SAN JOSE, Calif., Jan 28, 2009 (BUSINESS WIRE) -- Super Micro Computer, Inc. (NASDAQ:SMCI), a leader in application
optimized, high performance server solutions, today announced second
quarter fiscal 2009 financial results for the quarter ended December 31,
2008.
Fiscal SecondQuarter Highlights
-
Quarterly net sales of $128.6 million, down 6.1% from the same quarter
of last year and down 10.8% from the prior quarter.
-
GAAP net income of $5.3 million, down 30.9% from the same quarter of
last year and down 25.5% from the prior quarter.
-
GAAP gross margin of 18.7%, compared with 19.9% in the same quarter of
last year and 19.3% in the prior quarter.
Net sales for the second quarter fiscal 2009 ended December 31, 2008
totaled $128.6 million, down 6.1% from $136.9 million in the second
quarter of fiscal 2008. No customer accounted for more than 10% of net
sales during the quarter.
GAAP net income for the second quarter of fiscal year 2009 was $5.3
million or $0.14 per diluted share, a decrease of 30.9% from the net
income of $7.7 million, or $0.20 per diluted share in the same period a
year ago. Included in net income for the quarter was $1.3 million of
stock-based compensation expense (pre-tax). Excluding stock-based
compensation expense and the related tax effect, non-GAAP net income for
the second quarter of fiscal 2009 was $6.7 million, or $0.17 per diluted
share, compared to non-GAAP net income of $8.6 million, or $0.22 per
diluted share, in the same quarter of last year. On a sequential basis,
non-GAAP net income decreased from the first quarter of fiscal year 2009
by $1.6 million from $8.3 million and decreased by $0.04 from $0.21 per
diluted share.
GAAP gross margin for the second quarter declined to 18.7%, compared to
19.9% in the same period a year ago. Non-GAAP gross margin for the
second quarter was 18.9% compared to 20.0% in the same period a year
ago. On a sequential basis, non-GAAP gross margin decreased by 0.5% from
19.4% in the first quarter of fiscal 2009.
6-Month Summary
Net sales for the six months ended December 31, 2008 were $272.6
million, up 7.0% from $254.9 million for the first six months of fiscal
year 2008. Net income for the first six months of fiscal year 2009 was
$12.5 million or $0.32 per diluted share, compared to $13.5 million or
$0.35 per diluted share in the same period a year ago. Excluding stock
based-compensation expense and related tax effect, non-GAAP net income
for the first six months was $15.1 million or $0.38 per diluted share,
compared to $15.2 million or $0.39 per diluted share in the same period
a year ago.
The Company's cash and cash equivalents, short and long term investments
at December 31, 2008 were $74.9 million compared to $67.6 million at
June 30, 2008. Free cash flow in the six months ended December 31, 2008
was $7.5 million.
Management Commentary & Business Outlook
"We are operating in economic conditions that are much tougher than the
world could have imagined at the beginning of this fiscal year. While
the industry and competitors struggle this quarter, we continued to grow
market share and we delivered a solid quarter of profitability.
Additionally, we have begun to make necessary adjustments to our cost
structure," said Charles Liang, President and Chief Executive Officer.
"Supermicro's fundamentals are strong and we have an experienced
management team to drive our excellent product strategy with an exciting
portfolio of new products. We are as convinced as ever that Supermicro's
ability to help our customers compete and grow by providing innovative,
fast time-to-market and cost effective server solutions makes us one of
the strongest competitors in the industry with over 15 years of
consecutive profitability."
Current uncertainty in global economic conditions makes it more
difficult to predict customer purchasing decisions and Supermicro's
business outlook for the third quarter reflects the uncertainty in the
demand cycle and timing of sales.
The Company expects net sales to decrease 9% to 16% for the third
quarter of fiscal year 2009 ending March 31, 2009, compared to the third
fiscal quarter of last year, which represents a range of $115 million to
$125 million in net sales. In addition, the Company expects non-GAAP
earnings per diluted share of approximately $0.11 to $0.14 for the third
quarter.
It is currently expected that the outlook will not be updated until the
release of the Company's next quarterly earnings announcement,
notwithstanding subsequent developments; however, the Company may update
the outlook or any portion thereof at any time. Such updates will take
place only by way of a news release or other broadly disseminated
disclosure available to all interested parties in accordance with
Regulation FD.
