EX-99.1 2 a05-19606_1ex99d1.htm EXHIBIT 99

vnExhibit 99.1

 

Editorial Contact:

 

Investor Contact:

Mary Camarata

 

Marshall Mohr

Adaptec, Inc.

 

Adaptec, Inc.

408-957-1630

 

408-957-6773

mary_camarata@adaptec.com

 

marshall_mohr@adaptec.com

 

ADAPTEC REPORTS SECOND QUARTER FY 2006 RESULTS

 

MILPITAS, Calif. – November 3, 2005 – Adaptec, Inc. (NASDAQ: ADPT), a global leader in storage solutions, today reported financial results for the second quarter of its fiscal year of 2006 ended September 30, 2005, that are in-line with its press release issued on October 20, 2006.

 

Non-GAAP net revenue for the Company’s combined operations for the second quarter of fiscal 2006 ended September 30, 2005 was $115.1 million, compared with $105.9 million for the first quarter of fiscal 2006 and $121.7 million for the second quarter of 2005.  The non-GAAP net loss for the Company’s combined operations for the second quarter of fiscal 2006 was ($1.5) million or ($0.01) per share compared with a non-GAAP net loss of ($14.3) million or ($0.13) per share for the first quarter of fiscal 2006 and non-GAAP net income of $3.8 million or $0.03 per share for the second quarter of fiscal 2005.

 

The GAAP net loss for the Company’s combined operations for second quarter of fiscal 2006 was ($105.8) million or ($0.94) per share, compared with a net loss of ($36.0) million, or ($0.32) per share, for the first quarter of fiscal 2006 and net loss of ($8.1) million or ($0.07) per share, for the second quarter of fiscal 2005.  Included in the fiscal 2006 second quarter GAAP net loss is the total impairment of goodwill of $90.6 million and a loss on the sale of the IBM I&P Series business of $7.0 million.

 

A complete reconciliation between GAAP net revenue and net loss and non-GAAP net revenue and net loss for the second quarter of fiscal 2006, is provided in the attached tables.

 

During the quarter, the Company divested its IBM iSeries and pSeries RAID business and recently announced its intention to divest its Systems business. These two businesses are now considered “discontinued operations” and will be referenced as such in this announcement and in all future earnings announcements. Similarly, the Company’s Component business, now called Data Protection Solutions, and Desktop business are considered “continuing operations.” The operating results reflected in the prior paragraphs are based on the combination of continuing and discontinued operations. Detail on continuing operations is provided below.

 


 

Net revenue for the Company’s continuing operations for the second quarter of fiscal 2006 ended September 30, 2005 was $83.2 million, compared with $72.5 million for the first quarter of fiscal 2006 and $99.8 million for the second quarter of 2005.  Non-GAAP loss from continuing operations for the second quarter of fiscal 2006 was ($2.1) million or ($0.02) per share compared with ($8.3) million or  ($0.07) per share for the first quarter of fiscal 2006 and non-GAAP income from continuing operations of $7.7 million or $0.06 per share for the second quarter of fiscal 2005. The GAAP loss from continuing operations for the second quarter of fiscal 2006 was ($94.8) million or ($0.84) per share compared with ($10.5) million or ($0.09) per share for the first quarter of fiscal 2006 and GAAP income from continuing operations of $12.8 million or $0.10 per share for the second quarter of fiscal 2005.

 

The Company indicated that the increase revenue performance is primarily attributed to its Data Protection Solutions business, particularly sales to OEM’s, and seasonal buying associated with certain Desktop Products. Improved operating margins occurred in all of the Company’s business segments and reflect improvements in supply chain management, reduced spending and favorable product mix.

 

“In the past quarter the Adaptec team was intent on fixing our operational issues and taking steps to bring the Company back to profitability,” said Adaptec Interim Chief Executive Officer, D. Scott Mercer.   “We are pleased with the direction of the Company since we reported earnings in July. We made significant headway on a number of fronts and our improvement in operating results is an indication of our progress.”

