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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-Q



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|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[X]   |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 
|     
|      |  | For the quarterly period ended April 30, 2002                                           
|     
|      |  | or                                                                                      
|     
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|     
|      |  | For the transition period from _______________ to _______________                       

Commission file number 0-21103



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ADVANCED DIGITAL INFORMATION CORPORATION

|                                                       |  |                                              
|------------------------------------------------------ |  | ---------------------------------------------
|Incorporated under the laws
of the State of Washington |  | I.R.S. Employer Identification
No. 91-1618616

11431 Willows Road N.E.
P.O. Box 97057
Redmond, Washington 98073-9757

(425) 881-8004

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]     No [   ]

The total shares of common stock without par value outstanding at the end
of the quarter reported is 62,496,273.



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TABLE OF CONTENTS



|                             |                                                                                               |                                                            |  |  |  |  |  | 
|---------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------- |  |  |  |  |  | 
|PART IFINANCIAL INFORMATION
|                             | Item 1. Financial Statements                                                                 
|                             |                                                                                               | Consolidated Balance Sheets                               
|                             |                                                                                               | Consolidated Statements of Operations                     
|                             |                                                                                               | Consolidated Statements of Cash Flows                     
|                             |                                                                                               | Consolidated Statements of Changes in Shareholders Equity
|                             |                                                                                               | Notes to Interim Consolidated Financial Statements        
|                             | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                             | Item 3. Quantitative and Qualitative Disclosures About Market Risk Management                
|PART II  OTHER INFORMATION 
|                             | Item 1. Legal Proceedings                                                                    
|                             | Item 2. Changes in Securities                                                                
|                             | Item 3. Defaults Upon Senior Securities                                                      
|                             | Item 4. Submission of Matters to a Vote of Security Holders                                  
|                             | Item 5. Other Information                                                                    
|                             | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                  



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##### Table of Contents






PART IFINANCIAL INFORMATION




Item 1. Financial Statements




Advanced Digital Information Corporation

Consolidated Balance Sheets

(In thousands, except for share data)

|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |           |        |   |         | 
|----------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | --------------------------------- | ------- | -------------------------- | ------ | ----------- | ------- | --------- | ------ | - | ------- | 
|                                                                                                      |                                                                                                                   |                                   |         |                            |        | October 31, |         | April 30,
|                                                                                                      |                                                                                                                   |                                   |         |                            |        | 2001        |         | 2002     
|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |          
|Assets                                                                                                |                                                                                                                   |                                   |         |                            |        |             |         |          
|Current assets:                                                                                       |                                                                                                                   |                                   |         |                            |        |             |         |          
|                                                                                                      | Cash and cash equivalents                                                                                         |                                   | $       | 155,274                    |        |             | $       | 178,877   |       
|                                                                                                      | Accounts receivable, net of allowances of $1,752 in 2001
and $1,731 in 2002                                       |                                   |         | 82,451                     |        |             |         | 81,627    |       
|                                                                                                      | Inventories, net                                                                                                  |                                   |         | 42,430                     |        |             |         | 32,112    |       
|                                                                                                      | Marketable equity securities                                                                                      |                                   |         | 23,352                     |        |             |         | 1,554     |       
|                                                                                                      | Prepaid expenses and other                                                                                        |                                   |         | 1,789                      |        |             |         | 1,591     |       
|                                                                                                      | Income taxes receivable                                                                                           |                                   |         | 9,546                      |        |             |         | 5,923     |       
|                                                                                                      | Deferred income taxes                                                                                             |                                   |         | 10,297                     |        |             |         | 12,577    |       
|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |          
|                                                                                                      |                                                                                                                   |                                   |         | Total current assets       |        |             | 325,139 |           |        |   | 314,261 | 
|Property, plant and equipment, net of accumulated depreciation of
$14,783 in 2001 and $18,748 in 2002 |                                                                                                                   |                                   | 32,017  |                            |        |             | 42,992  |          
|Service parts for maintenance, net                                                                    |                                                                                                                   |                                   | 17,149  |                            |        |             | 19,143  |          
|Deferred income taxes                                                                                 |                                                                                                                   |                                   | 7,766   |                            |        |             | 8,087   |          
|Investments                                                                                           |                                                                                                                   |                                   | 11,503  |                            |        |             | 11,353  |          
|Intangible and other assets, net of accumulated amortization of
$3,255 in 2001 and $3,207 in 2002     |                                                                                                                   |                                   | 5,796   |                            |        |             | 5,504   |          
|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |          
|                                                                                                      |                                                                                                                   | $                                 | 399,370 |                            |        | $           | 401,340 |          
|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |          
|Liabilities and Shareholders Equity                                                                  |                                                                                                                   |                                   |         |                            |        |             |         |          
|Current liabilities:                                                                                  |                                                                                                                   |                                   |         |                            |        |             |         |          
|                                                                                                      | Accounts payable                                                                                                  |                                   | $       | 38,380                     |        |             | $       | 34,901    |       
|                                                                                                      | Accrued liabilities                                                                                               |                                   |         | 12,573                     |        |             |         | 12,541    |       
|                                                                                                      | Deferred revenue                                                                                                  |                                   |         | 12,772                     |        |             |         | 12,906    |       
|                                                                                                      | Bank line of credit and current portion of long-term debt                                                         |                                   |         | 3,999                      |        |             |         | 2,893     |       
|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |          
|                                                                                                      |                                                                                                                   |                                   |         | Total current liabilities  |        |             | 67,724  |           |        |   | 63,241  | 
|Long-term debt                                                                                        |                                                                                                                   |                                   | 1,170   |                            |        |             | 1,157   |          
|Commitments                                                                                           |                                                                                                                   |                                   |        |                            |        |             |        |          
|Shareholders equity:                                                                                 |                                                                                                                   |                                   |         |                            |        |             |         |          
|                                                                                                      | Preferred stock, no par value; 4,000,000 shares authorized;
none issued and outstanding                           |                                   |         |                           |        |             |         |          |       
|                                                                                                      | Common stock, no par value; 160,000,000 shares authorized,
62,496,273 issued and outstanding (61,934,277 in 2001) |                                   |         | 221,399                    |        |             |         | 227,363   |       
|                                                                                                      | Retained earnings                                                                                                 |                                   |         | 106,599                    |        |             |         | 111,488   |       
|                                                                                                      | Accumulated other comprehensive income (loss):                                                                    |                                   |         |                            |        |             |         |           |       
|                                                                                                      |                                                                                                                   | Cumulative translation adjustment |         |                            | (2,302 | )           |         |           | (2,421 | )
|                                                                                                      |                                                                                                                   | Unrealized investment gains       |         |                            | 4,780  |             |         |           | 512    |  
|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |          
|                                                                                                      |                                                                                                                   |                                   |         | Total shareholders equity |        |             | 330,476 |           |        |   | 336,942 | 
|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |          
|                                                                                                      |                                                                                                                   | $                                 | 399,370 |                            |        | $           | 401,340 |          
|                                                                                                      |                                                                                                                   |                                   |         |                            |        |             |         |          

