Exhibit 99.1
Super Micro Computer, Inc.
Announces Fiscal 2007 3rd Quarter Financial Results
SAN JOSE, Calif.--(BUSINESS WIRE)--May 9, 2007--Super Micro
Computer, Inc. (NASDAQ:SMCI), a leader in application optimized, high
performance server solutions, today announced financial results for
the third quarter of fiscal year 2007. This marked the Company's first
reporting of quarterly financial results since its initial public
offering on March 29, 2007.
Q3 Fiscal 2007 Highlights
Quarterly revenue of $105.7 million, up 39% compared to Q3 FY06
Net income of $4.1 million, or $0.13 per diluted share, up $0.02
compared to Q3 FY06
Server Solutions accounted for 37% of revenues, up from 35% in Q3
FY06
Introductions of new products including Universal Input/Output
servers.
"This quarter, we continued our tradition of innovation with the
addition of new products such as our Universal Input/Output ("UIO")
servers and their associated I/O carding including LSI 1068 SAS card,
Intel Sun Rise Lake SAS RAID 5 card and 4-port Gigabit Ethernet LAN
card. These products exemplify our commitment to empowering our
partners with the very best in server technology and providing them
with customizable configurations and optimizations for a wide range of
application requirements with exceptional scalability," said Charles
Liang, President and Chief Executive Officer of Super Micro Computer.
"Our continuing strong financial performance demonstrates how
customers value our innovative solutions which provide a much more
competitive price/performance ratio and reduce customers TCO."
Q3 Fiscal 2007 Financial Results
Net revenue for the third quarter ended March 31, 2007 was $105.7
million, up 39% from $75.9 million in the third quarter of fiscal year
2006. Net revenue from server solutions comprised 37% of net revenues,
up from 35% in the third quarter of fiscal year 2006. No customer
accounted for more than 10% of net revenues during the quarter.
Net income for the third quarter of fiscal year 2007 on a
generally accepted accounting principles (GAAP) basis was $4.1 million
or $0.13 per diluted share compared to net income of $3.6 million, or
$0.11 per diluted share in the same period a year ago. Included in
GAAP net income for the quarter was $0.7 million of stock-based
compensation expense. Excluding stock-based compensation expense and
related tax effect, non-GAAP net income for the third quarter was $4.5
million, or $0.14 per diluted share, compared to non-GAAP net income
of $3.8 million, or $0.12 per diluted share, in the same period a year
ago.
GAAP gross margin for the third quarter was 17.1%, compared to
19.5% in the same period a year ago. Non-GAAP gross margin for the
third quarter was 17.2% compared to 19.5% in the same period a year
ago. Third quarter of fiscal year 2007 gross margin was lower than the
same period a year ago due to lower margins on more mature products
offset in part by a higher mix of server revenue which had higher
margins than components. During the third quarter of fiscal year 2006,
the Company introduced and began delivering new products based on dual
core technology from Intel, which benefited gross margins.
Net revenue for the nine months ended March 31, 2007 was $309.4
million, up 46% from $212.5 million for the first nine months of
fiscal year 2006. GAAP net income for the first nine months of fiscal
year 2007 was $13.8 million or $0.43 per diluted share, compared to
$10.6 million or $0.34 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 nine months was $15.3
million or $0.47 per diluted share, compared to $11.2 million or $0.36
per diluted share in the same period a year ago.
The Company ended the quarter with $20.8 million in cash and cash
equivalents. On April 3, 2007, the Company received net proceeds of
approximately $43.6 million through the issuance of 6.4 million shares
from its initial public offering.
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
Super Micro Computer expects net revenue to be in the range of
$106 million to $111 million for the fiscal fourth quarter ending June
30, 2007.
Mr. Liang concluded, "We expect to see further growth through the
continued expansion of our already-broad product line, the additional
working capital and enhanced credibility provided by the IPO, and
continued diversity of our customers and markets we serve."
