SOURCE: Adaptec

May 11, 2006 16:05 ET

Adaptec Reports Fourth Quarter and Fiscal 2006 Results

-- Q4 Net Revenue From Continuing Operations: $73.4 Million

-- Fiscal Year 2006 Revenue From Continuing Operations: $310.1 Million

MILPITAS, CA -- (MARKET WIRE) -- May 11, 2006 -- Adaptec, Inc. (NASDAQ: ADPT), a global leader in storage solutions, today reported financial results for the fourth quarter of its fiscal year 2006, which ended on March 31, 2006.

Net revenue for the Company's continuing operations for the fourth quarter of fiscal 2006 was $73.4 million, compared with $79.0 million for the fourth quarter of 2005.

The loss from continuing operations, computed on a generally accepted accounting principles (GAAP) basis, for the fourth quarter of fiscal 2006 was ($4.2) million or ($0.04) per share compared with ($153.4) million or ($1.37) per share for the fourth quarter of fiscal 2005.

The non-GAAP income from continuing operations for the fourth quarter of fiscal 2006 was $5.6 million or $0.04 per share, compared with a non-GAAP loss from continuing operations of ($5.9) million or ($0.05) per share for the fourth quarter of fiscal 2005.

The GAAP net loss for the fourth quarter of fiscal 2006 was ($3.4) million or ($0.03) per share compared with a net loss of ($159.5) million or ($1.43) per share for the fourth quarter of fiscal 2005. The non-GAAP net income for the fourth quarter of fiscal 2006 was $3.3 million or $0.03 per share compared with a non-GAAP net loss of ($4.5) million or ($0.04) per share for the fourth quarter of fiscal 2005.

Net revenues from continuing operations for the fiscal year ended March 31, 2006 were $310.1 million, compared with $371.3 million, for the fiscal year ended March 31, 2005. Net loss for the fiscal year ended March 31, 2006, on a GAAP basis, was ($148.4) million, or ($1.31) per share, compared with net loss of ($145.1) million, or ($1.31) per share, for the fiscal year ended March 31, 2005.

Non-GAAP loss from continuing operations for the fiscal year ended March 31, 2006, was ($3.9) million, or ($0.03) per share, compared with non-GAAP income from continuing operations of $5.6 million, or $0.05 per share, for the fiscal year ended March 31, 2005. Non-GAAP net loss for the fiscal year ended March 31, 2006, was ($11.3) million, or ($0.10) per share, compared with non-GAAP net income of $2.0 million, or $0.02 per share, for the fiscal year ended March 31, 2005.

A complete reconciliation between GAAP and non-GAAP information referred to in this release is provided in the attached tables.

The Company indicated that its improved performance during the fourth fiscal quarter is primarily attributed to the company's ongoing focus on growing its leadership position in the serial technology marketplace, driving positive changes in its business and operating models, and improving company execution on all fronts.

"Fiscal 2006 was a year of recovery for Adaptec and now we are at a turning point in our strategy," said S. "Sundi" Sundaresh, president and CEO of Adaptec. "As we move into fiscal year 2007, we are well positioned with a strengthened management team, dedicated employee base, and renewed focus on our RAID data protection and serial controller technologies."

Conference Call

The Adaptec fourth quarter and fiscal 2006 earnings conference call is scheduled for 1:45 p.m. Pacific Time on May 11, 2006. Individuals may participate via webcast by visiting www.adaptec.com/investor 15 minutes prior to the call. A telephone replay of the teleconference will be available through June 11, 2006 by calling (888) 203-1112 in the U.S. or (719) 457-0820 internationally and referencing reservation number 1644870.

Safe Harbor Statement

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Forward-looking statements include statements regarding future events or the future performance of Adaptec. These forward-looking statements are based on current expectations, forecasts and assumptions and involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. These risks include: identifying and retaining key management, identifying potential buyers for the Systems business; market demand for RAID products; difficulty in forecasting the volume and timing of customer orders; reduced demand in the server, network storage and desktop computer markets; our target markets' failure to accept, or delay in accepting, network storage and other advanced storage solutions, including our SAS, SATA and iSCSI lines of products; decline in consumer acceptance of our current products; the timing and volume of orders by OEM customers for storage products; our ability to control and manage costs associated with the delivery of new products; and the adverse effects of the intense competition we face in our business. For a more complete discussion of risks related to our business, reference is made to the section titled "Risk Factors" included in our Quarterly Report on Form 10-Q for the quarter ended December 31, 2006, on file with the Securities and Exchange Commission. Adaptec assumes no obligation to update any forward-looking information that is included in this release.

