<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 10-Q
---------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-21103
ADVANCED DIGITAL INFORMATION CORPORATION
Incorporated under the laws I.R.S. Identification
of the State of Washington No. 91-1618616
11431 Willows Road
P.O. Box 97057
Redmond, Washington 98073-9757
(425) 881-8004
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [ ] No
The total shares of common stock without par value outstanding at the end of the
quarter reported is 51,602,286.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
ADVANCED DIGITAL INFORMATION CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
OCTOBER 31, APRIL 30,
1999 2000
----------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................ $ 156,548 $ 194,940
Accounts receivable, net of allowances of $1,004 in 1999
and $1,417 in 2000 ..................................... 44,568 55,854
Inventories, net ......................................... 33,317 46,623
Marketable equity securities ............................. 2,222 25,798
Prepaid expenses and other ............................... 1,063 1,290
Deferred income taxes .................................... 4,664 4,933
--------- ---------
Total current assets ................................... 242,382 329,438
Property, plant and equipment, net .......................... 8,712 9,620
Investment in Crossroads Systems, Inc. ...................... 185,544 148,027
Intangible and other assets and investment in common stock .. 16,336 20,675
--------- ---------
$ 452,974 $ 507,760
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ......................................... $ 20,582 $ 30,721
Accrued liabilities ...................................... 11,439 9,434
Income taxes payable ..................................... 3,138 20,276
Deferred revenue ......................................... 4,105 4,879
Current portion of long-term debt ........................ 8,753 6,610
--------- ---------
Total current liabilities .............................. 48,017 71,920
Long-term debt .............................................. 1,507 1,236
Deferred income taxes ....................................... 64,168 50,693
Minority interest ........................................... 324 --
Commitments ................................................. -- --
Shareholders' equity:
Preferred stock, no par value; 4,000,000 shares
authorized; none issued and outstanding ................ -- --
Common stock, no par value; 160,000,000 shares authorized,
51,602,286 issued and outstanding (50,931,534 in 1999) 191,155 198,189
Retained earnings ........................................ 31,227 94,338
Accumulated other comprehensive income:
Cumulative translation adjustment ..................... (963) (2,114)
Unrealized investment gains ........................... 117,539 93,498
--------- ---------
Total shareholders' equity ........................... 338,958 383,911
--------- ---------
$ 452,974 $ 507,760
========= =========
</TABLE>
See the accompanying notes to these consolidated financial statements.
2
<PAGE>
ADVANCED DIGITAL INFORMATION CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
---------------------- ----------------------
1999 2000 1999 2000
--------- --------- --------- ---------
(Unaudited)
<S> <C> <C> <C> <C>
Net sales ..................................... $ 54,044 $ 64,898 $ 103,188 $ 128,760
Cost of sales ................................. 36,005 41,483 68,755 82,443
--------- --------- --------- ---------
Gross profit ............................... 18,039 23,415 34,433 46,317
--------- --------- --------- ---------
Operating expenses:
Selling and administrative ................. 8,980 12,582 18,093 23,533
Research and development ................... 3,235 4,118 6,051 8,074
--------- --------- --------- ---------
12,215 16,700 24,144 31,607
--------- --------- --------- ---------
Operating profit .............................. 5,824 6,715 10,289 14,710
--------- --------- --------- ---------
Other income:
Interest income ............................ 90 2,488 324 4,672
Interest expense ........................... (202) (91) (546) (189)
Gain on sale of Crossroads Systems, Inc. ... -- 74,446 -- 74,446
Gain on sale of marketable equity securities -- 1,348 564 1,536
Foreign currency transaction gains, net .... 63 (69) 90 60
--------- --------- --------- ---------
(49) 78,122 432 80,525
--------- --------- --------- ---------
Income before provision for income taxes ...... 5,775 84,837 10,721 95,235
Minority interest ............................. 163 -- 283 18
Provision for income taxes .................... 2,067 28,894 3,841 32,106
--------- --------- --------- ---------
Net income .................................... $ 3,545 $ 55,943 $ 6,597 $ 63,111
========= ========= ========= =========
Basic net income per share .................... $ 0.09 $ 1.09 $ 0.17 $ 1.23
========= ========= ========= =========
Diluted net income per share .................. $ 0.09 $ 1.03 $ 0.16 $ 1.17
========= ========= ========= =========
</TABLE>
See the accompanying notes to these consolidated financial statements.
