A loss of $0.39 per share was reported in first quarter 2000 including restructuring and other one-time charges. Gross margin for the first quarter 2001 was 42 percent compared to 37 percent for the first quarter 2000, excluding restructuring and other one-time charges. This margin increase reflects a favorable product mix and continued benefits from operational efficiencies.
We are very pleased with our successes this quarter. In challenging times, customers have to make smarter and more deliberate decisions for their storage demands. We believe that our superior technology and compelling business proposition is resonating with companies in all industries, said Patrick J. Martin, StorageTek chairman, president and chief executive officer. In November, we outlined our strategy. We said that we were going to concentrate on growing revenue profitably and unleashing trapped profitability. We have set the foundation, are executing against our strategy and believe we are well positioned to successfully move forward.
The company reports strong revenue growth in international operations of 11 percent over first quarter 2000, with strong increases in Asia Pacific and Latin America of 30 percent and 19 percent, respectively. A strong international revenue base has successfully diversified our risks to economic downturns, said Martin.
In the first quarter, Automated Tape Solutions revenue increased because of customers’ preference for large libraries and the Company’s virtual tape solution, the Virtual Storage Manager (VSM). We offer a compelling alternative for traditional disk users looking for a break in their ever increasing disk budget cycle. You may hear others talking about virtual, but StorageTek is providing virtual, Martin said.
Financial highlights for the first quarter include a strong cash balance of $292 million and cash flow from operations of approximately $60 million. Debt was reduced for the eighth straight quarter. Our balance sheet is strong. The effective use of our working capital and the continued drive to unleash trapped profitability provides a solid foundation for us in times when many business sectors are under economic pressures. We will hold the line on discretionary expenses, but continue to invest in those areas that can generate profitable revenue growth, said Robert Kocol, StorageTek’s chief financial officer.
SOURCE: COMPANY PRESS RELEASE
