|
|
|
McDATA Announces First Quarter Fiscal Year 2005 Financial Results24 May 2005
McDATA Corporation (Nasdaq:MCDTA) (Nasdaq:MCDT) today reported results for its first quarter of fiscal year 2005 (Q1 05), which ended April 30, 2005. Revenue for Q1 05 was $98.9 million, compared to $105.7 million reported in the fourth quarter of fiscal year 2004 (Q4 04), and $97.2 million reported in the first quarter of fiscal year 2004 (Q1 04). Non-GAAP net income for Q1 05 was $3.0 million, or $0.03 per diluted share, compared to non-GAAP net income of $6.8 million, or $0.06 per diluted share in Q4 04, and non-GAAP net income of $1.1 million, or $0.01 per diluted share in Q1 04.
On a GAAP basis, McDATA reported a Q1 05 net loss of $(2.9) million, or $(0.02) per share, compared to breakeven net income, or $(0.0) per share in Q4 04, and a net loss of $(9.8) million, or $(0.09) per share in Q1 04.
McDATA's Q1 05 and Q4 04 non-GAAP net income excludes charges related to the amortization of deferred compensation and amortization of purchased intangible assets. Q1 04 non-GAAP net income excludes charges related to the amortization of deferred compensation, certain restructuring charges, amortization of purchased intangible assets, as well as the Company's share of the operating loss associated with its investment in Aarohi.
"Our first quarter results demonstrate the strength of the McDATA team and our loyal customer base," said John Kelley, McDATA chairman, president and CEO. "The past few months have been both exciting and challenging, and I am extremely proud of our performance. I look forward to establishing a track record of solid execution in the coming months as we focus on meeting product roadmap and integration milestones."
The non-GAAP results are a supplement to financial statements based on accounting principles generally accepted in the United States of America (GAAP). The non-GAAP results exclude certain expenses to provide what McDATA believes is a more complete understanding of our underlying operational results and trends. Non-GAAP results are one of the primary indicators management uses for planning and forecasting of future periods. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. A reconciliation of GAAP and non-GAAP net income is provided in the financial statements attached to this news release.
Q1 05 Business Highlights
-- McDATA continued to advance its Global Enterprise Data Infrastructure (GEDI) strategy throughout the quarter as the Company steadily progressed towards closing the acquisition of CNT.
-- IBM announced general availability of McDATA's Intrepid(R) 10000 Backbone Director, Eclipse(TM) 2640 SAN Router and the embedded blade server fibre channel switch, co-developed with QLogic.
-- EMC announced availability of the Eclipse 2640 SAN router.
-- McDATA entered into a partnership with Ingram Micro Asia, the only global IT distributor with operations in Asia, to further expand the Company's presence in the region.
-- McDATA introduced the five-star rated PartnerPlus Program that rewards channel partners for selling the Company's hardware, software and services.
Q1 05 Customer Highlights
-- LG Electronics, a Korea-based electronics manufacturer, deployed McDATA Intrepid directors and SANavigator(R) SAN management software to upgrade the company's Oracle ERP application and consolidate the network, integrating finance, personnel, marketing and service systems into a single database.
-- Credit Suisse, a leading financial services firm, deployed McDATA Intrepid directors and Sphereon fabric switches to consolidate and simplify disparate storage networks.
-- OSF Healthcare System implemented a business continuance/disaster recovery solution using McDATA's Intrepid 6140 directors and Eclipse SAN routers in a tiered storage architecture, protecting critical systems and data and meeting new availability service level agreements.
-- Agere Systems completed an aggressive cost-containment initiative by deploying a dual fabric extended storage area network based on McDATA Intrepid directors and Sphereon(TM) Fabric Switches.
Conference Call and Webcast
McDATA will host a conference call to discuss Q1 05 financial results today, May 23, 2005, at 6:00 a.m. MDT. The conference call is being webcast live via the Internet at www.mcdata.com. An archive of the webcast will be available for twelve months at www.mcdata.com.
About McDATA (www.mcdata.com)
McDATA (Nasdaq:MCDTA) (Nasdaq:MCDT) is the only data infrastructure solutions provider that can deliver a Global Enterprise Data Center -- a globally connected, centrally managed and highly optimized data network. With more than 20 years of storage networking experience, McDATA is trusted in the world's largest data centers, connecting more than two-thirds of all networked data and enabling information access anytime, anywhere.
