Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts:
Hanif Jamal
Chief Financial Officer
Tel: 303-845-3377
Email: investors@dothill.com
Jodi Bochert
Dot Hill Investor Relations
Tel: 303-845-3469
Email: investors@dothill.com
Kirsten Chapman
LHA Investor Relations
Tel: 415-433-3777
Email: dothill@lhai.com
Dot Hill Reports First Quarter 2014 Results
Year-over-year non-GAAP total revenue growth of 9% with a 59% increase in Vertical Markets
LONGMONT, Colo. -May 8, 2014 - Dot Hill Systems Corp. (NASDAQ:HILL) reported financial results for the first quarter ended March 31, 2014.
Financial Highlights:
• | Grew non-GAAP revenue by 9% year-over-year |
• | Grew Vertical Markets non-GAAP revenue 18% sequentially and 59% year-over-year |
• | Achieved non-GAAP gross margin of 33.1%, up from 31.7% in the fourth quarter of 2013 and 32.1% in the first quarter of 2013 |
• | Delivered non-GAAP earnings per fully diluted share of $0.02, compared to $0.07 in the fourth quarter 2013 and $0.00 in the first quarter of 2013 |
“We are confident in our 2014 goal of 45% growth at the midpoint of our guidance range in Vertical Markets,” stated Dana Kammersgard, chief executive officer, Dot Hill Systems Corp. “This anticipated growth primarily comes from existing customers with existing products who are still in the early stages of their revenue ramps and from some of these same customers with new products that we expect to launch later this year. Our growth is not dependent on revenue from new prospects.”
First Quarter 2014 GAAP Financial Detail (including discontinued operations)
• | Net revenue was $48.2 million for the first quarter of 2014, compared to $44.5 million for the first quarter of 2013 and $58.8 million for the fourth quarter of 2013. |
• | Gross margin for the first quarter of 2014 was 31.7%, compared to 32.2% for the first quarter of 2013 and 30.2% for the fourth quarter of 2013. |
Exhibit 99.1
• | Operating expenses for the first quarter of 2014 were $15.7 million, compared to $15.0 million for the first quarter of 2013 and $15.6 million in the fourth quarter of 2013. |
• | Net loss for the first quarter of 2014 was $0.4 million, or ($0.01) per fully diluted share, compared to a net loss of $1.0 million, or ($0.02) per fully diluted share, for the first quarter of 2013, and net income of $2.2 million, or $0.04 per fully diluted share, for the fourth quarter of 2013. |
First Quarter 2014 Non-GAAP Financial Detail
• | Non-GAAP net revenue was $48.9 million for the first quarter of 2014, compared to $44.9 million for the first quarter of 2013 and $59.7 million for the fourth quarter of 2013. |
◦ | Vertical Markets non-GAAP net revenue increased to $22.4 million, compared to $14.1 million in the first quarter of 2013 and $18.9 million in the fourth quarter of 2013. |
◦ | Server OEM non-GAAP net revenue decreased to $26.5 million, compared to $30.8 million in the first quarter of 2013 and $40.8 million in the fourth quarter of 2013. |
• | Non-GAAP gross margin for the first quarter of 2014 was 33.1%, up from 32.1% in the first quarter of 2013 and 31.7% in the fourth quarter of 2013. |
◦ | Vertical Markets non-GAAP gross margin was 43.4%, compared to 43.9% in the first quarter of 2013 and 38.7% in the fourth quarter of 2013. |
◦ | Server OEM non-GAAP gross margin was 24.4%, compared to 26.7% in the first quarter of 2013 and 28.4% in the fourth quarter of 2013. The decrease in gross margin for the segment is primarily due to allocation of fixed supply chain overhead costs over a smaller revenue base. |
• | Non-GAAP operating expenses for the first quarter of 2014 were $15.1 million, compared to $14.3 million for the first quarter of 2013 and $14.8 million in the fourth quarter of 2013. |
• | Non-GAAP contribution margin, which excludes research and development, general and administrative and certain corporate sales and marketing expenses, for the first quarter of 2014 was 26.6%, compared to 25.4% in the first quarter of 2013 and 25.7% in the fourth quarter of 2013. |
◦ | Vertical Markets non-GAAP contribution margin for the first quarter of 2014 was 33.6%, compared to 29.4% in the first quarter of 2013 and 26.7% in the fourth quarter of 2013. |
◦ | Server OEM non-GAAP contribution margin for the first quarter of 2014 was 22.7%, compared to 25.4% in the first quarter of 2013 and 27.1% in the fourth quarter of 2013. |
• | Non-GAAP net income for the first quarter of 2014 was $1.0 million, or $0.02 per fully diluted share, compared to $0.0 million or $0.00 per share, for the first quarter of 2013, and $4.2 million, or $0.07 per fully diluted share, for the fourth quarter of 2013. |
Balance Sheet and Cash
The company exited the first quarter of 2014 with cash and cash equivalents of $40.3 million with no borrowings. This compares to $40.3 million at the end of the first quarter of 2013, with $2.8 million in borrowings, and $40.4 million at the end of the fourth quarter of 2013, with $2.0 million in borrowings.
