Maxtor Corporation Reports Second Quarter 2004 Results

(Auszug aus der Pressemitteilung)

MILPITAS, Calif., July 21 – Maxtor Corporation

(NYSE: MXO) today announced its financial results for the second quarter ended
June 26, 2004. Revenue for the quarter was $818.3 million. The Company
reported a net loss on a GAAP basis of $26.1 million, or $(0.11) per share.
Included in the GAAP net loss was a charge of $5.1 million for the
amortization of intangible assets. Also included in the quarter was income of
$24.8 million from the settlement of a lawsuit brought by Maxtor against
Koninklijke Philips Electronics N.V. related to a quality issue on a legacy
Quantum product. On a non-GAAP basis, excluding the amortization charge and
this income from the lawsuit settlement, Maxtor reported a net loss of
$45.8 million, or $(0.19) per share. In the second quarter of 2003, revenue
was $910.9 million. Net income on a GAAP basis was $6.2 million, or $0.03
per diluted share. The GAAP net income included a charge for the amortization
of intangible assets and stock-based compensation expense, totaling
$20.8 million. On a non-GAAP basis, excluding these charges, net income in
the second quarter of 2003 was $27.0 million, or $0.11 per diluted share.

„Our second quarter financial performance reflected extremely aggressive
pricing during the quarter and a shortfall in our unit volume,“ said Paul
Tufano, president and chief executive officer. „Pricing during the seasonally
weak second quarter, especially on desktop drives, was very competitive, and
our average selling price fell from $75 in the first quarter to $71 in the
second. In addition, unit shipments were lower than anticipated, due to
sluggish demand in the distribution channel and lost opportunity with a major
OEM customer as we continued to work to revalidate and reengage on a specific

Maxtor shipped 11.5 million hard drives in the second quarter, including
1,970,000 to consumer electronics OEMs. SCSI drive shipments totaled 634,000.
The gross profit margin was 9.0%. Operating expenses on a non-GAAP basis were
$113 million. „During the third quarter, we completed a reduction in force
that affected approximately 450 positions,“ Mr. Tufano continued. „We believe
that the headcount eliminations will put us on track to achieve a reduction in
costs and expenses of approximately $60 million annually when they are fully
realized by the end of the year.“