 

Conference Call

 

The Adaptec second quarter 2006 second quarter earnings conference call is scheduled for 1:45 p.m. PDT on November 3, 2005. Individuals may participate via webcast by visiting www.adaptec.com/investor 15 minutes prior to the call. A telephone replay will be made accessible for one week, at (800) 642-1687 (domestic) or (706) 645-9291 (international) with ID#9348026. A webcast replay will also be available via the Adaptec Web site at www.adaptec.com/investor.

 

Safe Harbor Statement

 

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements include statements regarding future events or the future performance of Adaptec. These forward-looking statements are based on current expectations, forecasts and assumptions and involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks include: identifying potential buyers for the Systems business; market demand for RAID products; difficulty in forecasting the volume and timing of customer orders; reduced demand in the server, network storage and desktop computer markets; our target markets’ failure to accept, or delay in accepting, network storage and other advanced storage solutions, including our SAS, SATA and iSCSI lines of products; decline in consumer acceptance of our current products; the timing and volume of orders by OEM customers for storage products; our ability to control and manage costs associated with the delivery of new products; and the adverse effects of the intense competition we face in our business. For a more complete discussion of

 


 

risks related to our business, reference is made to the section titled “Risk Factors” included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2005, on file with the Securities and Exchange Commission. Adaptec assumes no obligation to update any forward looking information that is included in this release.

 

About Adaptec

 

Adaptec Inc. (NASDAQ:ADPT) provides end-to-end storage solutions that reliably move, manage and protect critical data and digital content. Adaptec provides software and hardware solutions for storage connectivity and data protection, storage networking and networked storage subsystems to leading OEM and distribution channel partners. Adaptec solutions are in use by enterprises, ISPs, medium and small businesses and consumers worldwide. Adaptec is an S&P Small Cap 600 Index member.

 


 

Adaptec, Inc.

GAAP Condensed Consolidated Statements of Operations and

Reconciliation of GAAP to Non-GAAP Operating Results (*)

(unaudited)

 

 

 

Three-Month Period Ended

 

 

 

September 30, 2005

 

September 30, 2004

 

 

 

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

 

 

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

$

83,234

 

$

—

 

$

83,234

 

$

99,752

 

$

—

 

$

99,752

 

Cost of revenues

 

54,315

 

(15

)(a)

54,300

 

53,145

 

—

 

53,145

 

Gross profit

 

28,919

 

15

 

28,934

 

46,607

 

—

 

46,607

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

15,680

 

(54

)(a)

15,626

 

22,336

 

(569

)(b)

21,767

 

Selling, marketing and administrative

 

16,273

 

(208

)(a)

16,065

 

20,153

 

(2,127

)(b)

18,026

 

Amortization of acquisition-related intangible assets

 

1,761

 

(1,761

)(c)

—

 

2,392

 

(2,392

)(c)

—

 

Restructuring charges

 

478

 

(478

)(d)

—

 

1,928

 

(1,928

)(d)

—

 

Goodwill impairment

 

90,602

 

(90,602

)(e)

—

 

—

 

—

 

—

 

Total operating expenses

 

124,794

 

(93,103

)

31,691

 

46,809

 

(7,016

)

39,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

(95,875

)

93,118

 

(2,757

)

(202

)

7,016

 

6,814

 

Interest and other income

 

4,523

 

15

(f)

4,538

 

3,659

 

—

 

3,659

 

Interest expense

 

(868

)

—

 

(868

)

(1,145

)

—

 

(1,145

)

Income (loss) from continuing operations before income taxes

 

(92,220

)

93,133

 

913

 

2,312

 

7,016

 

9,328

 

Provision for (benefit from) income taxes

 

2,557

 

482

(g)

3,039

 

(10,443

)

12,076

(h)

1,633

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

(94,777

)

92,651

 

(2,126

)

12,755

 

(5,060

)

7,695

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net of taxes

 

(4,053

)

4,641

(i)

588

 

(20,818

)

16,887

(i)

