STOCKREPORTS		 Adaptec, Inc. Nasdaq Symbol ADPT
19-JUL-97 Industry:
Computers (Peripherals)		 Summary: Adaptec is the leading provider of Small Computer System Interface (SCSI) technology, which manages the input and output of data between a computer and its peripherals.

Recent Price 41.38
52 Wk Range 43.75 - 19.56		 Yield Nil
12-Mo. P/E 44.5

Quantitative Evaluation:
Outlook (1 Lowest - 5 Highest)
5-
Fair Value
52.90
Risk
HIGH
Earn/Div Rank
B
Technical Evaluation:
BEARISH since 01/97
Rel. Strength Rank (1 Lowest - 99 Highest)
75
Insider Activity
Neutral

Overview 12-MAY-97

Net sales are projected to advance more than 25% in FY 98 (Mar.), as strong market demand for servers and high-end desktop systems is fueling higher sales of the company's input/output (I/O) products. High performance systems require advanced I/O devices like ADPT's SCSI adapter cards to alleviate performance bottlenecks. In addition, a continuing transition to Microsoft's Windows 95 and Windows NT operating systems, both of which are 32-bit, multi-tasking operating systems, should further boost demand for the company's products. ADPT's acquisition strategy, bolstering its prospects in networking, should also help top-line prospects. Gross margins are likely to remain steady in the 57% to 58% range, while operating costs equal 30% to 31% of sales. We are projecting EPS of $2.20 in FY 98, versus FY 97's $1.72 (excluding one-time charges). The shares were split two for one in late 1996.

Valuation 12-MAY-97

This dominant provider of SCSI I/O solutions is well positioned to benefit from secular growth trends in servers and high-performance desktops, which are increasingly utilizing SCSI technology to alleviate performance bottlenecks. ADPT has a strong penetration rate in the server market, which is growing 20% to 30% per year, and, as it offers more desktop solutions, its penetration on the desktop (currently near double digits) should continue to increase as well. Recent acquisitions, and efforts to expand its product line and extend its customer relationships, also add to the company's revenue prospects. As a result, we see strong sales and EPS momentum through FY 98, and expect the shares to outperform the market.

Key Stock Statistics

S&P EPS Est. 1998 2.15
P/E on S&P Est. 1998 19.2
S&P EPS Est. 1999 2.60
Dividend Rate/Share Nil
Shs. outstg. (M) 111.1
Avg. daily vol. (M) 1.834
Tang. Bk. Value/Share 5.11
Beta 1.56
Shareholders 700
Market cap. (B) $ 4.6
Inst. holdings 84%
Value of $10,000 invested 5 years ago:$ 184,854

Fiscal Year Ending Mar. 31

Revenue (Million $)
1997 1996 1995 1994 1993 1992
Q1 202.0 138.0 106.1 86.51 69.40 29.70
Q2 215.0 149.1 106.6 87.92 75.00 33.50
Q3 251.7 176.2 123.4 96.07 82.00 39.20
Q4 265.1 196.0 130.2 101.8 84.94 47.90
Year 933.9 659.3 466.2 372.3 311.3 150.3

Earning Per Share ($)
1997 1996 1995 1994 1993 1992
Q1 0.16 0.29 0.17 0.13 0.11 0.03
Q2 0.01 Nil 0.17 0.11 0.12 0.03
Q3 0.36 0.28 0.26 0.15 0.13 0.05
Q4 0.40 0.38 0.28 0.16 0.13 0.07
Year 0.93 0.95 0.88 0.55 0.47 0.17

Dividend Data
Amount ($) Date Decl. Ex-Div. Date Stock of Record Payment Date
2-for-1 Oct. 17 Nov. 18 Nov. 01 Nov. 15 '96

Business Summary 12-MAY-97

Adaptec is a leading supplier of input/output hardware and software used to eliminate performance bottlenecks between a microcomputer's central processing unit (CPU) and its peripherals, such as storage devices and network file servers. Products, mostly based on Small Computer System Interface (SCSI) technology, include host adapters, proprietary VLSI circuits and software-based development systems.

With the increased power of microprocessors and the emergence of high-performance peripherals, there has been significant growth in multi-user and multi-tasking computing environments and in the development of increasingly sophisticated applications software. These trends have increased the need for substantially greater and faster data transmission, or improved input/output (I/O) performance, between CPUs and peripherals. The company addresses this need through products that significantly enhance and optimize overall microcomputer system performance.

The company has developed a broad array of integrated hardware and software products that support major IBM-compatible microcomputer architectures and interface with leading operating environments. Subsystem products, including SCSI host adapters and related software, support diverse customer requirements. Adaptec has introduced host adapter kits targeted to support specific applications such as multimedia and data backup. SCSI host adapters are sold to major computer manufacturers.

