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MTI Technology

At less than $2 a share, is high-end data storage provider MTI Technology (Nasdaq: MTIC) a company with possible upside, or one staggering toward extinction? While evidence exists to support either conclusion, what seems certain is that potential investors may have an extended wait to see how the next chapter of the company's history is written.

Anyone with an interest in MTI matters is not going to get much help from Wall Street analysts. Only two firms (Needham & Co. and Wells Fargo Van Kasper, neither of which could be reached for comment) have issued recent recommendations for MTI. And they are opposed in advice, with Needham saying buy, Wells Fargo sell. Another financial analyst with knowledge of the networking and storage fields suggested the lack of coverage is directly related to the stagnation of MTI's business.

"They are kind of in a tough spot to obtain differentiation," said the analyst, who declined to be identified. "But they're not going out of business anytime soon. If the industry improves, they'll survive."

On the good-news side of the ledger, MTI is selling products and has new ones ready to announce "any day now," according to president and CEO Thomas Raimondi. The company's flagship product is its high-end, fault-tolerant Vivant line of Fibre Channel data-storage servers for SAN and NAS implementations, cabinet-size boxes whose prices run into the hundreds of thousands of dollars.

While MTI also sells tape drives and networking storage software and services, the RAID-based server sales account for more than 60 percent of recent revenues. Though the company lost $36 million in its fiscal year 2001 (which concluded April 7) and suffered a $66 million decline in revenues (to $161 million from $227 million in fiscal 2000), it has little debt and enough cash on hand to last at least until the end of the year, according to Raimondi.

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