(3,931

)

Loss from disposal of discontinued operations, net of taxes

 

(6,976

)

6,976

(i)

—

 

—

 

—

 

—

 

Income (loss) from discontinued operations, net of taxes

 

(11,029

)

11,617

 

588

 

(20,818

)

16,887

 

(3,931

)

Net income (loss)

 

$

(105,806

)

$

104,268

 

$

(1,538

)

$

(8,063

)

$

11,827

 

$

3,764

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.84

)

 

 

$

(0.02

)

$

0.12

 

 

 

$

0.07

 

Discontinued operations

 

$

(0.10

)

 

 

$

0.01

 

$

(0.19

)

 

 

$

(0.04

)

Net income (loss)

 

$

(0.94

)

 

 

$

(0.01

)

$

(0.07

)

 

 

$

0.03

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.84

)

 

 

$

(0.02

)

$

0.10

 

 

 

$

0.06

 

Discontinued operations

 

$

(0.10

)

 

 

0.01

 

$

(0.19

)

 

 

$

(0.04

)

Net income (loss)

 

$

(0.94

)

 

 

$

(0.01

)

$

(0.07

)

 

 

$

0.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

112,965

 

—

 

112,965

 

110,312

 

—

 

110,312

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

112,965

 

—

 

112,965

 

134,140

 

(2,298

)(l)

131,842

 

Discontinued operations

 

112,965

 

138

(j)

113,103

 

110,312

 

—

 

110,312

 

Net income (loss)

 

112,965

 

—

 

112,965

 

110,312

 

21,530

(k)

131,842

 

 


 

Adaptec, Inc.

GAAP Condensed Consolidated Statements of Operations and

Reconciliation of GAAP to Non-GAAP Operating Results (*)

(unaudited)

 

 

 

Six-Month Period Ended

 

 

 

September 30, 2005

 

September 30, 2004

 

 

 

GAAP

 

Adjustments

 

Non-GAAP

 

GAAP

 

Adjustments

 

Non-GAAP

 

 

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

$

155,749

 

$

—

 

$

155,749

 

$

198,609

 

$

—

 

$

198,609

 

Cost of revenues

 

103,525

 

(15

)(m)

103,510

 

104,992

 

—

 

104,992

 

Gross profit

 

52,224

 

15

 

52,239

 

93,617

 

—

 

93,617

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

31,856

 

(37

)(m)

31,819

 

46,127

 

(1,338

)(n)

44,789

 

Selling, marketing and administrative

 

33,555

 

(976

)(m)

32,579

 

37,248

 

(2,127

)(n)

35,121

 

Amortization of acquisition-related intangible assets

 

3,777

 

(3,777

)(c)

—

 

4,888

 

(4,888

)(c)

—

 

Restructuring charges

 

518

 

(518

)(d)

—

 

2,747

 

(2,747

)(d)

—

 

Goodwill impairment

 

90,602

 

(90,602

)(e)

—

 

—

 

—

 

—

 

Total operating expenses

 

160,308

 

(95,910

)

64,398

 

91,010

 

(11,100

)

79,910

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

(108,084

)

95,925

 

(12,159

)

2,607

 

11,100

 

13,707

 

Interest and other income

 

8,131

 

101

(f)

8,232

 

5,502

 

1,250

(o)

6,752

 

Interest expense

 

(1,840

)

—

 

(1,840

)

(2,267

)

—

 

(2,267

)

Income (loss) from continuing operations before income taxes

 

(101,793

)

96,026

 

(5,767

)

5,842

 

12,350

 

18,192

 

Provision for (benefit from) income taxes

 

3,445

 

1,236

(g)

4,681

 

(9,345

)

13,226

(h)

3,881

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

(105,238

)

94,790

 

(10,448

)

15,187

 

(876

)

14,311

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations, net of taxes

 

(29,565

)

24,190

(i)

(5,375

)

(23,240

)

19,043

(i)

(4,197

)

Loss from disposal of discontinued operations, net of taxes

 

