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Gadzoox misses estimates amid revenue plunge

The storage-networking equipment maker misses analyst expectations by 6 cents per share, reporting a net loss of 48 cents per share on revenue of $6.4 million.

Storage-networking equipment maker Gadzoox Networks missed analyst expectations by 6 cents per share Monday, reporting a net loss of 48 cents per share on revenue of $6.4 million.

Analysts surveyed by First Call expected the San Jose, Calif., company to report a loss of 42 cents per share, excluding one-time charges. The company's revenue plunged 57 percent from the $15 million it garnered in the same quarter a year ago.

The company faces bigger-name competitors such as Brocade, as well as the slowdown in computing-equipment spending. In March, the company laid off 10 percent of its staff as part of a program to cut expenses by 20 percent.

Including one-time charges, the company's loss was $40 million for the fiscal fourth quarter, which ended March 31. Among those charges was a $5 million charge for inventory made "excess and obsolete" by the lower revenue forecasts and discontinued product development. The company also took a $3.2 million charge for restructuring and a $17.8 million charge for writing off goodwill from its $23.5 million acquisition of SmartSAN Systems in March 2000.

"The last few months have been challenging for Gadzoox Networks and many other high-technology companies," said Chief Executive Michael Parides, but he believes the company now is "positioned...for long-term success."

In particular, he pointed to agreements with Compaq Computer and Hewlett-Packard to use its products, and its work in selling products based on the new, higher-speed 2 gigabit-per-second version of the Fibre Channel standard that underlies special-purpose networks devoted to shuttling data between storage devices and servers.

The company said revenue in the next two quarters should be about the same as the last quarter.