Exhibit 99.1
Second Quarter and Full Year 2014 Outlook
Non-GAAP net revenue and fully diluted earnings per share for the second quarter of 2014 are expected to be in the range of $49 million to $54 million and $0.01 to $0.04, respectively.
“We had a solid start to 2014, with revenue within guidance and EPS above guidance during the first quarter,” said Hanif Jamal, chief financial officer, Dot Hill Systems Corp. “More importantly, we crossed a critical milestone in our transformation that started in 2010 with the launch of our Vertical Markets strategy, with gross and contribution margin dollars from our Vertical Markets segment exceeding those from our core and legacy Server OEM business for the very first time.”
Conference Call Information
Dot Hill's first quarter financial results conference call is scheduled to take place on Thursday, May 8, 2014 at 11:00 am ET. Please join the Company for a live audio webcast at www.dothill.com in the Investor Relations section, or via telephone, please dial 877-303-3196 (U.S.) or 408-427-3864 (International) at least five minutes prior to the start of the call. A replay of the webcast is scheduled to be available for one week on the Dot Hill web site following the conference call. For a telephone replay, dial 855-859-2056 (U.S.) or 404-537-3406 (International) and enter conference ID# 30178058.
About Non-GAAP Financial Measures
The Company’s non-GAAP financial measures exclude the impact of stock-based compensation expense, legal settlements and associated expenses, intangible asset amortization, restructuring and severance charges, charges or credits for contingent consideration adjustments, charges for impairment of goodwill and other long-lived assets, specific and significant warranty claims arising from a supplier’s defective products, the impact of our discontinued AssuredUVS software business and the effects of foreign currency gains or losses. The non-GAAP financial measures include the recognition of revenues and directly related costs associated with long-term AssuredVRA software contracts, which were deferred and amortized in the Company’s GAAP financial statements. The Company used these non-GAAP measures when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. These non-GAAP measures should not be viewed in isolation from or as a substitute for the Company’s financial results in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures is attached to this press release.
