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Exhibit 99.1
FOR IMMEDIATE RELEASE
GADZOOX ANNOUNCES EXPECTATIONS FOR SECOND FISCAL QUARTER 2000 COMPANY
PLANS TO WRITE OFF EXCESS INVENTORY RELATED TO LOWER-THAN-EXPECTED REVENUES
San Jose, Calif., September 7, 2000 - Gadzoox (TM) Networks, Inc.
(NASDAQ: ZOOX), a pioneer of SAN (storage area network) products, today
announced it anticipates revenue for its second fiscal quarter, ending September
30, 2000, to fall 15-25% below the consensus analyst forecast of $9 million
dollars.
The market acceptance of the new Capellix family of switches has been
slower than the Company initially anticipated, and volume shipments will not
commence during the second fiscal quarter, ending September 2000. In addition,
for the current quarter, the Company plans to provide a one-time reserve of
between $9 million and $11 million for production cancellation penalties and
excess inventory that was manufactured in reliance on the Company's earlier
internal forecasts.
Gadzoox' new President and CEO, Michael Parides, stated, "We are in a
transition period, and the new executive team is taking the necessary steps to
market and support Capellix. While the adoption of Capellix has been slower than
expected, we are launching a marketing, communications and sales campaign to
create broader market acceptance. We are also focusing our efforts and investing
in next-generation SAN technology and products -- products we believe will
propel the Company well into the future. We believe that we have all the
ingredients to execute, and I am confident in our ability to deliver on our
current plans."
The Company will be broadcasting a conference call on September 7, 2000,
at 2:45 p.m. PDT. To access the conference call dial:
Domestic: 800-553-3587 International: 303-267-1006
A replay of the call will be available for one week as follows:
Domestic Replay: 800-625-5288 International Replay: 303-804-1855
The conference ID for both replay numbers is 806481.
The foregoing statements regarding anticipated results for the second
fiscal quarter ending September 2000 are preliminary and forward-looking. Actual
results could differ materially based, among other things, on the actual order
and shipment rate during the remainder of the quarter and any accounting
adjustments made during the quarterly close. The statements in this news release
relating to future events or predictions, including statements about future
revenues and inventory usage and future generation SAN technology and products,
involve known and unknown risks and uncertainties which may cause Gadzoox'
actual results in future periods to be materially different from any performance
suggested in this release. Such factors include, but may not necessarily be
limited to, fluctuations in customer demand, both in timing and in volume, the
fact that the SAN
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market is new and evolving, the Company's dependence on a limited number of
products, a significant portion of which are sold to a limited number of
partners including OEM and distribution channel partners, the ability or
willingness of our partners to sell our products, market acceptance of new
products, including but not limited to Capellix, Geminix and Axxess, and the
timing of such acceptance, the Company's dependence on its contract
manufacturing partners, competition in the Company's industry and the timing of
new technology, product introductions and the Company's ability to effectively
and efficiently integrate the SmartSAN products into the existing Gadzoox
product line. In the context of forward looking information provided in this
news release, reference is made to the discussion of risk factors detailed in
the Company's Annual Report on Form 10-K for the fiscal year ended March 31,
2000, as well as subsequent filings.
ABOUT GADZOOX NETWORKS
Gadzoox Networks, Inc. (NASDAQ: ZOOX) is a leader in SAN (storage area
network) products. The Company provides networking solutions for enterprise
storage with scalable, managed SAN solutions based on Gadzoox' Fibre Channel
switches, routers, storage pooling, hubs and management products. Serving as
modular building blocks, Gadzoox' products are designed to address the growth in
enterprise data through the evolving capabilities of SANs. Gadzoox is an ISO
9001 certified company. Gadzoox corporate headquarters is located at 5850
Hellyer Ave., San Jose, Calif., 95138. For more information, visit the company's
web site at www.gadzoox.com or call 888.423.3222.
Press contact: Investor Contact:
Rosie Sundell Christine Munson
Corporate Communications Director Chief Financial Officer
Gadzoox Networks, Inc. Gadzoox Networks, Inc.
408.360.6011 408.361.6191
[email protected] [email protected]
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