Conference Call Information
Super Micro Computer will discuss these financial results and its
outlook for the fourth quarter of fiscal 2007 in a conference call at
2:00 p.m. PT, today. Those wishing to participate in the conference
call should call 877-704-5378 (international callers dial
913-312-1292) a few minutes prior to registering. A replay of the call
will be available through Wednesday, May 16, (Midnight Eastern Time),
by dialing 888-203-1112 (international callers dial 719-457-0820) and
entering replay PIN 9094435. 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,
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 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)
March 31, June 30,
2007 2006
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 20,828 $ 16,509
Short-term investments - 53
Accounts receivable, net 32,777 22,252
Inventories, net 72,996 57,612
Deferred income taxes 3,440 3,440
Prepaid expenses and other current assets 5,339 1,311
--------- ---------
Total current assets 135,380 101,177
Property, plant, and equipment, net 31,165 29,605
Other assets 262 219
--------- ---------
Total assets $166,807 $131,001
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 66,177 $ 52,019
Accrued liabilities 14,348 8,891
Income tax payable 1,556 1,085
Accrued litigation loss - 575
Advances from receivable financing arrangements 944 800
Current portion of capital lease obligations 170 165
Current portion of long-term debt 645 616
--------- ---------
Total current liabilities 83,840 64,151
Deferred income taxes-noncurrent 300 398
Long-term capital lease obligations-net of
current portion 31 64
Long-term debt-net of current portion 18,134 18,621
--------- ---------
Total liabilities 102,305 83,234
--------- ---------
Stockholders' equity:
Common stock 12,616 10,536
Deferred stock compensation (1,746) (2,563)
Retained earnings 53,632 39,794
--------- ---------
Total stockholders' equity 64,502 47,767
--------- ---------
Total liabilities and stockholders' equity $166,807 $131,001
========= =========
SUPER MICRO COMPUTER, INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------- -------------------------
March 31, March 31, March 31, March 31,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net sales $ 105,659 $ 75,886 $ 309,448 $ 212,528
Cost of sales 87,592 61,100 254,381 171,557
------------ ------------ ------------ ------------
Gross profit 18,067 14,786 55,067 40,971
------------ ------------ ------------ ------------
Operating
expenses:
Research and
development 5,143 4,412 15,637 11,313
Sales and
marketing 3,485 2,324 8,968 7,070
General and
administrative 3,278 1,714 8,789 4,703
Provision for
(reversal of)
litigation
loss - 575 (120) 575
------------ ------------ ------------ ------------
Total operating
expenses 11,906 9,025 33,274 23,661
------------ ------------ ------------ ------------
Income from
operations 6,161 5,761 21,793 17,310
Interest income 69 64 190 179
Interest expense (369) (334) (1,040) (915)
Other income,net - 1 - 2
------------ ------------ ------------ ------------
Income before
income taxes
provision 5,861 5,492 20,943 16,576
Income tax
provision 1,790 1,906 7,105 5,979
------------ ------------ ------------ ------------
Net income $ 4,071 $ 3,586 $ 13,838 $ 10,597
============ ============ ============ ============
Net income per
share:
Basic $ 0.18 $ 0.16 $ 0.62 $ 0.48
============ ============ ============ ============
Diluted $ 0.13 $ 0.11 $ 0.43 $ 0.34
============ ============ ============ ============
Shares used in per
share
calculation:
Basic 22,277,339 21,971,132 22,226,460 21,964,218
============ ============ ============ ============
Diluted 32,434,182 32,048,534 32,373,284 30,804,738
============ ============ ============ ============
SUPER MICRO COMPUTER, INC
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(In thousands)
(Unaudited)
Nine Months Nine Months
Ended Ended
March 31, March 31,
2007 2006
-----------------------
OPERATING ACTIVITIES:
Net income $ 13,838 $ 10,597
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization 1,179 890
Stock-based compensation expense 1,673 849
Allowance for doubtful accounts 172 15
Allowance for sales returns 2,950 1,736
Loss on disposal of property and
equipment 2 1
Deferred income taxes (98) -
Gain on short-term investments - (8)
Changes in operating assets and
liabilities:
Accounts receivable, net (13,647) (8,958)