3
<PAGE>
ADVANCED DIGITAL INFORMATION CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED APRIL 30,
--------------------------
1999 2000
--------- ---------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .............................................. $ 6,597 $ 63,111
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization ....................... 1,813 2,148
Allowance for doubtful accounts receivable .......... 409 607
Allowance for inventory obsolescence ................ 2,478 2,983
Gain on sale of marketable equity securities ........ (564) (75,982)
Deferred income taxes ............................... -- (917)
Other ............................................... 351 119
Change in assets and liabilities:
Accounts receivable ................................. (4,352) (12,789)
Inventories ......................................... (8,207) (17,559)
Prepaid expenses and other .......................... (204) (271)
Other assets ........................................ 288 11
Accounts payable .................................... 367 10,526
Accrued liabilities ................................. 1,293 (1,834)
Income taxes payable ................................ 1,083 17,299
Deferred revenue .................................... 576 998
--------- ---------
Net cash provided by (used in) operating activities ........ 1,928 (11,550)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment ............... (2,136) (3,072)
Investment in marketable equity securities .............. (49) (26,769)
Proceeds from sale of marketable equity securities ...... 2,699 79,455
Acquisition of minority interest ........................ -- (4,765)
Investment in common stock .............................. (4,000) --
--------- ---------
Net cash provided by (used in) investing activities ........ (3,486) 44,849
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt ............................. (11,802) (1,078)
Repayment of other long-term liabilities ................ (300) --
Proceeds from issuance of common stock for stock
options, including tax benefit ........................ 745 7,033
--------- ---------
Net cash provided by (used in) financing activities ........ (11,357) 5,955
--------- ---------
Effect of exchange rate changes on cash .................... (542) (862)
--------- ---------
Net increase (decrease) in cash and cash equivalents ....... (13,457) 38,392
Cash and cash equivalents at beginning of period ........... 28,226 156,548
--------- ---------
Cash and cash equivalents at end of period ................. $ 14,769 $ 194,940
========= =========
</TABLE>
See the accompanying notes to these consolidated financial statements.
4
<PAGE>
ADVANCED DIGITAL INFORMATION CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
SIX MONTHS ENDED APRIL 30, 2000
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK OTHER
-------------------- RETAINED COMPREHENSIVE
SHARES AMOUNT EARNINGS INCOME TOTAL
-------- -------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Balance at October 31, 1999 .............. 50,932 $191,155 $ 31,227 $116,576 $338,958
Purchases under Stock Purchase Plan ...... 55 753 753
Exercise of stock options,
including tax benefit of $4,439 ........ 615 6,281 6,281
Comprehensive income:
Net income ............................. 63,111
Unrealized investment gains (losses) ... (24,041)
Foreign currency translation
adjustment ........................... (1,151)
Comprehensive income ............... 37,919
-------- -------- -------- -------- --------
Balance April 30, 2000 ................... 51,602 $198,189 $ 94,338 $ 91,384 $383,911
======== ======== ======== ======== ========
</TABLE>
See the accompanying notes to these consolidated financial statements.
5
<PAGE>
ADVANCED DIGITAL INFORMATION CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 2000
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The accompanying condensed financial statements are unaudited and should be
read in conjunction with the financial statements included in our Annual Report
on Form 10-K for the year ended October 31, 1999. In the opinion of management,
all normal recurring adjustments which are necessary for the fair presentation
of the results for the interim periods are reflected herein. Operating results
for the six-month period ended April 30, 2000, are not necessarily indicative of
results to be expected for a full year.
All references to the number of shares and per share amounts of our common
stock in the accompanying financial statements and these notes have been
restated to reflect a two-for-one stock split effected on March 14, 2000.
NOTE 2. RECENT ACCOUNTING PRONOUNCEMENTS
In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin 101, "Revenue Recognition in Financial Statements." This
pronouncement summarizes certain of the SEC staff's views on applying generally
accepted accounting principles to revenue recognition. We are required to adopt
SAB 101 for our current fiscal year and do not expect this adoption to have a
material impact on our results of operations, financial position or cash flows.