See the accompanying notes to these consolidated financial statements.

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Advanced Digital Information Corporation

Consolidated Statements of Operations

(In thousands, except for per share data)

|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |        |  
|---------------------------------------- | ------------------------------------------------ | - | ------------------ | ------ | ---------------- | - | ------ | ------ | ---- | - | ------- | ------ | - | - | ------- | ------ | -
|                                         |                                                  |   | Three months ended |        | Six months ended
|                                         |                                                  |   | April 30,          |        | April 30,       
|                                         |                                                  |   |                    |        |                 
|                                         |                                                  |   | 2001               |        | 2002             |   | 2001   |        | 2002
|                                         |                                                  |   |                    |        |                  |   |        |        |     
|Net sales                                |                                                  | $ | 96,134             |        |                  | $ | 80,687 |        |      | $ | 188,560 |        |   | $ | 177,410 |       
|Cost of sales                            |                                                  |   | 66,150             |        |                  |   | 59,696 |        |      |   | 130,970 |        |   |   | 132,617 |       
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|                                         | Gross profit                                     |   |                    | 29,984 |                  |   |        | 20,991 |      |   |         | 57,590 |   |   |         | 44,793 |  
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|Operating expenses:                      |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|                                         | Selling and administrative                       |   |                    | 15,835 |                  |   |        | 17,485 |      |   |         | 29,989 |   |   |         | 33,823 |  
|                                         | Research and development                         |   |                    | 6,840  |                  |   |        | 7,269  |      |   |         | 13,042 |   |   |         | 14,070 |  
|                                         | V-Stor acquisition costs                         |   |                    |       |                  |   |        | 1,475  |      |   |         |       |   |   |         | 1,475  |  
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|                                         |                                                  |   | 22,675             |        |                  |   | 26,229 |        |      |   | 43,031  |        |   |   | 49,368  |       
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|Operating profit (loss)                  |                                                  |   | 7,309              |        |                  |   | (5,238 | )      |      |   | 14,559  |        |   |   | (4,575  | )     
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|Other income (expense):                  |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|                                         | Interest income                                  |   |                    | 1,923  |                  |   |        | 961    |      |   |         | 4,740  |   |   |         | 2,007  |  
|                                         | Interest expense                                 |   |                    | (93    | )                |   |        | (59    | )    |   |         | (174   | ) |   |         | (119   | )
|                                         | Gain on equity securities transactions, net      |   |                    | 1,158  |                  |   |        | 5,935  |      |   |         | 1,105  |   |   |         | 8,179  |  
|                                         | Foreign currency transaction gains (losses), net |   |                    | 45     |                  |   |        | 360    |      |   |         | (192   | ) |   |         | 81     |  
|                                         | Other                                            |   |                    |       |                  |   |        | 69     |      |   |         | 5      |   |   |         | 61     |  
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|                                         |                                                  |   | 3,033              |        |                  |   | 7,266  |        |      |   | 5,484   |        |   |   | 10,209  |       
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|Income before provision for income taxes |                                                  |   | 10,342             |        |                  |   | 2,028  |        |      |   | 20,043  |        |   |   | 5,634   |       
|Provision (benefit) for income taxes     |                                                  |   | 3,634              |        |                  |   | (479   | )      |      |   | 6,826   |        |   |   | 745     |       
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|Net income                               |                                                  | $ | 6,708              |        |                  | $ | 2,507  |        |      | $ | 13,217  |        |   | $ | 4,889   |       
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|Basic net income per share               |                                                  | $ | 0.11               |        |                  | $ | 0.04   |        |      | $ | 0.22    |        |   | $ | 0.08    |       
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       
|Diluted net income per share             |                                                  | $ | 0.11               |        |                  | $ | 0.04   |        |      | $ | 0.21    |        |   | $ | 0.08    |       
|                                         |                                                  |   |                    |        |                  |   |        |        |      |   |         |        |   |   |         |       

See the accompanying notes to these consolidated financial statements.

