SAN JOSE, Calif., Aug 07, 2007 (BUSINESS WIRE) --
Super Micro Computer, Inc. (NASDAQ:SMCI), a leader in application optimized, high performance server solutions, today announced fourth quarter and full-year financial results for fiscal year 2007.
Q4 Fiscal 2007 Highlights
-- Quarterly revenue of $110.9 million, up 5.0% and 23.3% from the third quarter fiscal year 2007 and year-ago quarter in fiscal year 2006, respectively
-- Net income of $5.5 million, or $0.14 per diluted share, up 35.1% and down 13.4% from third quarter fiscal year 2007 and year-ago quarter in fiscal year 2006, respectively
-- Server Solutions accounted for 37.6% of revenues
-- Introductions of new products including Blade Servers
Q4 Fiscal 2007 Financial Results
Net revenue for the fourth quarter ended June 30, 2007 was $110.9 million, up 23.3% from $90.0 million in the fourth
quarter of fiscal year 2006. Net revenue from server solutions comprised 37.6% of net revenues, up from 36.7% in the fourth quarter of fiscal year 2006. No customer accounted for more than 10% of net revenues during the quarter. On a sequential basis, net revenue was up 5.0% from $105.7 million in the third quarter of fiscal year 2007.
Net income for the fourth quarter of fiscal year 2007 was $5.5 million or $0.14 per diluted share compared to net income of $6.4 million, or $0.19 per diluted share in the same period a year ago. Included in net income for the quarter was $0.8 million of stock-based compensation expense (pre-tax). Excluding stock-based compensation expense and the related tax effect, non-GAAP net income for the fourth quarter was $6.1 million, or $0.16 per diluted share, compared to non-GAAP net income of $6.4 million, or $0.19 per diluted share, in the same period
a year ago. On a sequential basis, non-GAAP net income was up $1.5 million or $0.02 per diluted share.
Gross margin for the fourth quarter was 18.0%, compared to 21.5% in the same period a year ago. Non-GAAP gross margin for the fourth quarter was 18.1% compared to 21.5% in the same period a year ago. Fourth quarter of fiscal year 2007 gross margin was lower than the same period a year ago due to higher inventory reserves in the fourth quarter of fiscal 2007 and delivery of new products based on new processor introductions, which benefited gross margins in Q4 of fiscal year 2006. On a sequential basis, non-GAAP gross margin was up 0.9% from 17.2% in the third quarter of fiscal 2007. The increase was primarily due to cost reductions on existing products and higher gross margins on new products such as 1U Twin and UIO offset in part by higher inventory reserves.
Full Fiscal
2007 Financial Results
Net revenue for the fiscal year ended June 30, 2007 was $420.4 million, up 39.0% from $302.5 million for the fiscal year ended June 30, 2006. Net income for fiscal year 2007 was $19.3 million or $0.57 per diluted share, compared to $16.9 million or $0.53 per diluted share in the fiscal year 2006. Excluding stock based-compensation expense and the related tax effect, non-GAAP net income for the fiscal year 2007 was $21.4 million or $0.63 per diluted share, compared to $17.6 million or $0.55 per diluted share for the fiscal year 2006.
The Company ended the fiscal year with $65.9 million in cash and cash equivalents and short term investments compared to $16.6 million at the end of fiscal year 2006.
In the first quarter of fiscal 2007, Super Micro Computer adopted Statement of Financial Accounting Standards No. 123R, Share-Based Payments (FAS
123R), which requires that stock-based compensation be recorded in its financial statements. The Company's non-GAAP financial measures exclude the stock-based compensation expense and the related tax effect of the applicable items. The reconciliation between GAAP and non-GAAP net income, gross margin and net income per share is provided in the financial tables accompanying this press release.
Business Outlook & Management Commentary
Super Micro Computer expects net revenue to be in the range of $117 million to $120 million for the first quarter ending September 30, 2007 in the new fiscal year 2008.
