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BW0109 AUG 14,1998 13:49 PACIFIC 16:49 EASTERN
( BW)(SYQUEST)(SYQT) SyQuest Reports Fiscal 1998 Third Quarter Results; Revenues Up 41% from Q3 1997 as SparQ Gains Market Share
Business Editors/Technology Writers
FREMONT, Calif.--(BUSINESS WIRE)--Aug. 14, 1998--SyQuest Technology Inc. (NASDAQ:SYQT), the leader in removable cartridge hard drive technology, said today net revenue for the third fiscal quarter ended June 30, 1998 rose 41 percent, to $44.7 million, from $31.7 million in the same period last year. This represents a decrease from $47.0 million in the second quarter of fiscal 1998.
Before a special finance charge, the Company reported an operating loss of $32.6 million as compared to an operating loss of $9.8 million in the same period last year. As previously announced, the loss was slightly larger than the prior quarter operating loss of $29.9 million. Also in the quarter, the Company recorded a special pretax financing charge of $9.0 million after review of its financing transactions, and is currently in negotiations that may result in a reversal of a portion of this charge. The net loss for the quarter was $42.5 million or $0.42 per share, compared to a net loss of $10.7 million or $0.31 per share for the same period a year ago.
For the nine months ended June 30, 1998, the Company reported net revenue of $123.8 million, which was an increase of approximately 28 percent over net revenue of $96.8 million for the same period of the prior year. The net loss for the nine months ended June 30, 1998 was approximately $110.8 million, or $1.40 per share, as compared to a net loss of $51.2 million, or $2.14 per share, in the same period of the prior year.
"Being able to achieve $44.7 million in revenue during a quarter that was a tough quarter for most PC manufacturers, retailers and the fixed disk industry was a notable accomplishment, and indicates the acceptance that we have achieved for our SparQ product line," said SyQuest President and CEO Ed Harper. "Market research indicates that there is significant market opportunity for high capacity removable storage, and although that market is currently in a flat spot, SyQuest is growing its market share."
According to data received by PC Data, SyQuest products now command approximately a 50% market share within the product category.
During the quarter, the Company continued to add manufacturing capacity, completed OEM agreements with Compaq Computer Corporation and Edge Corporation, and launched a consumer promotion program designed to increase awareness of the superior performance and value of the SparQ product line. The product line was broadened with the announcement that SyQuest will offer a USB SparQ drive for the Apple iMac and for PCs equipped with USB.
In light of current market demand and with a goal of improving financial performance, the Company last week announced a restructuring to size the company more appropriately for new demand levels.
SyQuest's financial condition at the close of the June quarter included a cash position of $13.4 million. At July 31, 1998 the Company had approximately 128 million common shares outstanding and approximately 49 million stock purchase warrants issued and outstanding. There would be approximately 230.8 million common shares outstanding if all stock purchase warrants and convertible preferred shares were exercised and converted as of July 31, 1998.
About SyQuest
Based in Fremont, SyQuest Technology, Inc. is the leader in removable cartridge hard drive storage technology. The company offers the highest capacity, best performing and most affordable removable hard drives and cartridges in the marketplace. SyQuest's easy-to-use, award-winning products are ideal storage solutions for SOHO/professionals, families, students, Internet users and more. SyQuest (SYQT) is publicly traded on NASDAQ's National Market System. The company's web site is www.syquest.com.
This news release contains forward-looking statements that involve risks and uncertainties, including competition in the marketplace for the company's products, and other risks detailed from time to time in the SEC reports filed by SyQuest including its most recent reports on Forms 8K, 10K and 10Q.
Note to Editors: SyQuest is a registered trademark and the SyQuest logo, SparQ, SyJet and Quest are trademarks of SyQuest Technology, Inc. All other brands or trade names are the property of their respective companies.
SYQUEST TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
June 30, Sept. 30,
1998 1997 $Change % Change
--------- ---------- --------- ----------
Assets
Current assets:
Cash and
cash equivalents $ 13,432 $ 7,083 $ 6,349 89.6%
Accounts
receivable, net 20,281 19,535 746 3.8%
Inventories, net 46,652 26,737 19,915 74.5%
Prepaid expenses
and deposits 7,627 6,049 1,578 26.1%
--------- ---------- --------- ----------
Total current
assets 87,992 59,404 28,588 48.1%
Net property,
equipment and
leasehold
improvements 27,659 22,999 4,660 20.3%
Other assets 228 246 (18) -7.3%
--------- --------- --------- -----
$ 115,879 $ 82,649 $ 33,230 40.2%
========= ========= ========= =====
Liabilities and
Stockholders' Equity
Current
liabilities:
Short term
borrowings $ 16,034 $ 23,291 (7,257) -31.2%
Accounts
payable 36,607 14,800 21,807 147.3%
Accrued
expenses and
other liabilities 15,603 15,532 71 0.5%
Current portion
of long-term debt 2,172 4,345 (2,173) -50.0%
--------- --------- --------- -----
Total current
liabilities 70,416 57,968 12,448 21.5%
--------- --------- --------- -----
Long-term debt 2,315 4,024 (1,709) -42.5%
Other long-term
liabilities 906 959 (53) -5.5%
Mandatory
redeemable
warrants 2,672 14,085 (11,413) -81.0%
Other obligations 20,710 -- 20,710 0.0%
Stockholders' equity:
Preferred stock -- -- -- 0.0%
Common stock 13 6 7 116.7%
Additional paid
in capital 346,767 222,766 124,001 55.7%
Treasury stock (12,855) (12,855) -- 0.0%
Retained (deficit) (315,065) (204,304) (110,761) 54.2%
--------- --------- --------- -----
Total
stockholders'
equity 18,860 5,613 13,247 236.0%
--------- --------- --------- -----
$ 115,879 $ 82,649 $ 33,230 40.2%
========= ========= ========= =====
--30--slt/sf* gdr/rn/sf
CONTACT: SyQuest Technology
Shannon Burns, 510/226-4158
investor.relations@syquest.com
or
Miller/Shandwick Technologies
Michael Celiceo, 650/596.5800
mceliceo@miller.shandwick.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS EARNINGS
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