(6,976

)

6,976

(i)

—

 

—

 

—

 

—

 

Loss from discontinued operations, net of taxes

 

(36,541

)

31,166

 

(5,375

)

(23,240

)

19,043

 

(4,197

)

Net income (loss)

 

$

(141,779

)

$

125,956

 

$

(15,823

)

$

(8,053

)

$

18,167

 

$

10,114

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.93

)

 

 

$

(0.09

)

$

0.14

 

 

 

$

0.13

 

Discontinued operations

 

$

(0.32

)

 

 

$

(0.05

)

$

(0.21

)

 

 

$

(0.04

)

Net income (loss)

 

$

(1.26

)

 

 

$

(0.14

)

$

(0.07

)

 

 

$

0.09

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.93

)

 

 

$

(0.09

)

$

0.12

 

 

 

$

0.12

 

Discontinued operations

 

$

(0.32

)

 

 

$

(0.05

)

$

(0.21

)

 

 

$

(0.04

)

Net income (loss)

 

$

(1.26

)

 

 

$

(0.14

)

$

(0.07

)

 

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

112,705

 

—

 

112,705

 

110,076

 

—

 

110,076

 

Diluted

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

112,705

 

—

 

112,705

 

131,302

 

—

 

131,302

 

Discontinued operations

 

112,705

 

—

 

112,705

 

110,076

 

—

 

110,076

 

Net income (loss)

 

112,705

 

—

 

112,705

 

110,076

 

21,226

(k)

131,302

 

 


 

(*) To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), we use non-GAAP measures of operating results, net income/(loss) and earnings per share, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses.  These non-GAAP measures are provided to enhance the user’s overall understanding of our current financial performance and our prospects for the future.  Specifically, we believe the non-GAAP results provide useful information to both management and investors by excluding certain expenses, gains and losses that we believe are not indicative of our core operating results.  In addition, since we have historically reported non-GAAP results to the investment community, we believe the inclusion of non-GAAP numbers provides consistency in our financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for assessing our performance, allocating resources and planning and forecasting future periods. The non-GAAP information is presented using consistent methodology from quarter-to-quarter and year-to-year. These 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) Management incentive program of $0.2 million associated with the Snap Appliance acquisition (acquired in July 2004) and deferred compensation expense related to assumed stock options of $0.1 million associated with the Snap Appliance acquisition. These assumed options were negotiated as part of the acquisition and represent compensation over and above the amounts that we provide to these acquired employees.

 

(b) Management incentive program of $1.9 million associated with the Snap Appliance acquisition and deferred compensation expense related to assumed stock options of $0.8 million associated with the Platys (acquired in August 2001) and Snap Appliance acquisitions. These assumed options were negotiated as part of the acquisitions and represent compensation over and above the amounts that we provide to these acquired employees.

 

(c) Amortization of acquisition-related intangible assets, primarily core and existing technologies, patents and customer relationships intangible assets, related to the acquisitions of Platys, Eurologic (acquired in April 2003), ICP vortex (acquired in June 2003) and Elipsan (acquired in February 2004).

 

(d) Restructuring expense primarily related to adjustments made to previous restructuring plans in the first and second quarter of fiscal 2006 and to activities under the first and second quarter of fiscal 2005 restructuring plans to reduce headcount, consolidate facilities and other actions related to the Snap Appliance acquisition.

 

(e) Impairment of goodwill.

 

(f) Loss on repurchase of 3% convertible notes.

 

(g) Incremental income taxes associated with certain non-GAAP adjustments.

 

(h) Incremental income taxes associated with certain non-GAAP adjustments and a tax benefit from certain discrete tax events during the second quarter of fiscal 2005 related to the method and amount of settled tax controversies.

