SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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)
February 3, 2000 (February 3, 2000)
STORAGE TECHNOLOGY CORPORATION
(Exact Name of Registrant As Specified In Its Charter)
Delaware 1-7534 84-0593263
(State or other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
One StorageTek Drive, Louisville, Colorado 80028-4309
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (303) 673-5151
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
All assumptions, anticipations, expectations and forecasts contained in the
following discussion regarding the effects of changes in certain directors and
officers of the Registrant, and the Registrant's restructuring activities and
expectations related to fourth quarter 1999 financial results contained in this
Form 8-K and the exhibits attached hereto are forward-looking statements within
the meaning of the Private Securities Reform Act of 1995. The actual results
arising from these matters may differ materially because of a number of risks
and uncertainties. The forward-looking statements made herein and in the
exhibits hereto represent a good-faith assessment by the Registrant of the
future success of these matters based upon the Registrant's reasonable beliefs
and opinions.
On February 3, 2000, the Registrant issued the press releases, attached hereto
as Exhibits 99.1 and 99.2.
Item 7. Financial Statements and Exhibits
The following financial statements, pro forma financial information and
exhibits, if any, are filed as part of this report:
(A) Financial statements of businesses acquired.
Not applicable
(B) Pro forma financial information.
Not applicable
(C) Exhibits.
99.1 Press Release of the Registrant, dated February 3, 2000
relating to the search for a Chairman of the Board, President
and Chief Executive Officer.
99.2 Press Release of the Registrant, dated February 3, 2000
relating to progress on the Registrant's restructuring program
and expectations related to fourth quarter 1999 financial
results.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 3, 2000 Storage Technology Corporation
By: /s/ Thomas G. Arnold
Thomas G. Arnold
Vice President and
Corporate Controller
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Exhibit 99.1
Storage Technology Corporation 303 673.5020 phone
One StorageTek Drive
Louisville, CO 80028-4130
NEWS RELEASE
Contact: Terry Monrad William Watts
303.673.4676 303-661-5841
cell: 720.841.5686 [email protected]
[email protected]
STORAGETEK ANNOUNCES THAT DAVID E. WEISS TO STEP DOWN
AS CHAIRMAN, PRESIDENT AND CEO
BOARD BEGINS SEARCH PROCESS, NAMES RICHARD C. STEADMAN AS LEAD DIRECTOR
LOUISVILLE, Colo., Feb. 3, 2000 -- StorageTek(TM) (Storage Technology Corp.,
NYSE:STK) today announced that David E. Weiss recommended to the board of
directors that he step down as chairman, president and chief executive officer
of the company. At the request of the board, Mr. Weiss will continue in office
until a successor has been selected and will participate in any transition as
requested by the board.
After accepting Mr. Weiss' recommendation, the board appointed a search
committee comprising of directors Robert E. LaBlanc, James R. Adams and Robert
E. Lee, and engaged the executive search firm of Spencer Stuart & Co. to assist
the committee in identifying a successor. Mr. LaBlanc is chairman of the search
committee. Additionally, at the suggestion of Mr. Weiss, the board elected
Richard C. Steadman lead independent director to coordinate the activities of
the independent directors while providing continuity during this time of
transition. Mr. Steadman is chairman of StorageTek's audit committee.
<PAGE>
STORAGETEK ANNOUNCES DAVID E. WEISS TO STEP DOWN
"Over the last six months, the board has worked with Goldman Sachs and Co. to
identify a strategic course that would best rebuild value for StorageTek's
shareholders, customers and employees. The board and management has also worked
closely with consultants from McKinsey & Co. to increase our company's
competitiveness and operating efficiency," said Mr. Steadman. "Through these
processes, the board determined that an independent StorageTek is most likely to
maximize shareholder value, and that our company is already in the process of a
restructuring that will create a leaner, more responsive and more profitable
organization.
"Our technology excellence is unquestioned, our strategy is aimed squarely at
the storage explosion in the emerging New Economy and Information Age, and our
balance sheet provides the resources to benefit from the Internet-driven demand
for data storage," Steadman continued.