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Advanced Digital Information Corporation

Consolidated Statements of Cash Flows

(In thousands)

|                                                     |                                                                                             |                                            |         |                  |         |      |         |         |        |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ---------------- | ------- | ---- | ------- | ------- | ------ | -
|                                                     |                                                                                             |                                            |         | Six months ended
|                                                     |                                                                                             |                                            |         | April 30,       
|                                                     |                                                                                             |                                            |         |                 
|                                                     |                                                                                             |                                            |         | 2001             |         | 2002
|                                                     |                                                                                             |                                            |         |                  |         |     
|Cash from operating activities:                      |                                                                                             |                                            |         |                  |         |      |         |        
|                                                     | Net income                                                                                  |                                            | $       | 13,217           |         |      | $       | 4,889   |       
|                                                     | Adjustments to reconcile net income to net cash
provided by (used in) operating activities: |                                            |         |                  |         |      |         |         |       
|                                                     |                                                                                             | Depreciation and amortization              |         |                  | 6,041   |      |         |         | 7,377  |  
|                                                     |                                                                                             | Allowance for doubtful accounts receivable |         |                  | 171     |      |         |         | 330    |  
|                                                     |                                                                                             | Inventory obsolescence                     |         |                  | 326     |      |         |         | 1,948  |  
|                                                     |                                                                                             | Gain on equity securities transactions     |         |                  | (1,114  | )    |         |         | (8,179 | )
|                                                     |                                                                                             | In-process research and development        |         |                  |        |      |         |         | 1,200  |  
|                                                     |                                                                                             | Deferred income taxes                      |         |                  | (946    | )    |         |         | (304   | )
|                                                     |                                                                                             | Tax benefit from exercise of stock options |         |                  | 761     |      |         |         | 2,029  |  
|                                                     |                                                                                             | Other                                      |         |                  | 5       |      |         |         | 12     |  
|                                                     | Change in assets and liabilities:                                                           |                                            |         |                  |         |      |         |         |       
|                                                     |                                                                                             | Accounts receivable                        |         |                  | (15,698 | )    |         |         | 280    |  
|                                                     |                                                                                             | Inventories                                |         |                  | (23,032 | )    |         |         | 8,306  |  
|                                                     |                                                                                             | Prepaid expenses and other                 |         |                  | (1,871  | )    |         |         | 201    |  
|                                                     |                                                                                             | Service parts for maintenance              |         |                  | (5,373  | )    |         |         | (4,063 | )
|                                                     |                                                                                             | Other assets                               |         |                  | (4      | )    |         |         | (11    | )
|                                                     |                                                                                             | Accounts payable                           |         |                  | (7,581  | )    |         |         | 750    |  
|                                                     |                                                                                             | Accrued liabilities                        |         |                  | (3,332  | )    |         |         | (51    | )
|                                                     |                                                                                             | Income taxes payable                       |         |                  | (3,132  | )    |         |         | 3,649  |  
|                                                     |                                                                                             | Deferred revenue                           |         |                  | 2,486   |      |         |         | 130    |  
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        
|Net cash provided by (used in) operating activities  |                                                                                             |                                            | (39,076 | )                |         |      | 18,493  |        
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        
|Cash from investing activities:                      |                                                                                             |                                            |         |                  |         |      |         |        
|                                                     | Purchase of property, plant and equipment                                                   |                                            |         | (8,197           | )       |      |         | (15,624 | )     
|                                                     | Purchase of other investments                                                               |                                            |         | (500             | )       |      |         | (2,900  | )     
|                                                     | Proceeds from equity securities transactions                                                |                                            |         | 3,094            |         |      |         | 20,726  |       
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        
|Net cash provided by (used in) investing activities  |                                                                                             |                                            | (5,603  | )                |         |      | 2,202   |        
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        
|Cash from financing activities:                      |                                                                                             |                                            |         |                  |         |      |         |        
|                                                     | Repayment of short-term and long-term debt                                                  |                                            |         | (1,101           | )       |      |         | (1,078  | )     
|                                                     | Proceeds from issuance of common stock for stock
options and stock purchase plan            |                                            |         | 2,123            |         |      |         | 3,935   |       
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        
|Net cash provided by financing activities            |                                                                                             |                                            | 1,022   |                  |         |      | 2,857   |        
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        
|Effect of exchange rate changes on cash              |                                                                                             |                                            | 216     |                  |         |      | 51      |        
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        
|Net increase (decrease) in cash and cash equivalents |                                                                                             |                                            | (43,441 | )                |         |      | 23,603  |        
|Cash and cash equivalents at beginning of period     |                                                                                             |                                            | 194,268 |                  |         |      | 155,274 |        
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        
|Cash and cash equivalents at end of period           |                                                                                             | $                                          | 150,827 |                  |         | $    | 178,877 |        
|                                                     |                                                                                             |                                            |         |                  |         |      |         |        

See the accompanying notes to these consolidated financial statements.

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Advanced Digital Information Corporation

