SMART Modular: Preliminary Fiscal 4Q08 Financial Results

SMART Modular Technologies announced its anticipated net sales and gross profit results for the fourth quarter and fiscal year 2008, based on its preliminary review.

For the fourth quarter of fiscal 2008, SMART expects to report net sales of approximately $158 to $164 million and gross profit of approximately $24 to $26 million.

Additionally, the Company will incur restructuring charges, as well as non-cash accounting charges related to year-end financial reviews which are not yet finalized. The restructuring plan, when finalized, is expected to improve the Company’s financial performance through prudent cost reductions and efficiency initiatives while reallocating resources and investment to its higher growth businesses.

The Company had previously provided guidance for the fourth quarter of fiscal 2008 as follows: net sales of approximately $160 to $170 million, gross profit of approximately $27 to $29 million, and GAAP net income of approximately $0.06 to $0.07 per diluted share.

For fiscal 2008, SMART expects to report net sales of approximately $668 to $674 million and gross profit of approximately $118 to $120 million.

SMART expects to end the fourth quarter of fiscal 2008 with approximately $113 to $118 million in cash and cash equivalents, as compared to $117 million at the end of the third quarter of fiscal 2008.

"Our Brazil operations performed well last quarter, our overall management and execution metrics continue to demonstrate effective controls, and we continued to make solid progress with our SSD business," commented Iain MacKenzie, CEO and president, SMART Modular Technologies. "However, several factors impacted our net sales and gross profit results for our fourth fiscal quarter, including: 1) the persistent oversupply in the DRAM market, 2) the deterioration of the economic climate in the U.S., which tempered customer demand for our products, and 3) prolonged and aggressive price-driven competition of DRAM-based memory modules."

"In the face of these challenges, we remain focused on both our execution and the development of new products that bring a market advantage to our customers. In particular, our leading high density DRAM modules will position us well once the DRAM market stabilizes, and our recently announced six new industrial-grade SSD product offerings enable SMART to expand its presence in the defense, aerospace, industrial, and embedded application areas and address new, more demanding storage market opportunities," concluded Mr. MacKenzie.