About Adaptec

Adaptec Inc. (NASDAQ: ADPT) provides end-to-end storage solutions that reliably move, manage and protect critical data and digital content. Adaptec provides software and hardware solutions for storage connectivity and data protection, storage networking and networked storage subsystems to leading OEM and distribution channel partners. Adaptec solutions are in use by enterprises, ISPs, medium and small businesses and consumers worldwide. Adaptec is an S&P Small Cap 600 Index member.


                               Adaptec, Inc.
         GAAP Condensed Consolidated Statements of Operations and
         Reconciliation of GAAP to Non-GAAP Operating Results (*)
                                (unaudited)

                                          Three-Month Period Ended
                                    ------------------------------------
                                               March 31, 2006
                                    ------------------------------------
                                      GAAP       Adjustments   Non-GAAP
                                    ---------  --------------  ---------
                                      (in thousands, except per share
                                                  amounts)

Net revenues                        $  73,414  $       -       $  73,414
Cost of revenues                       45,448          -          45,448
                                    ---------  ---------       ---------
Gross profit                           27,966          -          27,966
                                    ---------  ---------       ---------
Operating expenses:
     Research and development          13,641          -          13,641
     Selling, marketing and
      administrative                   15,272        (39)  (a)    15,233
     Amortization of
      acquisition-related
          intangible assets             1,689     (1,689)  (c)
     Restructuring charges              7,325     (7,325)  (e)
     Goodwill impairment                               -
     Other charges                        107       (107)  (g)
                                    ---------  ---------       ---------
         Total operating expenses      38,034     (9,160)         28,874
                                    ---------  ---------       ---------
Loss from continuing operations       (10,068)     9,160            (908)
Interest and other income               5,011        (22)  (i)     4,989
Interest expense                         (716)         -            (716)
                                    ---------  ---------       ---------
Income (loss) from continuing
 operations before income taxes        (5,773)     9,138           3,365
Provision for (benefit from) income
 taxes                                 (1,598)      (666)  (k)    (2,264)
                                    ---------  ---------       ---------
Income (loss) from continuing
 operations                            (4,175)     9,804           5,629
                                    ---------  ---------       ---------
Discontinued operations:
     Income (loss) from
      discontinued
          operations, net of taxes    (12,501)    10,169   (m)    (2,332)
     Income from disposal of
      discontinued
          operations, net of taxes     13,284    (13,284)  (m)
                                    ---------  ---------       ---------
Income (loss) from discontinued
 operations, net of taxes                 783     (3,115)         (2,332)
                                    ---------  ---------       ---------
Net income (loss)                   $  (3,392) $   6,689       $   3,297
                                    =========  =========       =========

Net income (loss) per common share:
    Basic
        Continuing operations       $   (0.04)                 $    0.05
        Discontinued operations     $    0.01                  $   (0.02)
        Net income (loss)           $   (0.03)                 $    0.03
    Diluted
        Continuing operations       $   (0.04)                 $    0.04
        Discontinued operations     $    0.01                  $   (0.02)
        Net income (loss)           $   (0.03)                 $    0.03

Shares used in computing net income
 (loss) per share:
    Basic                             114,678          -         114,678
    Diluted                           114,678     22,215   (u)   136,893




                                           Three-Month Period Ended
                                                March 31, 2005
                                    --------------------------------------
                                       GAAP       Adjustments    Non-GAAP
                                    ----------  ---------------  ---------
                                        (in thousands, except per share
                                                   amounts)