About Segment Financial Reporting
The Server OEM segment consists primarily of large Original Equipment Manufacturers who purchase products from the Company to sell along with their Server products. Major Server OEM customers include Hewlett Packard, Lenovo, Stratus, Dell, and AMD. The Vertical Markets segment consists of strategically selected Vertical Markets including Media & Entertainment, Telecommunications Infrastructure, Oil and Gas, Big Data Analytics and Digital Imaging among others. These customers typically embed the Company’s products into solutions for their customers. The Company sells to these customers through both Vertical Markets OEM partners or Embedded Solutions Integrators, as well as through Channel Partners. Major Vertical Markets customers include Teradata, CGG, Motorola, Tektronix, Samsung, Concurrent, Autodesk, and Nokia Siemens. The Corporate segment consists primarily of “platform costs” that support both the Server OEM and Vertical Markets segments
Exhibit 99.1
About Dot Hill
Leveraging its proprietary Assured family of storage solutions, Dot Hill solves many of today’s most challenging storage problems - helping IT to improve performance, increase availability, simplify operations, and reduce costs. Dot Hill’s solutions combine breakthrough software with the industry’s most flexible and extensive hardware platform and automated management to deliver best-in-class solutions. Headquartered in Longmont, Colorado, Dot Hill has offices and/or representatives in China, Germany, India, Japan, Singapore, the United Kingdom, and the United States. For more information, visit www.dothill.com
Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include statements regarding future opportunities for additional business and the stage of such opportunities relative to a final binding agreement, prospects for Dot Hill’s continued growth, and Dot Hill’s projected financial results for the second quarter of 2014. The risks that contribute to the uncertain nature of the forward-looking statements include, among other things: the risk that actual financial results for the second quarter of 2014 may be different from the financial guidance provided in this press release; the risks associated with macroeconomic factors that are outside of Dot Hill’s control; the risk that projected future opportunities may never fully develop into ongoing business relationships and/or binding contractual agreements; the fact that no Dot Hill customer agreements provide for mandatory minimum purchase requirements; the risk that one or more of Dot Hill’s OEM or other customers may cancel or reduce orders, not order as forecasted or terminate their agreements with Dot Hill; the risk that Dot Hill’s new products may not prove to be popular; the risk that one or more of Dot Hill’s suppliers or subcontractors may fail to perform or may terminate their agreements with Dot Hill; the risk that vertical markets’ sales may not ramp as expected; unforeseen product quality, technological, intellectual property, personnel or engineering issues and any costs that may result from such issues; and the additional risks set forth in Dot Hill’s most recent Form 10-Q and Form10-K filings with the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made. Dot Hill undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.
HILL-F
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2013 | December 31, 2013 | March 31, 2014 | |||||||||
Net revenue | $ | 44,480 | $ | 58,799 | $ | 48,207 | |||||
Cost of goods sold | 30,040 | 41,049 | 32,942 | ||||||||
Gross profit | 14,440 | 17,750 | 15,265 | ||||||||
