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To: Tom Hua who wrote (5969)	2/5/2001 4:16:49 PM
From: Art M	Respond to of 19633

Tom, STEC blew out numbers. Warms my heart. biz.yahoo.com Simple Technology Announces Record Revenues and Operating Income for Fourth Quarter and Full Year 2000 Company Records 61 Percent Quarterly Revenue Increase Over 1999 SANTA ANA, Calif.--(BUSINESS WIRE)--Feb. 5, 2001--Simple Technology, Inc. (Nasdaq:STEC - news), a leading manufacturer of Flash-based data storage and standard and custom memory solutions, today announced record revenues for its fourth quarter and full year ended December 31, 2000. Full year 2000 revenues were $308.3 million, an increase of 60% from 1999 revenues of $192.6 million, due primarily to increased Flash and IC Tower(TM) stacking product sales. Pro forma net income for the full year was $17.3 million, up 134% compared to $7.4 million last year. In 2000, pro forma diluted earnings per share were $0.50, compared to $0.23 in 1999. Quarterly revenues increased 61% from $56.3 million in the fourth quarter of 1999 to $90.5 million in the comparable period this year. Net income was $5.9 million in the fourth quarter of 2000, an increase of 168% from pro forma net income of $2.2 million in the fourth quarter of 1999. In the fourth quarter of 2000, diluted earnings per share were $0.15, compared to pro forma diluted earnings per share of $0.07 in the fourth quarter of 1999. Revenues for the fourth quarter increased by 7% over the third quarter of 2000. Gross margins improved to 22.3% from 21.6% in the third quarter. Fourth quarter net income increased 37% from pro forma net income of $4.3 million in the third quarter. Diluted earnings per share increased 15% from pro forma diluted earnings of $0.13 in the third quarter. ``We are delighted to report record results for the fourth quarter as well as for the full year 2000,'' said Simple Technology's chairman and chief executive officer Manouch Moshayedi. ``Quarterly and year- over-year revenues were $90.5 million and $308.3 million, respectively, which represent increases of 61% and 60%, respectively, giving us the best year in the company's history. ``These results were driven primarily by strong demand for our Flash and IC Tower stacking technologies from OEM customers in the communications and networking industries. Additionally, our design activity continues to expand as OEM customers seek out customized memory solutions, and we are extremely excited at the record number of design wins at our major OEM customers. ``At the same time,'' Moshayedi continued, ``we note that macro- economic conditions have softened in the past few months, resulting in significant reductions in capital spending. This has caused a slowdown in sales and a build-up of inventory by our communications and networking customers. As a consequence, we have experienced some pushouts and cancellations of orders during the first half of 2001. In addition, we have witnessed a rapid decline in DRAM and Flash prices in the past few months. While we believe there is significant price elasticity associated with these components, it will take time to increase sales volume enough to overcome the effect of eroding prices. ``Although it is impossible to predict what worldwide economic conditions will prevail over the next months, we are optimistic that our expanding product line and internal controls will enable us to remain competitive and improve our position by the second half of 2001. However, at the present time, we anticipate that current conditions will have a negative impact on the first two quarters of the year, with revenues relatively flat in the first quarter compared to the same quarter of last year. ``Currently, we are projecting 2001 annual revenues to be approximately 10% to 15% lower than 2000, with EPS expected to be flat to 10% lower. These projections could, of course, change materially depending upon global economic conditions and semiconductor cycles during the second half of 2001. ``Keeping current economic conditions in mind, and evaluating the strengths and experience of our company,'' Moshayedi concluded, ``we are very encouraged by our long-term prospects and we feel that these are the times when we should be able to pull away from our competition and gain market share.'' Business Segments: Flash and IC Tower Stacking Product Revenues Flash and IC Tower stacking revenues increased from 21% of revenues in full year 1999 to 40% of revenues in 2000. Flash and IC Tower stacking revenues were 26% of revenues in the fourth quarter of 1999, 44% of revenues in the third quarter of 2000 and 47% of revenue in the fourth quarter of 2000. Flash and IC Tower stacking revenues were $123.8 million in 2000, up 210% from $40.0 million last year. Revenues from Flash and IC Tower stacking products were $42.8 million in the fourth quarter this year, an increase of 189% from the comparable period last year and up 16% sequentially. OEM Division Revenues Simple Technology's OEM Division revenues as a percentage of total revenues increased to 60% in the fourth quarter of 2000, up from 26% last year. OEM Division revenues were $144.0 million in full year 2000, up 190% from $49.6 million in 1999. Revenue from the OEM Division was $54.5 million in the fourth quarter of 2000, up 273% from $14.6 million in the comparable period last year and up 30% sequentially from $41.8 million.