"In the fourth quarter of fiscal 2007, after more than 2 years of development, we were proud to launch our new SuperBlade(TM) product line. Utilizing the Supermicro's Server Building Block Solutions(R) approach which has made us successful in the rackmount server business,
we are able to provide SuperBlades(TM) in versatile configuration flexibility for the enterprise, datacenter, high performance computing (HPC), and office computing markets," said Charles Liang, President and Chief Executive Officer of Super Micro Computer. "Our SuperBlade(TM) designs implement the very latest advancements in server technology, making them not only perfect for enterprise applications, but also ideal for HPC, data centers and office computing environments."
"As we enter fiscal year 2008, we expect to see continued growth in the company, our overseas operations and our products lines. All these will help support the continued growth in revenues and being profitable every year for 13 years of the Company."
Conference Call Information
Super Micro Computer will discuss these financial results and its outlook for the first quarter of fiscal 2008 in a
conference call at 2:00 p.m. PT, today. Those wishing to participate in the conference call should call 866-293-8972 (international callers dial 913-312-1232) 10 minutes prior to registering. A replay of the call will be available until 11:59 pm ET on August 14, by dialing 888-203-1112 (international callers dial 719-457-0820) and entering replay PIN 4071883. The live web cast and replay of the call will be available on the Investor Relations section at www.supermicro.com, with the replay beginning approximately two hours after the conclusion of the call and will remain available until the Company's next earnings call.
Cautionary Statement Regarding Forward Looking Statements
Statements contained in this press release that are not historical fact may be forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements may relate, among other things, to our expected financial and operating results, our ability to build and grow Super Micro Computer, the benefits of our products and our ability to achieve our goals, plans and objectives. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from those anticipated. These include, but are not limited to: our dependence on continued growth in the market for X86 server, increased competition, difficulties of predicting timing, introduction and customer acceptance of new products, poor product sales, difficulties in establishing and maintaining successful relationships with our distribution partners, shortages or price fluctuations in our supply chain,
our ability to protect our intellectual property rights, our ability to control the rate of expansion domestically and internationally, difficulty managing rapid growth and general political, economic and market conditions and events. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in our filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings.
Use of Non-GAAP Financial Measures
Non-GAAP gross margin discussed in this press release excludes stock-based compensation expense. Non-GAAP net income (loss) and net income (loss) per share discussed in this press release exclude stock-based compensation expense and the related tax effect of the applicable items. Management presents non-GAAP
financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company's performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Pursuant to the requirements of SEC Regulation G, detailed reconciliations between the Company's GAAP and non-GAAP financial results is provided at the end of this press release.
Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company's SEC filings.
About Super Micro Computer, Inc.
Established in 1993, Supermicro emphasizes superior product design and uncompromising quality control to produce industry-leading serverboards, chassis and server systems. These mission-critical Server Building Block solutions provide benefits across many environments, including data center deployment, high-performance computing, high-end workstations, storage networks and standalone server installations. For more information on Supermicro's complete line of advanced motherboards, SuperServers, and optimized chassis, visit www.Supermicro.com, email Marketing@Supermicro.com or call the San Jose, CA headquarters at +1
408-503-8000.
SUPER MICRO COMPUTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, June 30,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $ 50,864 $ 16,509