Inventories, net (15,384) (20,654)
Prepaid expenses and other current
assets (715) (278)
Accounts payable 14,177 26,601
Accrued litigation loss (575) 575
Accrued liabilities 5,457 1,283
Income tax payable 538 (2,629)
----------- -----------
Net cash provided by operating activities 9,567 10,020
----------- -----------
INVESTING ACTIVITIES:
Purchases of short-term investments - (51)
Other assets (43) (69)
Purchases of property and equipment (2,642) (10,471)
Proceeds from maturity of short-term
investments 53 1,826
----------- -----------
Net cash used in investing activities (2,632) (8,765)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from long-term debt - 8,939
Proceeds from exercise of stock options 1,157 345
Repayment of long-term debt (458) (2,522)
Payment of obligations under capital leases (137) (68)
Advances under receivable financing
arrangements 144 539
Payment of offering costs (3,322) -
----------- -----------
Net cash provided by (used in) financing
activities (2,616) 7,233
----------- -----------
Net increase in cash and cash equivalents 4,319 8,488
Cash and cash equivalents at beginning of year 16,509 11,170
----------- -----------
Cash and cash equivalents at end of year $ 20,828 $ 19,658
=========== ===========
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 852 $ 916
Cash paid for taxes 6,665 8,612
Non-cash investing and financing activities:
Equipment purchased under capital leases 109 155
Deferred stock-based compensation related to
stock option grants - 2,345
Reversals of deferred stock-based
compensation for cancellation of stock
options 133 28
Accrued costs for property and equipment
purchases 112 101
Accrued offering costs 706 -
SUPER MICRO COMPUTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended March 31, 2007
---------------------------------------
GAAP (a) Reconciling Non-GAAP (b)
Items
------------ ----------- ------------
Net sales $ 105,659 $ - $ 105,659
Cost of sales 87,592 (84)(c) 87,508
------------ ----------- ------------
Gross profit 18,067 84 18,151
------------ ----------- ------------
Operating expenses:
Research and development 5,143 (304)(c) 4,839
Sales and marketing 3,485 (81)(c) 3,404
General and administrative 3,278 (215)(c) 3,063
Provision for litigation
loss - - -
------------ ----------- ------------
Total operating expenses 11,906 (600) 11,306
------------ ----------- ------------
Income from operations 6,161 684 6,845
Interest income 69 - 69
Interest expense (369) - (369)
Other income, net - - -
------------ ----------- ------------
Income before income taxes
provision 5,861 684 6,545
Income tax provision 1,790 219 (d) 2,009
------------ ----------- ------------
Net income $ 4,071 $ 465 $ 4,536
============ =========== ============
Net income per share:
Basic $ 0.18 $ 0.20
============ ============
Diluted $ 0.13 $ 0.14
============ ============
Shares used in per share
calculation:
Basic 22,277,339 22,277,339
============ ============
Diluted 32,434,182 32,434,182
============ ============
Three Months Ended March 31, 2006
---------------------------------------
GAAP (a) Reconciling Non-GAAP (b)
Items
------------ ----------- ------------
Net sales $ 75,886 $ - $ 75,886
Cost of sales 61,100 (25)(c) 61,075
------------ ----------- ------------
Gross profit 14,786 25 14,811
------------ ----------- ------------
Operating expenses:
Research and development 4,412 (133)(c) 4,279
Sales and marketing 2,324 (75)(c) 2,249
General and administrative 1,714 (102)(c) 1,612
Provision for litigation
loss 575 575
------------ ----------- ------------
Total operating expenses 9,025 (310) 8,715
------------ ----------- ------------
Income from operations 5,761 335 6,096
Interest income 64 - 64
Interest expense (334) - (334)
Other income, net 1 - 1
------------ ----------- ------------
Income before income taxes
provision 5,492 335 5,827
Income tax provision 1,906 88 (d) 1,994
------------ ----------- ------------
Net income $ 3,586 $ 247 $ 3,833
============ =========== ============
Net income per share:
Basic $ 0.16 $ 0.17
============ ============
Diluted $ 0.11 $ 0.12
============ ============
Shares used in per share
calculation:
Basic 21,971,132 21,971,132
------------ ============
Diluted 32,048,534 32,048,534
============ ============
(a) Operating results based on accounting principles generally
accepted in the United States (GAAP).
