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Adaptec Storage Systems Revenue to Increase 260 Percent in FY 2006

  • 07 December, 2004 08:50

<p>Snap Appliance Acquisition and Growth of Existing Systems Business with new Sales to Strategic OEM Customers, Including IBM, to Expand Revenue to US$200 Million</p>
<p>Sydney, Australia – December 7, 2004 - Adaptec, Inc. (NASDAQ: ADPT), a global leader in storage solutions, today announced that its acquisition of Snap Appliance and growth in the Adaptec core storage solutions business -- including products based on the Adaptec Flexible Storage Architecture (FSA), which is included in IBM's recently announced entry-level storage products -- are expected to enable the company to achieve more than US$200 million of storage systems revenue in its fiscal year ending March 2006. This new Adaptec estimate represents an increase of more than 260 percent in this segment of the company's business over a two year period.</p>
<p>"Over the past few years Adaptec has aggressively executed on the development of its end-to-end product line and successfully integrated several technology acquisitions," said Robert N. Stephens, president and CEO of Adaptec. "We are now seeing the results of this strategy pay off. Adaptec is clearly in a strong position for delivering increased revenue and improved operating margins."</p>
<p>In April 2003, Adaptec purchased Eurologic, adding block-based direct-attached storage (DAS) and storage-attached network (SAN) solutions to its product portfolio. This business contributed US$55 million of revenue to Adaptec's fiscal year ended March 2004. In July 2004, Adaptec acquired Snap Appliance adding the worldwide volume leader in network-attached storage (NAS) solutions, which is also expected to contribute to this growth.</p>
<p>Recently, Adaptec announced its Flexible Storage Architecture and that IBM will be the first major vendor to ship storage solutions incorporating the Adaptec FSA in its recently announced TotalStorage DS300 and DS400. The acquisition of Snap Appliance, coupled with growth in the core storage solutions business including its expanded IBM relationship, will enable Adaptec to achieve more than US$200 million of storage systems revenue in fiscal 2006.</p>
<p>Adaptec also announced that it expects results for the second quarter of fiscal 2005 to be at the bottom of the guidance range it provided with its first quarter earnings announcement. The guidance previously provided included revenue of US$124 million to US$127 million and pro forma net income per share of US$0.00 and US$0.02. This updated guidance reflects softness in the U.S. distribution channel business, while the company's OEM and non-U.S. businesses remain on target.</p>
<p>Safe Harbour Statement</p>
<p>This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements include statements regarding future events or the future performance of Adaptec, including projected storage subsystems revenue for fiscal 2006, anticipated growth in revenue from the storage subsystems business including Snap and core businesses, and revenue and the operating results for the second quarter of fiscal 2005. These forward-looking statements are based on current expectations, forecasts and assumptions and involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks include the difficulty in forecasting the growth in the market for storage subsystems products, competition and other challenges that Adaptec's customers may encounter in selling their storage products, fluctuations in demand in the storage market, decline in customer acceptance of ours and customers' products, the adverse effects of the intense competition we face in our business and the challenges we face in maintaining or increasing gross margins. For a more complete discussion of risks related to our business, reference is made to the section titled "Risk Factors" included in our Form 10-k for the year ended March 31,2004, on file with the Securities and Exchange Commission, and to the reports that we filed with the Securities and Exchange commission thereafter. Adaptec assumes no obligation to update this information.</p>
<p>About Adaptec</p>
<p>Adaptec Inc. (NASDAQ:ADPT) provides end-to-end storage solutions that reliably move, manage and protect critical data and digital content. Adaptec provides software and hardware solutions for storage connectivity and data protection, storage networking and networked storage subsystems to leading OEM and distribution channel partners. Adaptec solutions are in use by enterprises, ISPs, medium and small businesses and consumers worldwide. Adaptec is an S&amp;P Small Cap 600 Index member.</p>
<p>MEDIA CONTACT:
Rob Stirling
Markom Marketing
+61 2 9977 8922
robstirling@markom.com.au</p>
<p>Demetri Christodoulou
Adaptec Australia
+61 2 8875 7874
demetri@adaptec.com</p>

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