NOTE 3. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted net
income per share for the three months and six months ended April 30, 1999 and
2000:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
APRIL 30, APRIL 30,
----------------- ------------------
1999 2000 1999 2000
------- ------- ------- -------
<S> <C> <C> <C> <C>
Numerator:
Net income ................................. $ 3,545 $55,943 $ 6,597 $63,111
Denominator:
Denominator for basic net income per share
- weighted average shares .............. 39,336 51,524 39,213 51,334
Dilutive potential common shares from
Team Member (employee) stock options ..... 1,115 2,580 962 2,577
------- ------- ------- -------
Denominator for diluted net income per share
- adjusted weighted average shares and
assumed conversions ...................... 40,451 54,104 40,175 53,911
======= ======= ======= =======
Basic net income per share .................... $ 0.09 $ 1.09 $ 0.17 $ 1.23
======= ======= ======= =======
Diluted net income per share .................. $ 0.09 $ 1.03 $ 0.16 $ 1.17
======= ======= ======= =======
</TABLE>
6
<PAGE>
NOTE 4. INVENTORIES
Inventory is comprised as follows:
<TABLE>
<CAPTION>
OCTOBER 31, APRIL 30,
1999 2000
------- -------
<S> <C> <C>
Finished goods..................................... $13,871 $16,063
Work-in-process.................................... 3,892 4,780
Raw materials...................................... 22,133 35,002
------- -------
39,896 55,845
Allowance for inventory obsolescence............... (6,579) (9,222)
------- -------
$33,317 $46,623
======= =======
</TABLE>
NOTE 5. MARKETABLE EQUITY SECURITIES
At times we invest in certain marketable equity securities. In accordance
with Statement of Financial Accounting Standards No. 115, "Accounting for
Certain Investments in Debt and Equity Securities" such investments are
classified as available-for-sale. Under FAS 115, unrealized holding gains and
losses, net of taxes, are reflected as a net amount in a separate component of
shareholders' equity until realized. For the purpose of computing realized gains
and losses, costs are identified on a specific identification basis.
At April 30, 2000, the cost basis of owned securities was $26,769,000, the
fair value was $25,798,000 and the unrealized loss was $971,000. During the
current fiscal year, we sold certain marketable equity securities and realized
gains of $1,536,000.
NOTE 6. INVESTMENT IN CROSSROADS SYSTEMS, INC.
In August 1997, we purchased an approximately 15% interest in Crossroads
for a purchase price of $4,000,000. In October 1999, Crossroads completed an
initial public offering and in accordance with FAS 115, this investment is
classified as available-for-sale. During the second quarter of fiscal 2000, we
sold approximately 20% of our interest in Crossroads at an average price of
approximately $147 per share, resulting in a net gain of $74,446,000.
The fair value of the remaining investment is $148,027,000. The difference
between the cost basis and fair value of $144,813,000, net of taxes of
$50,685,000, is recorded as an unrealized investment gain. This unrealized gain
is included as a separate component of shareholders' equity at April 30, 2000.
NOTE 7. ACQUISITION OF MINORITY INTEREST
Effective January 1, 2000, we acquired the 20% minority interest in
ADIC/GRAU Storage Systems GmbH & Co. KG for a total purchase price of $4.7
million in cash. In connection with the acquisition, we recorded approximately
$4.4 million of goodwill and other intangible assets, with an average useful
life of eight years.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH
OUR FINANCIAL STATEMENTS INCLUDED IN OUR ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED OCTOBER 31, 1999. THIS DISCUSSION CONTAINS CERTAIN FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES, SUCH AS STATEMENTS OF OUR
PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS. SUCH RISKS ARE DETAILED IN OUR
ANNUAL REPORT ON FORM 10-K AND ARE INCORPORATED HEREIN BY REFERENCE. OUR ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HERE. WE UNDERTAKE NO
OBLIGATION TO PUBLICLY RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS
THAT MAY BE REQUIRED TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR
TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
7
<PAGE>
GENERAL
We provide hardware and software-based data storage solutions to the open
systems marketplace. Our storage solutions integrate into a wide range of
rapidly evolving network computing environments and are designed to enable
organizations to organize, protect and retrieve complex mission-critical data.
We design, manufacture, sell and support specialized data storage hardware and
software products and provide related services. Currently, we derive
substantially all of our revenue from the sale of storage libraries and related
service and support. As a result of our investments in software development, we
expect sales of our proprietary software products to increase in the future. We
distribute our products primarily through value-added resellers (VARs), and
original equipment manufacturers (OEMs), and we also sell directly to large end
users.
RESULTS OF OPERATIONS
NET SALES. Net sales increased during the second quarter of fiscal 2000 by
20% to $64.9 million from $54.0 million in fiscal 1999. Net sales for the six
months ended April 30, 2000 were $128.8 million, an increase of 25% from $103.2
million during the six months ended April 30, 1999. The increase in both periods
was led by volume increases in the FastStor and Scalar 1000 products both in
branded and OEM markets. A reduction in sales of our larger libraries and slower
growth in Europe offset this increase. International sales for the three months
ended April 30, 2000 were 39% of total sales compared to 48% of total sales for
the same period in fiscal 1999.