(b) Non-GAAP amounts exclude amortization of stock-based compensation
and related tax effect.
(c) Amortization of SFAS No. 123R, APB 25 and SFAS No. 123 stock-based
compensation in Q3'07 and APB 25 and SFAS No. 123 stock-based
compensation in Q3'06.
(d) The provision of income taxes used in arriving at the non-GAAP net
income was computed using an income tax rate of 34.2% and 30.7% for
the three months ended March 31, 2006 and 2007, respectively.
SUPER MICRO COMPUTER, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except share and per share amounts)
(Unaudited)
Nine Months Ended March 31, 2007
-------------------------------------
GAAP (a) Reconciling Non-GAAP
Items (b)
----------- ----------- -----------
Net sales $309,448 $ - $309,448
Cost of sales 254,381 (168)(c) 254,213
----------- ----------- -----------
Gross profit 55,067 168 55,235
----------- ----------- -----------
Operating expenses:
Research and development 15,637 (785)(c) 14,852
Sales and marketing 8,968 (270)(c) 8,698
General and administrative 8,789 (450)(c) 8,339
Provision for (reversal of)
litigation loss (120) - (120)
----------- ----------- -----------
Total operating expenses 33,274 (1,505) 31,769
----------- ----------- -----------
Income from operations 21,793 1,673 23,466
Interest income 190 - 190
Interest expense (1,040) - (1,040)
Other income, net - - -
----------- ----------- -----------
Income before income taxes
provision 20,943 1,673 22,616
Income tax provision 7,105 175 (d) 7,280
----------- ----------- -----------
Net income $13,838 $1,498 $15,336
=========== =========== ===========
Net income per share:
Basic $0.62 $0.69
=========== ===========
Diluted $0.43 $0.47
=========== ===========
Shares used in per share
calculation:
Basic 22,226,460 22,226,460
=========== ===========
Diluted 32,373,284 32,373,284
=========== ===========
Nine Months Ended March 31, 2006
-------------------------------------
GAAP (a) Reconciling Non-GAAP
Items (b)
----------- ----------- -----------
Net sales $212,528 $ - $212,528
Cost of sales 171,557 (77)(c) 171,480
----------- ----------- -----------
Gross profit 40,971 77 41,048
----------- ----------- -----------
Operating expenses:
Research and development 11,313 (336)(c) 10,977
Sales and marketing 7,070 (193)(c) 6,877
General and administrative 4,703 (243)(c) 4,460
Provision for (reversal of)
litigation loss 575 575
----------- ----------- -----------
Total operating expenses 23,661 (772) 22,889
----------- ----------- -----------
Income from operations 17,310 849 18,159
Interest income 179 - 179
Interest expense (915) - (915)
Other income, net 2 - 2
----------- ----------- -----------
Income before income taxes
provision 16,576 849 17,425
Income tax provision 5,979 237 (d) 6,216
----------- ----------- -----------
Net income $10,597 $612 $11,209
=========== =========== ===========
Net income per share:
Basic $0.48 $0.51
=========== ===========
Diluted $0.34 $0.36
=========== ===========
Shares used in per share
calculation:
Basic 21,964,218 21,964,218
----------- ===========
Diluted 30,804,738 30,804,738
=========== ===========
(a) Operating results based on accounting principles generally
accepted in the United States (GAAP).
(b) Non-GAAP amounts exclude amortization of stock-based compensation
and related tax effect.
(c) Amortization of SFAS No. 123R, APB 25 and SFAS No. 123 stock-based
compensation for the nine months ended March 31, 2007 and APB 25 and
SFAS No. 123 stock-based compensation for the nine months ended March
31, 2006.
(d) The provision of income taxes used in arriving at the non-GAAP net
income was computed using an income tax rate of 35.7% and 32.2% for
the nine months ended March 31, 2006 and 2007, respectively.
CONTACT: 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