SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 24, 1995
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STORAGE TECHNOLOGY CORPORATION
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(Exact Name of Registrant As Specified In Charter)
Delaware 1-7534 84-0593263
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
2270 South 88th Street, Louisville, Colorado 80028-4309
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (303) 673-5151
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
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On January 24, 1995, the Registrant released its 1994 financial results.
Item 7. Exhibits.
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Storage Technology Corporation's press release dated January 24, 1995.
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 hereunto duly authorized.
Storage Technology Corporation
Dated: January 26, 1995 By: /s/ GREGORY A. TYMN
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Gregory A. Tymn
Senior Vice President
Chief Financial Officer
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ITEM 7
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For Immediate Release Contact: Michael Klatman
January 24, 1995 (303) 673-5020
David Reid
(303) 673-4815
STORAGETEK REPORTS 1994 FINANCIAL RESULTS
LOUISVILLE, Colo. -- Storage Technology Corp. (NYSE:STK) today
reported net income for the fourth quarter of $28.1 million.
Earnings available to common shares were $.56 per share, after
consideration of the quarterly preferred dividend of $3 million.
By comparison, the company reported net income of $6.3 million,
or $.08 per share, for the fourth quarter of 1993. Revenue for
the fourth quarter of 1994 was $516.1 million, a quarterly record
for the company and a 29 percent increase over the $400.2 million
reported for the comparable period a year ago.
For 1994, the company reported net income of $41.4 million,
compared with a net loss of $77.8 million in 1993. On a per
share basis, the company earned $.66 in 1994 versus a loss of
$2.05 in 1993. Revenue for 1994 increased 16 percent to $1.6
billion from $1.4 billion in 1993.
"We made substantial progress in revenue and profitability during
1994," said Ryal R. Poppa, StorageTek chairman, president and
chief executive officer, "and closed the year with a strong
balance sheet, including $206 million in cash. We believe this
progress will continue in 1995 on the strength of new products
introduced in 1994 and planned introductions in 1995. We have
scheduled major product announcements for the week of Feb. 6.
more
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STORAGETEK REPORTS 1994 FINANCIAL RESULTS
Page 2
"While the fourth quarter was our best from operations since
1991, it fell short of our expectations, nonetheless," he said.
"Several factors associated with Iceberg kept us from having a
better quarter. Unit volume, configuration size and pricing were
all somewhat lower than anticipated. Margins on Iceberg were
slightly below expectations, but they continue to be excellent
and, with planned technological improvements in 1995, we believe,
sustainable.
"Offsetting the negative factors was a very strong tape library
business," Poppa said. "For example, order, shipment and revenue
activity increased substantially for both PowderHorn upgrades and
WolfCreek libraries. In addition, previously announced cost-
control measures have begun to be implemented."
Poppa gave this update on the status of products:
o 153 Iceberg subsystems were revenue recognized, bringing the
total to 247 since inception of the program. Some 400 units
representing about 70 terabytes of storage had been shipped
by yearend. The first dynamic, virtual-disk storage
solution for mainframe computers, the Iceberg 9200 Virtual
Storage Facility was named one of the year's 10 most
important products by Information Week magazine. "Iceberg's
first year in the market was a success and the backlog of
systems not yet revenue recognized gives us a good start for
the new year in this highly competitive market," said Poppa.
o Production capacity of the TimberLine 36-track subsystem is
sold out for the first quarter of 1995, after a sellout in
the fourth quarter of 1994. "We are at volume production for
the TimberLine product and recording backlog for the second
quarter," said Poppa. "Tape transport shipments nearly
doubled from 1993 to 1994, our largest year ever, and we
continue to sell a mix of 18-track, Silverton 36-track, and
TimberLine 36-track transports."
more
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STORAGETEK REPORTS 1994 FINANCIAL RESULTS
Page 3
o Some 450 PowderHorn and WolfCreek libraries were revenue
recognized in the fourth quarter to bring the worldwide
installed base to more than 7,000. Customers also upgraded
130 of the original 4400 Automated Cartridge System
libraries to PowderHorn models. "We added 180 new library
sites in 1994, demonstrating that the trend toward
automation continues," Poppa added.
Turning to major products scheduled for introduction in 1995,
Poppa gave this summary:
o Initial customer shipment of Arctic Fox, StorageTek's Hi-
performance Shared-access Facility, was achieved in January.
o Kodiak, StorageTek's Scalable Storage Facility, is expected
to be shipped to a beta site in the first quarter.
o The RedWood helical tape subsystem, which is capable of
storing substantially more data on a half-inch tape
cartridge than any other product now on the market, is in
beta test at several sites and due to be introduced at
customer events beginning Feb. 7.
