SCIENCE

Super Micro Computer announced fourth quarter and full-year financial results for the fiscal year ended June 30, 2011.

Fiscal 4th Quarter Highlights

-- Quarterly net sales of $260.3 million, up 11.1% from the third quarter of fiscal year 2011 and up 29.1% from the same quarter of last year.

-- Net income of $10.7 million, up 0.3% from the third quarter of fiscal year 2011 and up 39.1% from the same quarter of last year.

-- Gross margin of 15.4%, down from 16.2% in the third quarter of fiscal year 2011 and up 0.1% from the same quarter of last year.

-- Server Solutions accounted for 40.4% of net sales compared with 31.8% in the third quarter of fiscal year 2011 and 32.2% in the same quarter of last year.

Net sales for the fourth quarter ended June 30, 2011 totaled $260.3 million, up 29.1% from $201.7 million in the fourth quarter of fiscal year 2010. One customer accounted for more than 10% of net sales during the quarter ended June 30, 2011.

Net income for the fourth quarter of fiscal year 2011 was $10.7 million or $0.24 per diluted share, an increase of 39.1% from the net income of $7.7 million, or $0.18 per diluted share in the same period a year ago. Included in net income for the quarter is $2.3 million of stock-based compensation expense and $0.8 million of accrued customs fee for prior periods (pre-tax). Excluding these items and the related tax effect, non-GAAP net income for the fourth quarter was $13.0 million, or $0.29 per diluted share, compared to non-GAAP net income of $9.1 million, or $0.21 per diluted share, in the same quarter of the prior year. On a sequential basis, non-GAAP net income increased from the third quarter of fiscal year 2011 by $0.7 million or $0.01 per diluted share.

Gross margin for the fourth quarter was 15.4% compared to 15.3% in the same period a year ago. Non-GAAP gross margin for the fourth quarter was 15.5% compared to 15.4% in the same period a year ago. Non-GAAP gross margin was 16.2% for the third quarter of fiscal year 2011.

The Company's cash and cash equivalents and short and long term investments at June 30, 2011 were $75.2 million compared to $79.4 million at June 30, 2010. Free cash flow in the year ended June 30, 2011 was ($16.9) million primarily due to an increase in inventory to support the growth of the Company and investments in property for our expansion overseas.

Fiscal Year 2011 Summary

Net sales for the fiscal year ended June 30, 2011 were $942.6 million, up 30.7% from $721.4 million for the fiscal year ended June 30, 2010. Net income for fiscal year 2011 increased to $40.2 million, or $0.93 per diluted share, an increase of 49.4% from $26.9 million, or $0.65 per diluted share, for fiscal year 2010. Excluding $8.1 million of stock based-compensation expense, $0.7 million of litigation related expense, $0.6 million of accrued customs fee for prior periods and related tax effect, non-GAAP net income for the fiscal year 2011 was $47.7 million or $1.10 per diluted share, an increase of 44.3% compared to $33.1 million or $0.78 per diluted share for fiscal year 2010.

Business Outlook & Management Commentary

The Company expects net sales of $240 million to $260 million for the first quarter of fiscal year 2012 ending September 30, 2011. The Company expects non-GAAP earnings per diluted share of approximately $0.23 to $0.27 for the first quarter.

"Supermicro achieved record revenues of $260 million in our fourth quarter and finished the fourth quarter 29% higher than last year. We had strong growth across our product lines last year, especially our Storage, Blade and Rackmount products, and we continued to build market share with our channel, OEM and direct customers," said Charles Liang, Chairman and CEO. "While last year was a year of strong growth at Supermicro, continued aggressive R&D investment in our products, our leadership for upcoming technology launches, and the development of our Asia facility give us confidence that fiscal 2012 will continue our strong momentum and growth."

It is currently expected that the outlook will not be updated until the Company's next quarterly earnings announcement, notwithstanding subsequent developments. However, 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.