InterNet Bankruptcy Library - News for October 2, 1996

Bankruptcy News For December 30, 1996

  1. SyQuest reports fiscal 1996 fourth quarter results; net loss sharply reduced;
    sequential quarterly revenues increase for first time in over a year

SyQuest reports fiscal 1996 fourth quarter results; net loss sharply reduced; sequential
quarterly revenues increase for first time in over a year

FREMONT, Calif.--Dec. 30, 1996--SyQuest Technology Inc. (NASDAQ:SYQT), a
leading manufacturer of removable cartridge hard drives, today reported a reduced net
loss of $10.4 million, or $1.29 per share, on net revenues of $44.8 million for the fiscal
fourth quarter ended Sept. 30, 1996.

In the same period a year ago the company had a net loss of $19.1 million, or $1.69 per
share, on net revenues of $88.4 million.

Compared with the fiscal third quarter of 1996, SyQuest in the fourth quarter reduced its
net loss by 75 percent and increased its net revenue by 52 percent. Gross profit margins
improved to 22 percent of revenues, compared with negative gross margins in the
preceding period.

For all of fiscal year 1996, SyQuest posted a net loss of $136.7 million, or $12.38 per
share, on revenues of $200.4 million, compared with a net loss of $11.8 million, or $1.07
per share, on revenues of $299.5 million in fiscal 1995.

"Our fourth quarter results signal renewed momentum for SyQuest, marking the first time in
over a year that the company has achieved sequential quarterly revenue growth," said
Chairman Ed Marinaro. "Since early summer, under new management, we have taken
major steps to move SyQuest toward profitability. This quarter is a benchmark in our
turnaround strategy."

Marinaro said that the company has expanded its manufacturing capacity, without
additional factory hiring or increased plant facilities, through improvements in operating
efficiencies and yields.

He also noted that since May SyQuest has significantly restored its balance sheet,
completing $71.5 million worth of equity investments and restructuring $38.5 million of
debt into long- and short-term notes. On Nov. 7, 1996, the company announced that it had
exceeded the financial requirements of NASDAQ and was therefore allowed to maintain
its National Market listing on the stock exchange.

SyQuest to date has shipped a total of more than 3 million removable cartridge hard drives
and 15 million cartridges worldwide. The company has already shipped more than 90,000
units of its EZFlyer 230 drive -- the second of the EZ product family -- while
discontinuing the EZ135 drive.

SyQuest said that is has also begun initial delivery to customers of its innovative SyJet 1.5
GB removable cartridge hard drive and expects volume shipments to commence in January
1997, to fulfill a large backlog of orders from OEMs, resellers and retailers.

About SyQuest

SyQuest Technology Inc. is headquartered in Fremont, and maintains manufacturing plants
in Fremont and Penang, Malaysia, with additional facilities in Colorado, California,
Europe and Asia. The company offers removable cartridge hard drives for Apple,
Windows, MS-DOS, PC-DOS, UNIX, SGI and Sun OS platforms. SyQuest (SYQT) is
publicly traded on NASDAQ's National Market System. See SyQuest on the World Wide
Web at

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 reports filed by SyQuest with the SEC,
including the reports on Forms 10-Q and 10-K.

NOTE TO EDITORS: SyQuest and the SyQuest logo are registered trademarks of SyQuest
Technology Inc. All other brands or tradenames are the property of their respective

                          SYQUEST TECHNOLOGY, INC.
                    (In thousands, except per share data)

                                 Three months ended   Twelve
                                 months ended
                                    September 30,       
                                    September 30,
                                   1996      1995       1996  

        Net revenues                $ 44,836  $ 88,375   $
        200,407  $299,544 Cost of revenues              34,770
           93,142     248,693   248,497

        Gross Profit (loss)           10,066    (4,767)   
        (48,286)   51,047

        Operating Expenses:
          Selling, general and
           administrative             12,815    14,072     
           51,743    44,264
          Research and development     5,468     6,408     
          25,920    23,892 Restructuring                 (733)
               --        4,727       --

          Total operating expenses    17,550    20,480     
          82,390    68,156

          Income (loss) from 
           operations                 (7,484)  (25,247)  

        Other income (expense)        (2,650)      (86)    
        (1,938)      468

        Interest income (expense)       (294)      195     
        (1,037)    1,134

        Income (loss) before income 
         taxes                       (10,428)  (25,138)  

        Provision (benefit) for 
         income taxes                   --      (6,032)     

        Net income                  $(10,428) $(19,106) 
        $(136,651) $(11,786)

        Income (loss) per share     $  (1.29) $  (1.69)  $ 
        (12.38) $ (1.07)

        Common and common equivalent 
         shares used in computing
         per share amounts            11,497    11,063     
         11,497    11,063

        The computations of earnings per share for the quarter
        and for the year, ending September 30, 1996, include
        charges of $4,599 and $5,733, respectively, associated
        with the assured yield for the discount from fair
        market value related to conversion of the Company's 7%
        Cumulative Convertible Preferred Stock.  There are no
        such charges included in the September 30, 1995
        earnings per share calculations.

                            SYQUEST TECHNOLOGY, INC.
                                 (In thousands)

                                                       er 30,
        Current assets:
          Cash, cash equivalents and short-term
           investments                                 $
           3,670   $ 29,648
          Accounts receivable, net                      
          30,341     55,653 Inventories, net                  
                      10,538     34,213 Prepaid expenses and
          deferred income taxes      2,471     15,320

        Total current assets                         47,020   

        Net plant, property and equipment               
        27,180     26,720 Other assets                        
                       981      3,130
                                                   $ 75,181  

        Current liabilities:
          Accounts payable                             $
          23,917   $ 41,213 Bank borrowings                   
                      19,629       -- Provision for losses on
          purchase commitments     --       10,510 Accrued
          compensation and other liabilities     18,671    
          20,416 Income taxes payable                         
            1,966        355 Current portion of long-term debt
                     $ 20,188   $    --

        Total current liabilities                    84,371   

        Deferred income taxes                               --
              8,726 Long-term debt                            
              20,971        -- Other long-term liabilities    
                            192        276

        Stockholder's equity:
          Preferred stock                                   
          18         -- Common stock                          
                      14         13 Additional paid-in capital
                             102,580     79,489 Treasury stock
                                         (12,855)   (12,855)
          Retained earnings (deficit)                 
          (120,110)    16,541

        Total stockholder's equity (deficit)        (30,353)  

CONTACT: SyQuest Technology Inc. Henry Montgomery, 510/226-4000 or
Miller/Shandwick Technologies Richard Cline, 415/962-9550