 

(i) Loss from disposal of the IBM i/p Series RAID business, impairment of the IBM i/p Series RAID business acquisition (acquired in June 2004),  write-off of in-process research and development costs associated with the acquisitions of Snap Appliance and the IBM i/p Series RAID business, amortization of acquisition-related intangible assets related to the acquisitions of Platys, Eurologic, ICP vortex, Snap Appliance and the IBM i/p Series RAID business, management incentive program associated with the Snap Appliance acquisition, deferred compensation expense related to assumed stock options associated with the Snap Appliance acquisition, cash hire-on payments associated with the IBM i/p Series RAID business acquisition, and incremental income taxes associated with certain GAAP and non-GAAP adjustments. Amounts are summarized below:

 


 

(in millions)

 

Three-month ended
September 30, 2005

 

Three-month ended
September 30, 2004

 

Six-month ended
September 30, 2005

 

Six-month ended
September 30, 2004

 

Three-month ended
June 30, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of the IBM i/p Series RAID Business

 

$

—

 

$

—

 

$

15.5

 

$

—

 

$

15.5

 

Write-off of in-process research and development

 

—

 

2.2

 

—

 

5.2

 

—

 

Acquisition-related intangible assets

 

2.3

 

2.8

 

5.2

 

3.2

 

2.9

 

Management incentive program

 

2.0

 

1.0

 

2.7

 

1.0

 

0.7

 

Deferred compensation expense

 

1.0

 

0.1

 

1.1

 

0.1

 

0.1

 

Cash hire-on payments

 

—

 

0.6

 

—

 

0.6

 

—

 

Loss from disposal of IBM i/p Series RAID

 

7.0

 

—

 

7.0

 

—

 

—

 

Income taxes

 

(0.7

)

10.2

 

(0.3

)

8.9

 

0.3

 

Total

 

$

11.6

 

$

16.9

 

$

31.2

 

$

19.0

 

$

19.5

 

 

(j) Anti-dilutive effect of employee options.

 

(k) Anti-dilutive effect of employee options and 3/4% convertible notes.

 

(l) Dilutive effect of 3/4% convertible notes.

 

(m) Management incentive program of $0.8 million associated with the Snap Appliance acquisition and deferred compensation expense related to assumed stock options of $0.2 million associated with the Platys and Snap Appliance acquisitions.

 

(n) Management incentive program of $1.9 million associated with the Snap Appliance acquisition, deferred compensation expense related to assumed stock options of $1.5 million associated with the Platys and Snap Appliance acquisitions.

 

(o) Expense related to a license and release agreement to settle claims that some of our products infringed certain patents.

 

(p) Management incentive program of $0.6 million associated with the Snap Appliance acquisition and deferred compensation expense related to assumed stock options of $0.2 million associated with the Platys and Snap Appliance acquisitions.

 


 

Adaptec, Inc.

Summary Balance Sheet and Cash Flow Data

(unaudited)

 

Balance Sheet Data

 

 

 

As of

 

 

 

September 30, 2005

 

March 31, 2005

 

September 30, 2004

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and marketable securities

 

$

488,976

 

$

526,556

 

$

529,988

 

Accounts receivable, net

 

74,121

 

70,159

 

76,954

 

Inventories

 

33,119

 

60,204

 

65,115

 

Goodwill and other intangible assets

 

25,064

 

170,943

 

253,788

 

Other assets

 

96,366

 

135,644

 

162,697

 

Assets from discontinued operations

 

37,297

 

—

 

—

 

Total assets

 

$

754,943

 

$

963,506

 

$

1,088,542

 

 

 

 

 

 

 

 

 

Current liabilities

 

139,076

 

177,644

 

174,199

 

Liabilities from discontinued operations

 

4,554

 

—

 

—

 

Convertible notes and other long-term obligations

 

240,684

 

275,539

 

273,736

 

Stockholders’ equity

 

370,629

 

510,323

 

640,607

 

Total liabilities and stockholders’ equity

 

$

754,943

 

$

963,506

 

$

1,088,542

 

 

Cash Flow Data

 

 

 

Three-Month Period Ended

 

 

 

September 30, 2005

 

June 30, 2005

 

September 30, 2004

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

(94,777

)

$

(10,461

)

