After selling off a mass of non-core activities, Adaptec Inc, the Milpitas, California-based provider of bandwidth management technology, concludes that it has completed a turnaround year. Certainly the company is in better shape than a year ago when losses pushed its share price so low that companies such as Intel Corp and 3Com Corp were expected to snap up what had become a bargain buy.
So much has happened in terms of sell-offs and restructuring that Adaptec has produced two sets of accounts – one showing what actually went on and the other ‘normalized’ version excluding all the changes. Sell-offs meant that actual revenue slipped 9.6% in the fourth quarter but net income rose by 163.2% to $61.5m. For the year, Adaptec produced a loss of $13.2m, down from a profit of $172.8m on revenue 31.2% lower at $692.4m. Adaptec shares rose 12.75% to $24.8 as normalized earnings for the quarter of $0.36 were well above analysts estimates compiled by First Call of $0.30.
Adaptec says the strong fourth quarter was the result of growth in server demand, which fueled sales of host adapters in both the OEM and channel side of the business. While its current RAID offerings target entry level and high-end NT servers and Adaptec now aims to complete the RAID family with mid-range server products.