"We, the independent directors of StorageTek, are deeply appreciative of Mr.
Weiss' many years of service to StorageTek," said Steadman. "He has shown
vision and courage in a succession of challenging circumstances."
"I believe that new management will energize the company and deliver value for
our shareholders, customers, and employees, and I am pleased that the board
agreed with my recommendation," Weiss said.
Separately, StorageTek announced today the second phase of a broad restructuring
program that will position the company as a leaner, more responsive competitor
in the emerging data storage industry.
About StorageTek
StorageTek is the preeminent provider of network storage. The company's strategy
is to help customers enable business growth by removing the inhibitors to
managing information growth. StorageTek provides "Open, Intelligent and
Integrated"(TM) solutions that combine storage products, storage management
software and storage services to help customers collect, move, store, share and
protect all types of digital content on platforms ranging from laptops to
enterprise servers. The company, with headquarters in Louisville, Colo.,
reported revenue of $2.3 billion in 1998. Information on StorageTek is available
on the World Wide Web at www.storagetek.com or phone 1-800-786-7835.
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Exhibit 99.2
Storage Technology Corporation 303 673.5020 phone
One StorageTek Drive
Louisville, CO 80028-4130
NEWS RELEASE
Contact: Terry M. Monrad Bill Watts
303.673.4676 303.661.5841
cell: 720.841.5686 [email protected]
[email protected]
STORAGETEK ANNOUNCES SECOND PHASE OF RESTRUCTURING PROGRAM
INCLUDING BUSINESS UNIT CONSOLIDATION,
SALES/SERVICE REFOCUSING, NEW EXECUTIVE TEAM
Company Expects 10 Cents Per Share Fourth-Quarter Loss From Operations
LOUISVILLE, Colo., Feb 3, 2000 -- StorageTek (Storage Technology Corp.,
NYSE:STK) today announced the second phase of a broad restructuring program that
will position the company as a leaner, more responsive competitor in the
emerging data storage industry. Initiatives announced today include:
Consolidation of the company's six operating business units into two: the
Enterprise Business Group and the Client Server Business Group;
Designation of a reconfigured senior operating management team, including
general managers for the two consolidated business groups and the company's
international sales and service activities;
Conclusion of the company's exploration of strategic alternatives in conjunction
with Goldman Sachs & Co.;
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Conclusion of the company's development of efficiency and competitiveness
initiatives in conjunction with McKinsey & Co.;
STORAGETEK ANNOUNCES SECOND PHASE OF RESTRUCTURING
Restructuring of the U.S. and Canada sales and service organization as primarily
a channel-focused model with Fortune 500-oriented sales geographies and a growth
markets business unit that emphasizes dot-coms and e-commerce businesses; and,
Completion of a first round of staffing reductions in the fourth quarter of 1999
and initiation of additional reductions in the first quarter of 2000.
While the company is still completing the year-end audit and the financial
analysis of results, it expects a loss from operations of approximately 10 cents
per share in the fourth quarter, excluding restructuring, litigation and other
one-time charges. The company's fourth quarter results were affected by a number
of factors, including lower margins on consulting and integration service
revenue; the impact of the Y2K lock-down within the customer base; normal
end-of-year sales, bonus and commission expense increases; and operating
expenses associated with an additional week in the company's fiscal calendar
quarter. The company expects to report detailed 1999 year-end results during the
week of February 7.
"We have determined that the strategic alternative that best builds shareholder
value under current market conditions is to operate as a more efficient, more
flexible, more focused independent company," said David E. Weiss, chairman,
president and chief executive officer. "We have the technology, the talent, the
customer relationships and the financial strength to make this happen. The
initiatives we are announcing today, together with those announced in October,
are intended to put us back on the track to profitable growth and attractive
shareholder returns."
In October, StorageTek announced that it had engaged Goldman Sachs to assist in
the exploration of strategic alternatives and McKinsey to assist in the
improvement of management and organizational practices, and began a
restructuring program that will provide annualized savings of $150 million per
year by the end of 2000.
