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Technology Stocks : Advanced Digital Information Corp. (ADIC) -- Ignore unavailable to you. Want to Upgrade?

To: Jim Oravetz who wrote (2192)	6/7/2001 6:04:42 PM
From: Carolyn	Read Replies (1) \| Respond to of 2283

Received this from my broker today: JOHN C. DEAN ADIC: Initiating Coverage with a 2H rating and $22 Target Price Advanced Digital Information Company (ADIC) ADIC: Initiating Coverage with a 2H rating and $22 2H (Outperform, High Risk) Target Price Mkt Cap: $1,209.3 mil. June 5, 2001 SUMMARY * We are initiating coverage on this leading tape DATA STORAGE automation vendor with an Outperform (2H) rating and a $22 INFRASTRUCTURE price target. John C. Dean * ADIC entered 3FQ01 on a wave of momentum from share gains in 2000, an upcoming new product, the addition and extension of channel relationships, and acquisition of Scott McBride significant technology via the Pathlight acquisition. * We are forecasting revenue growth of 39% in FY01 and 35% in FY02, driven largely by strong OEM relationships and new product introductions. * EPS should grow 2% in FY01 and 49% in FY02. Flattish FY01 EPS reflects costs of developing new technology acquired with Pathlight and gross margin pressure from competition and a product mix shift. * ADIC is a technology agnostic play in the growing market to store, manage, and retrieve data. We believe the company is well-positioned to take advantage of the frenzied growth of SAN/NAS. FUNDAMENTALS P/E (10/01E) 41.2x P/E (10/02E) 27.7x TEV/EBITDA (10/01E) 28.0x TEV/EBITDA (10/02E) NA Book Value/Share (10/01E) $5.41 Price/Book Value 3.6x Dividend/Yield (10/01E) NA/NA Revenue (10/01E) $400.3 mil. Proj. Long-Term EPS Growth 20% ROE (10/01E) 8.3% Long-Term Debt to Capital(a) 0.3% (a) Data as of most recent quarter SHARE DATA RECOMMENDATION Price (6/5/01) $19.38 Current Rating 2H 52-Week Range $11.13-$28.25 Prior Rating NA Shares Outstanding(a) 62.4 mil. Current Target Price $22.00 Convertible No Previous Target Price NA EARNINGS PER SHARE FY ends 1Q 2Q 3Q 4Q Full Year Previous NA NA NA NA NA Previous NA NA NA NA NA Previous NA NA NA NA NA First Call Consensus EPS: 10/01E NA; 10/02E NA; 10/03E NA Calendar Year EPS: 12/00A $0.47; 12/01E $0.50; 12/02E $0.74; 12/03E NA EXECUTIVE SUMMARY ADIC, a leading tape automation player, is entering the current quarter on a wave of momentum from share gains in 2000, upcoming product introductions, the addition and extension of channel relationships, and the attainment of significant technology from an acquisition -- Pathlight (see section on acquisition) -- that closed in early May. We believe the following are the key investment themes associated with ADIC: * Tape automation, used in the backup and archiving of data for disaster recovery and business continuity, is clearly benefiting from the growth in data and its need to be managed, protected, and stored. We believe the recent introduction and renewed product roadmap of tape drive technologies are helping to spur added demand as customers are enthusiastic about tape drives backed by such vendors as Hewlett Packard, IBM, Quantum, Seagate, and Sony. * We have projected that ADIC's revenues will grow by 39% and 35% year-over- year in FY01 and FY02. Earnings should rise by 49% in FY02 after a flat FY01 due to Pathlight, together with a product mix shift that will lead to a narrower gross margin. We expect sales will be driven by ADIC's OEM relationships, and the introduction of a high-end library, which fills a void in ADIC's product portfolio. We believe EPS growth will resume in