Storage product maker
SmartDisk Corp. reported its financial results for the third quarter of 2001. The results are down sharply year-over-year, as they have been for so many tech companies, but SmartDisk also turned in results below its own guidance for the quarter. The company blames the anemic returns on worldwide economic conditions “exacerbated by the events of September 11.”
SmartDisk reported quarterly revenue of US$17.3 million, compared with revenue of $32.7 million for the same quarter last year. The company’s previously announced guidance for the quarter anticipated revenue of $23 – $25 million. SmartDisk reported a loss for the quarter of $3.7 million, compared with earnings of $2.2 million for the same quarter last year. $1.1 million of that loss was the result of an inventory write-down, as well.
SmartDisk also noted that its quarterly operational loss excludes a $47.6 million charge in amortization and write-down of goodwill and other intangible assets related to acquisitions and other non-recurring expenses associated with the closing of the company’s Acton, MA operation — former home of VST Technologies Inc. Including those items, SmartDisk’s net loss was $51.3 million.
Reiterating a now-common refrain heard in the tech sector these days from executives, analysts and investors alike, SmartDisk president and CEO Michael S. Battaglia said that his company expects current market instability to last at least another two quarters.
Battaglia said that his company plans to release new products in the first half of the year, including what he describes as “pocket-sized high-speed hard drives.”
Battaglia also said that SmartDisk would improve gross margins on hardware products, thanks to a switch to Asian manufacturing and more efficient procurement. SmartDisk also will “compress [its] cost structure” by reducing product cost and dropping operating expenses by more than 30 percent from year ago levels.
Highlights for the company’s third quarter included the release of new titanium CD-RW and USB flash media readers and the development of prototypes of FireFly, the company’s diminutive FireWire-based storage product. FireFly was first shown at Macworld Expo in New York this past July. The company said it’s preparing for fourth quarter production of the unit; several new products also entered development this quarter, for launch in the first half of 2002.
SmartDisk offered investors some guidance for the fourth quarter, as well. The company expects to see revenue in the $14-16 million range with a loss from operations in the $0.12-$0.17 per share range. SmartDisk says that it’ll be able to continue to satisfy its cash requirements, from operations and cash reserves.