Ciprico Reports First Quarter Fiscal 2008 Results
07 Février 2008 - 11:00PM
Business Wire
Ciprico Inc. (NASDAQ: CPCI) (the �Company�) today reported revenue
for the first quarter of the fiscal year 2008 ended December 31,
2007 of $2.0 million, down $0.2 million, or 9% from the prior
quarter, and $0.8 million, or 27% from the first quarter of fiscal
2007. Gross margins improved sequentially from 26.1% last quarter
to 41.8% this quarter compared to 43% in the first quarter of the
prior year. Operating expenses increased 12% from the prior quarter
and increased $1.7 million from the quarter a year ago resulting in
a net loss of $3 million for this quarter compared to a loss of
$838,000 in the prior year first quarter. While current revenues
were disappointing the company made substantial progress in
building our software platform and customer potential while
strengthening our balance sheet. Ciprico continued to focus on
bringing its industry leading RAIDCore technology to market, and we
have only begun to have any significant penetration into the
market. We have shipped over 40,000 licenses of RAIDCore by Ciprico
and we currently have well over 100 companies evaluating the
RAIDCore software with over 30 customers who have purchased
RAIDCore from Ciprico. We have received strong response from them
that ultimately the ability to offer silicon agnostic storage
protection software vs. a hardware solution is a strategic
imperative. We remain highly optimistic that the overall transition
from hardware to virtualized software data protection in the
mainstream server IT and media workstation markets will continue
but while testing and OEM consideration has met plan, adoption
rates, efforts to provide security for the software from piracy and
the shipments of products incorporating the platform have taken
longer than expected. Revenues for the quarter were adversely
affected by the overall decline in the economy evidenced in other
storage vendor sales as well as the on-going entertainment writers�
strike, the latter which greatly affected our MediaVault� product
revenues. During the quarter we did record significant revenue
related to work done on a military contract that flows through
Boeing as prime contractor. We had previously announced that we had
been awarded this contract and that we expected approximately $1
million in revenue on the initial phase of the contract. Boeing has
since indicated that due to military requested cost reductions it
is suspending further work on this phase of the contract. We have
recorded approximately $650,000 in revenue to date related to this
contract. We continue to pursue engagement on the long term aspects
of this opportunity and a number of addition military
opportunities, particularly in light of the favorable customer
feedback regarding our technology and solution. Operating expenses
increased as we continue to aggressively invest in our engineering
team and our first full quarter of some sales and marketing teams
hired late in the previous quarter. General and administrative
expenses increased over the previous quarter due to additional
accounting and audit costs related to our year-end, as well as
non-capitalizable debt acquisition costs incurred in the first
quarter of fiscal 2008. These investments in research and
development, sales and marketing, and balance sheet strength
resulted in a net loss for the first quarter of $3.0 million,
compared to a net loss of $2.8 million in the previous quarter. We
ended the quarter with cash and investment balances of $6.8
million, $2.2 million higher than the prior quarter end balance of
$4.6 million. During the quarter we issued $5.2 million of
convertible notes and warrants, which produced net cash proceeds of
$5.0 million. Net cash used in operations was $2.5 million during
the first quarter, which includes our net loss of $3.0 million for
the quarter adjusted for $0.3 million of non-cash charges
(depreciation and stock compensation) and $0.2 million of changes
in operating assets and liabilities. We also had $0.3 million in
capital expenditures. �The first quarter was an exciting quarter
for us in terms of customer reception to a software storage
protection platform but not for sales, but early feedback has us
confident in our strategy said Steve Merrifield, chief executive
officer. �Despite our challenges we do believe we made significant
progress last quarter,� noting the following highlights: Since
taking over RAIDCore Ciprico has shipped a total of over 40,000
software licenses and controller boards Now have well over 100
system builders & OEMs evaluating over RAIDCore solution Over
30 customers have purchased RAIDCore from Ciprico Achieved a
Vanguard award for our first RAIDCore based appliance, the MV5108
and delivered first production units Introduced RAIDCore technology
running on Intel platforms and began qualification work with
leading motherboard vendors Demonstrated industry leading
performance at SuperComputing �07 conference �Potential customer
discussions have convinced us of the value of the core strategy
said Merrifield. As we move into our second quarter we are focused
on execution and believe we are building momentum with our unique,
virtual RAID technology. We will begin shipments this quarter to a
number of new customers running on multiple silicon solutions as a
result of the dramatic growth in evaluations being conducted over
the past two quarters. Also over the next 90-120 days we expect to
announce multiple strategic partnerships that will accelerate
RAIDCore�s market acceptance. In addition, we will release new
MediaVault and DiMeda� products utilizing our RAIDCore Technology.
