by Anton Shilov
01/28/2003 | 09:35 PM
Maxtor Corporation announced its financial results for the fourth quarter ended December 28, 2002. Revenue for the quarter was $1.038 billion. The company reported net income on a GAAP basis of $3.6 million, or $0.01 per share. Even this not very substantial income means that the company has finally returned to profitability after the acquisition of Quantum. During the quarter the management team succeeded in cutting down the expenses and improving sales, what eventually made it possible to end the quarter without losses.
In order to cut down the expenses, in December Maxtor announced a reduction in force of approximately 500 employees, however it is not expected to see the full benefits from this reduction until the first half of 2003.<%BANNER[article]%>
Included in the GAAP net income was a charge of $20.6 million for the amortization of intangible assets, $0.9 million in stock compensation expense and $12.3 million in severance expense related to a reduction in force announced in December 2002. On a pro forma basis, excluding these charges, Maxtor reported net income of $37.3 million, or $0.15 per share. In the fourth quarter of 2001, Maxtor reported revenue of $1.071 billion from continuing operations, a net loss from continuing operations on a GAAP basis of $149.3 million, or $0.63 per share, and a pro forma net loss from continuing operations of $34.2 million, or $0.15 per share.
Maxtor completed the transition of desktop manufacturing to Maxtor facilities in Singapore by the end of the third quarter. They experienced steady improvements in the yields on their new products throughout the fourth quarter, providing them with an improved mix of higher margin 60 and 80GB per platter drives. These were primary drivers in the increase in the gross profit margin from 7.0% in the third quarter to 16.2% in the fourth. For the quarter Maxtor shipped nearly 570 thousands of HDDs.
For the fiscal year 2002, revenue totaled $3.780 billion. The company reported a net loss from continuing operations on a GAAP basis of $260.6 million, or $1.09 per share. In 2001, Maxtor reported revenue from continuing operations of $3.766 billion and a net loss from continuing operations on a GAAP basis of $598.2 million, or $2.89 per share. Therefore, for the year the management succeeded in rising the revenue and cutting the loss more than twice compared to the previous year.