5/1/2003 - SimpleTech, Inc. (Nasdaq: STEC), a technology solutions provider offering products based on DRAM, SRAM and Flash memory technologies, announced its financial results for the first quarter of 2003.
Revenues for the first quarter of 2003 decreased 11% to $40.9 million from $45.8 million for the fourth quarter of 2002, and decreased 20% from $51.0 million for the first quarter of 2002. Revenues for the first quarter of 2003 decreased sequentially from the prior quarter due primarily to seasonality and significant price declines for DRAM and Flash components during the quarter. Revenues for the first quarter of 2003 decreased from the same period in 2002 due primarily to a 19% decline in average selling prices. Revenues from Flash-based memory solutions for the first quarter of 2003 increased by 63% from the same period for 2002. The increase was due primarily to greater unit shipments to Industrial and Commercial customers. Revenues for the first quarter of 2003 met the company's previous guidance of a range from $38 million to $42 million. Net loss for the first quarter of 2003 was $1.7 million, compared to net income of $153,000 for the fourth quarter of 2002 and net income of $313,000 for the same period in 2002. Loss per share was $0.04 for the first quarter of 2003, compared to $0.00 earnings per share for the fourth quarter of 2002 and net income per share of $0.01 for the same period in 2002.
Revenues from Commercial Division customers comprised 78% of total revenues for the first quarter of 2003 compared to 75% of total revenues for the fourth quarter of 2002. Commercial revenues decreased to $31.8 million for the first quarter of 2003 from $34.2 million for the fourth quarter of 2002.
Revenues from Industrial Division customers comprised 22% of total revenues for the first quarter of 2003 compared to 25% of total revenues for the fourth quarter of 2002. Industrial revenues decreased to $9.1 million for the first quarter of 2003 from $11.6 million for the fourth quarter of 2002.
The Xiran Division completed the initial integration of its application specific integrated circuit (ASIC) into board and system level products. In April 2003, the Xiran Division displayed an initial product targeted for streaming media applications at the National Association of Broadcasters (NAB) Exhibition in Las Vegas. The product displayed features one of the lowest costs per delivered stream available for broadband content delivery. The NAB Exhibition is a leading source of new product announcements in the global broadcast technology marketplace. The Xiran Division streaming media server won an award for Innovation in Media (AIM) at the Exhibition. SimpleTech currently expects to ship beta-level prototype units to potential customers in the third quarter of 2003.
"After recording a strong fourth quarter of 2002, we are pleased with our progress for the first quarter of 2003 after working through seasonality and price decreases of more than 40% for both Flash and DRAM components," said Manouch Moshayedi, chief executive officer of SimpleTech, Inc. "We believe that our toughest quarter of the year is behind us.
"Given the pricing environment for DRAM and Flash memory during the first quarter of 2003, we are pleased to have maintained a solid balance sheet and to have decreased our general and administrative expenses, while investing additional resources in sales & marketing and research & development. In addition, based on recent key design wins, we believe we are well positioned in several high-volume opportunities for our stacked DRAM memory products, Bonzai USB Mini-Drives and customized Flash-based solutions.
"We believe the outlook for SimpleTech is bright given that we have navigated through a very difficult quarter, and in light of the successful introduction and expansion in market distribution of a number of new products. Further, we expect new memory solutions, such as our Bonzai line of USB Mini-Drives, and new designs for military sub-systems, global positioning tracking systems, point-of-sale systems and other exciting new markets, to make significant contributions to our future growth.
"The volatility of the memory component pricing environment, the unsettled worldwide geopolitical situation as well as the state of the economy limit visibility. However, we expect our second quarter 2003 revenues to be flat compared to our revenues for the first quarter of 2003."
SimpleTech, Inc. is a technology solutions provider offering products based on DRAM, SRAM and Flash memory technologies. Headquartered in Santa Ana, Calif., the company is a leader in the design, development, manufacturing and marketing of memory solutions. For information, please contact the company's Investor Relations department at (949) 260-8328 (firstname.lastname@example.org) or visit www.simpletech.com
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