Operating expenses: | |||||||||||
Research and development | 8,713 | 8,739 | 9,476 | ||||||||
Sales and marketing | 3,108 | 3,643 | 3,294 | ||||||||
General and administrative | 3,137 | 3,242 | 2,898 | ||||||||
Total operating expenses | 14,958 | 15,624 | 15,668 | ||||||||
Operating income (loss) | (518 | ) | 2,126 | (403 | ) | ||||||
Other income (expense): | |||||||||||
Interest income (expense), net | (7 | ) | — | (18 | ) | ||||||
Other income (expense), net | (1 | ) | (22 | ) | 10 | ||||||
Total other income (expense), net | (8 | ) | (22 | ) | (8 | ) | |||||
Income (loss) before income taxes and discontinued operations | (526 | ) | 2,104 | (411 | ) | ||||||
Income tax expense (benefit) | 34 | (132 | ) | 1 | |||||||
Income (loss) from continuing operations | (560 | ) | 2,236 | (412 | ) | ||||||
Loss from discontinued operations | (421 | ) | (24 | ) | — | ||||||
Net income (loss) | $ | (981 | ) | $ | 2,212 | $ | (412 | ) | |||
Continuing operations: | |||||||||||
Basic and diluted earnings (loss) per share | $ | (0.01 | ) | $ | 0.04 | $ | (0.01 | ) | |||
Discontinued operations: | |||||||||||
Basic and diluted loss per share | $ | (0.01 | ) | $ | (0.00 | ) | $ | — | |||
Net income (loss): | |||||||||||
Basic and diluted income (loss) per share* | $ | (0.02 | ) | $ | 0.04 | $ | (0.01 | ) | |||
Weighted average shares used to calculate net income (loss) per share: | |||||||||||
Basic | 58,001 | 58,948 | 59,678 | ||||||||
Diluted | 58,001 | 60,867 | 59,678 | ||||||||
* Per share data may not always add to the total for the period because each figure is independently calculated. |
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except par value data) | |||||||
December 31, 2013 | March 31, 2014 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 40,406 | $ | 40,322 | |||
Accounts receivable, net | 42,907 | 33,672 | |||||
Inventories | 6,539 | 7,664 | |||||
Prepaid expenses and other assets | 7,265 | 6,106 | |||||
Total current assets | 97,117 | 87,764 | |||||
Property and equipment, net | 7,565 | 8,197 | |||||
Other assets | 702 | 625 | |||||
Total assets | $ | 105,384 | $ | 96,586 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 33,255 | $ | 26,259 | |||
Accrued compensation | 4,922 | 3,527 | |||||
Accrued expenses | 8,935 | 7,994 | |||||
Deferred revenue | 4,211 | 5,012 | |||||
Credit facility borrowings | 2,000 | — | |||||
Total current liabilities | 53,323 | 42,792 | |||||
Other long-term liabilities | 4,414 | 4,229 | |||||
Total liabilities | 57,737 | 47,021 | |||||
Stockholders' equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 59 | 60 | |||||
Additional paid-in capital | 330,103 | 332,462 | |||||
Accumulated other comprehensive loss | (3,254 | ) | (3,284 | ) | |||
Accumulated deficit | (279,261 | ) | (279,673 | ) | |||
Total stockholders' equity | 47,647 | 49,565 | |||||
Total liabilities and stockholders' equity | $ | 105,384 | $ | 96,586 |
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(INCLUDES RESULTS FROM BOTH DISCONTINUED AND CONTINUING OPERATIONS) | |||||||||||
(In thousands) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2013 | December 31, 2013 | March 31, 2014 | |||||||||
Cash Flows From Operating Activities: | |||||||||||
Net income (loss) | $ | (981 | ) | $ | 2,212 | $ | (412 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 709 | 810 | 959 | ||||||||
Stock-based compensation expense | 668 | 773 | 578 | ||||||||
Write off of fixed assets | — | 23 | — | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 2,521 | (12,770 | ) | 9,240 | |||||||
Inventories | 91 | (106 | ) | (1,122 | ) | ||||||
Prepaid expenses and other assets | (266 | ) | (627 | ) | 1,238 | ||||||