Separately, StorageTek announced today that Weiss had made, and the board of
directors accepted, a proposal that he step aside as chairman, president and
chief executive officer. He will continue in office until a successor has been
selected and a transition has been completed.
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STORAGETEK ANNOUNCES SECOND PHASE OF RESTRUCTURING
Details on the initiatives announced today are as follows:
Business unit consolidation: The newly-created Enterprise Business Group will
comprise the current Nearline Business Group and the Enterprise Disk Business
Group. The new Client Server Business Group will include the current Client
Server Tape and Disk Business Groups and the Storage Networking Business Group
including Storage Area Networks (SANs).
Weiss said, "The consolidation into two business groups will provide three
important benefits. First, it will align StorageTek's organizational structure
with the specific families of products and solutions that we develop,
manufacture, sell and service. It will better support our distribution model in
order to address both our existing customer base and the larger universe of
prospective customers, and the consolidation will allow us to reduce redundant
costs."
StorageTek continues to explore strategic alternatives for its Managed Storage
Systems unit.
New operating management: Roger Archibald was named vice president and general
manager of the Enterprise Business Group; he was previously vice president and
general manager of the Enterprise Disk Business Group. Pierre Cousin was named
vice president and general manager of the Client Server Business Group; he was
previously president of StorageTek France and general manager of the Southern
Region of Europe.
Alain Andreoli was appointed corporate vice president and general manager for
International Operations, Global Services and e-Business; he has been vice
president and general manager for Europe, Africa and the Middle East. Gary
Francis was named vice president of strategic planning; he previously headed the
Nearline Business Group. Katherine Ott was named vice president, global
marketing.
All of these executives will report to Weiss as chief executive officer. As a
result of the streamlining of the management structure, the company no longer
requires a chief operating officer, and consequently Victor Perez, who currently
holds that position, will leave StorageTek at the end of the first quarter.
"In his 20-plus years at StorageTek, Victor has made many valuable contributions
to our growth and development," said Weiss. "We wish him the very best."
<PAGE>
STORAGETEK ANNOUNCES SECOND PHASE OF RESTRUCTURING
Sales and service restructuring: StorageTek is changing from a direct-sales
model to a primarily channel-focused model in the U.S. and Canada, and expects
continued growth in channel product sales in 2000. The channel-focused model
will provide better service to new and existing end user customers as well as
enhancing reseller, distributor and original-equipment manufacturer
partnerships.
New field sales geographies in the U.S. and Canada have been established to
better serve Fortune 500 customers with enterprise-level product and service
requirements. A newly formed Growth Markets business unit will address the needs
of small and medium-sized customers, with particular emphasis on dot-com and
e-commerce businesses, whose data storage requirements are substantial.
Staffing reductions: As of the end of the fourth quarter of 1999, StorageTek had
taken actions to remove approximately 600 positions from its infrastructure.
These reductions came from the elimination of permanent positions, normal
attrition and the elimination of contractors, temporary employees and other
non-permanent positions. Those reductions occurred in all functional areas,
particularly in consulting and service business areas. StorageTek plans to
eliminate between 500 and 600 additional positions during the first quarter of
2000.
About StorageTek
StorageTek is the preeminent provider of network storage. The company's strategy
is to help customers enable business growth by removing the inhibitors to
managing information growth. StorageTek provides "Open, Intelligent and
Integrated"(TM) solutions that combine storage products, storage management
software and storage services to help customers collect, move, store, share and
protect all types of digital content on platforms ranging from laptops to
enterprise servers. The company, with headquarters in Louisville, Colo.,
reported revenue of $2.3 billion in 1998. Information on StorageTek is available
on the World Wide Web at www.storagetek.com or phone 1-800-786-7835.
All assumptions, anticipations, expectations and forecasts contained in this
press release regarding the Company's restructuring are forward-looking
statements within the meaning of the Private Securities Reform Act of 1995. The
actual results arising from these changes may differ materially because of a
number of risks and uncertainties. The forward-looking statements made herein
represent a good-faith assessment by the Company of its restructuring, based
upon its reasonable beliefs and opinions.
