Super Micro Computer (SMCI) 8-K Super Micro Computer, Inc. Announces 1st Quarter Fiscal 2011 Financial Results

Supermicro

©

2009

GPU Solutions

Universal I/O

Double-Sided

Datacenter

Optimized

Twin Architecture

SuperBlade

®

Storage

Confidential

1st Quarter Fiscal 2011

Earnings Conference Presentation

October 26, 2010

Exhibit 99.2

Confidential

2

Safe Harbor Statement

This presentation contains forward-looking statements within the meaning of Section 27A of the

Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as

amended. These forward-looking statements may relate, among other things,  to our expected

financial and operating results, our ability to build and grow Supermicro, the benefit 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 markets

for X86 based servers, blade servers and embedded applications, increased competition, difficulties

of predicting timing of new product introductions, customer acceptance of new products, 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.

For a further list and description of risks and uncertainties, see the reports filed by Supermicro with

the Securities and Exchange Commission. Supermicro disclaims any

intention or obligation to update

or revise any forward-looking statements, whether as a result of new information, future events or

otherwise. Supplemental information, condensed balance sheets and statements of operations follow.

All monetary amounts are stated in U.S. dollars.

Confidential

3

Non-GAAP Financial Measures

Non-GAAP gross margin in this presentation excludes stock-based compensation expense. Non-

GAAP net income and net income per share in this presentation exclude stock-based compensation

expense, a provision for litigation costs 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 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 the press release that was issued

announcing the Company’s operating and financial results for the quarter ended September 30, 2010. 

In addition, a reconciliation from GAAP to non-GAAP results is contained in the financial summary

attached to today’s presentation and is available in the Investor Relations section of our website at

www.supermicro.com

in the Events and Presentations section. 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.

Confidential

4

Q1’FY2011 Non-GAAP Financial Highlights

(in millions, except per share data)

Q1'11

YoY

Sequential

Revenue

$207.2

39.5%

2.7%

Profit after Tax

$9.3

58.9%

2.1%

EPS

$0.22

46.7%

4.8%

Change

Confidential

5

Summary of Results

Another record for revenue with $207 million and 40%

higher than last year

In the seasonally weaker summer quarter we were pleased

to see a strong September, indicating a good upcoming

quarter

We grew in our overseas markets and particularly in the

Asia region

Our systems revenue increased to 36% of total revenue

Our margins improved and are moving in the right direction

Our growth strategy of expanding overseas and in new

markets is positioning us for future growth

Confidential

Leading Products

Twin Architecture

New -

2U Twin³

(8 nodes in 2U)

1U

Twin,

2U

Twin²,

2U

Twin

(6x

3.5”

HDD

or

12x

2.5”

HDD)

SuperBlade™

-

TwinBlade™

and

GPU

Blade

20/28

DP

nodes

in

7U,

support

40Gb/s

Infiniband

or

10G

Ethernet connectivity

GPU in blade, leverage Twin architecture

GPU optimized product lines (1U, 2U and 4U)

4 GPUs

in 1U project kick off!

Extreme performance for calculation-intensive applications

Scientific computation, imaging processing and CFD

(Computational Fluid Dynamic) simulation

IPC and Embedded Applications

Atom-based low power server: fan-less / long life cycle, for

embedded and server appliances

Twin Architectures

GPU-optimized

TwinBlade™

ATOM server

Industrial Solution

6

Confidential

Leading Products

New Generation 8-way/4-way Systems

Addressing (8-way) high-end high-margin solution

Boxboro-EX MP (Nehalem-EX) and G34 MP system in

1U/4U

Addressing HPC application needs as well as enterprise

market

Storage product line expansion

Super SBB product line

Higher density storage subsystems: Double-Sided

SuperRack

Double side access, cable management, water cooling

Switch Products: 10GbE, IB, FCoE

10GbE onboard and 10GbE standalone switch

FCoE

solution coming soon

Front

Back

Super-SBB

Double-Sided Storage

1U, 4U / 4-way

5U / 8-way

10GbE Switch

SuperRack

7

Confidential

8

Revenue Comparables

$149

$182

$189

$202

$207

$0

$40

$80

$120

$160

$200

$240

$'s millions

Q1'10

Q2'10

Q3'10

Q4'10

Q1'11

Supermicro Revenue Trend

Y/Y

3.1%

41.5%

72.8%

63.4%

39.5%

Seq.