Consolidated Statements of Changes in Shareholders Equity

Six months ended April 30, 2002

(In thousands)

|                                                           |                                                            |                                                                                |        |   |              |   |          |   |               |   |               |       |       |   |        |      |             |   |         |   |     |  | 
|---------------------------------------------------------- | ---------------------------------------------------------- | ------------------------------------------------------------------------------ | ------ | - | ------------ | - | -------- | - | ------------- | - | ------------- | ----- | ----- | - | ------ | ---- | ----------- | - | ------- | - | --- |  | 
|                                                           |                                                            |                                                                                |        |   |              |   |          |   |               |   |               |       |       |   |        |      | Accumulated |   |         |   |    
|                                                           |                                                            |                                                                                |        |   | Common Stock |   |          |   |               |   | Other         |       |       |   |       
|                                                           |                                                            |                                                                                |        |   |              |   | Retained |   | Comprehensive |   |               |       |      
|                                                           |                                                            |                                                                                |        |   | Shares       |   | Amount   |   | Earnings      |   | Income (Loss) |       | Total
|                                                           |                                                            |                                                                                |        |   |              |   |          |   |               |   |               |       |      
|Balance at October 31, 2001                                |                                                            |                                                                                | 61,934 |   |              | $ | 221,399  |   |               | $ | 106,599       |       |       | $ | 2,478  |      |             | $ | 330,476 |  
|Purchases under stock purchase plan                        |                                                            |                                                                                | 101    |   |              |   | 1,042    |   |               |   |              |       |       |   |       |      |             |   | 1,042   |  
|Exercise of stock options,
including tax benefit of $2,029 |                                                            |                                                                                | 401    |   |              |   | 4,829    |   |               |   |              |       |       |   |       |      |             |   | 4,829   |  
|Exercise of warrants                                       |                                                            |                                                                                | 60     |   |              |   | 93       |   |               |   |              |       |       |   |       |      |             |   | 93      |  
|Comprehensive income:                                      |                                                            |                                                                                |        |   |              |   |          |   |               |   |               |       |       |   |        |      |             |   |         |  
|                                                           | Net income                                                 |                                                                                |        |  |              |   |          |  |               |   |               | 4,889 |       |   |        |     |             |   |         |  |    
|                                                           | Unrealized investment gains:                               |                                                                                |        |   |              |   |          |   |               |   |               |       |       |   |        |      |             |   |         |   |    
|                                                           |                                                            | Unrealized investment
losses, net of tax of
$1,018                             |        |   |             |   |          |   |              |   |               |       |      |   |        |      | (1,891      | ) |         |   |    | 
|                                                           |                                                            | Reclassification
adjustment: gain included
in net income, net of tax
of $1,280 |        |   |             |   |          |   |              |   |               |       |      |   |        |      | (2,377      | ) |         |   |    | 
|                                                           | Foreign currency translation
adjustment, net of tax of $64 |                                                                                |        |  |              |   |          |  |               |   |               |      |       |   |        | (119 | )           |   |         |  |    
|                                                           |                                                            | Total comprehensive income                                                     |        |   |             |   |          |   |              |   |               |       |      |   |        |      |            |   |         |   | 502 | 
|                                                           |                                                            |                                                                                |        |   |              |   |          |   |               |   |               |       |       |   |        |      |             |   |         |  
|Balance at April 30, 2002                                  |                                                            |                                                                                | 62,496 |   |              | $ | 227,363  |   |               | $ | 111,488       |       |       | $ | (1,909 | )    |             | $ | 336,942 |  
|                                                           |                                                            |                                                                                |        |   |              |   |          |   |               |   |               |       |       |   |        |      |             |   |         |  

See the accompanying notes to these consolidated financial statements.

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Advanced Digital Information Corporation

Notes to Interim Consolidated Financial Statements

April 30, 2002

Note 1. Basis of presentation

The accompanying consolidated financial statements are unaudited and
include the accounts of the Company and its subsidiaries. All significant
intercompany transactions, balances and profits have been eliminated in
consolidation.

On May 11, 2001 we acquired Pathlight Technology, Inc. (Pathlight) in a
business combination accounted for as a pooling-of-interests. The consolidated
financial statements have been restated to retroactively combine Pathlight as a
wholly owned subsidiary of ADIC since inception. Certain prior period balances
have been adjusted or reclassified to conform our accounting policies and
current period presentation.

The accompanying consolidated financial statements are unaudited and
should be read in conjunction with the financial statements included in our
Annual Report on Form 10-K for the year ended October 31, 2001. The year-end
balance sheet data was derived from audited financial statements, but does not
include all disclosures required by accounting principles generally accepted in
the United States of America. In our opinion all normal recurring adjustments
which are necessary for the fair presentation of the results for the interim
periods are reflected herein. Operating results for the six-month period ended
April 30, 2002, are not necessarily indicative of results to be expected for a
full year.

Note 2. Acquisition of V-Stor

On March 14, 2002, we acquired the intellectual property and assets and
hired the engineering and product management personnel of V-Stor LLC, a
privately held company based in California. V-Stor develops disk-based data
protection products for the open systems market. The V-Stor development effort
includes software that allows disk-based storage to look and act like tape
systems to traditional backup applications in order to allow disk to be
utilized easily in existing data protection systems. The V-Stor technology
will be integrated into new products, including products that combine disk and
tape for backup. Expenses related to our acquisition of V-Stor were $1.5
million for the three and six months ended April 30, 2002. These one-time
acquisition charges relate to acquired in-process research and development and
compensation to V-Stor personnel. The acquired technology had not reached
technological feasibility and has no alternative future use.

