EMC reports record revenues, strong net income and cash flow; Board authorizes stock buyback; Company reports fourth-quarter and fiscal year 1995 results

Business Wire, Jan 25, 1996

HOPKINTON, Mass.--(BUSINESS WIRE)--Jan. 25, 1996-- EMC Corporation, the world's leading independent provider of intelligent information storage and retrieval technology, today reported results for the 1995 fourth quarter and fiscal year. These results include strong growth in revenues, higher net income before one-time charges, and a significant increase in cash balances.

Reflecting the ongoing improvement in EMC's current competitive and financial position as well as the company's outlook, EMC also announced that its Board of Directors has authorized a common stock repurchase program of up to 15 million shares.

Revenue for the fourth quarter was a record $519 million, 21% higher than the fourth quarter of 1994. Net income for the quarter was $101 million or $0.41 per share, 29% and 21% respectively above the fourth quarter of 1994, before one-time after-tax charges of $39 million or $0.15 per share. The one-time charges include $0.03 per share to cover the costs associated with completing the McDATA acquisition and $0.12 per share for one-time operating charges related to end-of-life products and inventory. Including the one-time charges, net income for the fourth quarter was $62 million or $0.26 per share.

Revenue for the 1995 fiscal year totaled $1.92 billion, 39% above 1994. Fiscal year earnings for 1995 were at the $366 million and $1.49 per share levels and, including the one-time fourth-quarter charges, were at $327 million and $1.34 per share. These 1995 results significantly exceed the $1.38 billion revenue, $251 million net income and $1.10 earnings per share achieved by EMC in 1994. The 1995 results include the operations of McDATA Corporation, acquired by EMC during the fourth quarter.

"EMC has just completed another year of extraordinary progress," said Michael C. Ruettgers, EMC president and CEO. "We finished 1995 with a resumption of strong sequential quarterly revenue growth, surpassing IBM Corporation as the industry leader in total terabytes of mainframe storage shipped and achieving our aggressive goal of $200 million in open storage business during our first full year in this market. The one-time charges in the fourth quarter reflect the acquisition of McDATA Corporation, a leader in high-end network switching technology, and improvement in the quality of our product and inventory position. At the same time, strong financial performance, an increased focus on working capital management, and the acquisition of McDATA resulted in an increase in cash balances of almost $150 million in the fourth quarter of 1995. With this increase, our cash balances rose to over $500 million at year-end."

EMC also announced today that its Board of Directors has authorized the purchase of up to 15 million shares of its common stock over the next five years. Ruettgers said, "EMC's product and market leadership and strong financial position now enable the company to invest for growth in our current business, broaden our business base and repurchase our shares to create more value for our customers, our employees and our shareholders."

Shares repurchased under the program will be utilized primarily in connection with the company's employee stock option and purchase plans. Shares will be purchased from time to time, with the precise timing and amount dependent upon market conditions.

"The program announced today reflects our belief that repurchasing EMC stock is currently an attractive opportunity for the company, and it underscores our commitment to enhancing long-term shareholder value," Ruettgers said.

"The fourth quarter of 1995 will be remembered as one of the most significant and positive quarters in our company's history," noted Ruettgers. "We announced reseller and OEM agreements with Hewlett-Packard Company and AT&T Global Information Systems (now NCR Corporation), for both of these industry leaders to market and sell our Symmetrix 3000 systems with their high-performance UNIX-based servers. We completed the acquisition of McDATA, which will be a strong contributor to both our ongoing revenue and profit streams as well as our introduction of new products and capabilities. And we brought several unprecedented new services and capabilities to market, including Symmetrix Data Migration Services and Symmetrix ESP (Enterprise Storage Platform). EMC is now the clear world leader in intelligent information storage systems, and our competitive position has never been stronger than it is today."

On January 12, EMC announced an increased focus on strategic alliances and an organizational re-alignment aimed at leveraging its product and market leadership and enabling the company to more directly reflect the enterprise-wide, information-centric approach being adopted by customers. EMC has now unified its product development, product marketing, sales, operations, and customer service efforts into singular functional organizations whose responsibilities will cross all of EMC's target markets. In making the announcement, EMC also raised its 1996 revenue expectations to $600 million for its open systems storage business -- 50% higher than previously expected and triple its 1995 level.