Net revenues                        $   78,958  $        -       $  78,958
Cost of revenues                        54,543           -          54,543
                                    ----------  ----------       ---------
Gross profit                            24,415           -          24,415
                                    ----------  ----------       ---------
Operating expenses:
     Research and development           18,242        (202)  (b)    18,040
     Selling, marketing and
      administrative                    17,076        (768)  (b)    16,308
     Amortization of
      acquisition-related
          intangible assets              2,181      (2,181)  (d)         -
     Restructuring charges                 921        (921)  (e)         -
     Goodwill impairment                52,272     (52,272)  (f)         -
     Other charges                       2,465      (2,465)  (h)         -
                                    ----------  ----------       ---------
         Total operating expenses       93,157     (58,809)         34,348
                                    ----------  ----------       ---------
Loss from continuing operations        (68,742)     58,809          (9,933)
Interest and other income                 (230)      4,466   (j)     4,236
Interest expense                        (1,089)          -          (1,089)
                                    ----------  ----------       ---------
Income (loss) from continuing
 operations before income taxes        (70,061)     63,275          (6,786)
Provision for (benefit from) income
 taxes                                  83,357     (84,226)  (l)      (869)
                                    ----------  ----------       ---------
Income (loss) from continuing
 operations                           (153,418)    147,501          (5,917)
                                    ----------  ----------       ---------
Discontinued operations:
     Income (loss) from
      discontinued
          operations, net of taxes      (6,124)      7,495   (m)     1,371
     Income from disposal of
      discontinued
          operations, net of taxes           -           -               -
                                    ----------  ----------       ---------
Income (loss) from discontinued
 operations, net of taxes               (6,124)      7,495           1,371
                                    ----------  ----------       ---------
Net income (loss)                   $ (159,542) $  154,996       $  (4,546)
                                    ==========  ==========       =========

Net income (loss) per common share:
    Basic
        Continuing operations       $    (1.37)                  $   (0.05)
        Discontinued operations     $    (0.05)                  $    0.01
        Net income (loss)           $    (1.43)                  $   (0.04)
    Diluted
        Continuing operations       $    (1.37)                  $   (0.05)
        Discontinued operations     $    (0.05)                  $    0.01
        Net income (loss)           $    (1.43)                  $   (0.04)

Shares used in computing net income
 (loss) per share:
    Basic                              111,905           -         111,905
    Diluted                            111,905           -         111,905






                               Adaptec, Inc.
         GAAP Condensed Consolidated Statements of Operations and
         Reconciliation of GAAP to Non-GAAP Operating Results (*)
                                (unaudited)

                                          Twelve-Month Period Ended
                                   ---------------------------------------
                                               March 31, 2006
                                   ---------------------------------------
                                      GAAP       Adjustments     Non-GAAP
                                   ----------  ---------------  ----------
                                       (in thousands, except per share
                                                   amounts)

Net revenues                       $  310,145  $        -       $  310,145
Cost of revenues                      201,890         (15)  (n)    201,875
                                   ----------  ----------       ----------
Gross profit                          108,255          15          108,270
                                   ----------  ----------       ----------
Operating expenses:
     Research and development          60,895         (89)  (n)     60,806
     Selling, marketing and
      administrative                   64,989      (1,088)  (n)     63,901
     Amortization of
      acquisition-related
          intangible assets             7,155      (7,155)  (c)
     Restructuring charges             10,430     (10,430)  (e)
     Goodwill impairment               90,602     (90,602)  (p)
     Other charges                      1,579      (1,579)  (g)
                                   ----------  ----------       ----------
         Total operating expenses     235,650    (110,943)         124,707
                                   ----------  ----------       ----------

Income (loss) from continuing
 operations                          (127,395)    110,958          (16,437)
Interest and other income              17,621          79   (r)     17,700
Interest expense                       (3,314)          -           (3,314)
                                   ----------  ----------       ----------
Income (loss) from continuing
 operations before income taxes      (113,088)    111,037           (2,051)
Provision for (benefit from)
 income taxes                           1,608         201   (k)      1,809
                                   ----------  ----------       ----------

Income (loss) from continuing
 operations                          (114,696)    110,836           (3,860)
                                   ----------  ----------       ----------
Discontinued operations:
     Loss from discontinued
          operations, net of taxes    (43,546)     36,144   (m)     (7,402)
     Income from disposal of
      discontinued
          operations, net of taxes      9,810      (9,810)  (m)
                                   ----------  ----------       ----------
Loss from discontinued operations,
 net of taxes                         (33,736)     26,334           (7,402)
                                   ----------  ----------       ----------
Net income (loss)                  $ (148,432) $  137,170       $  (11,262)
                                   ==========  ==========       ==========

