Exabyte tops 3Q estimate

2 min read

Exabyte Corp. (Nasdaq: EXBT), said Monday its third quarter loss was $7.51 million, or 33 cents a share, a penny narrower than First Call's expected loss of 34 cents a share.

Shares in the maker of network backup systems closed up 0.88 to 11.19 Friday. The stock has rallied since it posted a smaller-than-expected loss in its second quarter.

Revenue for the third quarter was $60.1 million, up 13 percent from $53.41 million for the third quarter of 1999 and up 17 percent over the $51.31 million posted in the second quarter of 2000.

Including restructuring charges of $5.8 million, or 26 cents per share, the total third quarter loss was $13.31 million or 59 cents a share, representing a significant reduction from the loss of $17.50 million or 78 cents a share for the third quarter of 1999. First Call was expecting a loss of 34 cents a share.

The company recorded significant sequential gains in all 3 of its major lines of business -- drives, automated tape libraries and media.

The company said it plans to invest significantly in the development of new automation products and support infrastructure.

Exabyte has been jointly developing the technologies required for the M3 and M4 generations of its MammothTape technology with its partner Hitachi since early 1999. Earlier this year, Exabyte approached Hitachi about producing the scanners and mechanical tape decks for the M2 product.

As Exabyte shifts M2 scanner production from its subsidiary, Exabyte Magnetics Germany, to Hitachi, a process expected to be completed by the end of this year, it may reduce its German staff from a peak of 110 employees in June to fewer than 30 employees next January.

Exabyte also began the outsourcing of the production of the company's high-volume automation products to Shinei Sanyo in Singapore during the quarter, a move which will also result in a more variable cost business model, the company said.

Without the impact of restructuring charges, the gross margin for the quarter was 23 percent compared to 15 percent in the third quarter of 1999 and 26 percent in the second quarter of 2000. The sequential decline in the gross margin was due to cost rather than pricing or product mix factors.