Wednesday, February 6, 2002

Ontrack Data International Inc. announces record fourth quarter revenue and reports year-end results

MINNEAPOLIS, February 6, 2002 - ONTRACK Data International, Inc. (NASDAQ: ONDI) today reported total revenue for the fourth quarter of 2001 was a record $16.5 million, an 11 percent increase over revenue of $14.9 million in the fourth quarter of 2000. Diluted earnings per share excluding goodwill amortization totaled $0.15 per share compared to $0.17 per share in the fourth quarter of 2000.

Fourth quarter 2001 service revenues totaled $12.2 million, a 21 percent increase over the fourth quarter of 2000. Of this total, Data Recovery revenue increased 18 percent over last year’s fourth quarter to $8.7 million. DataTrail™ revenue was a record $3.5 million in the fourth quarter and was driven by two large merger and acquisition jobs totaling $2.5 million.

“We closed out the year with strong performances in all of our businesses,” stated Ben Allen, president & CEO. “Our strategy to penetrate the civil litigation market proved successful, as we saw a 25 percent increase over the third quarter of 2001 to approximately $1 million in electronic discovery revenue for litigation cases. We believe continuing to execute this strategy will help offset the significant fluctuations that go hand-in-hand with merger and acquisition work over time.”

Software revenue totaled $4.3 million compared to $4.9 million in the fourth quarter of 2000. The Company’s EasyRecovery™ do-it-yourself data recovery software generated $840,000 in revenue while Disk Manager® software revenues were $853,000. Software utility revenues totaled $2.3 million in the quarter, of which approximately $1.4 million represented revenue recognized from cash collections in the domestic retail channel. During the fourth quarter of 2001, Ontrack decided to transition out of the domestic retail channel and focus on reducing costs, collecting cash and searching for a partner to distribute its PC utility software titles. In January 2002, the Company signed an agreement with Activision Value Publishing, Inc. to become the primary distributor of four of its PC Utility software titles in the North American retail channel. Ontrack will continue to distribute its full line of software products through online channels, including its own storefront at, and expects to make this product line profitable in 2002.

Ontrack will discuss its fourth quarter 2001 and 2002 outlook during the Company’s quarterly conference call to be held on February 6, 2002, at 4:00 PM Central Time. Investors may access the call by dialing 888-391-0108. A replay of the call is available beginning two hours following the conclusion of the call and for one week after the call by dialing 800-633-8284 and entering the code – 19999251. Investors also may access a live web cast of the conference call at

About Ontrack
Ontrack provides data availability software and service solutions, helping customers manage, recover and discover their valuable data. Using its hundreds of proprietary tools and techniques, Ontrack can recover lost or corrupted data from virtually all operating systems and types of storage devices through its do-it-yourself, remote and in-lab capabilities. Ontrack DataTrail™ electronic discovery solutions help companies, law firms and federal agencies quickly and cost-effectively recover electronic information for use in legal matters. Ontrack also offers award-winning PC utility software programs and services to help prevent critical data loss through a broad line of problem-solving, file-management and productivity utilities. Ontrack can be reached online at or by calling 800-872-2599. In addition to its Minneapolis headquarters, Ontrack operates other locations in Los Angeles, CA; Boulder, CO; Washington D.C.; New York; London, England; Paris, France; Stuttgart, Germany; Milan, Italy; and Lugano, Switzerland. Ontrack also makes its data recovery services available in Tokyo, Japan through its strategic alliance with Y-E Data, and in Katowice, Poland through its alliance with MBM.

ONTRACK Data International, Inc.
Consolidated Condensed Statements of Income
(In thousands except per share amounts)

Three MonthsTwelve Months
Ended December 31,Ended December 31

Total revenues


Cost of revenues:

Total cost of revenues 4,738 4,03616,06013,285

Gross margin


Operating expenses:

Sales and marketing4,3013,74616,24913,947
Research and development2,7582,63210,4429,454
General and administrative2,8232,51511,6649,098
Amortization of goodwill4014631,6451,851
Workforce reduction costs--850-
Terminated merger---(579)
Total operating expenses10,2839,35640,85033,771

Operating income (loss)

Interest and other income2244911,1781,345
Income before income taxes1,6801,9921157,220
Provision for income taxes453578-2,172
Net Income$1,227$1,414$115$5,048
Diluted net income per share excluding goodwill amortization $0.15$0.17$0.12$0.62
Diluted net income per share$0.12$0.14$0.01$0.48
Shares used in computing net income per share10,41410,31910,36410,468

ONTRACK Data International, Inc.
Consolidated Condensed Balance Sheets
(In thousands)

December 31, 2001
December 31, 2000
Current assets:
Cash, cash equivalents and short-term
Accounts receivable, net
Prepaid expenses and other current assets
Total current assets
Long term investment – cash
Deferred taxes
Furniture and equipment, net
Intangibles, net
Total assets
Total current liabilities
Total shareholders' equity
Total liabilities and shareholders' equity

Media Contact:

Ben Blomberg, 952-516-3617,