SAN JOSE, Calif., Aug. 24, 2010 (GLOBE NEWSWIRE) -- OCZ Technology Group, Inc. (Nasdaq:OCZ), a leading provider of high-performance solid-state drives (SSDs) and memory modules for computing devices and systems, announces that it has made a strategic decision to discontinue certain commodity level DRAM module products as part of an optimization plan for its memory business to focus on specialty and high-performance memory offerings. The decision to optimize the DRAM module business comes after careful consideration from OCZ's Board of Directors, and is being implemented now as the Company has reached sufficient scale in its Solid State Drive segment. The plan is consistent with OCZ's publicly stated strategy to focus resources on the continued growth in its SSD business, while scaling back on non-core, low-margin product lines. OCZ is committed to continuing to deliver its core high-performance DRAM module products to its customers on an ongoing basis. The Company anticipates that the increased focus on high-performance memory products will also provide margin efficiencies in SSD production, due to the synergies in manufacturing, purchasing, and product development. OCZ's commodity DRAM module products represent roughly 70% of the Company's overall DRAM module revenue (approximately $70 million TTM), which over the past 6 quarters has operated at less than 3% average gross margins. These products will be taken out of production during the 2 nd and 3 rd fiscal Quarters, which end August and November 2010 respectively. The Company anticipates the transition will have a positive effect on operating margins, and plans to issue pro-forma financial statements beginning with the upcoming second quarter results, through the completion of the transition. "OCZ continues to focus on Solid State Drive products and away from the rapidly commoditized standard speed DRAM module market; I am excited that we have been able to gain sufficient SSD manufacturing scale allowing us to focus on our strengths," commented Ryan Petersen, CEO of the OCZ Technology Group, Inc.
Mr. Petersen added, "Our R&D driven SSD business is performing well and is anticipated to be the majority of our revenue going forward, thus the next logical step is refocusing our DRAM business in the high-performance segment--a limited but more profitable market in which we have traditionally excelled.""For fiscal 2011, OCZ's prior revenue guidance was in the range of $200 million to $215 million. We are adjusting DRAM module revenue guidance down by $35.0 million, but all other product lines are anticipated, based on current booking rates, to be in line with expectations. Adjusted revenue guidance is now a range of $165 million to $180 million." About OCZ Technology Group, Inc. Founded in 2002, San Jose, CA-based OCZ Technology Group, Inc. ("OCZ"), is a leader in the design, manufacturing, and distribution of high performance and reliable Solid State Drives (SSDs) and premium computer components. OCZ has built on its expertise in high-speed memory to become a leader in the SSD market, a technology that competes with traditional rotating magnetic hard disk drives (HDDs). SSDs are faster, more reliable, generate less heat and use significantly less power than the HDDs used in the majority of computers today. In addition to SSD technology, OCZ also offers high performance components for computing devices and systems, including enterprise-class power management products as well leading-edge computer gaming solutions. For more information, please visit: www.ocztechnology.com. The OCZ Technology Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7439 Forward-Looking Statements Certain statements in this release relate to future events and expectations and as such constitute forward-looking statements involving known and unknown factors that may cause actual results of OCZ Technology Group, Inc. to be different from those expressed or implied in the forward-looking statements. In this context, words such as "will," "would," "expect," "anticipate," "should" or other similar words and phrases often identify forward-looking statements made on behalf of OCZ. It is important to note that actual results of OCZ may differ materially from those described or implied in such forward-looking statements based on a number of factors and uncertainties, including, but not limited to, market acceptance of OCZ's products and OCZ's ability to continually develop enhanced products; adverse changes both in the general macro-economic environment as well as in the industries OCZ serves, including computer manufacturing, traditional and online retailers, information storage, internet search and content providers and computer system integrators; OCZ's ability to efficiently manage material and inventory, including integrated circuit chip costs and freight costs; and OCZ's ability to generate cash from operations, secure external funding for its operations and manage its liquidity needs. Other general economic, business and financing conditions and factors are described in more detail in "Item 1A - Risk Factors" in Part II in OCZ's Annual Report on Form 10-K filed with the SEC on May 20, 2010. The filing is available both at www.sec.gov as well as via OCZ's website at www.ocztechnology.com. OCZ does not undertake to update its forward-looking statements.
CONTACT: OCZ Technology Group, Inc. Ryan Petersen, CEO 408-733-8400 The Investor Relations Group Investor Relations: Adam Holdsworth Public Relations: Mike Graff 212-825-3210