Conference Call Information
Super Micro Computer will discuss these financial results in a
conference call at 2:00 p.m. PT, today. Those wishing to participate in
the conference call should call 888-637-7738 (international callers dial
913-981-5536) 10 minutes prior to registering. A replay of the call will
be available until 11:59 pm ET on Feb. 13, 2009 by dialing 888-203-1112
(international callers dial 719-457-0820) and entering replay PIN
2990334 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. The call will be accompanied by a slide presentation which can be
found on our website at www.supermicro.com
in the investor section under Events and Presentations in a pdf format
that can be downloaded.
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 Supermicro, 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: current economic conditions, our
dependence on continued growth in the markets for X86, blade servers and
embedded applications, 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 distributors and vendors, 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 and net income 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)
|
|
| | | |
December 31,
|
|
June 30,
|
| | | |
|
2008
|
| |
|
2008
|
|
|
ASSETS
| | | | | |
|
Current assets:
| | | | |
|
Cash and cash equivalents
|
$
|
60,297
| | |
$
|
51,481
| |
|
Short-term investments
| |
57
| | | |
57
| |
|
Accounts receivable, net
| |
39,587
| | | |
49,501
| |
|
Inventories, net
| | |
89,142
| | | |
85,683
| |
|
Deferred income taxes - current
| |
8,446
| | | |
8,663
| |
|
Prepaid income taxes
| |
7,166
| | | |
2,661
| |
|
Prepaid expenses and other current assets
|
|
3,368
|
| |
|
1,837
|
|
| |
Total current assets
| |
208,063
| | | |
199,883
| |
|
Long-term investments
| |
14,557
| | | |
16,106
| |
|
Property, plant and equipment, net
| |
45,766
| | | |
45,602
| |
|
Deferred income taxes - noncurrent
| | |
1,299
| | | |
939
| |
|
Restricted assets
| | |
1,769
| | | |
1,728
| |
|
Other assets
| | |
|
125
|
| |
|
127
|
|
| |
Total assets
|
$
|
271,579
|
| |
$
|
264,385
|
|
| | | | | |
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
| | | |
|
Current liabilities:
| | | | |
|
Accounts payable
| |
$
|
65,556
| | |
$
|
80,962
| |
|
Accrued liabilities
| | |
16,960
| | | |
14,790
| |
|
Income taxes payable
| |
109
| | | |
189
| |
|
Advances from receivable financing arrangements
| |
1,936
| | | |
1,173
| |
|
Current portion of capital lease obligations
| |
41
| | | |
57
| |
|
Current portion of long-term debt
|
|
308
|
| |
|
320
|
|
| |
Total current liabilities
| |
84,910
| | | |
97,491
| |
| | | | | |
|
|
Long-term capital lease obligations-net of current portion
| |
86
| | | |
108
| |
|
Long-term debt-net of current portion
| |
9,853
| | | |
9,981
| |
|
Other long-term liabilities
|
|
4,984
|
| |
|
4,934
|
|
| |
Total liabilities
| |
99,833
| | | |
112,514
| |
|
Stockholders' equity:
| | | | |
|
Common stock and additional paid-in capital
| | |
78,686
| | | |
69,434
| |
|
Deferred stock-based compensation
| |
(359
|
