Along with earnings in line with expectations, Adaptec Inc. (Nasdaq: ADPT) announced a new acquisition this week and unveiled its first line of external iSCSI storage devices.
The news represents Adaptec's efforts to become an "end-to-end storage" provider -- the strategy most big storage companies are adopting this year. In Adaptec's case, the vendor is looking to leverage capital to build out its product line, particularly in areas like iSCSI, where it sees a market for its particular expertise among small to medium-sized businesses.
Let's look at the news items individually.
Earnings: The company announced income of $5 million for last quarter, up from $3 million the previous year. Revenue of $115.1 million rose from $109 million a year ago. The company forecasts revenues this quarter to be flat sequentially, falling between $114 and $116 million instead of the usual seasonal decline (see Adaptec Reports Q3 Earnings).
Acquisition: During a conference call with financial analysts, Adaptec CEO Bob Stephens said the company paid between $20 million and $25 million Monday for U.K.-based Elipsan Ltd., which makes storage virtualization technology (see Adaptec Gets Virtual With Elipsan). Eurologic spun off Elipsan shortly before Adaptec paid $30 million to acquire Eurologic last April (see Adaptec Adopts Eurologic). Stephens said Adaptec passed on Elipsan back then because Elipsan had no product at the time. He said Elipsan now has product shipping, and part of its software will be incorporated into Adaptecs new iSCSI product.
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