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Advanced Digital Information Corporation

Notes to Interim Consolidated Financial Statements (Continued)

April 30, 2002

Note 3. Earnings per share

The following table sets forth the computation of basic and diluted net
income per share for the three months and six months ended April 30, 2001 and
2002:

|                             |                                                                                                       |   |                                           |        |                  |   |      |        |      |   |      |        |  |   |      |        | 
|---------------------------- | ----------------------------------------------------------------------------------------------------- | - | ----------------------------------------- | ------ | ---------------- | - | ---- | ------ | ---- | - | ---- | ------ |  | - | ---- | ------ | 
|                             |                                                                                                       |   | Three months ended                        |        | Six months ended
|                             |                                                                                                       |   | April 30,                                 |        | April 30,       
|                             |                                                                                                       |   |                                           |        |                 
|                             |                                                                                                       |   | 2001                                      |        | 2002             |   | 2001 |        | 2002
|                             |                                                                                                       |   |                                           |        |                  |   |      |        |     
|                             |                                                                                                       |   | (In thousands, except for per share data)
|Numerator:                   |                                                                                                       |   |                                           |        |                  |   |      |        |      |   |      |        |  |   |      |       
|                             | Net income                                                                                            |   | $                                         | 6,708  |                  |   | $    | 2,507  |      |   | $    | 13,217 |  |   | $    | 4,889  | 
|                             |                                                                                                       |   |                                           |        |                  |   |      |        |      |   |      |        |  |   |      |       
|Denominator:                 |                                                                                                       |   |                                           |        |                  |   |      |        |      |   |      |        |  |   |      |       
|                             | Denominator for basic net income per shareweighted average shares                                    |   |                                           | 60,944 |                  |   |      | 62,396 |      |   |      | 60,875 |  |   |      | 62,235 | 
|                             | Dilutive potential common shares from Team
Member (employee) stock options and warrants               |   |                                           | 2,596  |                  |   |      | 1,428  |      |   |      | 3,557  |  |   |      | 1,724  | 
|                             |                                                                                                       |   |                                           |        |                  |   |      |        |      |   |      |        |  |   |      |       
|                             | Denominator for diluted net income per shareadjusted weighted average shares and assumed
conversions |   |                                           | 63,540 |                  |   |      | 63,824 |      |   |      | 64,432 |  |   |      | 63,959 | 
|                             |                                                                                                       |   |                                           |        |                  |   |      |        |      |   |      |        |  |   |      |       
|Basic net income per share   |                                                                                                       | $ | 0.11                                      |        |                  | $ | 0.04 |        |      | $ | 0.22 |        |  | $ | 0.08 |       
|                             |                                                                                                       |   |                                           |        |                  |   |      |        |      |   |      |        |  |   |      |       
|Diluted net income per share |                                                                                                       | $ | 0.11                                      |        |                  | $ | 0.04 |        |      | $ | 0.21 |        |  | $ | 0.08 |       
|                             |                                                                                                       |   |                                           |        |                  |   |      |        |      |   |      |        |  |   |      |       

Note 4. Inventories

Inventories are comprised of the following:

|                                     |  |                |        |           |  |   |        |  
|------------------------------------ |  | -------------- | ------ | --------- |  | - | ------ | -
|                                     |  | October 31,    |        | April 30,
|                                     |  | 2001           |        | 2002     
|                                     |  |                |        |          
|                                     |  | (In thousands)
|Finished goods                       |  | $              | 23,055 |           |  | $ | 23,508 |  
|Work-in-process                      |  |                | 939    |           |  |   | 585    |  
|Raw materials                        |  |                | 25,824 |           |  |   | 17,790 |  
|                                     |  |                |        |           |  |   |        |  
|                                     |  |                | 49,818 |           |  |   | 41,883 |  
|Allowance for inventory obsolescence |  |                | (7,388 | )         |  |   | (9,771 | )
|                                     |  |                |        |           |  |   |        |  
|                                     |  | $              | 42,430 |           |  | $ | 32,112 |  
|                                     |  |                |        |           |  |   |        |  

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Advanced Digital Information Corporation

Notes to Interim Consolidated Financial Statements (Continued)

April 30, 2002

Note 5. Investments in marketable equity securities and other investments

At April 30, 2002, the cost basis of marketable equity securities included
as a current asset was $766,000 and the fair value was $1,554,000. The
difference between the cost basis and fair value of $788,000, net of taxes of
$276,000 is recorded as an unrealized investment gain. During the three month
and six month periods ended April 30, 2002, we sold a portion of these
marketable equity securities and realized a gain of $1,985,000 and $3,657,000,
respectively.

During the six month period ended April 30, 2002 we received cash of
$287,000 related to the sale of calls, a derivative financial instrument that
permits the purchaser of the call to buy a specified marketable equity security
at a specified price. In accordance with our internal policies, we only sell
calls on marketable securities we already own. We have recorded a liability of
$38,000 at April 30, 2002, which represents the current fair market value of
the calls at that time. For the three month and six month periods ended April
30, 2002, we have also recorded $3,950,000 and $4,522,000, respectively, as a
component of our net gain on equity securities related to call transactions.
This reflects the change in the fair market value of the related liability
during the six months plus the cash received on current period sales of calls.
We will continue to record the derivative liability at fair market value until
maturity in June 2002.

Note 6. Share repurchase

During May and June 2002 we repurchased 123,000 shares of our common stock
for $987,690 under the authorization of our Board of Directors.

Note 7. Recent accounting pronouncements

In April 2002, the FASB issued Statement of Financial Account Standards
(SFAS) No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of
FASB Statement No. 13, and Technical Corrections. SFAS No. 145 rescinds and
amends certain previous standards related primarily to debt and leases. The
most substantive amendment requires sale-leaseback accounting for certain lease
modifications that have economic effects that are similar to sale-leaseback
transactions. The provisions of SFAS No. 145 related to the rescission of SFAS
No. 4 are effective for financial statements issued for fiscal years beginning
after May 15, 2002 and will become effective for ADIC commencing with its 2003
fiscal year. The provisions of SFAS No. 145 related to the rescission of SFAS
No. 13 shall be effective for transactions occurring after May 15, 2002. All
other provisions of SFAS No. 145 are effective for financial statements issued
on or after May 15, 2002. This accounting pronouncement is not expected to
have a significant impact on our financial position or results of operations.