)
| | |
(675
|
)
|
|
Treasury stock
| |
(1,786
|
)
| | |
-
| |
|
Accumulated other comprehensive loss
| |
(876
|
)
| | |
(451
|
)
|
|
Retained earnings
| |
|
96,081
|
| |
|
83,563
|
|
| |
Total stockholders' equity
|
|
171,746
|
| |
|
151,871
|
|
| |
Total liabilities and stockholders' equity
|
$
|
271,579
|
| |
$
|
264,385
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands, except share and per share amounts)
|
|
(Unaudited)
|
| |
| |
| |
| |
|
Three Months Ended
| |
Six Months Ended
|
|
December 31,
| |
December 31,
| |
December 31,
| |
December 31,
|
|
2008
| |
2007
| |
2008
| |
2007
|
|
Net sales
|
$
|
128,565
| | |
$
|
136,933
| | |
$ 272,616
| | |
$
|
254,882
| |
|
Cost of sales
|
|
104,473
|
| |
|
109,678
|
| |
220,688
|
| |
|
204,582
|
|
|
Gross profit
| |
24,092
| | | |
27,255
| | |
51,928
| | | |
50,300
| |
|
Operating expenses:
| | | | | | | |
|
Research and development
| |
8,961
| | | |
6,987
| | |
17,046
| | | |
13,693
| |
|
Sales and marketing
| |
4,292
| | | |
4,560
| | |
9,048
| | | |
8,289
| |
|
General and administrative
|
|
3,565
|
| |
|
3,472
|
| |
6,720
|
| |
|
6,896
|
|
|
Total operating expenses
| |
16,818
| | | |
15,019
| | |
32,814
| | | |
28,878
| |
|
Income from operations
| |
7,274
| | | |
12,236
| | |
19,114
| | | |
21,422
| |
|
Interest income
| |
154
| | | |
454
| | |
372
| | | |
992
| |
|
Interest expense
|
|
(265
|
)
| |
|
(248
|
)
| |
(502
|
)
| |
|
(500
|
)
|
|
Income before income tax provision
| |
7,163
| | | |
12,442
| | |
18,984
| | | |
21,914
| |
|
Income tax provision
|
|
1,817
|
| |
|
4,702
|
| |
6,466
|
| |
|
8,367
|
|
|
Net income
|
$
|
5,346
|
| |
$
|
7,740
|
| |
$ 12,518
|
| |
$
|
13,547
|
|
|
Net income per share:
| | | | | | | |
|
Basic
|
$
|
0.16
|
| |
$
|
0.25
|
| |
$ 0.37
|
| |
$
|
0.44
|
|
|
Diluted
|
$
|
0.14
|
| |
$
|
0.20
|
| |
$ 0.32
|
| |
$
|
0.35
|
|
|
Shares used in per share calculation:
| | | | | | | |
|
Basic
|
|
34,443,233
|
| |
|
30,817,552
|
| |
33,739,629
|
| |
|
30,556,084
|
|
|
Diluted
|
|
39,159,735
|
| |
|
38,741,151
|
| |
39,283,271
|
| |
|
38,683,142
|
|
| | | | | | |
|
| | | | | | |
|
Stock-based compensation is included in the following cost and
expense
categories by period (in thousands):
| | | | |
|
Three Months Ended
| |
Six Months Ended
|
|
December 31,
| |
December 31,
| |
December 31,
|
|
December 31,
|
|
2008
| |
2007
| |
2008
| |
2007
|
|
Cost of sales
|
$
|
143
| | |
$
|
118
| | |
$
|
276
| |
$ 230
| |
|
Research and development
| |
645
| | | |
406
| | | |
1,196
| |
755
| |
|
Sales and marketing
| |
197
| | | |
148
| | | |
388
| |
292
| |
|
General and administrative
| |
351
| | | |
266
| | | |
685
| |
531
| |
|
SUPER MICRO COMPUTER, INC
|
|
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
|
|
(In thousands)
|
|
(Unaudited)
|
|
Six Months Ended
December 31,
|
|
2008
|
|
2007
|
|
OPERATING ACTIVITIES:
| | | |
|
Net income
|
$
|
12,518
| | |
$
|
13,547
| |
|
Reconciliation of net income to net cash provided by operating
activities:
| | | |
|
Depreciation and amortization
| |
1,688
| | | |
1,137
| |
|
