NEWS: Data General Reports Second Quarter 1998 Results
biz.yahoo.com
Thursday April 23, 8:04 am Eastern Time
Company Press Release
WESTBORO, Mass.--(BUSINESS WIRE)--April 23, 1998--Data General Corporation today reported a net loss of $4.5 million, or $.09 per share, on revenues of $361.8 million, for its second quarter of fiscal 1998, which ended March 28, 1998. The results included a one-time gain of approximately $.05 per share, resulting from the sale of an investment.
For the second quarter of fiscal 1997, the company reported net income of $13.8 million, or $.32 per share on a diluted basis, on revenues of $389.3 million.
''Our AViiON server business continued to grow during the quarter and our longer-term outlook remains positive. However, the transition we are making in our storage business to fibre- channel technology continued to negatively impact the overall results,'' said Data General President and Chief Executive Officer Ronald L. Skates.
''We are shipping fibre channel based CLARiiON storage products and revenues for those products are growing. We expect additional product milestones will be met in the near future, but we are not yet at a point where we are shipping enough fibre channel products to offset the drop- off in our older SCSI technology based systems,'' said Mr. Skates.
''Returning to profitability is our top priority and, in line with that, we have reorganized and strengthened our operations to focus on our two key businesses, our AViiON server and CLARiiON storage lines.''
''Joel Schwartz and Ethan Allen, two of our most experienced and proven executives, will lead the divisions, which between them represent approximately 90 percent of our product revenues.'' added Mr. Skates.
Mr. Schwartz, who has been heading up Worldwide Sales, will direct the CLARiiON storage division; and Mr. Allen, who has been responsible for the company's Worldwide Services operations, will direct the AViiON server division.
Further commenting on the CLARiiON results, Mr. Skates said, ''Fibre channel is a new, complex storage technology that is just now reaching the level of stability and reliability required by the commercial marketplace. We believe that we are the leader in this technology and that it will become a significant growth area for us.''
Industry consulting group International Data Corporation (IDC) has predicted that by the year 2000, fibre channel storage will become a $6 billion dollar market.
Data General's strategy received a significant endorsement earlier this month when Dell Computer announced it would deliver enterprise storage products based on Data General's fibre channel technology later this year.
In announcing the agreement, Mike Lambert, senior vice president of Dell's Server Product Group, said, ''We believe the CLARiiON superior fibre channel architecture and the division's proven record for delivering advanced storage technologies provide the ideal combination for Dell's future storage offerings.''
Mr. Skates noted, ''In addition to their potential in the NT marketplace with Dell, our fibre channel products will also position
us well in UNIX markets that require the ability to scale to several terabytes of storage, such as data warehousing, video, multi-media, scientific, imaging and enterprise-class storage solutions.''
Commenting on the company's server business, Mr. Skates said, ''Compared to last year's second quarter, AViiON revenues continued to grow with both our Windows NT and NUMA technology based servers posting strong results.''
Revenues for AViiON servers that run NT increased by 50 percent over the prior year with strong results posted by the company's new high-end eight processor AV 8600 enterprise server which began shipping during the quarter.
''We also continue to be pleased with the acceptance of our NUMA based AViiON servers,'' added Mr. Skates. ''The new servers are opening up additional opportunities in high- performance on-line transaction processing and data warehousing applications.''
For the first six months of fiscal 1998, the company reported a net loss of $1.0 million or $.02 per share. For the same period last year, the company reported net income of $24.2 million, or $.57 per share on a diluted basis.
Revenues for the first two quarters of fiscal 1998 totaled $727.1 million, compared to $737.8 million for the first six months of
fiscal 1997.
Mr. Skates concluded, ''By focusing our organization and better allocating resources to our leading-edge products, we believe
we will be well positioned to be successful. For the short- term, however, we do not expect to see meaningful improvement in our results until late this year.''
Statements concerning the company's business outlook, anticipated profitability, revenues or expenses, and product line growth, together with other statements made in this press release which are not historical facts, are ''forward-looking statements,'' as that term is defined under the Federal Securities Laws. Such statements are subject to risks and uncertainties which could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, fluctuations in customer demand, order patterns and inventory levels, changes and delays in product development plans and schedules, customer acceptance of new products, changes in pricing or other actions by competitors, general
economic conditions, as well as other risks detailed in the company's filings with the Securities and Exchange Commission, including Data General's Report on Form 10-K for the 1997 fiscal year which ended September 27, 1997 and first quarter
10-Q.
NOTE - Information on Data General, its products and services, can be accessed on the Internet at dg.com.
Additional information on the CLARiiON Business Unit can be accessed at clariion.com. |