20.3%

22.5%

4.0%

6.5%

2.7%

Confidential

9

Revenue Analysis

$-

$40

$80

$120

$160

$200

$240

Q1'10

Q2'10

Q3'10

Q4'10

Q1'11

$97

$117

$126

$137

$133

$51

$65

$63

$65

$74

$'s millions

Supermicro Subsystems/System Revenue

Subsystems

Systems

Confidential

10

Non-GAAP Gross Margins

16.6%

16.7%

15.5%

15.4%

16.0%

Q1'10

Q2'10

Q3'10

Q4'10

Q1'11

Confidential

11

Non-GAAP Gross Profit

$24.7

$30.5

$29.4

$31.1

$33.2

$-

Q1'10

Q2'10

Q3'10

Q4'10

Q1'11

Gross Profit

$'s millions

Confidential

12

Summary P&L non-GAAP

(in millions, except per share data)

Q1'11

YoY

Sequential

Q1'10

Q4'10

Operating Expense

$18.7

$3.1

$0.7

$15.6

$18.0

Operating Expense Ratio

9.0%

-1.5%

0.1%

10.5%

8.9%

Operating Income

$14.6

$5.5

$1.5

$9.1

$13.1

Net Income

$9.3

$3.4

$0.2

$5.8

$9.1

EPS

$0.22

$0.07

$0.01

$0.15

$0.21

Diluted Share  Count

42.7

40.1

43.7

Effective Quarterly

Tax Rate

35.8%

35.1%

30.2%

Change

Confidential

13

Q1 FY2011 YTD Summary Statement of Cash Flows

($’s millions)

3 Months Ended

3 Months Ended

30-Sep-10

30-Sep-09

Net Income

$7.2

$3.9

Depreciation and amortization

$1.3

$1.1

Stock comp expense (FAS 123R)

$1.8

$1.5

Other reserves

$3.4

$1.0

Net change in AR, Inventory, AP

$1.5

-$2.8

Other prepaids and liabilities

$1.7

$5.0

Cash flow from operations

$16.9

$9.7

Capital expenditures

-$7.2

-$0.7

Free cash flow

$9.7

$9.0

Net cash  - investing activities

$0.8

$3.4

Net cash - financing activities

$0.4

-$9.1

Net change in cash 

$10.9

$3.3

Confidential

14

Q1 FY 2011 Summary of Balance Sheet Metrics

($’s millions)

Q1'11

Q4'10

Change

Cash Equivalents & Investments

89.4

$        

79.4

$   

10.0

$  

Accounts Receivable

71.8

$        

73.0

$   

(1.2)

$   

Inventory

151.5

$      

135.6

$ 

15.9

$  

Accounts Payable

113.1

$      

95.4

$   

17.7

$  

DSO

32

31

1

DIO

76

75

1

DPO

55

54

1

Cash Cycle Days

53

52

1

Confidential

15

Supplemental Financials

First Quarter Fiscal 2011

Ended September 30, 2010

Confidential

16

Non-GAAP Financial Summary

(in millions, except per share data)

Q1'11

Q4'10

Q1'10

Net Sales

207.2

$    

201.7

$  

148.5

$ 

Non-GAAP Gross Margin

16.0%

15.4%

16.6%

Non-GAAP Operating Expenses

18.7

$      

18.0

$     

15.6

$    

Non-GAAP Operating Income

14.6

$      

13.1

$     

9.1

$      

Non-GAAP Net Income

9.3

$        

9.1

$       

5.8

$      

Non-GAAP Net Income per share

0.22

$      

0.21

$     

0.15

$    

Fully diluted shares for calculation

42.7

43.7

40.1

Confidential

17

Prior Period Net Income Comparisons

(in millions, except per share data)

Net Income (GAAP)

Net Income (Non-GAAP)

Diluted Net Income per common share (GAAP)

Diluted Net Income per share (Non-GAAP)

Shares used in diluted EPS calculation

Q1'11

Q4'10

Q1'10

7.2

$        

7.7

$        

3.9

$        

2.1

$        

1.4

$        

1.9

$        

9.3

$        

9.1

$        

5.8

$        

0.17

$      

0.18

$      

0.10

$      

0.05

$      

0.03

$      

0.05

$      

0.22

$      

0.21

$      

0.15

$      

42.7

43.7

40.1

FAS123R & Other Unusual Expense (tax affected)

FAS123R & Other Unusual Expense (tax affected)

Confidential

18

Q1 FY 2011 GAAP to Non-GAAP Reconciliation

(in millions, except per share data)

FAS123R &

Q1'11

Q1'11 GAAP

Other Unusual

Non-GAAP

Results

Expenses

Results

Net Sales

207.2

$         

-

$                 

207.2

$         

Cost of Sales

174.1

$         

0.2

$                   

173.9

$         

Gross Profit

33.0

$           

0.2

$                   

33.2

$           

Operating Expense

21.0

$           

2.4

$                   

18.7

$           

Operating Income

12.0

$           

2.6

$                   

14.6

$           

Interest, net

(0.1)

