SAN JOSE, Calif.--(BUSINESS WIRE)--
Super Micro Computer, Inc. (NASDAQ:SMCI), a global leader in
high-performance, high-efficiency server, storage technology and green
computing, today announced preliminary financial information for its
fiscal first quarter ended September 30, 2017.
Preliminary Fiscal First Quarter Highlights
The Company expects to report the following financial results for the
quarter ended September 30, 2017:
-
Net sales in a range of $675 million to $685 million compared to its
previous guidance range of $625 million to $685 million
-
GAAP gross margin in the range of 13.2% to 13.4%
-
Non-GAAP gross margin in the range of 13.3% to 13.5%
-
GAAP fully diluted earnings per share in the range of $0.16 to $0.20
-
Non-GAAP fully diluted earnings per share in a range of $0.26 to $0.30
compared to its previous guidance range of $0.30 to $0.40
The GAAP gross margin range of 13.2% to 13.4% that the Company expects
to report includes stock-based compensation expense of $0.4 million. The
Company expects to report non-GAAP gross margin, which excludes
stock-based compensation expense, in the range of 13.3% to 13.5%.
The GAAP fully diluted earnings per share range of $0.16 to $0.20 that
the Company expects to report includes stock-based compensation of $5.7
million and Audit Committee investigation expense of $4.0 million.
Operating expenses for the quarter were higher than expected principally
due to the Audit Committee investigation expense, additional personnel
expenses, particularly related to new opportunities to jointly develop
strategic projects with key partners, and Company network security
infrastructure investments. Excluding stock-based compensation and the
Audit Committee investigation expenses and the related tax effect, the
non-GAAP fully diluted earnings per share range that the Company expects
to report is $0.26 to $0.30.
At September 30, 2017, total cash, cash equivalents, short and long term
investments was $148 million and bank debt was $180 million.
Financial Information Is Preliminary and May Be Subject To Change
The unaudited interim financial information presented in this press
release is preliminary. The final financial results reported for this
period may also differ from the results reported in this release as a
result of the Audit Committee review discussed below.
Second Quarter Fiscal 2018 Guidance
The Company expects net sales of $725 million to $780 million for the
second quarter of fiscal year 2018 ending December 31, 2017.
Delayed 10-K
As previously disclosed by the Company, additional time is needed for
the Company to compile and analyze certain information and documentation
and finalize its financial statements, as well as complete a related
audit committee review, in order to permit the Company's independent
registered public accounting firm to complete its audit of the financial
statements to be incorporated in the Form 10-K and complete its audit of
the Company's internal controls over financial reporting as of June 30,
2017.
In connection with the in-process audit of the Company's financial
results for the year ended June 30, 2017, a sales transaction was
subject to additional inquiry and review. The transaction in question
was originally recorded as revenue during the quarter ended December 31,
2016. However, prior to review by the Company's independent auditors and
prior to the Company's public announcement of its results for the
quarter, the recognition of revenue was reversed and the revenue was
subsequently recognized in the quarter ended March 31, 2017. When the
audit committee was made aware of this transaction, the Audit Committee
of the Company's Board of Directors initiated an independent
investigation to determine whether there were any similar transactions
and if so, whether such transactions were properly accounted for. Due to
the volume of data to be reviewed to complete the investigation, the
Company was unable to file its Form 10-K on a timely basis.
The Company is unable at this time to provide a date as to when the
investigation and the 2017 audits will be completed or predict the
possible outcome of the investigation.
NASDAQ Compliance Plan
Super Micro announced on September 14, 2017 that it received a
notification letter from Nasdaq stating that the Company is not in
compliance with Nasdaq listing rule 5250(c)(1), which requires timely
filing of reports with the U.S. Securities and Exchange Commission. The
September 14, 2017 letter was sent as a result of the Company's delay in
filing its Annual Report on Form 10-K for the year ended June 30, 2017
(the "Form 10-K"). The Form 10-K was due on August 29, 2017. The Company
filed a Form 12b-25 on August 29, 2017, the effect of which was to
extend the due date for the Form 10-K to September 13, 2017. The Company
was unable to file the Form 10-K by September 13, 2017, for the reasons
reported in the Form 12b-25 and further described above.
The Nasdaq notice has no immediate effect on the listing or trading of
the Company's common stock on the Nasdaq Global Select Market. Under the
Nasdaq rules, the Company has 60 days from the date of the notice either
to file the Form 10-K or to submit a plan to Nasdaq to regain compliance
with Nasdaq's listing rules. The Company intends to submit a plan within
the required time period and if the plan accepted, the Company could be
granted up to 180 days from the Form 10-K's due date to regain
compliance. If NASDAQ does not accept the Company's plan, then the
Company will have the opportunity to appeal that decision to a NASDAQ
hearings panel.
Super Micro intends to take all necessary steps to achieve compliance
with the NASDAQ continued listing requirements as soon as practicable.
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, the preliminary financial information for the quarter ended
September 30, 2017 and the guidance provided for the quarter ending
December 31, 2017. 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, including any impact which may arise
from the pending Audit Committee investigation. 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 costs associated with the Audit Committee investigation
described above as well as 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, the reconciliation between the
Company's GAAP and non-GAAP financial results is associated with
stock-based compensation of $5.7 million, Audit Committee investigation
expense of $4.0 million less related tax effect of $4.2 million provided
above.
About Super Micro Computer, Inc.
Supermicro®, a global leader in high-performance, high-efficiency server
technology and innovation is a premier provider of end-to-end green
computing solutions for Data Center, Cloud Computing, Enterprise IT,
Hadoop/Big Data, HPC and Embedded Systems worldwide. Supermicro's
advanced Server Building Block Solutions® offer a vast array of
components for building energy-efficient, application-optimized,
computing solutions. Architecture innovations include Twin, TwinPro,
FatTwin™, Ultra Series, MicroCloud, MicroBlade, SuperBlade®,
Double-sided Storage®, Battery Backup Power (BBP®) modules and WIO/UIO.
Products include servers, blades, GPU systems, workstations,
motherboards, chassis, power supplies, storage, networking, server
management software and SuperRack® cabinets/accessories delivering
unrivaled performance and value.
Founded in 1993 and headquartered in San Jose, California, Supermicro is
committed to protecting the environment through its "We Keep IT Green®"
initiative. The Company has global logistics and operations centers in
Silicon Valley (USA), the Netherlands (Europe) and its Science &
Technology Park in Taiwan (Asia).
Supermicro, FatTwin, TwinPro, SuperBlade, Double-Sided Storage, BBP,
SuperRack, Building Block Solutions and We Keep IT Green are trademarks
and/or registered trademarks of Super Micro Computer, Inc.
All other brands, names and trademarks are the property of their
respective owners.
SMCI-F
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Investor Relations Contact
Super Micro Computer, Inc.
Perry
G. Hayes, 408-895-6570
SVP, Investor Relations
PerryH@Supermicro.com
Source: Super Micro Computer, Inc.
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