Stock-based compensation expense
| |
2,545
| | | |
1,808
| |
|
Allowance for doubtful accounts
| |
365
| | | |
196
| |
|
Allowance for sales returns
| |
2,481
| | | |
2,631
| |
|
Provision for inventory
| |
327
| | | |
4,510
| |
|
Loss on disposal of property and equipment
| |
18
| | | |
-
| |
|
Deferred income taxes
| |
131
| | | |
(2,011
|
)
|
|
Gain on short-term investments
| |
-
| | | |
(418
|
)
|
|
Changes in operating assets and liabilities:
| | | |
|
Accounts receivable, net
| |
7,068
| | | |
(15,175
|
)
|
|
Inventories
| |
(3,786
|
)
| | |
(30,403
|
)
|
|
Prepaid expenses and other current assets
| |
(1,531
|
)
| | |
(259
|
)
|
|
Other assets
| |
(1
|
)
| | |
89
| |
|
Accounts payable
| |
(14,756
|
)
| | |
31,275
| |
|
Income tax payable
| |
703
| | | |
2,121
| |
|
Accrued liabilities
| |
2,170
| | | |
(1,039
|
)
|
|
Other long-term liabilities
|
|
50
|
| |
|
2,944
|
|
|
Net cash provided by operating activities
|
|
9,990
|
| |
|
10,953
|
|
|
INVESTING ACTIVITIES:
| | | |
|
Proceeds from investments
| |
850
| | | |
17,480
| |
|
Purchases of investments
| |
-
| | | |
(21,375
|
)
|
|
Purchases of property, plant and equipment
| |
(2,517
|
)
| | |
(12,550
|
)
|
|
Restricted assets
|
|
(41
|
)
| |
|
(4
|
)
|
|
Net cash used in investing activities
|
|
(1,708
|
)
| |
|
(16,449
|
)
|
|
FINANCING ACTIVITIES:
| | | |
|
Repayment of long-term debt
| |
(140
|
)
| | |
(1,107
|
)
|
|
Proceeds from exercise of stock options
| |
1,735
| | | |
1,320
| |
|
Payment of obligations under capital leases
| |
(38
|
)
| | |
(75
|
)
|
|
Advances under receivable financing arrangements
| |
763
| | | |
(86
|
)
|
|
Payment to acquire treasury stock
| |
(1,786
|
)
| | |
-
| |
|
Payment of offering costs
|
|
-
|
| |
|
(20
|
)
|
|
Net cash provided by financing activities
|
|
534
|
| |
|
32
|
|
|
Net increase (decrease) in cash and cash equivalents
| |
8,816
| | | |
(5,464
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
51,481
|
| |
|
50,864
|
|
|
Cash and cash equivalents at end of period
|
$
|
60,297
|
| |
$
|
45,400
|
|
|
Supplemental disclosure of cash flow information:
| | | |
|
Cash paid for interest
| |
502
| | | |
500
| |
|
Cash paid for taxes
| |
5,182
| | | |
5,054
| |
|
Non-cash investing and financing activities:
| | | |
|
Equipment purchased under capital leases
| |
-
| | | |
4
| |
|
Reversals of deferred stock-based compensation for cancellation of
stock options
| |
3
| | | |
21
| |
|
Accrued costs for property, plant and equipment purchases
| |
313
| | | |
1,886
| |
|
Accrued offering costs
| |
-
| | | |
20
| |
|
Changes in fair values of investments
| |
(699
|
)
| | |
-
| |
|
SUPER MICRO COMPUTER, INC
|
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
|
(In thousands, except share and per share amounts)
|
|
(Unaudited)
|
|
| | |
| |
| |
| |
| |
Three Months Ended
| |
Six Months Ended
|
| |
December 31,
| |
December 31,
| |
December 31,
| |
December 31,
|
| |
2008
| |
2007
| |
2008
| |
2007
|
|
GAAP GROSS PROFIT
|
$
|
24,092
| | |
$
|
27,255
| | |
$
|
51,928
| | |
$
|
50,300
| |
|