Net income (loss) per common
 share:
    Basic
        Continuing operations      $    (1.01)                  $    (0.03)
        Discontinued operations    $    (0.30)                  $    (0.07)
        Net income (loss)          $    (1.31)                  $    (0.10)
    Diluted
        Continuing operations      $    (1.01)                  $    (0.03)
        Discontinued operations    $    (0.30)                  $    (0.07)
        Net income (loss)          $    (1.31)                  $    (0.10)

Shares used in computing net
 income (loss) per share:
    Basic                             113,405           -          113,405
    Diluted                           113,405           -          113,405




                                          Twelve-Month Period Ended
                                               March 31, 2005
                                   ---------------------------------------
                                      GAAP       Adjustments     Non-GAAP
                                   ----------  ---------------  ----------
                                       (in thousands, except per share
                                                   amounts)

Net revenues                       $  371,257  $        -       $  371,257
Cost of revenues                      219,455           -          219,455
                                   ----------  ----------       ----------
Gross profit                          151,802           -          151,802
                                   ----------  ----------       ----------
Operating expenses:
     Research and development          86,479      (1,879)  (o)     84,600
     Selling, marketing and
      administrative                   72,120      (3,267)  (o)     68,853
     Amortization of
      acquisition-related
          intangible assets             9,251      (9,251)  (d)          -
     Restructuring charges              5,896      (5,896)  (e)          -
     Goodwill impairment               52,272     (52,272)  (f)          -
     Other charges                       (290)        290   (q)          -
                                   ----------  ----------       ----------
         Total operating expenses     225,728     (72,275)         153,453
                                   ----------  ----------       ----------

Income (loss) from continuing
 operations                           (73,926)     72,275           (1,651)
Interest and other income               8,369       6,158   (s)     14,527
Interest expense                       (4,439)          -           (4,439)
                                   ----------  ----------       ----------
Income (loss) from continuing
 operations before income taxes       (69,996)     78,433            8,437
Provision for (benefit from)
 income taxes                          51,894     (49,017)  (t)      2,877
                                   ----------  ----------       ----------

Income (loss) from continuing
 operations                          (121,890)    127,450            5,560
                                   ----------  ----------       ----------
Discontinued operations:
     Loss from discontinued
          operations, net of taxes    (23,216)     19,690   (m)     (3,526)
     Income from disposal of
      discontinued
          operations, net of taxes          -           -                -
                                   ----------  ----------       ----------
Loss from discontinued operations,
 net of taxes                         (23,216)     19,690           (3,526)
                                   ----------  ----------       ----------
Net income (loss)                  $ (145,106) $  147,140       $    2,034
                                   ==========  ==========       ==========

Net income (loss) per common
 share:
    Basic
        Continuing operations      $    (1.10)                  $     0.05
        Discontinued operations    $    (0.21)                  $    (0.03)
        Net income (loss)          $    (1.31)                  $     0.02
    Diluted
        Continuing operations      $    (1.10)                  $     0.05
        Discontinued operations    $    (0.21)                  $    (0.03)
        Net income (loss)          $    (1.31)                  $     0.02

Shares used in computing net
 income (loss) per share:
    Basic                             110,798           -          110,798
    Diluted                           110,798       1,638   (v)    112,436

(*) To supplement our consolidated financial statements presented in
accordance with generally accepted accounting principles (GAAP), we use
non-GAAP measures of operating results, net income/(loss) and earnings per
share, which are adjusted from results based on GAAP to exclude certain
expenses, gains and losses.  These non-GAAP measures are provided to
enhance the user's overall understanding of our current financial
performance and our prospects for the future.  Specifically, we believe the
non-GAAP results provide useful information to both management and
investors by excluding certain expenses, gains and losses that we believe
are not indicative of our core operating results.  In addition, since we
have historically reported non-GAAP results to the investment community, we
believe the inclusion of non-GAAP numbers provides consistency in our
financial reporting. Further, these non-GAAP results are one of the primary
indicators management uses for assessing our performance, allocating
resources and planning and forecasting future periods. The non-GAAP
information is presented using consistent methodology from
quarter-to-quarter and year-to-year. These measures should be considered in
addition to results prepared in accordance with GAAP, but should not be
considered a substitute for or superior to GAAP results.

