Earnings Grow 25 Percent for the Quarter and 28 Percent for 2004
LOUISVILLE, Colo., January 25, 2005 - StorageTek (Storage Technology Corp., NYSE:STK) today announced fourth quarter 2004 net income of $89.3 million, or $0.83 diluted earnings per share. These amounts compare to fourth quarter 2003 net income of $71.3 million, or $0.64 diluted earnings per share. Revenue for the fourth quarter of 2004 was $665.8 million compared to $655.1 million for the fourth quarter of 2003.
Net income for the full year 2004 was $191.0 million, or $1.72 diluted earnings per share, compared to $148.9 million, or $1.35 diluted earnings per share for 2003. Revenue for the full year 2004 was $2.22 billion compared to $2.18 billion for 2003.
"Our superior technologies, strong customer relationships and solid business model allowed us to deliver robust earnings for the quarter and the full year," said Patrick Martin, StorageTek chairman, president and chief executive officer. "We continue to help our customers understand what happens to data throughout its lifetime and this is becoming an increasingly important aspect of effective data management. Our Information Lifecycle Management strategy is resonating with customers as they struggle with increasing storage demands and stagnant budgets. StorageTek brings a unique set of solutions that customers are incorporating into their storage infrastructures."
Storage services revenue was up seven percent over fourth quarter 2003 and eight percent for the full year. Service margins increased to 42 percent for the quarter and 44 percent for the full year. Fourth quarter 2004 product gross margins expanded to 53 percent and total gross margins strengthened to 49 percent.
"We come into the new year with enthusiasm and momentum. For the past four years, we have been building the foundation and will continue to move into new markets with innovative storage offerings to exploit these opportunities," said Martin.
Financial highlights for the quarter include a cash and investments balance of $1.18 billion, quarterly cash flow from operations of over $120 million and full year 2004 cash flow from operations of approximately $385 million. "Our strong operating results and financial strength continue to be important to customers in a demanding environment. In 2005 we will maintain our disciplined approach to capital management that we have built over the last few years," said Robert Kocol, StorageTek's chief financial officer.
StorageTek will conduct the fourth quarter and full year 2004 financial results conference call today at 5:00 p.m. EST. Please join us for a live audio webcast at http://storagetek.shareholder.com/medialist.cfm. If you prefer to join via telephone line, please dial 800.810.0924 at least 5 minutes prior to the start of the call. International participants should dial 913.981.4900.
A replay of the call will be available on the web. The replay via phone line will be available beginning at 8 p.m. EST today and running through midnight January 28, by dialing 888.203.1112. If calling internationally, dial 719.457.0820. Use pass code 2548962.
Certain statements, projections and forecasts contained herein regarding StorageTek's future performance and financial results, future products, and business plans constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of words such as "may," "will," "should," "expects," "plans," "anticipates," and "believes." There are a number of risks and uncertainties that could cause StorageTek's actual results to differ materially.
Some of these risks and uncertainties include, but are not limited to, StorageTek's ability to develop, manufacture and market new products and services successfully; the effect of product mix and distribution channel mix on our gross margins; our ability to execute our Information Lifecycle Management strategy; competitive pricing pressures; rapid technological changes in the markets in which we compete; our ability to attract and retain highly skilled employees; changes in our management; our ability to protect and develop intellectual property rights; our reliance on certain sole source suppliers; our ability to obtain quality parts and components in a timely manner; general economic conditions in the United States and globally; and other risks described in StorageTek's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that are filed with the Securities and Exchange Commission and which are available on the SEC's website.
StorageTek (NYSE:STK), a $2 billion worldwide company with headquarters in Louisville, Colo., delivers a broad range of storage solutions that are easy to manage, integrate well with existing infrastructures and allow universal access to data across servers, media types and networks. StorageTek provides practical and safe storage solutions in disk, networking, services, tape and tape automation. For more information, see http://www.storagetek.com, or call 1.800.786.7835.
For detailed report email:
Karla J. Kimrey
Vice President, Investor Relations
Manager, Global Public Relations