- 11 June 2004 11:13
EMC Advances Information Lifecycle Management At Annual Analyst Day
EMC ADVANCES INFORMATION LIFECYCLE MANAGEMENT AT ANNUAL ANALYST DAY
Information Storage and Management Leader Forecasts 30 Per Cent Revenue Growth for 2004; Discusses Virtual Infrastructure, Strategies to Accelerate Delivery of Information Lifecycle Management
NEW YORK – June 11, 2004 – EMC Corporation (NYSE: EMC), the world leader in information storage and management, today presented its annual strategy update to more than 300 investors, securities analysts and members of the news media. EMC executives reviewed the company’s record of delivering market-leading innovation and execution, updated its 2004 outlook and reiterated its previously stated outlook for the current quarter, and detailed EMC’s product development and business strategies for information lifecycle management (ILM).
Joe Tucci, EMC President and CEO, said, “There’s never been a better time than now for information lifecycle management because the growth of information – propelled by business continuity, compliance and the proliferation of unstructured content such as rich media and e-mail – is far outpacing the growth of IT budgets. ILM helps companies around the world deal with this growth in data while lowering costs for sharing, managing and protecting the company’s valuable information assets. We are leading the industry in bringing these benefits to market by fully leveraging our technology and distribution portfolio, our acquired companies and our partners.”
As a result of these opportunities and EMC’s execution, Tucci said he expects 2004 revenues of approximately $US8.1 billion and net income of about $US850 million, excluding the previously announced $US25 million after-tax, one-time charges incurred in the first quarter. This would represent year-to-year revenue growth of approximately 30 per cent.
Members of EMC’s executive management team outlined the company’s plans to accelerate deployment of ILM and enable customers to optimise and align IT resources to the business based upon the changing value of information. Among the day’s highlights, EMC:
Articulated its strategy to capitalise on an addressable market opportunity estimated to be more than $US46 billion in 2004, through the delivery of ILM and the technology solutions that underpin it to large, medium and small organisations around the world. Discussed virtual infrastructure (VI), which was pioneered by VMware and delivers technologies that help optimise a customer’s server, network and storage resources, and outlined VI’s role in customer IT initiatives, such as ILM and utility computing. Introduced the EMC Software Group, a newly formed organisation that brings EMC’s core open software, LEGATO and Documentum businesses together to advance the company’s leadership in ILM and maximise customer value through best-of-breed and integrated end-to-end software solutions. The EMC Software Group, co-led by Executive Vice Presidents David DeWalt and Mark Lewis, is expected to have software license and services revenues of approximately $US1.5 billion for the full year 2004. Discussed its approach to allow for the non-disruptive movement and migration of data across the storage infrastructure. This “first of its kind” storage network-based software leverages intelligent SAN-based ports to separate management from the data path without impacting the performance of the existing storage infrastructure or limiting future flexibility and scalability. Previewed new, advanced software capabilities to allow organisations to create and automate storage policies based on business processes that will automatically assign and move content among different tiers of storage. Detailed the incremental opportunity that ILM is creating for advanced replication capabilities and the demand for greater functionality within various tiers of storage, including EMC’s traditional high-end and mid-tier networked storage families, content addressed storage (CAS), disk libraries, offline vaulting, iSCSI and entry-level SANs. Today nearly two-thirds of EMC’s 500 largest customers protect and manage information across three or more tiers of EMC storage.
“We have expanded our value to customers and our addressable market by continuously building on and building out our core technology portfolio,” Tucci continued. “ILM, which can be greatly enabled by virtual infrastructure, helps organisations get the maximum value from their information at the lowest total cost by integrating their storage and compute environments and ultimately managing them as a single pool of heterogeneous IT resources. Doing so will lower costs, shield customers from the complexity of managing multi-vendor systems and dramatically raise the level of business continuity they can confidently expect from their infrastructures.”
Evolving Financial Model
Bill Teuber, EMC’s Executive Vice President and Chief Financial Officer, reaffirmed EMC’s previously stated goals of $US1.95 billion to $US1.975 billion in revenue and diluted earnings per share of $US0.08 for the second quarter. He disclosed that since EMC reported its first quarter earnings on April 15, 2004, the company has purchased approximately 23.5 million shares of its stock for about $US265 million, bringing its year-to-date purchases to a total of 26.6 million shares for $US310 million. Teuber also reiterated EMC’s focus on raising operating margins to the mid-teens by the fourth quarter of 2004. In addition, he discussed EMC’s evolving financial model and targeted the further improvement of operating margins into the high-teens exiting 2005.
“While EMC’s financial position has improved significantly over the past two years, we continue to focus our efforts on driving revenue growth, margin expansion, operating profit and cash flow,” said Teuber. “With revenues and gross margins performing better than expected in the first quarter, we are taking the opportunity to invest in growth areas such as our new software businesses and markets where we have been underrepresented, including international regions and small to medium-sized businesses.”
EMC Corporation (NYSE: EMC) is the world leader in products, services and solutions for information storage and management that help organisations extract the maximum value from their information, at the lowest total cost, across every point in the information lifecycle. Information about EMC’s products and services can be found at www.EMC.com.
Expected net income for 2004 would be about $US825 million, including first-quarter restructuring and other special charges of $US25 million. Management uses non-GAAP financial measures to gain an understanding of its comparative operating performance. Management believes that these measures provide useful information because they exclude activities that are not necessarily relevant to understand EMC’s business.
This release contains “forward-looking statements” as defined under the Federal Securities Laws, including statements regarding business outlook. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) risks associated with acquisitions and investments, including the challenges and costs of integration, restructuring and achieving anticipated synergies associated with the acquisitions of LEGATO Systems, Inc., Documentum, Inc. and VMware, Inc.; (iv) competitive factors, including but not limited to pricing pressures; (v) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (vi) component quality and availability; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) insufficient, excess or obsolete inventory; (ix) war or acts of terrorism; (x) the ability to attract and retain highly qualified employees; (xi) fluctuating currency exchange rates; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission. In addition, any statements in this release regarding business outlook are based on current expectations and do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be completed after the date hereof. The Business Outlook set forth in EMC’s news releases dated January 22 and April 15, 2004, still represents EMC’s current expectation unless specifically superseded by statements within this release. EMC disclaims any obligation to update any such forward-looking statements after the date of this release.
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