ACADEMIA
Super Micro Computer sales up 42 percent
Fiscal 2nd Quarter Highlights
- Quarterly net sales of $182.0 million, up 22.5% from the first quarter of fiscal year 2010 and up 41.5% from the same quarter of last year.
- Net income of $7.6 million, up 96.8% from the first quarter of fiscal year 2010 and up 42.2% from the same quarter of last year.
- Gross margin of 16.7%, comparable to 16.5% in the first quarter of fiscal year 2010 and down from 18.7% from the same quarter of last year.
- Server Solutions accounted for 36.0% of net sales compared with 34.5% in the first quarter of fiscal year 2010 and 41.0% in the same quarter of last year.
Net sales for the second quarter ended December 31, 2009 totaled $182.0 million, up 41.5% from $128.6 million in the second quarter of fiscal year 2009. No customer accounted for more than 10% of net sales during the quarter.
Net income for the second quarter of fiscal year 2010 was $7.6 million or $0.19 per diluted common share, an increase of 42.2% from the net income of $5.3 million, or $0.14 per diluted common share in the same period a year ago. Included in net income for the quarter was $1.7 million of stock-based compensation expense (pre-tax). Excluding stock-based compensation expense and the related tax effect, non-GAAP net income for the second quarter was $9.2 million, or $0.22 per diluted common share, compared to non-GAAP net income of $6.7 million, or $0.17 per diluted common share, in the same quarter of last year. On a sequential basis, non-GAAP net income increased from the first quarter of fiscal year 2010 by $3.4 million or $0.07 per diluted common share.
Gross margin for the second quarter was 16.7%, compared to 18.7% in the same period a year ago. Non-GAAP gross margin for the second quarter was 16.7% compared to 18.9% in the same period a year ago. Non-GAAP gross margin was 16.6% for the first quarter of fiscal year 2010.
The Company's cash and cash equivalents, short and long term investments at December 31, 2009 were $88.9 million compared to $85.2 million at September 30, 2009. Free cash flow in the six months ended December 31, 2009 was $9.9 million.
Business Outlook & Management Commentary
The Company expects net sales of $175 million to $185 million for the third quarter of fiscal year 2010 ending March 31, 2010. The industry has historically seen a seasonally lower rate of growth in net sales in the fiscal third quarter. This quarter we have a good boost because of our very strong new product innovations, additional new market segment wins and a recovering economy offset in part by seasonality and the transition to new products. The Company expects non-GAAP earnings per diluted common share of approximately $0.18 to $0.21 for the third quarter.
“Our second quarter was a record quarter for Supermicro and we grew 22.5% from the prior quarter, continuing our momentum of growth and profitability as the global economy recovers. Our growth is a result of the strongest and most extensive product lines that we have ever had at Supermicro, which enables us to be more competitive and gain more market share in larger deployment deals. Supermicro continues to benefit from our offerings that our customers value in this economy, especially maximizing performance per watt and per dollar. We continue to extend the Supermicro brand as a technology leader. Our pipeline of technology innovations and our rapid product development ability make us feel very confident that we are in the technology leading position in the industry,” said Charles Liang, President and Chief Executive Officer of Super Micro Computer.
It is currently expected that the outlook will be released at the Company’s next quarterly earnings announcement, notwithstanding subsequent developments. The Company may update the outlook or any portion thereof at any time. Such updates will take place only by way of a news release or other broadly disseminated disclosure available to all interested parties in accordance with Regulation FD.
Conference Call Information
Super Micro Computer will discuss these financial results in a conference call at 2:00 p.m. PT, today. To participate in the conference, please call 888-791-4309 (international callers dial 913-312-0826) 10 minutes prior. A recording of the conference will be available until 11:59 p.m. ET on Tuesday, January 26, 2010 by dialing 888-203-1112 (international callers dial 719-457-0820) and entering replay PIN6448603. The live web cast and recording of the call will be available on the Investor Relations section at www.supermicro.com two hours after the conference conclusion. They will remain available until the Company's next earnings call.