EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

Super Micro Computer, Inc. Announces Fiscal Year 2007 and 4th Quarter Financial Results

SAN JOSE, Calif., August 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.”

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,
2007
    June 30,
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, 2007     June 30, 2006     June 30, 2007     June 30, 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, 2007     June 30, 2006     June 30, 2007     June 30, 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
June 30,
2007
    Fiscal
Year
Ended
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, 2007     June 30, 2006     June 30, 2007     June 30, 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