GROSS PROFIT. Gross profit was $23.4 million or 36% of net sales for the
three months ended April 30, 2000 compared to $18.0 million or 33% of net sales
for the same period in fiscal 1999. For the six months ended April 30, 2000,
gross profit was $46.3 million or 36% of net sales compared to $34.4 million or
33% of net sales for the same period in fiscal 1999. Gross profit percentage was
higher in both periods due to a continued shift towards sales of higher value
products and a continuing decrease in standalone and media sales as a percentage
of total sales.
SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses
were $12.6 million or 19% of net sales for the three months ended April 30, 2000
compared to $9.0 million or 17% of net sales for the same period in fiscal 1999.
The dollar and percentage increases are due primarily to sales and marketing
costs as we continue to increase our efforts to take advantage of new products
and sales channels. A portion of these costs was associated with the product
launch of our Scalar 100 product that began shipping in April 2000.
ACQUIRED IN-PROCESS TECHNOLOGY. In connection with the acquisitions of
MountainGate in fiscal 1999 and EMASS in fiscal 1998, acquired in-process
technology was identified and valued by an independent third party and was
expensed immediately. All expenses after the acquisition dates are included in
research and development expenses.
In the case of MountainGate, the acquired in-process technology was valued
at $2.1 million, approximately 23% of the total assets acquired. The project we
were pursuing consisted of an NT version of the CentraVision product expected to
include many new features required to function in the enterprise open solutions
market. Costs, including engineering time and material and costs associated with
beta versions and testing, have been incurred to develop the acquired in-process
technology into a commercially viable product. The project was substantially
complete at April 30, 2000 and will be released in the third fiscal quarter.
Acquired in-process technology of EMASS included a new large library
storage product and associated software, as well as separate software products
using UNIX and Windows NT platforms. We expect that these products will replace
existing large library and software products. We expect that customer service
and maintenance contracts will, however, continue to provide revenue associated
with the older products.
8
<PAGE>
We expect that the new library product will be released in the fourth
quarter of calendar 2000 or the first quarter of calendar 2001. Remaining costs
to be incurred are primarily associated with drives and other hardware costs
associated with building test systems. Approximately $500,000 of costs were
incurred in the first half of fiscal 2000 in connection with the software
products. We expect that minimal costs will be incurred prior to the completion
of the last of the products in May 2000.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses were
$4.1 million or 6% of net sales for the second quarter of fiscal 2000 compared
to $3.2 million or 6% of net sales for the second quarter of fiscal 1999.
Approximately 50% of the research and development spending was related to
software-based products that may be incorporated into intelligent peripherals or
sold separately. We intend to maintain this level of research and development
spending, relative to net sales, as we continue investing heavily in software
development and new hardware products.
OTHER INCOME (EXPENSE). Other income for the second quarter of fiscal 2000
was $78.1 million, of which $74.4 million resulted from the gain on sale of a
portion of our equity interest in Crossroads Systems, Inc. Additionally, we sold
certain other marketable equity securities which resulted in a gain of $1.3
million during the quarter. The increase in interest income in both the three
months and six months ended April 30, 2000, is the result of the investment of
cash balances received in the follow-on stock offering in September 1999.
Additionally in the second quarter of fiscal 2000 interest income was earned on
the additional cash balances received as a result of the sales of marketable
equity securities. Interest expense in fiscal 2000 relates to interest on
operating credit lines through a German bank. In fiscal 1999 we incurred
interest associated primarily with a bank loan used to finance the acquisition
of EMASS. All U.S. bank debt was paid off during fiscal 1999.
PROVISION FOR INCOME TAXES. Income tax expense for the six months ended
April 30, 2000 was $32.1 million, an effective tax rate of 34%. The effective
tax rate includes taxes paid in various federal, state and international
jurisdictions. This compares with income tax expense in fiscal 1999 of $3.8
million, an effective tax rate of 36%. The large dollar amount of taxes owed is
associated with the gain on sale of Crossroads. There are significant deferred
tax assets for net operating loss carryforwards and other temporary differences
associated with MountainGate and with subsidiaries acquired in the EMASS
transaction. At October 31, 1999 a valuation allowance had been established on a
portion of these deferred tax assets. During fiscal 2000 we determined that it
was more likely than not that we could realize a portion of these deferred tax
assets and consequently reduced the previously established valuation allowance
by $850,000. At April 30, 2000 we had a valuation allowance of $2.4 million
which, if reduced, will lower our effective income tax rate in future periods.
