PC Card manufacturer Xircom Inc has reported net income for the year ending September 30 up 153% at $46.3m on revenue that rose 48% to $408.9m. Earnings per share were up 153% at $1.82. The figure for net income excludes acquisition-related costs and other non-recurring charges which, when factored, in bring the figure down to […]
PC Card manufacturer Xircom Inc has reported net income for the year ending September 30 up 153% at $46.3m on revenue that rose 48% to $408.9m. Earnings per share were up 153% at $1.82. The figure for net income excludes acquisition-related costs and other non-recurring charges which, when factored, in bring the figure down to $43m, with EPS reduced to $1.69.
These are the last results figures from the Thousand Oaks, California-based company in which revenues will be derived entirely from the PC Card segment, as Xircom has lately been on the acquisition trail (hence the two different net income figures). Last month it bought the Rex personal organizer business from Franklin Electronic Publishers Inc and USB Universal Serial Bus port expansion specialist Entrega Technologies Inc.
Of the two, the Entrega acquisition is the more important in the short term, says European marketing director Benny Van Calster. The USB market should represent between 10% and 15% of revenue next year, bringing in some $40m to $50m of revenue, he predicted. This will entail Xircom extending the market reach of the USB product line, Entrega having sold primarily in the US market only.
The Rex organizer business, on the other hand, requires a period of further development, probably some 18 months, during which time Xircom plans to add more security features in order to attack the corporate market.
As for fiscal 1999, roughly 60% of revenue came from Xircom’s Combination Cards (Fast Ethernet and modem combined), which is also the fastest growing segment of the market due to these products’ application in the portable market, Calster said.
He added that the 48% overall growth in revenue was fastest than that of the market as a whole, due amongst other things to the increasing uptake of Xircom’s RealPort cable-free card technology, which already represents around 60% of all the company’s PC Card sales. The technology has been extended from the Combination product line into LAN cards and modem cards, and will only not reach 100% of the company’s PC Cards revenues because it is still not appropriate for slim notebooks, for which Xircom proposes its MiniDock connector system.
The higher profit margin possible on products using the RealPort technology are also one of the reasons Xircom’s profitability has risen faster over the last year than sales, says Calster. The other is greater efficiency, with inventories having been reduced to 30 days of sale, he went on.
For the next 12 months, said Xircom’s European marketing director, the company expects revenue growth of around 20% in its existing business, which together with the USB sales should mean revenue for fiscal 2000 of around $500m, he predicted.