
Total Consolidated
EMC $1,483 $1,648 $1,709 $1,876 $6,716
Q1 2000 Q2 2000 Q3 2000 Q4 2000 YTD 2000
Storage Revenue
Enterprise Systems $1,132 $1,340 $1,451 $1,596 $5,519
Software 270 350 332 483 1,435
ESCON, misc.
(by McData) 39 37 34 43 153
Subtotal 1,440 1,728 1,817 2,122 7,107
Service/Rental 115 132 159 197 604
Base EMC 1,556 1,860 1,976 2,319 7,711
Midrange (CLARiiON)
Product and Service 98 141 165 179 582
Total Storage Revenue 1,654 2,001 2,141 2,498 8,293
Data General
Data General Systems 88 69 71 57 286
Data General Service 81 76 71 66 294
Total Data General 169 145 142 123 580
Total Consolidated
EMC $1,823 $2,146 $2,283 $2,621 $8,873
Revenue analysis - new format
Q1 1999 Q2 1999 Q3 1999 Q4 1999 YTD 1999
Storage Revenue
Information Storage
Systems $1,003 $1,137 $1,152 $1,273 $4,565
Information Storage
Software 155 179 207 281 822
Information Storage
Services 75 84 93 110 362
Total Information
Storage Revenues 1,233 1,400 1,451 1,664 5,748
Other Businesses 250 248 257 212 967
Total Consolidated
Revenues $1,483 $1,648 $1,709 $1,876 $6,716
Q1 2000 Q2 2000 Q3 2000 Q4 2000 YTD 2000
Storage Revenue
Information Storage
Systems $1,267 $1,516 $1,647 $1,816 $6,246
Information Storage
Software 270 350 332 483 1,435
Information Storage
Services 116 134 161 200 612
Total Information
Storage Revenues 1,654 2,001 2,141 2,498 8,293
Other Businesses 169 145 142 123 580
Total Consolidated
Revenues $1,823 $2,146 $2,283 $2,621 $8,873
Note: Amounts may not foot due to rounding
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--30--ll/bos* jr/bos
CONTACT: EMC Corporation
Mark Fredrickson
508-293-7137
fredrickson_mark@emc.com
KEYWORD: MASSACHUSETTS
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS HARDWARE HUMAN RESOURCES
NETWORKING SOFTWARE EARNINGS
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