Forward-Looking Statements
This press release contains statements about expected future events that are forward-looking and subject to risks and uncertainties. Readers are urged to consider statements that include the terms "believes," "belief," "expects," "plans," "objectives," "estimates," "anticipates," "intends," "targets," or the like to be uncertain and forward-looking. Factors that could cause actual results to differ and vary materially from expectations include, but are not limited to, our relationships with EMC, IBM and HDS and the level of their orders, aggressive price competition by numerous other SAN and IP switch suppliers, OEM qualification of our new products, manufacturing constraints, our ability to integrate CNT's operations with our operations and other risk factors that are disclosed in our filings with the Securities and Exchange Commission. These cautionary statements by us should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by us. All cautionary statements should be read as being applicable to all forward-looking statements wherever they appear. We do not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
McDATA CORPORATION
CONDENSED REPORTED CONSOLIDATED INCOME STATEMENTS (Note 1)
(in thousands, except per share data)
(unaudited)
Three Months Ended
April 30, April 30,
2004 2005
---- ----
Revenue $97,229 $98,868
Cost of revenue 42,487 45,440
------ ------
Gross profit 54,742 53,428
Operating expenses:
Research and development 25,104 20,932
Selling and marketing 23,485 24,048
General and administrative 12,450 11,153
Restructuring costs 1,345 -
Amortization of deferred compensation 2,258 703
------ ------
Operating expenses 64,642 56,836
Loss from operations (9,900) (3,408)
Interest and other income, net 1,174 967
------ ------
Loss before income taxes (8,726) (2,441)
Income tax expense 541 416
------ ------
Loss before equity in net loss of affiliated
company (9,267) (2,857)
Equity in net loss of affiliated company (577) -
------ ------
Net loss $(9,844) $(2,857)
====== ======
Basic net loss per share $(0.09) $(0.02)
====== ======
Shares used in computing basic net loss
per share 114,955 115,474
======= =======
Diluted net loss per share $(0.09) $(0.02)
====== ======
Shares used in computing diluted net loss
per share 114,955 115,474
======= =======
McDATA CORPORATION
CONDENSED NON-GAAP CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
(unaudited)
Three Months Ended
April 30, April 30,
2004 2005
---- ----
Revenue $97,229 $98,868
Cost of revenue 42,379 45,419
------ ------
Gross profit 54,850 53,449
Operating expenses:
Research and development 24,409 20,632
Selling and marketing 23,310 24,009
General and administrative 6,568 5,579
Acquired in-process research and development - -
Restructuring costs - -
Amortization of deferred compensation - -
------ ------
Operating expenses 54,287 50,220
Income from operations 563 3,229
Interest and other income, net 1,174 967
------ ------
Income before income taxes 1,737 4,196
Income tax expense 590 1,175
------ ------
Income before equity in net loss of affiliated
company 1,147 3,021
Equity in net loss of affiliated company - -
------ ------
Net income $1,147 $3,021
====== ======
Basic net income per share $0.01 $0.03
====== ======
Shares used in computing basic net income
per share 114,955 115,474
======= =======
Diluted net income per share $0.01 $0.03
====== ======
Shares used in computing diluted net income
per share 117,520 116,185
======= =======
McDATA CORPORATION
RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME (LOSS) (Note 2)
(in thousands, except per share data)
(unaudited)
Three Months Ended
April 30, April 30,
2004 2005
---- ----
GAAP net loss $(9,844) $(2,857)
Adjustments:
Amortization of deferred compensation and
acquisition-related compensation 3,306 1,067
Amortization of intangible assets 5,812 5,570
Restructuring costs 1,345 -
Income tax expense (49) (759)
Equity in net loss of affiliated company 577 -
------ ------
Non-GAAP net income $1,147 $3,021
GAAP net loss per share - basic and diluted $(0.09) $(0.02)
Non-GAAP net income per share - diluted $0.01 $0.03
Shares used in non-GAAP per share calculation -
diluted 117,520 116,185
Note (1) - Certain prior period amounts have been reclassified to
conform to the fiscal 2005 presentation.
Note (2) - The condensed non-GAAP consolidated income statements for
all periods presented are for illustrative purposes only and are not
prepared in accordance with generally accepted accounting principles.
The following is provided as a supplement to the non-GAAP
reconciliation above:
Three Months Ended
April 30, April 30,
Non-GAAP Adjustments 2004 2005
---- ----
Cost of revenue:
Deferred compensation and acquisition-related
compensation $108 $21
Operating expenses:
Research and development:
Acquisition-related compensation 695 300
Selling and marketing
Acquisition-related compensation 175 39
General and administrative
Acquisition-related compensation 70 4
Amortization of intangible assets 5,812 5,570
Restructuring costs 1,345 -
Amortization of deferred compensation 2,258 703
------ ------
Operating expenses subtotal 10,355 6,616
------ ------
Total non-GAAP Adjustments 10,463 6,637
Income tax expense 49 759
Equity in net loss of affiliated company 577 -
------ ------
After-tax impact of non-GAAP adjustments $10,991 $5,878
====== ======
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
January 31, April 30,
2005 2005
---- ----
Assets
Cash, cash equivalents and short term
investments $209,766 $236,670
Securities lending collateral 130,804 116,112
Accounts receivable, net 63,810 56,488
Inventories, net 13,720 15,742
Other current assets 7,280 7,621
------- -------
Total current assets 425,380 432,633
Property and equipment, net 94,929 92,155
Long-term investments 95,589 73,930
Goodwill 78,693 78,693
Intangible assets, net 87,592 82,022
Other assets, net 36,052 40,544
------- -------
Total assets $818,235 $799,977
======= =======
Liabilities and Stockholders' Equity
Accounts payable and accrued
liabilities $64,894 $61,641
Securities lending collateral 130,804 116,112
Current portion of deferred revenue 22,736 26,464
Current portion of notes payable
and capital leases 912 682
------- -------
Total current liabilities 219,346 204,899
Notes payable and capital leases,
less current portion 256 145
Deferred revenue, less current portion 27,001 25,309
Convertible subordinate debt 170,495 168,990
Other long-term liabilities 3,913 5,305
------- -------
Total liabilities 421,011 404,648
Stockholders' equity 397,224 395,329
------- -------
Total liabilities and stockholders'
equity $818,235 $799,977
======= =======
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
April 30, April 30,
2004 2005
---- ----
Net cash provided by operating activities $5,510 $8,105
====== ======
Cash flows from investing activities:
Purchases of property and equipment $(4,422) $(2,301)
Net purchases and sales of investments (2,472) 3,488
------ ------
Net cash provided (used) by investing
activities $(6,894) $1,187
====== ======
Cash flows from financing activities:
Payments on notes payable and capital leases $(936) $(277)
Cash restricted pursuant to interest rate
swap transaction - 43
Proceeds from the issuance of common stock 2,623 64
------ ------
Net cash provided (used) by financing activities $1,687 $(170)
====== ======
Net increase in cash and cash equivalents $303 $9,122
====== ======
Source: Business Wire
All trademarks and copyrighted information contained herein are the property of their respective owners.
Related Articles
|
|
|