$

12,755

 

Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used for) operations:

 

 

 

 

 

 

 

Non-cash P&L items:

 

 

 

 

 

 

 

Goodwill impairment

 

90,602

 

—

 

—

 

Stock-based compensation

 

77

 

187

 

750

 

Non-cash effect of tax settlement

 

—

 

—

 

(4,068

)

Loss on repurchase of 3% convertible notes

 

16

 

86

 

—

 

Depreciation and amortization

 

6,569

 

6,475

 

9,154

 

Deferred income taxes

 

—

 

—

 

56

 

Other items

 

(262

)

133

 

104

 

Changes in assets and liabilities

 

3,611

 

(18,661

)

(12,128

)

Net cash provided by (used for) operating activities of continuing operations

 

5,836

 

(22,241

)

6,623

 

Net cash provided by (used for) operating activities of discontinued operations

 

5,854

 

(774

)

(14,793

)

Net cash provided by (used for) operating activities

 

$

11,690

 

$

(23,015

)

$

(8,170

)

 

 

 

 

 

 

 

 

Other significant cash flow activities:

 

 

 

 

 

 

 

Payments for business acquisitions, net of cash acquired

 

—

 

—

 

(43,021

)

Repurchase of 3% convertible notes

 

(4,343

)

(18,645

)

—

 

 


 

Adaptec, Inc.

GAAP Condensed Consolidated Statements of Operations and

Reconciliation of GAAP to Non-GAAP Operating Results (*)

(unaudited)

 

 

 

Three-Month Period Ended
June 30, 2005

 

 

 

GAAP

 

Adjustments

 

Non-GAAP

 

 

 

(in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Net revenues

 

$

72,515

 

$

—

 

$

72,515

 

Cost of revenues

 

49,210

 

—

 

49,210

 

Gross profit

 

23,305

 

—

 

23,305

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

16,176

 

17

(p)

16,193

 

Selling, marketing and administrative

 

17,282

 

(768

)(p)

16,514

 

Amortization of acquisition-related intangible assets

 

2,016

 

(2,016

)(c)

—

 

Restructuring charges

 

40

 

(40

)(d)

—

 

Total operating expenses

 

35,514

 

(2,807

)

32,707

 

Loss from continuing operations

 

(12,209

)

2,807

 

(9,402

)

Interest and other income

 

3,608

 

86

(f)

3,694

 

Interest expense

 

(972

)

—

 

(972

)

Loss from continuing operations before income taxes

 

(9,573

)

2,893

 

(6,680

)

Provision for income taxes

 

888

 

754

(g)

1,642

 

Loss from continuing operations

 

(10,461

)

2,139

 

(8,322

)

Discontinued operations:

 

 

 

 

 

 

 

Loss from discontinued operations, net of taxes

 

(25,512

)

19,549

(i)

(5,963

)

Loss from discontinued operations, net of taxes

 

(25,512

)

19,549

 

(5,963

)

Net loss

 

$

(35,973

)

$

21,688

 

$

(14,285

)

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

Basic

 

 

 

 

 

 

 

Continuing operations

 

$

(0.09

)

 

 

$

(0.07

)

Discontinued operations

 

$

(0.23

)

 

 

$

(0.05

)

Net income (loss)

 

$

(0.32

)

 

 

$

(0.13

)

Diluted

 

 

 

 

 

 

 

Continuing operations

 

$

(0.09

)

 

 

$

(0.07

)

Discontinued operations

 

$

(0.23

)

 

 

$

(0.05

)

Net income (loss)

 

$

(0.32

)

 

 

$

(0.13

)

 

 

 

 

 

 

 

 

Shares used in computing net loss per share:

 

 

 

 

 

 

 

Basic

 

112,445

 

—

 

112,445

 

Diluted

 

112,445

 

—

 

112,445

 

 

Please see the footnotes accompanying the Condensed Consolidated Statement of Operations for the three- and six-month period ended September 30, 2005 and 2004 for an explanation of the footnotes referred to in the table above.