Add back stock-based compensation (a)
|
|
143
|
| |
|
118
|
| |
|
276
|
| |
|
230
|
|
|
Non-GAAP GROSS PROFIT
|
$
|
24,235
|
| |
$
|
27,373
|
| |
$
|
52,204
|
| |
$
|
50,530
|
|
| | | | | | | |
|
|
GAAP GROSS MARGIN
| |
18.7
|
%
| | |
19.9
|
%
| | |
19.0
|
%
| | |
19.7
|
%
|
|
Add back stock-based compensation (a)
|
|
0.2
|
%
| |
|
0.1
|
%
| |
|
0.1
|
%
| |
|
0.1
|
%
|
|
Non-GAAP GROSS MARGIN
|
|
18.9
|
%
| |
|
20.0
|
%
| |
|
19.1
|
%
| |
|
19.8
|
%
|
| | | | | | | |
|
|
GAAP INCOME FROM OPERATIONS
|
$
|
7,274
| | |
$
|
12,236
| | |
$
|
19,114
| | |
$
|
21,422
| |
|
Add back stock-based compensation (a)
|
|
1,336
|
| |
|
938
|
| |
|
2,545
|
| |
|
1,808
|
|
|
Non-GAAP INCOME FROM OPERATIONS
|
$
|
8,610
|
| |
$
|
13,174
|
| |
$
|
21,659
|
| |
$
|
23,230
|
|
| | | | | | | |
|
|
GAAP NET INCOME
|
$
|
5,346
| | |
$
|
7,740
| | |
$
|
12,518
| | |
$
|
13,547
| |
|
Add back stock-based compensation (a)
| |
1,336
| | | |
938
| | | |
2,545
| | | |
1,808
| |
|
Add back adjustments to tax provision (b)
|
|
46
|
| |
|
(120
|
)
| |
|
(6
|
)
| |
|
(168
|
)
|
|
Non-GAAP NET INCOME
|
$
|
6,728
|
| |
$
|
8,558
|
| |
$
|
15,057
|
| |
$
|
15,187
|
|
| | | | | | | |
|
|
GAAP NET INCOME PER SHARE - BASIC
|
$
|
0.16
| | |
$
|
0.25
| | |
$
|
0.37
| | |
$
|
0.44
| |
|
Add back stock-based compensation and adjustments to tax provision
(a) (b)
|
|
0.04
|
| |
|
0.03
|
| |
|
0.08
|
| |
|
0.06
|
|
|
Non-GAAP NET INCOME PER SHARE - BASIC
|
$
|
0.20
|
| |
$
|
0.28
|
| |
$
|
0.45
|
| |
$
|
0.50
|
|
| | | | | | | |
|
| | | | | | | |
|
|
GAAP NET INCOME PER SHARE - DILUTED
|
$
|
0.14
| | |
$
|
0.20
| | |
$
|
0.32
| | |
$
|
0.35
| |
|
Add back stock-based compensation and adjustments to tax provision
(a) (b)
|
|
0.03
|
| |
|
0.02
|
| |
|
0.06
|
| |
|
0.04
|
|
|
Non-GAAP NET INCOME PER SHARE - DILUTED
|
$
|
0.17
|
| |
$
|
0.22
|
| |
$
|
0.38
|
| |
$
|
0.39
|
|
| | | | | | | |
|
|
SHARES USED IN COMPUTING NET INCOME PER SHARE
| | | | | | | |
|
BASIC -GAAP
|
|
34,443,233
|
| |
|
30,817,552
|
| |
|
33,739,629
|
| |
|
30,556,084
|
|
|
BASIC - Non-GAAP
|
|
34,443,233
|
| |
|
30,817,552
|
| |
|
33,739,629
|
| |
|
30,556,084
|
|
| | | | | | | |
|
|
DILUTED - GAAP
|
|
39,159,735
|
| |
|
38,741,151
|
| |
|
39,283,271
|
| |
|
38,683,142
|
|
|
DILUTED - Non-GAAP
|
|
39,233,814
|
| |
|
38,942,446
|
| |
|
39,426,695
|
| |
|
38,899,565
|
|
| | | | | | | |
|
| | | | | | | |
|
(a) Amortization of SFAS No. 123R, APB 25 and SFAS No. 123
stock-based compensation for the three and six months ended
December 31, 2008 and 2007.
|
|
(b) The provision of income taxes used in arriving at the non-GAAP
net income was computed using an income tax rate of 20.8% and 36.0%
for the three months ended December 31, 2008 and 2007, respectively
and 30.1% and 36.0% for the six months ended December 31, 2008 and
2007, respectively.
|
SMCI-F
SOURCE: Super Micro Computer, Inc.
Super Micro Computer, Inc.
Howard Hideshima, 408-503-8000
Chief Financial Officer
ir@supermicro.com
or
Perry G. Hayes, 408-895-6570
SVP, Investor Relations
ir@supermicro.com
Copyright Business Wire 2009