Accounts payable | 456 | 6,564 | (7,112 | ) | |||||||
Accrued compensation and other expenses | (3,074 | ) | 972 | (2,809 | ) | ||||||
Deferred revenue | 682 | (2 | ) | 799 | |||||||
Other long-term liabilities | 142 | 1,030 | (252 | ) | |||||||
Net cash provided by (used in) operating activities | 948 | (1,121 | ) | 1,107 | |||||||
Cash Flows From Investing Activities: | |||||||||||
Purchases of property and equipment | (1,195 | ) | (717 | ) | (995 | ) | |||||
Net cash used in investing activities | (1,195 | ) | (717 | ) | (995 | ) | |||||
Cash Flows From Financing Activities: | |||||||||||
Payments on bank borrowings | (2,800 | ) | — | (2,000 | ) | ||||||
Proceeds from bank borrowings | 2,800 | 2,000 | — | ||||||||
Shares withheld for tax purposes | (114 | ) | (1 | ) | (72 | ) | |||||
Proceeds from sale of stock to employees | 387 | 254 | 1,854 | ||||||||
Net cash provided by (used in) financing activities | 273 | 2,253 | (218 | ) | |||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (44 | ) | (366 | ) | 22 | ||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (18 | ) | 49 | (84 | ) | ||||||
Cash and Cash Equivalents, beginning of period | 40,315 | 40,357 | 40,406 | ||||||||
Cash and Cash Equivalents, end of period | $ | 40,297 | $ | 40,406 | $ | 40,322 | |||||
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | |||||||||||
Capital assets acquired but not paid | $ | 489 | $ | 369 | $ | 995 | |||||
Supplemental Cash Flow Data: | |||||||||||
Cash paid (refund) for income taxes | $ | 17 | $ | (3 | ) | $ | 195 |
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2013 | December 31, 2013 | March 31, 2014 | |||||||||
GAAP net revenue from continuing operations | $ | 44,480 | $ | 58,799 | $ | 48,207 | |||||
Revenue from discontinued operations | 20 | 10 | — | ||||||||
Net revenue, from continuing and discontinued operations | $ | 44,500 | $ | 58,809 | $ | 48,207 | |||||
AssuredUVS revenue | (20 | ) | (10 | ) | — | ||||||
Long-term software contract royalties | 401 | 942 | 653 | ||||||||
Non-GAAP net revenue | $ | 44,881 | $ | 59,741 | $ | 48,860 | |||||
GAAP gross profit from continuing operations | $ | 14,440 | $ | 17,750 | $ | 15,265 | |||||
Gross margin % from continuing operations | 32.5 | % | 30.2 | % | 31.7 | % | |||||
Gross profit from discontinued operations | (111 | ) | 10 | — | |||||||
Gross profit from continuing and discontinued operations | 14,329 | 17,760 | 15,265 | ||||||||
Gross margin % from continuing and discontinued operations | 32.2 | % | 30.2 | % | 31.7 | % | |||||
Stock-based compensation | 96 | 80 | 64 | ||||||||
Severance costs | 23 | — | 73 | ||||||||
Power supply component failures | (808 | ) | 75 | — | |||||||
AssuredUVS revenue | (20 | ) | (10 | ) | — | ||||||
AssuredUVS expenses | 129 | — | — | ||||||||
Long-term software contract royalties | 401 | 942 | 653 | ||||||||
Long-term software contract costs | 256 | 90 | 123 | ||||||||
Non-GAAP gross profit | $ | 14,406 | $ | 18,937 | $ | 16,178 | |||||
Non-GAAP gross margin % | 32.1 | % | 31.7 | % | 33.1 | % | |||||
GAAP operating expenses from continuing operations | $ | 14,958 | $ | 15,624 | $ | 15,668 | |||||
Operating expenses from discontinued operations | 310 | 33 | — | ||||||||
Operating expenses from continuing and discontinued operations | $ | 15,268 | $ | 15,657 | $ | 15,668 | |||||
Currency (loss) gain | (343 | ) | (152 | ) | 73 | ||||||
Stock-based compensation | (572 | ) | (693 | ) | (514 | ) | |||||
AssuredUVS expenses | (353 | ) | (8 | ) | — | ||||||
Long-term software contract deferred costs | 400 | 29 | — | ||||||||
Restructuring (charge) recoveries | 10 | (11 | ) | — | |||||||
