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Super Micro Computer, Inc. Announces 4th Quarter 2013 Financial Results

Use of Non-GAAP Financial Measures

Non-GAAP gross margin discussed in this press release excludes stock-based compensation expense for prior periods. Non-GAAP net income and net income per share discussed in this press release exclude stock-based compensation expense 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 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.

Supermicro ® (NASDAQ: SMCI), a global leader in high-performance, high-efficiency server technology innovation is a premier provider of advanced server Building Block Solutions ® for Datacenter, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and Embedded Systems worldwide. Supermicro’s advanced server Building Block Solutions ® offers a vast array of modular, interoperable components for building energy-efficient, application-optimized computing solutions. This broad line of products includes servers, blades, GPU systems, workstations, motherboards, chassis, power supplies, storage technologies, networking solutions and SuperRack ® cabinets/accessories. Architecture innovations include Twin Architecture, SuperServer ®, SuperBlade ®, MicroCloud, Super Storage Bridge Bay (SBB), Double-Sided Storage , Universal I/O (UIO) and WIO expansion technology all of which deliver unrivaled performance and value. Supermicro is committed to protecting the environment through its “We Keep IT Green ®” initiative by providing customers with the most energy-efficient, environmentally-friendly solutions available on the market. Founded in 1993, Supermicro is headquartered in Silicon Valley with worldwide operations and manufacturing centers in Europe and Asia. For more information, visit www.supermicro.com.

Supermicro, SuperServer, SuperBlade, Building Block Solutions, SuperRack, Double-Sided Storage and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc.

 
SUPER MICRO COMPUTER, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands)(Unaudited)
    June 30,2013   June 30,2012
ASSETS
Current assets:
Cash and cash equivalents $ 93,038 $ 80,826
Accounts receivable, net 149,340 102,014
Inventory 254,170 276,599
Deferred income taxes – current 15,786 12,638
Prepaid income taxes 4,039 3,478
Prepaid expenses and other current assets 6,819   6,357  
Total current assets 523,192 481,912
Long-term investments 2,637 2,923
Property, plant and equipment, net 95,912 97,419
Deferred income taxes – noncurrent 7,275 3,459
Other assets 3,241   3,390  
Total assets $ 632,257   $ 589,103  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 172,855 $ 173,991
Accrued liabilities 34,122 30,401
Income taxes payable 6,049 2,754
Short-term debt and current portion of long-term debt 28,638   13,362  
Total current liabilities 241,664 220,508
Long term debt-net of current portion 6,533 19,395
Other long-term liabilities 10,336   10,849  
Total liabilities 258,533 250,752
Stockholders' equity:
Common stock and additional paid-in capital 157,712 143,806
Treasury stock (at cost) (2,030 ) (2,030 )
Accumulated other comprehensive loss (69 ) (76 )
Retained earnings 217,930     196,651  
Total Super Micro Computer Inc. stockholders' equity 373,543 338,351
Noncontrolling interest 181    
Total liabilities and stockholders' equity $ 632,257   $ 589,103  
 
SUPER MICRO COMPUTER, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except share and per share amounts)(Unaudited)
       
Three Months Ended Fiscal Year Ended
June 30,2013 June 30,2012 June 30,2013 June 30,2012
Net sales $ 322,333 $ 275,896 $ 1,162,561 $ 1,013,874
Cost of sales 276,310   233,448   1,002,508   848,457  
Gross profit 46,023 42,448 160,053 165,417
Operating expenses:
Research and development 19,557 17,580 75,208 64,223
Sales and marketing 8,361 9,391 33,785 33,308
General and administrative 5,677   6,285   23,902   21,872  
Total operating expenses 33,595   33,256   132,895   119,403  
Income from operations 12,428 9,192 27,158 46,014
Interest and other income, net 24 8 48 54
Interest expense (161 ) (161 ) (610 ) (717 )
Income before income tax provision 12,291 9,039 26,596 45,351
Income tax provision 3,865   3,529   5,317   15,498  
Net income $ 8,426   $ 5,510   $ 21,279   $ 29,853  
Net income per common share:
Basic $ 0.20   $ 0.13   $ 0.50   $ 0.72  
Diluted $ 0.19   $ 0.12   $ 0.48   $ 0.67  
Weighted-average shares used in calculation of net income per common share:
Basic (a) 42,267   41,535   41,992   40,890  
Diluted (b) 43,918   44,738   43,907   44,152  
 

Stock-based compensation is included in the following cost and expense categories by period (in thousands):

Three Months Ended Fiscal Year Ended
June 30,2013 June 30,2012 June 30,2013 June 30,2012
Cost of sales $ 257 $ 192 $ 953 $ 783
Research and development 1,599 1,548 6,527 5,542
Sales and marketing 359 432 1,541 1,469
General and administrative 484 650 2,340 2,458
 
