msystems Reports $219 Million in Revenues and Pro Forma Earnings Per Share of 21 Cents for the First Quarter of 2006
I probably sold out much too soon
Wednesday April 26, 8:45 am ET Company expects revenues to approach 1 billion dollars in 2006
KFAR-SABA, Israel--(BUSINESS WIRE)--April 26, 2006--msystems(TM) (Nasdaq: FLSH - News), a leader in smart personal storage, today announced financial results for the first quarter ended March 31, 2006.
GAAP financial highlights for the first quarter:
Revenues were $219.1 million, an 87 percent increase compared with the first quarter of 2005
Gross margins were 20.4 percent
Net income was $7.1 million, or $0.17 per share on a fully diluted basis
Pro forma financial highlights for the first quarter, excluding the effects of stock based compensation expenses, amortization of intangible assets related to an acquisition, a one time gain from the sale of an investment and the related tax effects:
Revenues were $219.1 million
Gross margins were 20.6 percent
Net income was $8.7 million, or $0.21 per share on a fully diluted basis
As a result of the consolidation of the venture with a flash partner, first quarter revenues, cost of goods sold and operating income increased by $24 million, $15 million and $9 million, respectively, which were off-set by a minority interest of $9 million, resulting in the consolidation having no effect on net income or earnings per share.
Commenting on the results, Dov Moran, President and Chief Executive Officer of msystems, said, "We are very pleased with our results for the first quarter of 2006, in which we achieved revenues and net income well above our initial expectations despite difficult market conditions and seasonal weakness. This quarter we demonstrated the strength of our business model, which enables us to show strong performance even in a challenging environment through the effective use of our sales channels and our supply agreements, which provide us access to flash capacity at competitive prices, as well as the effective management of our inventory."
He continued, "We remain focused on our two primary target markets - the USB Flash Drive (UFD) and mobile markets. In the UFD market, U3 continues to gain traction worldwide as evidenced by our recent launch of U3 Smart Drives in Japan. In the first quarter, we also saw our first sales of mTrust (formerly Xkey) to Fortune 500 companies. In the mobile market, we are receiving positive feedback from customers for our new multi-sourced H3 mDOC and are beginning to see our first design wins. We also announced at 3GSM the commercial launch of 512 megabyte high density SIM cards with Orange and Oberthur."
Mr. Moran concluded, "As evidenced by the results of the first quarter, the demand for our products continues to be strong and we remain very optimistic that 2006 will be another successful year of exceptional growth for msystems. We believe that our people, technology, products and strategy position us well, and will drive our revenues in 2006 to approach the one billion dollar mark."
msystems will host a conference call to discuss its financial results and other matters discussed in this press release, as well as provide an update on the Company's outlook for 2006, at 10:00 a.m. EST today, April 26, 2006. The call will be available live on the Internet at www.m-systems.com and www.kcsa.com. Following the call, the webcast will be archived for a period of 90 days. A replay of the call will be available beginning at approximately 12:00 p.m. EDT, April 26, 2006, until May 1, 2006 at 11:59 p.m. To access the replay, please call +1-973-341-3080; ID Code: 7251964.
msystems has been transforming raw flash material into smarter storage solutions since 1989. From embedded flash drives deployed in millions of mobile handsets to U3 USB smart drives designed for leading global brands, msystems creates, develops, manufactures and markets smart personal storage solutions for a myriad of applications targeting high growth markets. msystems' product lines include:
mDrive (formerly DiskOnKey®) U3 USB smart drives for personal, portable computing
mDOC embedded flash drives for mobile handsets and consumer electronics devices
mSIM MegaSIM® series high-density SIM cards and mSIM M.MAR® series SIM cards and highly secure cards (available both from msystems and its subsidiary Microelectronica)
mCard, high-quality memory cards for mobile handsets and digital cameras
mTrust (formerly Xkey®) end-to-end enterprise access, control and management solution for USB flash drives and other removable media
mSSD (formerly FFD(TM)) rugged solid state disks for mission-critical applications
mModule (formerly DiskOnChip® modular family) modular flash storage for embedded systems
mSafe (formerly SuperMAP® family) secure hardware and software crypto cores
More information is available online at www.m-systems.com. msystems. made smarter.
All company and product names mentioned may be trademarks or registered trademarks of their respective holders and are used for identification purposes only. msystems is incorporated as M-Systems Flash Disk Pioneers Ltd. http://biz.yahoo.com/bw/060426/20060426005577.html?.v=1