Legal fees related to power supply component failure | (1 | ) | — | — | |||||||
Severance costs | (82 | ) | (7 | ) | (83 | ) | |||||
Non-GAAP operating expenses | $ | 14,327 | $ | 14,815 | $ | 15,144 | |||||
Exhibit 99.1
GAAP net income (loss) from continuing operations | $ | (560 | ) | $ | 2,236 | $ | (412 | ) | |||
Net loss from discontinued operations | (421 | ) | (24 | ) | — | ||||||
Net income (loss) from continuing and discontinued operations | $ | (981 | ) | $ | 2,212 | $ | (412 | ) | |||
Currency loss (gain) | 343 | 152 | (73 | ) | |||||||
Stock-based compensation | 668 | 773 | 578 | ||||||||
Restructuring charge (recoveries) | (10 | ) | 11 | — | |||||||
Power supply component failures | (807 | ) | 75 | — | |||||||
AssuredUVS expenses | 482 | 8 | — | ||||||||
AssuredUVS revenue | (20 | ) | (10 | ) | — | ||||||
Other income | — | — | (10 | ) | |||||||
Long-term software contract royalties | 401 | 942 | 653 | ||||||||
Long-term software contract costs | 256 | 90 | 123 | ||||||||
Long-term software contract deferred costs | (400 | ) | (29 | ) | — | ||||||
Severance costs | 105 | 7 | 156 | ||||||||
Non-GAAP net income (loss) | $ | 37 | $ | 4,231 | $ | 1,015 | |||||
Non-GAAP net income (loss) per share | |||||||||||
Basic and diluted | $ | — | $ | 0.07 | $ | 0.02 | |||||
Weighted average shares used to calculate net income per share: | |||||||||||
Basic | 58,001 | 58,948 | 59,678 | ||||||||
Diluted | 58,473 | 60,867 | 63,912 | ||||||||
Non-GAAP net income (loss) | $ | 37 | $ | 4,231 | $ | 1,015 | |||||
Interest expense (income) less AssuredUVS | 7 | (2 | ) | 18 | |||||||
Income tax expense (benefit) | 34 | (132 | ) | 1 | |||||||
Depreciation less AssuredUVS | 706 | 810 | 959 | ||||||||
Non-GAAP EBITDA | $ | 784 | $ | 4,907 | $ | 1,993 |
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR SERVER OEM SEGMENT | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2013 | December 31, 2013 | March 31, 2014 | |||||||||
Server OEM net revenue from continuing operations | $ | 30,383 | $ | 39,889 | $ | 25,854 | |||||
Long-term software contract royalties | 401 | 942 | 653 | ||||||||
Server OEM Non-GAAP net revenue | $ | 30,784 | $ | 40,831 | $ | 26,507 | |||||
Server OEM gross profit from continuing operations | $ | 8,283 | $ | 10,445 | $ | 5,604 | |||||
Server OEM gross margin % from continuing operations | 27.3 | % | 26.2 | % | 21.7 | % | |||||
Server OEM gross profit from discontinued operations | — | — | — | ||||||||
Server OEM gross profit from continuing and discontinued operations | 8,283 | 10,445 | 5,604 | ||||||||
Server OEM gross margin % from continuing and discontinued operations | 27.3 | % | 26.2 | % | 21.7 | % | |||||
Stock-based compensation | 78 | 59 | 41 | ||||||||
Severance costs | 14 | — | 47 | ||||||||
Power supply component failures | (808.0 | ) | 75.0 | — | |||||||
Long-term software contract royalties | 401 | 942 | 653 | ||||||||
Long-term software contract costs | 256 | 90 | 123 | ||||||||
Server OEM non-GAAP gross profit | $ | 8,224 | $ | 11,611 | $ | 6,468 | |||||
Server OEM Non-GAAP gross margin % | 26.7 | % | 28.4 | % | 24.4 | % | |||||
Server OEM selling and marketing expenses from continuing operations | $ | 435 | $ | 569 | $ | 482 | |||||
Server OEM contribution margin from continuing operations | $ | 7,848 | $ | 9,876 | $ | 5,122 | |||||
Server OEM contribution % from continuing operations | 25.8 | % | 24.8 | % | 19.8 | % | |||||
Stock-based compensation | (16.0 | ) | (13.0 | ) | (15.0 | ) | |||||
Severance costs | (1 | ) | — | (9 | ) | ||||||
Server OEM non-GAAP selling and marketing expenses | $ | 418 | $ | 556 | $ | 458 | |||||