(a) Management incentive program of $0.03 million associated with the Snap
Appliance acquisition (acquired in July 2004) and deferred compensation
expense related to assumed stock options associated with the Snap Appliance
acquisition. These assumed options were negotiated as part of the
acquisition and represent compensation over and above the amounts that we
provide to these acquired employees.

(b) Management incentive program of $0.6 million associated with the Snap
Appliance acquisition and deferred compensation expense related to assumed
stock options of $0.4 million associated with the Platys (acquired in
August 2001) and Snap Appliance acquisitions.

(c) Amortization of acquisition-related intangible assets, primarily core
and existing technologies, patents and customer relationships intangible
assets, related to the acquisitions of Platys, Eurologic (acquired in April
2003), ICP vortex (acquired in June 2003), Elipsan (acquired in February
2004) and the IBM i/p Series RAID business (acquired in June 2004).

(d) Amortization of acquisition-related intangible assets, primarily core
and existing technologies, patents and customer relationships intangible
assets, related to the acquisitions of Platys, Eurologic, ICP vortex and
Elipsan.

(e) Restructuring expense primarily related to (i) activities under the
third and fourth quarters of fiscal 2006 restructuring plan to simplify our
infrastructure by reducing headcount and consolidating facilities as well
as adjustments made to previous restructuring plans and (ii) to activities
under the first, second, third and fourth quarters of fiscal 2005
restructuring plans to reduce headcount, consolidate facilities and other
actions related to the Snap Appliance acquisition, plans to reduce
headcount related to the Vitesse and ServerEngines strategic alliances and
adjustments made to previous restructuring plans.

(f) Impairment of goodwill related to the Channel segment of $52.3 million

(g) Loss on the sale of our Singapore manufacturing assets, buildings and
improvements and inventory.

(h) Other charges primarily represents $0.9 million and $1.6 million in
severance, benefits, loss on the sale of property and equipment and legal
fees associated with the strategic alliances entered into with
ServerEngines and Vitesse, respectively.

(i) Loss on repurchase of 3% convertible notes.

(j) Loss on liquidation of investments related to the repatriation of cash
from Singapore to the United States.

(k) Incremental income taxes associated with certain non-GAAP adjustments.

(l) Incremental income taxes associated with certain non-GAAP adjustments,
recording of a valuation allowance on net deferred tax assets and taxes
incurred on the repatriation of cash from Singapore to the United States.

(m) Loss (income) from disposal of the IBM i/p Series RAID business and
Systems business, impairment of the IBM i/p Series RAID long-lived assets,
impairment of the Systems long-lived assets, write-off of in-process
research and development costs associated with the acquisitions of Snap
Appliance and the IBM i/p Series RAID business, amortization of
acquisition-related intangible assets related to the acquisitions of
Platys, Eurologic, ICP vortex, Snap Appliance and the IBM i/p Series RAID
business, management incentive program associated with the Snap Appliance
acquisition, deferred compensation expense related to assumed stock options
associated with the Snap Appliance acquisition, cash hire-on payments
associated with the IBM i/p Series RAID business acquisition, and
incremental income taxes associated with certain GAAP and non-GAAP
adjustments. Amounts are summarized below:

                           Three-    Three-    Twelve-    Twelve-    Three-
                           Month     Month     Month      Month      Month
                           Ended     Ended     Ended      Ended      Ended
                          March 31, March 31, March 31,  March 31, December
                           2006      2005      2006       2005     31, 2005
(in millions)

Impairment of the IBM
 i/p Series RAID Business  $ ---     $ ---     $15.5      $ ---     $ ---
Impairment of Systems
 long lived assets          10.0       ---      10.0        ---       ---
Write-off of in-process
 research and development    ---       ---       ---        5.2       ---
Acquisition-related
 intangible assets           ---       2.9       5.2        9.0       ---
Management incentive
 program                     0.5       0.7       4.0        2.8       0.8
Deferred compensation
 expense                     0.1       0.2       1.4        0.7       0.2
Cash hire-on payments        ---       ---       ---        0.6       ---
Loss (gain) from disposal
 of IBM i/p Series RAID     (2.1)      ---       1.4        ---      (3.5)
Gain from disposal of
 Systems Business          (12.1)      ---     (12.1)       ---       ---
Income taxes                 0.5       3.7       0.9        1.4       1.1
                           -----     -----     -----      -----     -----
    Total                  $(3.1)    $ 7.5     $26.3      $19.7     $(1.4)
                           -----     -----     -----      -----     -----


(n) Management incentive program of $1.0 million associated with the Snap
Appliance acquisition and deferred compensation expense related to assumed
stock options of $0.2 million associated with the Platys and Snap Appliance
acquisitions.

