Adaptec: Fiscal 3Q10 Financial Results

(in US$ millions)	3Q09	3Q010	9 mo. 09	9 mo. 10
Revenues	28.2	16.9	91.4	57.1
*Growth*		-40%		*-38%*
Net income (loss)	(1.3)	(7.3)	7.0	(10.5)

Adaptec, Inc. reported its results for the third quarter of fiscal 2010, which ended on January 1, 2010.

Financial Highlights for Third Quarter of Fiscal 2010:

Total net revenues of $16.9 million
GAAP gross margins of 44%; non-GAAP gross margins of 51%
GAAP net loss per share of $(0.06); non-GAAP net loss per share of $(0.01)
Ended the quarter with $380.4 million in combined cash, cash equivalents and marketable securities

Financial Results
Net revenues for the Company’s third quarter of fiscal 2010 were $16.9 million, compared with $28.2 million for the third quarter of fiscal 2009. Gross margins, computed on a generally accepted accounting principles (GAAP) basis, were 44% for the third quarter of fiscal 2010, compared with 40% for the third quarter of fiscal 2009. Non-GAAP gross margins for the third quarter of fiscal 2010 were 51%, compared with 44% for the third quarter of fiscal 2009.

The Company’s GAAP loss from continuing operations, net of taxes, for the third quarter of fiscal 2010 was $(7.5) million, or $(0.06) per share, compared with GAAP income from continuing operations, net of taxes, of $0.1 million, or $0.00 per share, for the third quarter of fiscal 2009. GAAP net loss for the third quarter of fiscal 2010 was $(7.3) million, or $(0.06) per share, compared with $(1.3) million, or $(0.01) per share, for the third quarter of fiscal 2009.

GAAP loss from continuing operations, net of taxes,
and net loss for the third quarter of fiscal 2010
included the following:

Guaranteed cash payments of $0.7 million in connection with the Separation Agreement and Consulting Service Agreement entered into with its former Chief Executive Officer;
Additional costs of $0.5 million of professional fees related to our response to the consent solicitation and potential payment of a requested expense reimbursement of $0.7 million related to professional fees that Steel Partners, Steel Partners Holdings L.P., Steel Partners LLC, Steel Partners II GP LLC, Warren Lichtenstein, Jack L. Howard, and John J. Quicke incurred for the consent solicitation;
Stock-based compensation expense of $2.9 million;
Restructuring charges of $1.0 million related to a management approved plan to better align operating costs with the continued decline in net revenues; and,
Other income included $0.9 million received from a class action settlement and $0.4 million gain from sale of an investment.

Non-GAAP loss from continuing operations, net of taxes, for the third quarter of fiscal 2010 was $(1.0) million, or $(0.01) per share, compared with non-GAAP income from continuing operations, net of taxes, of $0.1 million, or $0.00 per share, for the third quarter of fiscal 2009. Non-GAAP net loss for the third quarter of fiscal 2010 was $(1.0) million, or $(0.01) per share, compared with $(0.1) million, or $(0.00) per share, for the third quarter of fiscal 2009.