Server OEM non-GAAP contribution margin | $ | 7,806 | $ | 11,055 | $ | 6,010 | |||||
Server OEM Non-GAAP contribution margin % | 25.4 | % | 27.1 | % | 22.7 | % | |||||
Server OEM operating income for continuing operations | $ | 7,848 | $ | 9,876 | $ | 5,122 | |||||
Server OEM operating income (loss) for discontinued continuing operations | — | — | — | ||||||||
Server OEM operating income for continuing and discontinued operations | $ | 7,848 | $ | 9,876 | $ | 5,122 | |||||
Stock-based compensation | 94 | 72 | 56 | ||||||||
Severance costs | 15 | — | 56 | ||||||||
Power supply component failures | (808 | ) | 75 | — | |||||||
Long-term software contract royalties | 401 | 942 | 653 | ||||||||
Long-term software contract costs | 256 | 90 | 123 | ||||||||
Server OEM non-GAAP operating income | $ | 7,806 | $ | 11,055 | $ | 6,010 |
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR VERTICAL MARKETS SEGMENT | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2013 | December 31, 2013 | March 31, 2014 | |||||||||
Vertical Markets net revenue from continuing operations | $ | 14,097 | $ | 18,910 | $ | 22,353 | |||||
Revenue from discontinued operations | 20 | 10 | — | ||||||||
Vertical Markets net revenue, from continuing and discontinued operations | $ | 14,117 | $ | 18,920 | $ | 22,353 | |||||
AssuredUVS revenue | (20 | ) | (10 | ) | — | ||||||
Vertical Markets Non-GAAP net revenue | $ | 14,097 | $ | 18,910 | $ | 22,353 | |||||
Vertical Markets gross profit from continuing operations | $ | 6,157 | $ | 7,305 | $ | 9,661 | |||||
Vertical Markets gross margin % from continuing operations | 43.7 | % | 38.6 | % | 43.2 | % | |||||
Vertical Markets gross profit from discontinued operations | (111.0 | ) | 10.0 | — | |||||||
Vertical Markets gross profit from continuing and discontinued operations | 6,046 | 7,315 | 9,661 | ||||||||
Vertical Markets gross margin % from continuing and discontinued operations | 42.8 | % | 38.7 | % | 43.2 | % | |||||
Stock-based compensation | 18.0 | 21.0 | 23.0 | ||||||||
Severance costs | 9 | — | 26 | ||||||||
AssuredUVS revenue | (20 | ) | (10 | ) | — | ||||||
AssuredUVS expenses | 129 | — | — | ||||||||
Vertical Markets non-GAAP gross profit | $ | 6,182 | $ | 7,326 | $ | 9,710 | |||||
Vertical Markets Non-GAAP gross margin % | 43.9 | % | 38.7 | % | 43.4 | % | |||||
Vertical Markets selling and marketing expenses from continuing operations | $ | 2,080 | $ | 2,302 | $ | 2,254 | |||||
Vertical Markets contribution margin from continuing operations | $ | 4,077 | $ | 5,003 | $ | 7,407 | |||||
Vertical Markets contribution % from continuing operations | 28.9 | % | 26.5 | % | 33.1 | % | |||||
Stock-based compensation | (35 | ) | (28 | ) | (33 | ) | |||||
Severance costs | (2 | ) | — | (19 | ) | ||||||
Vertical Markets non-GAAP selling and marketing expenses | $ | 2,043 | $ | 2,274 | $ | 2,202 | |||||
Vertical Markets non-GAAP contribution margin | $ | 4,139 | $ | 5,052 | $ | 7,508 | |||||
Vertical Markets Non-GAAP contribution margin % | 29.4 | % | 26.7 | % | 33.6 | % | |||||
Vertical Markets operating income for continuing operations | $ | 4,077 | $ | 5,003 | $ | 7,407 | |||||
Vertical Markets operating income (loss) for discontinued continuing operations | (111 | ) | 10 | — | |||||||
Vertical Markets operating income for continuing and discontinued operations | 3,966 | 5,013 | 7,407 | ||||||||
Stock-based compensation | 53 | 49 | 56 | ||||||||
Severance costs | 11 | — | 45 | ||||||||
AssuredUVS revenue | (20 | ) | (10 | ) | — | ||||||
AssuredUVS expenses | 129 | — | — | ||||||||
Vertical Markets non-GAAP operating income | $ | 4,139 | $ | 5,052 | $ | 7,508 |