StorageTek will hold its annual meeting at 10 a.m. May 24 at the
Ritz Carlton hotel in Boston, Mass.
Storage Technology Corp. designs, manufactures, markets and
services, worldwide, information storage and retrieval subsystems
for enterprisewide computer systems and networks.
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STORAGE TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)
QUARTER ENDED YEAR ENDED
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12/30/94 12/31/93 12/30/94 12/31/93
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Sales $ 383,562 $ 269,966 $1,115,802 $ 902,482
Service and rental 132,584 130,233 509,157 502,270
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Total revenue 516,146 400,199 1,624,959 1,404,752
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Cost of sales 242,761 178,854 728,983 641,411
Cost of service
and rental 87,307 84,212 328,267 324,502
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Total cost of
revenue 330,068 263,066 1,057,250 965,913
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Gross profit 186,078 137,133 567,709 438,839
Research and
product develop-
ment costs 47,588 42,532 169,811 163,286
Marketing, general,
administrative
and other 99,001 87,488 341,747 324,823
Restructuring and
other charges 4,872 74,772
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Operating
profit (loss) 39,489 2,241 56,151 (124,042)
Interest expense 9,794 10,348 40,678 43,670
Interest income (8,717) (13,952) (42,964) (54,916)
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Income (loss)
before income
taxes and
cumulative
effect of
accounting
change 38,412 5,845 58,437 (112,796)
Provision (benefit)
for income taxes 10,300 (500) 17,000 5,000
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Income (loss)
before cumu-
lative effect
of accounting
change 28,112 6,345 41,437 (117,796)
Cumulative effect
on prior years of
change in method
of accounting for
income taxes 40,000
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Net income
(loss) 28,112 6,345 41,437 (77,796)
(Continued on following page)<PAGE>
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(Continued from previous page)
STORAGE TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)
QUARTER ENDED YEAR ENDED
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12/30/94 12/31/93 12/30/94 12/31/93
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Net income
(loss) 28,112 6,345 41,437 (77,796)
Preferred dividend
requirement 3,019 3,019 12,075 9,805
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Income (loss)
applicable to
common shares $ 25,093 $ 3,326 $ 29,362 $ (87,601)
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EARNINGS (LOSS) PER
COMMON SHARE:
Primary:
Income (loss)
before cumulative
effect of
accounting change $ 0.56 $ 0.08 $ 0.66 $ (2.98)
Cumulative effect
of change in
method of
accounting for
income taxes 0.93
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$ 0.56 $ 0.08 $ 0.66 $ (2.05)
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Fully Diluted $ 0.54 (A) (A) (A)
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(A) Fully diluted earnings per share for the fourth quarter of
1994 reflects the assumed conversion of the Company's convertible
preferred stock, whereas the convertible preferred stock was not
dilutive for all other periods presented.
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STORAGE TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEET
(In Thousands of Dollars)
12/30/94
(Unaudited) 12/31/93
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ASSETS
Cash and cash equivalents $ 205,926 $ 255,062
Short-term investments 16,042
Accounts receivable, net 313,231 218,701
Notes and installment receivables 8,203 9,973
Net investment in sales-type leases 155,341 171,165
Inventories 240,019 203,257
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Total current assets 922,720 874,200
Notes and installment receivables 9,918 13,968
Net investment in sales-type leases 231,377 252,678
Computer equipment, at cost (net) 137,374 97,324
Spare parts for field service, at
cost (net) 56,977 50,150
Property, plant and equipment, at
cost (net) 332,651 306,034
Deferred income tax assets (net) 51,603 52,260
Other assets 147,387 146,395
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$1,890,007 $1,793,009
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Nonrecourse borrowings secured by
lease commitments $ 79,407 $ 74,191
Current portion of other long-term
debt 27,396 32,581
Accounts payable 113,794 91,890
Accrued liabilities 219,139 192,874
Income taxes payable 8,764 14,167
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Total current liabilities 448,500 405,703
8% Convertible subordinated
debentures 145,645 145,645
Nonrecourse borrowings secured by
lease commitments 112,073 96,975
Other long-term debt 99,169 119,098
Deferred income tax liabilities 10,073 8,285
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Total liabilities 815,460 775,706
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STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value 35 35
Common stock, $.10 par value 4,456 4,310
Capital in excess of par value 1,449,240 1,421,860
Accumulated deficit (372,261) (401,623)
Treasury stock (773) (735)
Unearned compensation (6,150) (6,544)
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Total stockholders' equity 1,074,547 1,017,303
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$1,890,007 $1,793,009
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