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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (1320)	10/23/1997 8:06:00 PM
From: Mark Oliver	Respond to of 9256

Read Rite announces earnings, .62 vs estimates of .67 missing by five cents. biz.yahoo.com Read-Rite Reports Sales and Earnings for the Fourth Quarter and Fiscal 1997 MILPITAS, Calif., Oct. 22 /PRNewswire/ -- Read-Rite Corporation (Nasdaq:RDRT) today reported sales of $318.2 million for the fourth quarter of fiscal 1997 ended September 30, 1997, a 63 percent increase over the $195.4 million reported in the comparable period of fiscal 1996. Net income was $30.5 million compared to a loss of $63.9 million reported in the fourth quarter of fiscal 1996. Primary earnings per share were 62 cents based on 49.2 million shares, compared to a loss of $1.37 based on 46.7 million shares in the fourth quarter of fiscal 1996. Fully diluted earnings per share for the fourth quarter of fiscal 1997 were 61 cents based on 52.5 million shares. The results for the fourth quarter of fiscal 1997 include $1.9 million, or 4 cents per share, for the pre-payment premium associated with the company's early paydown of $100 million in subordinated debt with cash received from the Convertible Note Offering which was completed in August, as well as incremental interest expense associated with the Convertible Notes. The results of the fourth quarter of fiscal 1996 included special charges to the company's net income of $27.0 million. For fiscal 1997, Read-Rite announced sales of $1.16 billion, a 17.3 percent increase over the $991.0 million reported for fiscal 1996. Net income for fiscal 1997 was $91.0 million compared to a loss of $43.0 million reported for fiscal 1996. Primary earnings per share were $1.87 based on 48.8 million shares for fiscal 1997, compared to a loss of 92 cents based on 46.8 million shares reported for fiscal 1996. Fully diluted earnings per share for fiscal 1997 were $1.87 based on 49.6 million shares. The results for fiscal 1997 include $1.9 million, or 4 cents per share, of additional expense as discussed above. The results of fiscal 1996 included special charges to the company's net income of $52 million. Toward the end of the fourth quarter, the company experienced a general industry slowdown in demand for recording heads, due primarily to a lower than anticipated average number of heads per drive and reduced demand for heads in the high-end segment. However, sales for the quarter increased over the $310.2 million reported in the third quarter of fiscal 1997. Read-Rite shipped 29.7 million thin-film recording heads during the fourth quarter of fiscal 1997, including a record 5.2 million head stack assemblies (HSAs). For fiscal 1997, the company shipped 106.6 million thin film recording heads. ''We are very pleased with our financial performance during fiscal 1997 and our progress in implementing our magnetoresistive (MR) recording head strategy,'' said Cyril J. Yansouni, chairman and chief executive officer. ''We achieved several new milestones with our MR recording head technology during the fourth quarter. Our MR recording head product mix shifted heavily toward the 1.75 GB per 3.5-inch per disk capacity point, and we ramped volume production of 2.1 GB per 3.5-inch disk MR recording heads for two major customer programs, shipping a significant number of HSAs incorporating these technologies,'' he stated. ''We are committed to meeting the many challenges presented by this new technology in order to continue supplying our customers with technologically advanced MR recording heads,'' stated Mr. Yansouni. During the fourth quarter of fiscal 1997, Read-Rite completed an offering of $345 million aggregate principal amount of 6.5% Convertible Subordinated Notes due September 1, 2004. In October, the company entered into a new $200 million credit facility which includes a $150 million revolving line of credit and a $50 million term loan. The new credit facility replaces an unused $65 million revolving line of credit and refinances a $50 million term loan. Read-Rite Corporation is the world's leading independent manufacturer of recording heads, head gimbal assemblies (HGAs) and head stack assemblies (HSAs) for disk drives and magnetoresistive heads for quarter-inch-cartridge tape drives. The company is headquartered in Milpitas, California and has operations in Japan, Thailand, Malaysia, the Philippines and Singapore. Read-Rite employs some 23,000 people. The company's home page on the World Wide Web can be reached at www.readrite.com. NOTE: This news release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934, as amended, and is subject to the ''safe harbor'' created by those sections. The company's actual results for future periods could differ materially from those projected in such forward-looking information. Factors that could cause actual results to differ include, but are not limited to, the following: the company's ability to ramp-up volume production quickly and cost-effectively on its new MR products; design-ins and qualifications for additional products may not occur or could be slower than anticipated; competitors may introduce MR products earlier and/or more cost-effectively than the company; demand for the company's products could weaken and lead to order cancellations or reschedules; the company's ability to achieve and maintain satisfactory yields on its new and current products; the company's Giant MR (spin valve), GMR and magneto-optically enhanced recording head technology development may not be successful, or this new technology may not be adopted by its customers.