(o) Management incentive program of $2.8 million associated with the Snap
Appliance acquisition, deferred compensation expense related to assumed
stock options of $2.4 million associated with the Platys and Snap Appliance
acquisitions.

(p) Impairment of goodwill.

(q) Other charges primarily represents $0.9 million and $1.6 million in
severance, benefits, loss on the sale of property and equipment and legal
fees associated with the strategic alliances entered into with
ServerEngines and Vitesse, respectively and gain of $2.8 million on sale of
long-lived assets.

(r)  Loss on repurchase of 3% convertible notes.

(s) Loss of $4.5 million on liquidation of investments related to the
repatriation of cash from Singapore to the United States and expense of
$1.7 million related to a license and release agreement to settle claims
that some of our products infringed certain patents.

(t)  Incremental income taxes associated with certain non-GAAP adjustments,
recording of a valuation allowance on net deferred tax assets, taxes
incurred on the repatriation of cash from Singapore to the United States
and a tax benefit from certain discrete tax events during the second and
third quarter of fiscal 2005 related to the method and amount of settled
tax controversies.

(u) Anti-dilutive effect of employee options and 3/4% convertible notes.

(v) Anti-dilutive effect of employee options.

                              Adaptec, Inc.
                 Summary Balance Sheet and Cash Flow Data
                                (unaudited)

          Balance Sheet Data                          As of
                                        ----------------------------------
                                        March 31,    December   March 31,
                                           2006      31, 2005      2005
                                        ----------  ----------  ----------
                                                  (in thousands)

Cash, cash equivalents and marketable
 securities                             $  556,552  $  532,306  $  526,556
Accounts receivable, net                    47,876      57,086      70,159
Inventories                                 23,423      22,441      60,204
Goodwill and other intangible assets        18,471      21,739     170,943
Other assets                                71,721      61,732     135,644
Assets held for sale                             -      22,583           -
Assets from discontinued operations         19,356      30,481           -
                                        ----------  ----------  ----------
     Total assets                       $  737,399  $  748,368  $  963,506
                                        ==========  ==========  ==========

Current liabilities                        133,749     135,043     177,644
Liabilities from discontinued
 operations                                  4,856       5,336           -
Convertible notes and other long-term
 obligations                               229,349     240,648     275,539
Stockholders' equity                       369,445     367,341     510,323
                                        ----------  ----------  ----------
     Total liabilities and
      stockholders' equity              $  737,399  $  748,368  $  963,506
                                        ==========  ==========  ==========


          Cash Flow Data                     Three-Month Period Ended
                                        ----------------------------------
                                        March 31,    December   March 31,
                                           2006      30, 2005      2005
                                        ----------  ----------  ----------
                                                  (in thousands)

Net income (loss) from continuing
 operations                             $   (4,175) $   (2,614) $ (153,418)
Adjustments to reconcile income (loss)
 from continuing operations to net cash
 provided by (used for) operations:
     Non-cash P&L items:
       Goodwill impairment                       -           -      52,272
       Loss (gain) on sale of
        long-lived assets                      107       1,472       1,372
       Stock-based compensation                 18          20         525
       Deferred income taxes                     -           -      50,779
       Loss on repurchase of 3%
        convertible notes                      (22)          -           -
       Depreciation and amortization         5,113       6,340       8,875
       Other items                             889         507        (616)
     Changes in assets and liabilities     (15,159)     11,913      48,524
                                        ----------  ----------  ----------
Net cash provided by operating
 activities of continuing operations       (13,229)     17,638       8,313
Net cash provided by (used for)
 operating activities of discontinued
 operations                                 (2,303)      2,109      (2,620)
                                        ----------  ----------  ----------
Net cash provided by (used for)
 operating activities                   $  (15,532) $   19,747  $    5,693
                                        ==========  ==========  ==========

Other significant cash flow activities:
     Proceeds from the sale of business     35,490      24,126
     Repurchase of 3% convertible notes      1,321           -           -