Cost cutting pays off for Adaptec

Restructuring is beginning to bear fruit for Adaptec, the dominant player in the RAID controller market. In an upbeat statement accompanying Q3 results, CFO Andy Brown said the company's cost cutting had "proceeded more rapidly than we originally expected". The company notes strong demand for bus adaptor products, and it is particularly pleased with a major design win for its new 64-bit product courtesy of a contract from Dell to fit the AAC-364 64-bit RAID adapter into new PowerEdge servers and PowerVault storage systems during the quarter Adaptec is also touting its ownership of the de facto software standard for CD-RW on the desktop. It says it will leverage this market leading position into the DVD market. Revenue for Q3 was $183.9 million and net income and $26.7 million. Strip out the contributions from the Peripheral Technology Solutions group (PTS), sold in parts to STMicroelectronics and Texas Instruments, and net revenues were $159.6 million in Q3, 17.9 per cent down from $194.4 million in Q3, 1998. Net income was $29.2 million, down 13 per cent from $33.6 million excluding unusual charges and a change in accounting principle a year ago. ®