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Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations

The following discussion and analysis should be read in conjunction with
our financial statements included in our Annual Report on Form 10-K for the
year ended October 31, 2001. This discussion contains certain forward-looking
statements that involve risks and uncertainties, such as statements of our
plans, objectives, expectations and intentions. Such risks are detailed in our
Annual Report on Form 10-K for the year ended October 31, 2001 and are
incorporated herein by reference. Our actual results could differ materially
from those discussed here. We undertake no obligation to publicly
release any
revisions to these forward-looking statements that may be required to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

General

We provide hardware and software-based data storage solutions to the open
systems marketplace. Our storage solutions integrate into a wide range of
rapidly evolving network computing environments and are designed to enable
organizations to organize, protect and retrieve complex mission-critical data.
We design, manufacture, sell and support specialized data storage hardware and
software products and provide related services. Currently, we derive
substantially all of our revenue from the sale of storage libraries,
connectivity and management products and related service and support. We
distribute our products primarily through value-added resellers (VARs),
distributors and original equipment manufacturers (OEMs), and also sell
directly to large end users.

The following discussion and analysis has been prepared utilizing the
restated combined financial statements as if Pathlight was a wholly owned
subsidiary of ADIC since inception. The combined information is not
necessarily indicative of the actual results of operations had the acquisition
occurred at the beginning of the periods, nor should it be used to project the
Companys results of operations for any future date or period.

Results of Operations

Net Sales.Net sales decreased during the second quarter of fiscal 2002
to $80.7 million, a decrease of 16% from $96.1 million in the comparable
quarter of fiscal 2001. Net sales for the six months ended April 30, 2002 were
$177.4 million, a decrease of 6% from $188.6 million during the six months
ended April 30, 2001. The decrease in both comparison periods is primarily due
to a decline in sales to our branded customers. Revenue from branded customers
was $44.2 million in the second quarter of fiscal 2002 as compared to $59.3
million in the second quarter of fiscal 2001. For the six months ended April
30, 2002 and 2001, branded sales were $92.1 million and
$109.6 million,
respectively. The decrease in branded sales from the comparable periods in
fiscal 2001 is believed to be primarily due to weak economic conditions
affecting branded customers. OEM business during the second quarter of fiscal
2002 declined just under 1% from the second quarter of fiscal 2001. During the
six months ended April 30, 2002, revenue from OEM customers increased 8%
compared to the six months ended April 30, 2001. This increase is primarily
due to strong sales growth of new Scalar® product offerings to OEM customers.
Weak economic conditions contributed to a decline in OEM revenues from $48.8
million in the first quarter of fiscal 2002 to $36.5 million in the second
quarter of fiscal 2002.

Gross Profit.Gross profit was $21.0 million or 26% of net sales for the
three months ended April 30, 2002 compared to $30.0 million or 31% of net sales
for the same period in fiscal 2001. For the six months ended April 30, 2002,
gross profit was $44.8 million or 25% of net sales compared to $57.6 million or
31% of net sales for the same period in fiscal 2001. The reduction in gross
profit is primarily a result of OEM sales representing a larger percentage of
our total sales. OEM sales generally have lower

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margins. In addition, we have increased our fixed costs as they relate to
infrastructure. We expect margins to improve as more of our products
incorporate either software or proprietary connectivity solutions.

Selling and Administrative Expenses.Selling and administrative expenses
were $17.5 million or 22% of net sales for the three months ended April 30,
2002 compared to $15.8 million or 16% of net sales for the same period in
fiscal 2001. For the six month period ended April 30, 2002, selling and
administrative expenses were $33.8 million or 19% of net sales compared to
$30.0 million of 16% of net sales for the same period in fiscal 2001. Selling
and administrative expenses have increased in both absolute dollars and as a
percentage of net sales due to continued efforts to expand our sales and
service channels and improve our infrastructure. We expect some moderate
increase in selling and administrative expenses to support new product
offerings, sales and service channels and to continue improvement of our
infrastructure.

Research and Development Expenses.Research and development expenses were
$7.3 million or 9% of net sales for the second quarter of fiscal 2002 compared
to $6.8 million or 7% of net sales for the second quarter of fiscal 2001.
During the six months ended April 30, 2002, we incurred research and
development expenses of $14.1 million or 8% of net sales compared to $13.0
million or 7% of net sales for the same period in fiscal 2001. The increases
in absolute dollars in fiscal 2002 are related to added resources, additional
spending related to new products and maintaining heavy investment in software
and hardware product development. We believe that significant investments in
research and development are required to remain competitive and to solidify our
market position in intelligent storage solutions. Consequently, we expect to
incur increased research and development expenses in future periods.

Acquisition Expenses.Expenses related to our acquisition of V-Stor were
$1.5 million for the three and six months ended April 30, 2002. These one-time
acquisition charges relate to acquired in-process research and development and
compensation to V-Stor personnel.

Other Income (Expense).Other income was $7.3 million for the second
quarter of fiscal 2002 compared to $3.0 million for the second quarter of
fiscal 2001. For the six months ended April 30, 2002, other income was $10.2
million compared to $5.5 million for the same period in fiscal 2001. The
decrease in interest income in both the three months and six months ended April
30, 2002 is the result of lower returns on cash balances from the comparable
periods in fiscal 2001. This decrease in interest income from the comparable
periods in fiscal 2001 was offset by an increase in the gain on equity
securities transactions to $5.9 million and $8.2 million, respectively, in the
first three months and six months of fiscal 2002. In the comparable periods in
fiscal 2001, we had a gain on equity securities transactions of $1.2 million
and $1.1 million, respectively. Interest expense in both periods primarily
relates to interest on operating credit lines through a German bank along with
a loan payable to a German bank. As of April 30, 2002, we have sold the
majority of our marketable equity securities. As a result, we expect other
income to decrease in future periods as gains on equity securities transactions
diminish.