$            

-

$                 

(0.1)

$            

Income Before Tax

11.9

$           

2.6

$                   

14.4

$           

Income Tax

4.7

$              

(0.5)

$                

5.2

$              

Net Income

7.2

$              

2.1

$                   

9.3

$              

Diluted Net Income per share

0.17

$           

0.05

$               

0.22

$           

Diluted shares used in GAAP and

Non-GAAP per share calculation

41.4

42.7

42.7

Confidential

19

Q4 FY 2010 GAAP to Non-GAAP Reconciliation

(in millions, except per share data)

FAS123R &

Q4'10

Q4'10 GAAP

Other Unusual

Non-GAAP

Results

Expenses

Results

Net Sales

201.7

$         

-

$                 

201.7

$         

Cost of Sales

170.8

$         

0.2

$                   

170.6

$         

Gross Profit

30.9

$           

0.2

$                   

31.1

$           

Operating Expense

19.5

$           

1.5

$                   

18.0

$           

Operating Income

11.4

$           

1.7

$                   

13.1

$           

Interest, net

(0.1)

$            

-

$                 

(0.1)

$            

Income Before Tax

11.3

$           

1.7

$                   

13.0

$           

Income Tax

3.6

$              

(0.3)

$                

3.9

$              

Net Income

7.7

$              

1.4

$                   

9.1

$              

Diluted Net Income per share

0.18

$           

0.03

$               

0.21

$           

Diluted shares used in GAAP and

Non-GAAP per share calculation

42.2

43.7

43.7

Confidential

20

Q3 FY 2010 GAAP to Non-GAAP Reconciliation

(in millions, except per share data)

FAS123R &

Q3'10

Q3'10 GAAP

Other Unusual

Non-GAAP

Results

Expenses

Results

Net Sales

189.3

$         

-

$                 

189.3

$         

Cost of Sales

160.0

$         

0.1

$                   

159.9

$         

Gross Profit

29.3

$           

0.1

$                   

29.4

$           

Operating Expense

18.7

$           

1.4

$                   

17.3

$           

Operating Income

10.5

$           

1.5

$                   

12.1

$           

Interest, net

(0.0)

$            

-

$                 

(0.0)

$            

Income Before Tax

10.5

$           

1.5

$                   

12.0

$           

Income Tax

2.8

$              

(0.3)

$                

3.1

$              

Net Income

7.7

$              

1.2

$                   

8.9

$              

Diluted Net Income per share

0.18

$           

0.03

$               

0.21

$           

Diluted shares used in GAAP and

Non-GAAP per share calculation

41.7

43.3

43.3

Confidential

21

Q2 FY 2010 GAAP to Non-GAAP Reconciliation

(in millions, except per share data)

FAS123R &

Q2'10

Q2'10 GAAP

Other Unusual

Non-GAAP

Results

Expenses

Results

Net Sales

182.0

$         

-

$                 

182.0

$         

Cost of Sales

151.7

$         

0.2

$                   

151.5

$         

Gross Profit

30.3

$           

0.2

$                   

30.5

$           

Operating Expense

17.9

$           

1.5

$                   

16.4

$           

Operating Income

12.4

$           

1.7

$                   

14.1

$           

Interest, net

(0.1)

$            

-

$                 

(0.1)

$            

Income Before Tax

12.3

$           

1.7

$                   

14.0

$           

Income Tax

4.7

$              

(0.1)

$                

4.8

$              

Net Income

7.6

$              

1.6

$                   

9.2

$              

Diluted Net Income per share

0.19

$           

0.03

$               

0.22

$           

Diluted shares used in GAAP and

Non-GAAP per share calculation

39.8

41.5

41.5

Confidential

22

Q1 FY 2010 GAAP to Non-GAAP Reconciliation

(in millions, except per share data)

FAS123R &

Q1'10

Q1'10 GAAP

Other Unusual

Non-GAAP

Results

Expenses

Results

Net Sales

148.5

$        

-

$                 

148.5

$        

Cost of Sales

124.0

$        

0.1

$                  

123.9

$        

Gross Profit

24.5

$          

0.1

$                  

24.7

$          

Operating Expense

18.0

$          

2.5

$                  

15.6

$          

Operating Income

6.5

$             

2.6

$                  

9.1

$             

Interest, net

(0.1)

$           

-

$                 

(0.1)

$           

Income Before Tax

6.4

$             

2.6

$                  

9.0

$             

Income Tax

2.5

$             

0.7

$                  

3.1

$             

Net Income

3.9

$             

1.9

$                  

5.8

$             

Diluted Net Income per share

0.10

$          

0.05

$              

0.15

$          

Diluted shares used in GAAP and

Non-GAAP per share calculation

39.2

40.1

40.1