In April 1996, ADPT purchased certain assets and the ongoing business of Western Digital's Connectivity Solutions Group. As part of the agreement, the company will serve as Western Digital's sole source for certain advanced storage control solutions. ADPT made several other acquisitions during 1996, including Sigmax Technologies, Inc., a developer of CD-ROM controllers, for $14 million in cash; Data Kinesis, Inc., a software developer for better system performance in file management and RAID applications, for $32 million in cash and $15 million in stock; and Corel Corp.'s CD creator software program and PD optical recording technology, for $12 million in cash.

Important Developments

Mar. '97 The company acquired Skipstone, Inc., a privately held company, for $7.5 million in cash. The purchase added to Adaptec's technology in FireWire, a complex serial bus protocol used in video applications.

Capitalization

Long Term Debt: $230,850,000, incl. $230,000,000 in conv. sub. notes (03/31/97).

Per Share Data ($)
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Tangible Bk. Val. NA 4.83 3.59 2.84 2.22 1.41 1.21 1.05 0.63 0.60
Cash Flow NA 1.11 1.02 0.65 0.54 0.23 0.19 0.23 0.06 0.08
Earnings 0.93 0.95 0.88 0.55 0.48 0.17 0.15 0.19 0.03 0.06
Dividends Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Payout Ratio Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
Cal. Yrs. 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Prices - High 41 1/8 24 1/4 12 1/4 10 7 3/4 2 7/16 3 2 1/2 15/16 2 5/8
- Low 17 1/2 10 7/8 7 4 5/8 2 1/8 1 1/16 1 1/8 9/16 9/16 9/16
P/E Ratio - High 44 26 14 18 16 14 20 14 39 42
- Low 19 12 8 8 4 6 7 3 23 9

Income Statement Analysis (Million $)
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Revs. NA 659 466 372 311 150 129 109 65.0 59.0
Oper. Inc. NA 196 133 88.6 69.7 21.1 17.2 19.4 2.8 5.6
Depr. NA 17.6 15.7 11.4 7.0 4.7 3.8 3.0 2.1 1.2
Int. Exp. NA 0.8 1.2 1.3 1.0 0.2 0.2 0.3 0.1 Nil
Pretax Inc. NA 138 125 78.6 65.9 19.5 17.1 18.1 1.6 5.6
Eff. Tax Rate NA 25% 25% 25% 25% 25% 29% 27% 11% 32%
Net Inc. NA 103 93.4 59.0 49.4 14.6 12.2 13.2 1.5 3.8

Balance Sheet & Other Fin. Data (Million $)
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Cash NA 295 247 183 147 66.8 59.8 51.5 13.7 18.7
Curr. Assets NA 465 350 293 235 123 96.0 90.0 41.0 36.0
Total Assets NA 646 436 358 283 139 109 98.0 48.0 41.0
Curr. Liab. NA 130 56.4 38.5 35.7 17.2 10.2 14.2 7.6 4.6
LT Debt NA 4.3 7.7 11.1 14.5 0.4 1.0 1.5 2.0 Nil
Common Eqty. NA 512 372 298 225 116 95.0 82.0 38.0 36.0
Total Cap. NA 516 379 309 247 121 99 84.0 40.0 37.0
Cap. Exp. NA 39.7 31.6 17.3 36.8 5.9 7.1 4.0 4.2 3.0
Cash Flow NA 121 109 70.4 56.4 19.4 16.0 16.2 3.5 5.0

Curr. Ratio NA 3.6 6.2 7.6 6.6 7.2 9.4 6.3 5.4 7.9
% LT Debt of Cap. NA 0.8 2.0 3.6 5.8 0.3 1.0 1.8 4.9 Nil
% Net Inc.of Revs. NA 15.6 20.0 15.8 15.9 9.7 9.5 12.0 2.2 6.4
% Ret. on Assets NA 19.4 23.5 18.1 21.8 11.5 11.8 16.5 3.3 9.5
% Ret. on Equity NA 23.3 27.9 22.3 26.8 13.5 13.8 20.2 3.9 11.2

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--691 S. Milpitas Blvd., Milpitas, CA 95035. Tel--(408) 945-8600. Website--http://www.adaptec.com Chrmn--J. G. Adler. Pres & CEO--F. G. Saviers. VP-Fin, CFO & Investor Contact--Paul G. Hansen. Secy--H. P. Massey Jr. Dirs--J. G. Adler, L. B. Boucher, J. East, R. J. Loarie, B. J. Moore, W. F. Sanders, F. G. Saviers, P. E. White. Transfer Agent--Chase Trust Co. of California, SF. Incorporated--in California in 1981. Empl-- 1,800. S&P Analyst: Megan Graham Hackett


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