Provision (Benefit) for Income Taxes.For the three months ended April
30, 2002, income tax benefit was $479,000 compared to income tax expense of
$3.6 million for the comparable period in fiscal 2001. Income tax expense was
$745,000 for the six months ended April 30, 2002 compared to $6.8 million for
the six months ended April 30, 2001. The effective income tax rates for the
three and six months ended April 30, 2002 were a benefit of 24% and an expense
of 13%, respectively. The effective tax rates for the comparable periods in
fiscal 2001 were 35% and 34%, respectively. The lower effective tax rates in
fiscal 2002 reflect reduced income relative to non-taxable items and tax
credits, which together, result in a lower expected tax rate for the year. The
effective tax rate includes tax expense for various federal, state and
international jurisdictions.

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Liquidity and Capital Resources

Cash provided by operating activities was $18.5 million for the six months
ended April 30, 2002. In the comparable period of fiscal 2001, cash used in
operating activities was $39.1 million. In fiscal 2002, operating cash was
provided by net income, depreciation and amortization, decreases in inventories
and income taxes receivable and was offset by gains on equity security
transactions and an increase in service parts for maintenance. In fiscal 2001,
operating cash was primarily used to fund increases in accounts receivable,
inventories and service parts for maintenance, decreases in accounts payable
and accrued liabilities and was offset by net income and depreciation.

Cash provided by investing activities was $2.2 million for the first six
months of fiscal 2002. In the comparable period of fiscal 2001, cash used in
investing activities was $5.6 million. Cash inflows include proceeds from
certain equity securities transactions of $20.7 million and $3.1 million for
the first six months of 2002 and 2001, respectively. Investments in property,
plant and equipment were $15.6 million and $8.2 million during the first six
months of fiscal 2002 and 2001, respectively. Capital expenditures during the
first six months of fiscal 2002 were comprised primarily of computer hardware
and software to improve our infrastructure, leasehold improvements purchased
for our new Englewood, Colorado facility and tooling and equipment related to
new product introductions. Both periods reflect the purchase of other
investments in non-marketable securities.

Cash provided by financing activities during the first six months of
fiscal 2002 was $2.9 million, compared to $1.0 million provided in the first
six months of fiscal 2001. During the first six months of fiscal 2002 and
2001, we received proceeds from the exercise of stock options and purchases
under the stock purchase plan of $3.9 million and $2.1 million, respectively.
Offsetting the above proceeds in both periods were certain payments on bank
lines of credit and long-term debt, which were $1.1 million in both six month
periods.

At April 30, 2002, our cash and cash equivalents totaled $178.9 million, a
$23.6 million increase from $155.3 million at October 31, 2001. Our working
capital, the difference between current assets and current liabilities, was
$251.0 million and $257.4 million at April 30, 2002 and October 31, 2001,
respectively. The ratio of current assets to current liabilities was 5.0 to 1
and 4.8 to 1 at April 30, 2002 and October 31, 2001, respectively.

We believe that our existing cash and cash equivalents, available bank
lines of credit, debt capacity and anticipated cash flow from our operating
activities will be sufficient to fund our working capital and capital
expenditure needs for at least the next 12 months. We will continue to
evaluate possible acquisitions of, or investments in businesses, products, or
technologies that we believe are strategic, which may require the use of cash.
In addition, we have made and expect to make investments in companies with whom
we have identified potential synergies.

Recent Accounting Pronouncements

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. SFAS No. 145 rescinds and amends certain previous standards
related primarily to debt and leases. The most substantive amendment requires
sale-leaseback accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions. The provisions of
SFAS No. 145 related to the rescission of SFAS No. 4 are effective for
financial statements issued for fiscal years beginning after May 15, 2002 and
will become effective for ADIC commencing with its 2003 fiscal year. The
provisions of SFAS No. 145 related to the rescission of SFAS No. 13 shall be
effective for transactions occurring after May 15, 2002. All other provisions
of SFAS No. 145 are effective for financial statements issued on or after May
15,

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2002. This accounting pronouncement is not expected to have a significant
impact on our financial position or results of operations.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of
operations is based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses and related disclosure of contingent assets
and liabilities. On an on-going basis, we evaluate our estimates, including
those related to customer promotional offers, sales returns, bad debts,
inventories, warranty costs, investments, intangible assets and income taxes.
We base our estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual
results may differ from these estimates under different assumptions or
conditions.

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements.

We record estimated reductions to revenue for customer promotional offers
including special pricing agreements, price protection, stock rotation and
volume-based incentives at the time of shipment based upon the expected rate of
occurrence. If market conditions were to decline, we may take actions to
increase customer promotional offers possibly resulting in an incremental
reduction of revenue at the time the incentive is offered.

We record an allowance for sales returns for our estimates of expected
customer product returns. Should actual return rates differ from our
estimates, revisions to our sales return allowance may be necessary.

We maintain an allowance for doubtful accounts for estimated losses
resulting from the inability of our customers to make required payments. If the
financial condition of our customers were to deteriorate, resulting in an
impairment of their ability to make payments, additional allowances may be
required.

We write down our inventory for estimated obsolescence or unmarketable
inventory equal to the difference between the cost of inventory and the
estimated market value based upon assumptions about future demand and market
conditions. If technology rapidly changes or actual market conditions are less
favorable than those projected by management, additional inventory write-downs
may be required.

