Lunar Flare NAS appliances began shipment in limited availability at the end of April and in general availability near the end of June.
Net loss, which excludes non-cash charges related to the accounting for Series E Preferred Stock, for the second quarter 2001 was $6.0 million, or $0.25 per share. These non-cash charges include a beneficial conversion charge of $0.5 million and $0.3 million representing the accrual of the 4.75% annual premium on the Series E Preferred Stock. Charges for both of these items will continue to be incurred while the Series E Preferred Stock is outstanding.
Net loss applicable to common shares for the second quarter 2001, which included non-cash charges related to the accounting for Series E Convertible Preferred Stock, was $6.8 million, or $0.28 per common share, compared to a net loss of $3.1 million, or $0.13 per common share, for the second quarter of 2000 and $5.9 million, or $0.24 per common share, for the first quarter 2001.
Total operating expenses for second quarter 2001 were $6.3 million, an increase of $0.3 million from first quarter 2001. This increase is due primarily to expanded sales and marketing initiatives surrounding the general availability of Lunar Flare NAS.
Net cash used by the Company during the second quarter 2001 was $6.3 million, compared to $6.8 million in first quarter 2001. Cash on hand at June 30, 2001 was $27.2 million.
We achieved a major milestone during the quarter with the initial shipment and general availability of our first product, Lunar Flare NAS, stated Joan Wrabetz, president and chief executive officer of Tricord Systems. Customer and channel partner response to the value proposition of our product and our ‘easy to do business with’ model has been very positive. However, through our initial selling efforts, we are finding that the current difficult economic environment is having a negative effect on selling and early adoption of our product. Customers are delaying or avoiding near term purchase decisions, purchases are smaller and less predictable, and there is limited visibility to future purchases. Therefore, we are updating our revenue guidance for the second half of 2001 to reflect the near term difficult economic environment, and we currently expect second half of 2001 revenues in the range of $1 to 4 million.
On the positive side, Tricord’s product allows customers to increase their storage utilization, minimize up front and ongoing storage costs, and maximize the return on their storage investments helping them better manage through these difficult economic times. Because of these benefits, we believe that our company is uniquely positioned to gain share in the storage and appliance space and become a leading provider in the long term.
Despite the extremely challenging current economic and IT spending environment, we remain squarely focused on ramping our sales efforts, both directly and through our channel partnerships, acquiring strong reference customers, continuing to aggressively enhance our product offerings and developing Illuminaä software licensing partnerships. As we do this, we also are aggressively attacking unnecessary costs and managing our cash.
SOURCE: COMPANY PRESS RELEASE
