MILPITAS, Calif. -- Capping a year in which its net revenue skidded 21 percent from the 1998 fiscal year, Adaptec
nevertheless managed to turn a $40 million operating profit in the
fourth quarter, up 108 percent from the year-ago period.
"Our fourth quarter marks a turnaround year for Adaptec -- a
year in which we focused on the profitable growth side of the
business," said Bob Stephens, president and CEO of the maker
of host adapters and RAID storage products. "Today, we are a
stronger company, better able to exploit future market
Net revenue for the fourth quarter was $184 million, with net
income of $62 million, or 55 cents per share (diluted). That
compared with income of $19 million in the fourth quarter of
1998 and was up 38 percent from income of $29 million in the third
quarter of 1999.
The company attributed the strong fourth quarter to growth in
server demand, which fueled sales of host adapters. Acceptance
of its new high-end RAID product and a successful
expense-reduction program were also credited.
For the fiscal year, revenue was $602 million, down 21 percent
from revenue of $758 million in fiscal 1998. Net income of $87
million was down 41 percent from income of $147 million in the
previous year. Diluted earnings per share were 77 cents, down
38 percent from $1.25 in fiscal 1998.
Much of the blame was because of a heavy fall-off in the Peripheral
Technology Solutions business, which Adaptec sold to
STMicroelectronics. In addition, a technology shift on the
desktop necessitated action in Adaptec's channel, affecting
revenue in the first and second fiscal quarters.
"As we move into the next fiscal year, our three main business
segments -- host, RAID, and software -- offer compelling
growth opportunities," said Andy Brown, vice president and
chief financial officer of Adaptec. "Entering fiscal year 2000, our
operating expenses are at 35 percent of revenue. The team is
delivering results that keep Adaptec at the forefront of the I/O