Short-term investments 15,055 53
Accounts receivable, net 33,426 22,252
Inventories, net 66,772 57,612
Deferred income taxes - current 5,630 3,440
Prepaid expenses and other current assets 1,759 1,311
---------- ---------
Total current assets 173,506 101,177
Property, plant, and equipment, net 31,089 29,605
Deferred income taxes - noncurrent 624 -
Other assets 364 219
---------- ---------
Total assets $205,583 $131,001
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 61,453 $ 52,019
Accrued liabilities 14,074 8,891
Income tax payable 1,489 1,085
Accrued litigation loss - 575
Advances from receivable financing arrangements 982 800
Current portion of capital lease obligations 118 165
Current portion of long-term debt 304 616
---------- ---------
Total current liabilities 78,420 64,151
Deferred income taxes-noncurrent - 398
Long-term capital lease obligations-net of
current portion 40 64
Long-term debt-net of current portion 11,251 18,621
---------- ---------
Total liabilities 89,711 83,234
Stockholders' equity:
Common stock 58,239 10,536
Deferred stock-based compensation (1,500) (2,563)
Retained earnings 59,133 39,794
---------- ---------
Total stockholders' equity 115,872 47,767
---------- ---------
Total liabilities and stockholders' equity $205,583 $131,001
========== =========
SUPER MICRO COMPUTER, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Fiscal Year Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net sales $ 110,945 $ 90,013 $ 420,393 $ 302,541
Cost of sales 91,003 70,678 345,384 242,235
------------ ------------ ------------ ------------
Gross profit 19,942 19,335 75,009 60,306
Operating
expenses:
Research and
development 5,534 4,501 21,171 15,814
Sales and
marketing 3,618 2,293 12,586 9,363
General and
administrative 2,678 2,228 11,467 6,931
Provision for
(reversal of)
litigation loss - - (120) 575
------------ ------------ ------------ ------------
Total operating
expenses 11,830 9,022 45,104 32,683
Income from
operations 8,112 10,313 29,905 27,623
Interest income 575 75 765 254
Interest expense (292) (342) (1,332) (1,257)
Other income, net - - - 2
------------ ------------ ------------ ------------
Income before
income taxes
provision 8,395 10,046 29,338 26,622
Income tax
provision 2,894 3,696 9,999 9,675
------------ ------------ ------------ ------------
Net income $ 5,501 $ 6,350 $ 19,339 $ 16,947
============ ============ ============ ============
Net income per
share:
Basic $ 0.18 $ 0.29 $ 0.80 $ 0.77
============ ============ ============ ============
Diluted $ 0.14 $ 0.19 $ 0.57 $ 0.53
============ ============ ============ ============
Shares used in per
share
calculation:
Basic 29,931,695 22,149,689 24,152,769 22,010,586
============ ============ ============ ============
Diluted 38,570,651 32,850,665 33,946,074 31,846,864
============ ============ ============ ============
Stock-based compensation is included in the following cost and expense
categories by period (in thousands):
Three Months Ended Fiscal Year Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Cost of sales $ 133 $ 24 $ 300 $ 102
Research and
development 273 105 1,058 441
Sales and
marketing 92 43 362 236
General and
administrative 260 74 710 317
SUPER MICRO COMPUTER, INC
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(In thousands)
(Unaudited)
Fiscal Year Ended Fiscal Year Ended
June 30, 2007 June 30, 2006
----------------- -----------------
OPERATING ACTIVITIES:
Net income $ 19,339 $ 16,947
Reconciliation of net income to
net cash provided by operating
activities:
Depreciation and amortization 1,640 1,214
Stock-based compensation
expense 2,430 1,096
Allowance for doubtful
accounts 240 18
Allowance for sales returns 4,408 2,497
Loss on disposal of property
and equipment 16 13
Deferred income taxes (3,212) (819)
Gain on short-term
investments (93) (9)
Changes in operating assets
and liabilities:
Accounts receivable, net (15,822) (11,244)
Inventories, net (9,160) (17,087)
Prepaid expenses and
other current assets (866) (523)
Accounts payable 9,487 14,224
Income tax payable 1,936 (1,018)
Accrued litigation loss (575) 575
Accrued liabilities 5,221 2,322
----------------- -----------------
Net cash provided by operating
activities 14,989 8,206
----------------- -----------------
INVESTING ACTIVITIES:
Proceeds from short-term
investments 145 1,826
Purchases of property and
equipment (3,042) (11,452)
Purchases of short-term
investments (15,054) (103)
Other assets (157) (63)