LIQUIDITY AND CAPITAL RESOURCES
In both fiscal 2000 and fiscal 1999 operating cash was primarily used to
fund increases in accounts receivable and inventories and was offset by net
income, depreciation and other allowances. In fiscal 2000, accounts payable
growth of $10.5 million offset these uses of cash. Additionally, fiscal 2000
reflects an increase in income taxes payable of $17.3 million. This increase is
primarily the net of a provision for taxes associated with the gain on sale of
Crossroads, less estimated federal tax payments of $8.5 million. Excluding the
gain on sale of Crossroads, and the estimated tax payment made in relation to
these gains, cash used in operating activities for fiscal 2000 would have been
$3.0 million. In the comparable period of fiscal 1999, cash of $1.9 million was
provided by operating activities.
Cash flows provided by investing activities were $44.9 million for the
first six months of fiscal 2000, compared to cash flows used in investing
activities of $3.5 million in the first six months of fiscal 1999. Fiscal 2000
reflects the proceeds from the sale of Crossroads and other marketable equity
securities, as well as investments in marketable equity securities. Fiscal 1999
uses include $4.0 million associated with an investment in LiveVault Corporation
(formerly known as Network Integrity, Inc.), a developer of specialized data
protection software products.
Cash flows provided by financing activities in the first six months of
fiscal 2000 were $6.0 million. This amount reflects $7.0 million associated with
the exercise of stock options, including the tax
9
<PAGE>
benefits from such exercises, offset by certain payments of long-term and
short-term debt. Cash flows provided by financing activities in the first six
months of fiscal 1999 include a partial payment of certain U.S. bank debt of
$11.8 million.
During the first six months of fiscal 2000, we committed to the worldwide
implementation of a fully-integrated Enterprise Resource Planning information
system. We anticipate that the total cost of this project will be approximately
$5.0 million. During the period, we also signed a lease for a new Redmond,
Washington facility. The new facility, totaling 78,000 square feet, will provide
for increased manufacturing capacity, additional office space, and expanded test
and systems engineering labs.
At April 30, 2000, our cash and cash equivalents totaled $194.9 million, up
from $156.5 million at October 31, 1999. Our working capital, the difference
between current assets and current liabilities, was $257.5 million at April 30,
2000, with a ratio of current assets to current liabilities of 4.6 to 1.
Additionally, at April 30, 2000, our investment in Crossroads Systems, Inc. had
a market value of $148.0 million. The market for technology stocks is extremely
volatile and there is no assurance that we will realize this value when and if
we liquidate the remainder of our investment in Crossroads.
We believe that our existing cash and cash equivalents, available bank
lines of credit, debt capacity and anticipated cash flow from our operating
activities, will be sufficient to fund our working capital and capital
expenditure needs for at least the next 12 months. We may utilize cash to
acquire or invest in businesses, products or technologies that we believe are
strategic. We regularly evaluate other companies and technologies for possible
acquisition by us. In addition, we have made and expect to continue to make
substantial investments in companies with whom we have identified potential
synergies. However, we have no present commitments or agreements with respect to
any material acquisition of other businesses, products or technologies.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK MANAGEMENT
We are exposed to various market risks, including changes in foreign
currency rates and interest rates. We may enter into various derivative
transactions to manage certain of these exposures. We do not hold or issue
derivative instruments for trading purposes.
The assets and liabilities of our non-U.S. subsidiaries have functional
currencies other than the U.S. dollar and are translated into U.S. dollars at
exchange rates in effect at the balance sheet date. Income and expense items are
translated at the average exchange rates prevailing during the period. A 10%
depreciation in the U.S. dollar would result in an approximately $500,000
decrease in income before provision for income taxes for the first six months of
fiscal 2000.
At April 30, 2000, we had variable rate debt of approximately $6.5 million
provided by German banks, and fixed rate debt of $1.4 million, also provided by
a German bank. The fair value of such debt approximates the carrying amount on
the consolidated balance sheet at April 30, 2000. Market risk is estimated as
the potential for interest rates to increase 10% on the variable rate debt. Any
such increase would be immaterial to the consolidated financial position and
results of operations and cash flows. We have entered into an interest rate swap
agreement on the variable rate debt, which fixes the interest rate at 4.3%.
10
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other information.
None
Item 6. Exhibits and Reports on Form 8-K.
We filed a Form 8-K dated February 18, 2000 under Item 5
"Other Events" associated with the two-for-one stock split
effected March 14, 2000.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ADVANCED DIGITAL INFORMATION CORPORATION
Dated: June 14, 2000 /s/ Peter H. van Oppen
----------------------------------------
Peter H. van Oppen, Chairman
and Chief Executive Officer
Dated: June 14, 2000 /s/ Jon W. Gacek
----------------------------------------
Jon W. Gacek, Senior Vice President
and Chief Financial Officer (Principal
Financial and Accounting Officer)
12