With the slower than expected adoption rates we are taking action
to evaluate strategic options and will reduce expenses to insure we
are able to realize the potential our software platform has in the
market. �We are confident we are making progress with our customers
and partners that will allow Ciprico to be successful. As we have
said in the past our revenues will be erratic near term and our
profitability will continue to be impacted by the investments we
are making to enable RAIDCore to be the solution of the future. We
will measure our progress in terms of design in wins, announcing
key partnerships and revenue growth. If we can gain additional
short term traction and reduce the time to revenue, we continue to
believe a target of doubling our revenue in fiscal 2008 may be
achievable. We remain confident Ciprico will return to
profitability in fiscal 2009.� The Company will host a conference
call on February 8, 2008 at 10:00 a.m. Eastern Time and 9:00 a.m.
Central Time, to discuss this release. The conference call will be
broadcast live via the Internet at www.ciprico.com. The conference
call will also be available live via telephone at 800-218-4007. A
replay will be available through February 18, 2008 at 800-405-2236,
using the passcode 11107922, or on the company�s web site. Safe
Harbor Statement under the Securities Reform Act of 1995 This press
release includes forward-looking statements that involve risk and
uncertainties that could cause actual results to differ materially
from the forward-looking statements. Such forward-looking
statements, which reflect our current view of expected growth in
software licensing revenues, quarterly sales growth, revenue growth
in fiscal 2008, our ability to build sustainable growth and return
to profitability in fiscal 2009, product development efforts and
impact on new product introductions, and other future events and
financial performance, involve known and unknown risks that could
cause actual results and facts to differ materially from those
expressed in the forward-looking statements for a variety of
reasons. These risks and uncertainties include but are not limited
to: delays in product development; market acceptance of Ciprico's
products and services; technological change in the storage and
related industries; competition in the storage software market; the
potential failure of Ciprico�s partners to introduce products
incorporating Ciprico's products; intellectual property issues; and
other risk factors discussed in Ciprico's reports on Forms 10-KSB,
10-QSB and other reports filed with the Securities and Exchange
Commission. Investors should take such risks into account when
making investment decisions. Forward-looking statements speak only
as of the date on which they were made, and except as required by
law; we assume no obligation to update any forward-looking
statements. We do not intend to update or revise any
forward-looking statements whether as a result of new information,
future events or otherwise. About Ciprico Ciprico Inc. (NASDAQ:
CPCI) is a leading provider of intelligent storage software,
solutions and appliances for enterprise class IT servers,
professional workstations and digital media workflows. Ciprico is
headquartered in Minneapolis, MN. More information about Ciprico is
available at www.ciprico.com CIPRICO INC.CONDENSED STATEMENTS OF
OPERATIONS(Unaudited) � (Amounts in thousands, except per share
amounts) Three Months Ended December 31, 2007 � 2006 � NET SALES $
2,008 $ 2,766 Cost of sales � 1,168 � � 1,581 � � GROSS PROFIT 840
1,185 � OPERATING EXPENSES: � Research and development 1,507 704
Sales and marketing 1,598 780 General and administrative � 757 � �
672 � � Total operating expenses � 3,862 � � 2,156 � LOSS FROM
OPERATIONS (3,022 ) (971 ) Interest expense 15 - Other income,
primarily interest � 82 � � 149 � � LOSS BEFORE INCOME TAXES (2,955
) (822 ) Income taxes � 16 � � 16 � � NET LOSS $ (2,971 ) $ (838 )
� Shares used to calculate net loss per share: Basic and diluted
5,113 5,018 � NET LOSS PER COMMON SHARE: Basic and diluted $ (0.58
) $ (0.17 )
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