----------------- -----------------
Net cash used in investing
activities (18,108) (9,792)
----------------- -----------------
FINANCING ACTIVITIES:
Proceeds from long-term debt - 8,939
Proceeds from exercise of stock
options 1,823 377
Repayment of long-term debt (7,682) (2,668)
Payment of obligations under
capital leases (210) (97)
Advances under receivable
financing arrangements 182 437
Proceeds from initial public
offering of common stock, net of
offering costs 43,361 -
Payment of deferred offering costs - (63)
----------------- -----------------
Net cash provided by financing
activities 37,474 6,925
----------------- -----------------
Net increase in cash and cash
equivalents 34,355 5,339
Cash and cash equivalents at
beginning of year 16,509 11,170
----------------- -----------------
Cash and cash equivalents at end
of year $ 50,864 $ 16,509
================= =================
Supplemental disclosure of cash
flow information:
Cash paid for interest $ 1,332 $ 1,255
Cash paid for taxes $ 11,275 $ 11,510
Non-cash investing and financing
activities:
Equipment purchased under
capital leases $ 139 $ 216
Deferred stock-based
compensation related to stock
option grants $ - $ 2,345
Reversals of deferred stock-
based compensation for
cancellation of stock options $ 164 $ 77
Accrued costs for property and
equipment purchases $ 78 $ 131
Accrued offering costs $ 317 $ 355
SUPER MICRO COMPUTER, INC
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Fiscal Year Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
GAAP GROSS PROFIT $ 19,942 $ 19,335 $ 75,009 $ 60,306
Add back stock-
based
compensation (a) 133 24 300 102
------------ ------------ ------------ ------------
Non-GAAP GROSS
PROFIT $ 20,075 $ 19,359 $ 75,309 $ 60,408
============ ============ ============ ============
GAAP GROSS MARGIN 18.0% 21.5% 17.8% 19.9%
Add back stock-
based
compensation (a) 0.1% 0.0% 0.1% 0.1%
------------ ------------ ------------ ------------
Non-GAAP GROSS
MARGIN 18.1% 21.5% 17.9% 20.0%
============ ============ ============ ============
GAAP INCOME FROM
OPERATIONS $ 8,112 $ 10,313 $ 29,905 $ 27,623
Add back stock-
based
compensation (a) 758 246 2,430 1,096
------------ ------------ ------------ ------------
Non-GAAP INCOME
FROM OPERATIONS $ 8,870 $ 10,559 $ 32,335 $ 28,719
============ ============ ============ ============
GAAP NET INCOME $ 5,501 $ 6,350 $ 19,339 $ 16,947
Add back stock-
based
compensation (a) 758 246 2,430 1,096
Add back
adjustments to
tax provision
(b) (190) (162) (365) (399)
------------ ------------ ------------ ------------
Non-GAAP NET
INCOME $ 6,069 $ 6,434 $ 21,404 $ 17,644
============ ============ ============ ============
GAAP NET INCOME
PER SHARE - BASIC $ 0.18 $ 0.29 $ 0.80 $ 0.77
Add back stock-
based
compensation and
adjustments to
tax provision
(a) (b) 0.02 0.00 0.09 0.03
------------ ------------ ------------ ------------
Non-GAAP NET
INCOME PER SHARE
- BASIC $ 0.20 $ 0.29 $ 0.89 $ 0.80
============ ============ ============ ============
GAAP NET INCOME
PER SHARE -
DILUTED $ 0.14 $ 0.19 $ 0.57 $ 0.53
Add back stock-
based
compensation and
adjustments to
tax provision
(a) (b) 0.02 0.00 0.06 0.02
------------ ------------ ------------ ------------
Non-GAAP NET
INCOME PER SHARE
- DILUTED $ 0.16 $ 0.19 $ 0.63 $ 0.55
============ ============ ============ ============
SHARES USED IN
COMPUTING NET
INCOME PER SHARE
BASIC -GAAP 29,931,695 22,149,689 24,152,769 22,010,586
============ ============ ============ ============
BASIC - Non-GAAP 29,931,695 22,149,689 24,152,769 22,010,586
============ ============ ============ ============
DILUTED - GAAP 38,570,651 32,850,665 33,946,074 31,846,864
============ ============ ============ ============
DILUTED - Non-
GAAP 38,868,832 33,068,971 34,148,251 32,076,460
============ ============ ============ ============
(a) Amortization of SFAS No. 123R, APB 25 and SFAS No. 123 stock-based
compensation for the three and twelve months ended June 30, 2007 and
June 30, 2006.
(b) The provision of income taxes used in arriving at the non-GAAP net
income was computed using an income tax rate of 32.6% and 36.3% for
the fiscal years ended June 30, 2007 and 2006, respectively.
SMCI-F
SOURCE: Super Micro Computer, Inc.
Super Micro Computer, Inc.
Howard Hideshima, 408-503-8000
Chief Financial Officer
ir@supermicro.com
or
Kalt Rosen Group/Ruder Finn
Howard Kalt, 415-317-0092
Investor Relations
ir@supermicro.com
Copyright Business Wire 2007
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