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 http://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 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
companies.
SYQUEST TECHNOLOGY, INC.
CONSOLIDATED CONDENSED INCOME STATEMENT
(In thousands, except per share data)
Three months ended Twelve
months ended
September 30,
September 30,
1996 1995 1996
1995
(Unaudited)
(Audited)
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)
(130,676)
(17,109)
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)
(133,651)
(15,507)
Provision (benefit) for
income taxes -- (6,032)
3,000
(3,721)
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.
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands)
(Audited)
Septemb
er 30,
1996
1995
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
134,834
Net plant, property and equipment
27,180 26,720 Other assets
981 3,130
$ 75,181
$164,684
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
72,494
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)
83,188
$75,181
$164,684
CONTACT: SyQuest Technology Inc. Henry Montgomery, 510/226-4000 or
Miller/Shandwick Technologies Richard Cline, 415/962-9550
rcline@miller.shandwick.com