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR CORPORATE SEGMENT | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2013 | December 31, 2013 | March 31, 2014 | |||||||||
Corporate selling and marketing expenses from continuing operations | $ | 593 | $ | 772 | $ | 558 | |||||
Corporate contribution margin from continuing operations | $ | (593 | ) | $ | (772 | ) | $ | (558 | ) | ||
Stock-based compensation | (25 | ) | (21 | ) | (24 | ) | |||||
Severance costs | (2 | ) | — | (14 | ) | ||||||
Corporate non-GAAP selling and marketing expenses | $ | 566 | $ | 751 | $ | 520 | |||||
Corporate non-GAAP contribution margin | $ | (566 | ) | $ | (751 | ) | $ | (520 | ) | ||
Corporate expenses from continuing operations (Research & Development and General & Administrative) | $ | 11,850.0 | $ | 11,981.0 | $ | 12,374.0 | |||||
Corporate expenses from discontinued operations | 310 | 33 | — | ||||||||
Corporate expenses from continuing and discontinued operations | $ | 12,160 | $ | 12,014 | $ | 12,374 | |||||
Currency loss (gain) | (343.0 | ) | (152.0 | ) | 73.0 | ||||||
Stock-based compensation | (496 | ) | (631 | ) | (442 | ) | |||||
AssuredUVS expenses | (353 | ) | (8 | ) | — | ||||||
Long-term software contract deferred costs | 400 | 29 | — | ||||||||
Restructuring (charge) recoveries | 10 | (11 | ) | — | |||||||
Legal fees related to power supply component failure | (1 | ) | — | — | |||||||
Severance costs | (77 | ) | (7 | ) | (41 | ) | |||||
Non-GAAP corporate expenses | $ | 11,300 | $ | 11,234 | $ | 11,964 | |||||
Corporate operating loss for continuing operations | $ | (12,443.0 | ) | $ | (12,753.0 | ) | $ | (12,932.0 | ) | ||
Corporate operating loss from discontinued operations | (310 | ) | (33 | ) | — | ||||||
Corporate operating loss from continuing and discontinued operations | $ | (12,753 | ) | $ | (12,786 | ) | $ | (12,932 | ) | ||
Currency loss (gain) | 343 | 152 | (73 | ) | |||||||
Stock-based compensation | 521 | 652 | 466 | ||||||||
AssuredUVS expenses | 353 | 8 | — | ||||||||
Long-term software contract deferred costs | (400 | ) | (29 | ) | — | ||||||
Restructuring (charge) recoveries | (10 | ) | 11 | — | |||||||
Legal fees related to power supply component failure | 1 | — | — | ||||||||
Severance costs | 79 | 7 | 55 | ||||||||
Corporate non-GAAP operating loss | $ | (11,866 | ) | $ | (11,985 | ) | $ | (12,484 | ) |
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES | |||||||||||
(In thousands, except per share amounts) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2013 | December 31, 2013 | March 31, 2014 | |||||||||
GAAP earnings (loss) per share from continuing operations | $ | (0.01 | ) | $ | 0.04 | $ | (0.01 | ) | |||
Loss per share from discontinued operations | (0.01 | ) | (0.00 | ) | — | ||||||
Earnings (loss) per share from continuing and discontinued operations* | $ | (0.02 | ) | $ | 0.04 | $ | (0.01 | ) | |||
Currency loss | 0.01 | 0.00 | (0.00 | ) | |||||||
Stock-based compensation | 0.01 | 0.01 | 0.01 | ||||||||
AssuredUVS expenses | 0.01 | 0.00 | — | ||||||||
Long-term software contract royalties | 0.01 | 0.02 | 0.01 | ||||||||
Long-term software contract costs | 0.00 | 0.00 | 0.00 | ||||||||
Long-term software contract deferred costs | (0.01 | ) | (0.00 | ) | — | ||||||
Other adjustments | (0.01 | ) | 0.00 | 0.01 | |||||||
Non-GAAP earnings per share* | $ | 0.00 | $ | 0.07 | $ | 0.02 | |||||
Weighted average shares used to calculate earnings per share: | |||||||||||
Basic | 58,001 | 58,948 | 59,678 | ||||||||
Diluted | 58,473 | 60,867 | 63,912 | ||||||||
* Per share data may not always add to the total for the period because each figure is independently calculated. |