We provide for the estimated cost of product warranties at the time
revenue is recognized. While we engage in extensive product quality programs
and processes, including actively monitoring and evaluating the quality of our
component suppliers, our warranty obligation is affected by product failure
rates, material usage and service delivery costs incurred in correcting a
product failure. Should actual product failure rates, material usage or service
delivery costs differ from our estimates, revisions to the estimated warranty
liability would be required.

We hold equity interests in companies having operations or technology in
areas within our strategic focus, some of which are publicly traded and have
highly volatile share prices. We record an investment impairment charge when
we believe an investment has experienced a decline in value that is other than
temporary. Future adverse changes in market conditions or poor operating
results of underlying

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investments could result in losses or an inability to recover the carrying
value of the investments that may not be reflected in an investments current
carrying value, thereby possibly requiring an impairment charge in the future.

We assess the impairment of identifiable intangibles and goodwill whenever
events or changes in circumstances indicate that the carrying value may not be
recoverable. We record an impairment charge when we determine that the
carrying value of intangibles and goodwill may not be recoverable. Upon
implementation of SFAS No. 142, Goodwill and Other Intangible Assets at the
beginning of fiscal 2003, we will cease to amortize goodwill. In lieu of
amortization, we are required to perform an initial impairment review of our
goodwill in fiscal 2003 and an annual impairment review thereafter. We expect
to complete our initial review during the first quarter of fiscal 2003. We
currently do not expect to record an impairment charge upon completion of the
initial impairment review. However, there can be no assurance that at the time
the review is completed a material impairment charge will not be recorded.

We do not currently record a valuation allowance to reduce our deferred
tax assets because we believe that the assets are more likely than not to be
realized. While we have considered future taxable income and ongoing prudent
and feasible tax planning strategies in assessing the need for a valuation
allowance, in the event we were to determine that we would not be able to
realize all or part of our net deferred tax asset in the future, an adjustment
to the deferred tax asset would be charged to income in the period such
determination was made.




Item 3. Quantitative and Qualitative Disclosures About Market Risk Management

We are exposed to various market risks, including changes in foreign
currency rates and interest rates. We may enter into various derivative
transactions to manage certain of these exposures.

The assets and liabilities of our non-U.S. subsidiaries have functional
currencies other than the U.S. dollar and are translated into U.S. dollars at
exchange rates in effect at the balance sheet date. Income and expense items
are translated at the average exchange rates prevailing during the period. A
10% depreciation in the U.S. dollar would result in an approximately $52,000
increase in income before provision for income taxes for the first six months
of fiscal 2002.

At April 30, 2002, we had variable rate debt of approximately $2.7 million
provided by German banks, and fixed rate debt of $1.1 million, also provided by
a German bank. The fair value of such debt approximates the carrying amount on
the consolidated balance sheet at April 30, 2002. We have entered into an
interest rate swap agreement on the variable rate debt, which fixes the
interest rate at 4.3% through November 2003. Interest on the fixed rate debt
is 4.4%.




PART II  OTHER INFORMATION




Item 1. Legal Proceedings

No material pending litigation.




Item 2. Changes in Securities

None.




Item 3. Defaults Upon Senior Securities

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None.




Item 4. Submission of Matters to a Vote of Security Holders

At its annual meeting on March 12, 2002 duly called and with proxies
solicited, 54,645,246 shares were represented in person or by proxy
constituting 87.82 percent of the outstanding shares. There were 62,221,640
shares of the Companys common stock outstanding and entitled to vote at the
annual meeting.

| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | i. The proposal to amend the Advanced Digital
Information Corporation 1999 Stock Incentive Compensation Plan
was approved. It received the following votes (there were no
broker non-votes):

|        |  |       |            |             |  |                  |       |  
|------- |  | ----- | ---------- | ----------- |  | ---------------- | ----- | -
|        |  |       |            |             |  | Percent of Votes
|        |  | Votes |            | For/Against
|        |  |       |            |            
|For     |  |       | 42,087,056 |             |  |                  | 77.02 | %
|Against |  |       | 12,389,224 |             |  |                  | 22.67 | %
|Abstain |  |       | 168,966    |             |  |                  | .31   | %

| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ii. Two directors were reelected to the Board, each to hold
office for three-year terms. The nominees received the following
votes (there were no broker non-votes):

|                   |  |           |            |                |  |  |            | 
|------------------ |  | --------- | ---------- | -------------- |  |  | ---------- | 
|                   |  | Number of |            | Number of     
|Nominee            |  | Votes For |            | Votes Withheld
|                   |  |           |            |               
|John W. Stanton    |  |           | 53,970,344 |                |  |  | 674,902    | 
|Peter H. van Oppen |  |           | 44,253,335 |                |  |  | 10,391,911 | 

Tom A. Alberg, Christopher T. Bayley, Richard L. McCormick and Walter F.
Walker had continuing terms as directors.




Item 5. Other Information

None.




Item 6. Exhibits and Reports on Form 8-K

None.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                     |  |                                                                                                             
|-------------------- |  | ------------------------------------------------------------------------------------------------------------
|                     |  | ADVANCED DIGITAL INFORMATION CORPORATION                                                                    
|                    
|Dated: June 12, 2002 |  | PETER H. VAN OPPEN                                                                                          
|                     |  |                                                                                                             
|                     |  | Peter H. van Oppen, Chairman
and Chief Executive Officer                                                    
|                    
|Dated: June 12, 2002 |  | JON W. GACEK                                                                                                
|                     |  |                                                                                                             
|                     |  | Jon W. Gacek, Senior Vice President
and Chief Financial Officer (Principal
Financial and Accounting Officer)

14