SUPER MICRO COMPUTER, INCCONDENSED CONSOLIDATED CASH FLOW STATEMENTS(In thousands)(Unaudited)
  Fiscal Year Ended June 30,
2013   2012
OPERATING ACTIVITIES:
Net income $ 21,279 $ 29,853
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization 7,835 7,071
Stock-based compensation expense 11,361 10,252
Excess tax benefits from stock-based compensation (865 ) (2,047 )
Allowance for doubtful accounts 929 217
Provision for inventory 9,725 8,579
Exchange gain (153 )
Deferred income taxes, net (7,010 ) (3,137 )
Changes in operating assets and liabilities:
Accounts receivable, net (48,255 ) (17,226 )
Inventory 12,704 (92,467 )
Prepaid expenses and other assets (67 ) (1,656 )
Accounts payable (2,208 ) 61,336
Income taxes payable, net 4,490 8,968
Accrued liabilities 4,384 4,967
Other long-term liabilities (566 ) 1,757  
Net cash provided by operating activities 13,583   16,467  
 
INVESTING ACTIVITIES:
Proceeds from investments 300 2,475
Purchases of property, plant and equipment (5,001 ) (24,862 )
Restricted cash (412 ) (32 )
Investment in a privately held company (168 )
Land deposit refund   2,868  
Net cash used in investing activities (5,113 ) (19,719 )
 
FINANCING ACTIVITIES:
Proceeds from debt 20,641 33,696
Repayment of debt (18,073 ) (28,949 )
Proceeds from exercise of stock options 1,845 8,549
Excess tax benefits from stock-based compensation 865 2,047
Payment of obligations under capital leases (40 ) (35 )
Payments under receivable financing arrangements (610 ) (382 )
Contribution from noncontrolling interests 168
Minimum tax withholding paid on behalf of employees for restricted stock awards (1,034 ) (1,109 )
Net cash provided by financing activities 3,762   13,817  
Effect of exchange rate fluctuations on cash (20 ) 318
Net increase in cash and cash equivalents 12,212 10,883
Cash and cash equivalents at beginning of year 80,826   69,943  
Cash and cash equivalents at end of year 93,038   80,826  
Supplemental disclosure of cash flow information:
Cash paid for interest 718 621
Cash paid for taxes, net of refunds 8,074 8,455
Non-cash investing and financing activities:
Accrued costs for property, plant and equipment purchases 1,871 797
Deposit applied to property acquisition 5,867
Equipment purchased under capital leases 85 7
 
SUPER MICRO COMPUTER, INCRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(In thousands, except share and per share amounts)(Unaudited)
       
Three Months Ended Fiscal Year Ended
June 30,2013 June 30,2012 June 30,2013 June 30,2012
GAAP GROSS PROFIT $ 46,023 $ 42,448 $ 160,053 $ 165,417
Add back stock-based compensation (c) 257   192   953   783  
Non-GAAP GROSS PROFIT $ 46,280   $ 42,640   $ 161,006   $ 166,200  
 
GAAP GROSS MARGIN 14.3 % 15.4 % 13.8 % 16.3 %
Add back stock-based compensation (c) 0.1 % 0.1 % 0.0 % 0.1 %
Non-GAAP GROSS MARGIN 14.4 % 15.5 % 13.8 % 16.4 %
 
GAAP INCOME FROM OPERATIONS $ 12,428 $ 9,192 $ 27,158 $ 46,014
Add back stock-based compensation (c) 2,699   2,822   11,361   10,252  
Non-GAAP INCOME FROM OPERATIONS $ 15,127   $ 12,014   $ 38,519   $ 56,266  
 
GAAP NET INCOME $ 8,426 $ 5,510 $ 21,279 $ 29,853
Add back stock-based compensation (c) 2,699 2,822 11,361 10,252
Add back adjustments to tax benefit (provision) (d) 167   (219 ) (440 ) (1,532 )
Non-GAAP NET INCOME $ 11,292   $ 8,113   $ 32,200   $ 38,573  
 
GAAP NET INCOME PER COMMON SHARE – BASIC (a) $ 0.20 $ 0.13 $ 0.50 $ 0.72
Add back stock-based compensation and adjustments to tax provision (c) (d) 0.07   0.06   0.26   0.21  
Non-GAAP NET INCOME PER COMMON SHARE – BASIC (e) $ 0.27   $ 0.19   $ 0.76   $ 0.93  
 
GAAP NET INCOME PER COMMON SHARE – DILUTED (b) $ 0.19 $ 0.12 $ 0.48 $ 0.67
Add back stock-based compensation and adjustments to tax provision (c) (d) 0.07   0.06   0.25   0.19  
Non-GAAP NET INCOME PER COMMON SHARE – DILUTED (f) $ 0.26   $ 0.18   $ 0.73   $ 0.86  
 
WEIGHTED-AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE
BASIC –GAAP (g) 42,267   41,535   41,992   40,890  
BASIC - Non-GAAP (h) 42,447   41,896   42,202   41,278  
 
DILUTED – GAAP (g) 43,918   44,738   43,907   44,152  
DILUTED - Non-GAAP (h) 44,171   45,548   44,256   45,008  
 

(a) Approximately $36,000 and $106,000 of undistributed earnings allocated to participating securities were not included in the determination of GAAP basic net income per common share for the three months and fiscal year ended June 30, 2013, respectively, and approximately $48,000 and $280,000 for the three months and fiscal year ended June 30, 2012, respectively.

Stock quotes in this article: SMCI 

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