 


 

Adaptec, Inc.

Reconciliation of Continuing Operations with Combined Operations

Q2’06 Results

($ in millions, except per share amounts)

(unaudited)

 

 

 

Quarter Ended
September 30, 2005

 

 

 

GAAP

 

Adjustments

 

Non-GAAP

 

Net Revenue - Continuing Operations

 

$

83.2

 

$

0.0

 

$

83.2

 

Net Revenue - Discontinued Operations

 

$

0.0

 

$

31.9

 

$

31.9

 

Total Net Revenue

 

$

83.2

 

$

31.9

 

115.1

*

 

 

 

 

 

 

 

 

Gross Margin - Continuing Operations

 

35

%

0

%

35

%

Gross Margin - Discontinued Operations

 

0

%

28

%

28

%

Total Gross Margin

 

35

%

 

 

33

%*

 

 

 

 

 

 

 

 

Loss - Continuing Operations

 

$

(94.8

)

$

92.7

**

$

(2.1

)

Income - Discontinued Operations

 

$

(11.0

)

$

11.6

***

$

0.6

 

Total Net Loss

 

$

(105.8

)

$

104.3

 

$

(1.5

)

 

 

 

 

 

 

 

 

Loss Per Share - Continuing Operations

 

$

(0.84

)

$

0.82

**

$

(0.02

)

Income (Loss) Per Share - Discontinued Operations

 

$

(0.10

)

$

0.11

***

$

0.01

 

Total Net Loss Per Share

 

$

(0.94

)

$

0.93

 

$

(0.01

)

 

Adjustments

 

*                                         Total net revenue and total gross margin are being provided as a bridge between our results and our previous forecast. At the time of our previous forecast, all of our operations were continuing operations.

 

**                                  Amortization of acquisition-related intangible assets of $1.8 million, management incentive program associated with the Snap Appliance acquisition of $0.2 million, deferred compensation expense related to assumed stock options associated with the Snap Appliance acquisition of $0.1 million, adjustments related to previous restructuring plans of $0.5 million, goodwill impairment of $90.6 million, immaterial loss on repurchase of 3% convertible notes and $(0.5) million of incremental income taxes associated with certain non-GAAP adjustments.

 

***                           Amortization of acquisition-related intangible assets of $2.3 million, management incentive program associated with the Snap Appliance acquisition of $2.0 million, deferred compensation expense related to assumed stock options associated with the Snap Appliance acquisition of approximately $1.0 million, loss from the disposal of the IBM i/p Series RAID business of $7.0 million and $(0.7) million of incremental income taxes  associated with certain non-GAAP adjustments.

 


 

Adaptec, Inc.

Reconciliation of Continuing Operations with Combined Operations

Q1’06 Results

($ in millions, except per share amounts)

(unaudited)

 

 

 

Quarter Ended
June 30, 2005

 

 

 

GAAP

 

Adjustments

 

Non-GAAP

 

Net Revenue - Continuing Operations

 

$

72.5

 

$

0.0

 

$

72.5

 

Net Revenue - Discontinued Operations

 

$

0.0

 

$

33.4

****

$

33.4

 

Total Net Revenue

 

$

72.5

 

$

33.4

 

$

105.9

*

 

 

 

 

 

 

 

 

Gross Margin - Continuing Operations

 

32

%

0

%

32

%

Gross Margin - Discontinued Operations

 

0

%

14

%

14

%

Total Gross Margin

 

32

%

 

 

27

%*

 

 

 

 

 

 

 

 

Loss - Continuing Operations

 

$

(10.5

)

$

2.2

**

$

(8.3

)

Loss - Discontinued Operations

 

$

(25.5

)

$

19.5

***

$

(6.0

)

Total Net Loss

 

$

(36.0

)

$

21.7

 

$

(14.3

)

 

 

 

 

 

 

 

 

Loss Per Share - Continuing Operations

 

$

(0.09

)

$

0.02

**

$

(0.07

)

Loss Per Share - Discontinued Operations

 

$

(0.23

)

$

0.18

***

$

(0.05

)

Total Net Loss Per Share

 

$

(0.32

)

$

0.19

 

$

(0.13

)

 

Adjustments

 

*                               Total net revenue and total gross margin are being provided as a bridge between our results and our previous forecast. At the time of our previous forecast, all of our operations were continuing operations.

