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Ciprico Reports Q4

MINNEAPOLIS -- Ciprico Inc. (NASDAQ:CPCI) today reported revenue for the fiscal fourth quarter ended September 30, 2007 of $2.2 million, up $0.6 million, or 34%, sequentially. The periods results are in line with the Company’s previous guidance of a 30% increase over its third quarter revenue. Sales for the period were down 22% year-over year. Sales for fiscal year 2007 totaled $8.6 million, a 28% decrease from the prior fiscal year.

“We are pleased with our quarter-over-quarter revenue growth and the initial traction of the RAIDCore™ product,” said Steve Merrifield, chief executive officer. “However, it takes a significant investment of time and resources to move the market from hardware-based products to a new and innovative software technology. More than 80% of our professionals at Ciprico are new in the past 12 months, combine that with the transition to a new product line, and we believe certain year-over-year comparisons are less meaningful given the new direction of the Company.”

The Company continues its transition from a hardware-based business model to one focused on software and solutions. Investments in software development have and are expected to yield significant new products and resulted in a number of key strategic announcements including:

  • RAIDCore software suite running on Intel chipsets.
  • Virtualized RAID data protection.
  • New RAIDCore software based MediaVault™ 5100 products.
  • Integration of RAIDCore software into H3C Technologies (Huawei/3 Com) iSCSI servers.
  • Shipment of over 10,000 RAIDCore software licenses.

“As we work with our customers, we are even more confident in our strategy,” Merrifield said. “In particular, we are encouraged by the positive response to our RAIDCore software – an enterprise-class, flexible software platform that is well-positioned to replace expensive hardware RAID solutions. RAIDCore evaluation samples are in the hands of a number of potential customers and partners. We are working with these customers to help them accelerate their qualification and design-in process.”

During the fourth quarter sales and marketing resources were added to begin to build the customer and channel partnerships necessary to return Ciprico to profitability. These investments resulted in a net loss for the fourth quarter of $2.8 million, compared to a net loss of $2.5 million in the previous quarter. For the fiscal year the net loss was $8.1 million compared to a loss of $3.7 million in the previous fiscal year.

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