 

**                        Amortization of acquisition-related intangible assets of $2.0 million, management incentive program associated with the Snap Appliance acquisition of $0.6 million, deferred compensation expense related to assumed stock options associated with the Platys and Snap Appliance acquisitions of $0.2 million, immaterial adjustments to previous restructuring plans, loss on repurchase of 3% convertible notes of $0.1 million and ($0.7) million of incremental income taxes associated with certain non-GAAP adjustments.

 

***                 Impairment related to the IBM i/p Series RAID business acquisition of $15.5 million, amortization of acquisition-related intangible assets of approximately $2.9 million, management incentive program associated with Snap Appliance acquisition of approximately $0.7 million, deferred compensation expense related to assumed stock options associated with the Snap Appliance acquisition of approximately $0.1 million and $0.3 million of incremental income taxes associated with certain non-GAAP adjustments.

 

****          Net revenue of discontinued operations excludes $7.5 million of an impairment on the IBM i/p Series RAID business.

 


 

Adaptec, Inc.

Reconciliation of Continuing Operations with Combined Operations

Q2’05 Results

($ in millions, except per share amounts)

(unaudited)

 

 

 

Quarter Ended
September 30, 2004

 

 

 

GAAP

 

Adjustments

 

Non-GAAP

 

Net Revenue - Continuing Operations

 

$

99.8

 

$

0.0

 

$

99.8

 

Net Revenue - Discontinued Operations

 

$

0.0

 

$

21.9

 

$

21.9

 

Total Net Revenue

 

$

99.8

 

$

21.9

 

$

121.7

*

 

 

 

 

 

 

 

 

Gross Margin - Continuing Operations

 

47

%

0

%

47

%

Gross Margin - Discontinued Operations

 

0

%

32

%

32

%

Total Gross Margin

 

47

%

 

 

44

%*

 

 

 

 

 

 

 

 

Loss - Continuing Operations

 

$

12.8

 

$

(5.1

)**

$

7.7

 

Loss - Discontinued Operations

 

$

(20.8

)

$

16.9

***

$

(3.9

)

Total Net Loss

 

$

(8.0

)

$

11.8

 

$

3.8

 

 

 

 

 

 

 

 

 

Income Per Share - Continuing Operations

 

$

0.10

 

$

(0.04

)**

$

0.06

 

Loss Per Share - Discontinued Operations

 

$

(0.19

)

$

0.15

***

$

(0.04

)

Total Net Income (Loss) Per Share

 

$

(0.07

)

$

0.10

 

$

0.03

 

 

Adjustments

 

*                               Total net revenue and total gross margin are being provided as a bridge between our results and our previous forecast. At the time of our previous forecast, all of our operations were continuing operations.

 

**                        Amortization of acquisition-related intangible assets of $2.4 million, management incentive program associated with the Snap Appliance acquisition of $1.9 million, deferred compensation expense related to assumed stock options associated with the Platys and Snap Appliance acquisitions of $0.8 million, adjustments to previous restructuring plans of $1.9 million and ($12.1) million of incremental income taxes associated with certain non-GAAP adjustments.

 

***                 Amortization of acquisition-related intangible assets of $2.8 million, management incentive program associated with the Snap Appliance acquisition of $1.0 million, deferred compensation expense related to assumed stock options associated with the Snap Appliance acquisition of approximately $0.1 million, write-off of in-process research and development costs associated with the acquisition of Snap Appliance of $2.2 million, cash hire-on payments associated with the IBM i/p Series RAID business acquisition of $0.6 million and $10.2 million of incremental income taxes associated with certain non-GAAP adjustments.