Smart Modular Technologies: Fiscal 2Q10 Financial Results
Storage (SSD) represents 4% of revenues.
This is a Press Release edited by StorageNewsletter.com on March 29, 2010 at 2:02 pm(in US$ millions) | 2Q09 | 2Q10 | 6 mo. 09 |
6 mo. 10 |
Revenues | 109.1 | 160.1 | 249.9 | 283.2 |
Growth | +47% | +13% | ||
Net income (loss) | (1.9) | 16.1 | (8.7) | 20.7 |
SMART Modular Technologies, Inc. reported financial results for the second quarter of fiscal 2010 ended February 26, 2010.
Second Quarter Fiscal 2010 Highlights:
- Net sales of $160.1 million
- Gross profit of $42.0 million
- GAAP diluted EPS of $0.25
- Non-GAAP diluted EPS of $0.23
- Adjusted EBITDA of $28.4 million
Net sales for the second quarter of fiscal 2010 were $160.1 million, compared to $123.1 million for the first quarter of fiscal 2010, and $109.1 million for the second quarter of fiscal 2009.
Gross profit for the second quarter of fiscal 2010 was $42.0 million, compared to $28.8 million for the first quarter of fiscal 2010, and $24.1 million for the second quarter of fiscal 2009.
On a GAAP basis, net income for the second quarter of fiscal 2010 was $16.1 million, or $0.25 per diluted share, compared to net income of $4.6 million, or $0.07 per diluted share for the first quarter of fiscal 2010, and a net loss of $1.9 million, or a net loss of $0.03 per share for the second quarter of fiscal 2009.
On a non-GAAP basis, net income was $14.9 million or $0.23 per diluted share for the second quarter of fiscal 2010, compared to net income of $5.4 million, or $0.08 per diluted share for the first quarter of fiscal 2010, and net income of $4.1 million, or $0.06 per diluted share for the second quarter of fiscal 2009.
Adjusted EBITDA for the second quarter of fiscal 2010 was $28.4 million, compared to $15.0 million for the first quarter of fiscal 2010, and $10.2 million for the second quarter of fiscal 2009.
"In the second quarter of fiscal 2010 we saw robust demand for our products and services, driven by improvement in the overall economy and an improved DRAM pricing environment," commented Iain MacKenzie, President and CEO of SMART. "This increased demand, coupled with our operating leverage and efficient cost structure, is driving better financial performance. In the future we expect to benefit from the progress we are making in the expansion of our capacity in Brazil and Malaysia, and from our investment in Flash packaging in Brazil, which is targeted for launch in the early part of our fiscal 2011. In addition, we are ramping up our investment in our growing enterprise solid state storage business."
Business Outlook
The following statements are based upon management’s current expectations. These statements are forward-looking, and actual results may differ materially. The Company undertakes no obligation to update these statements. For the third quarter of fiscal 2010, SMART estimates net sales will be in the range of $175 million to $185 million, gross profit in the range of $38 million to $42 million, and net income per diluted share in the range of $0.15 to $0.19 on a GAAP basis. On a non-GAAP basis, SMART estimates net income per diluted share will be in the range of $0.18 to $0.22. The guidance for the third quarter of fiscal 2010 includes an income tax provision estimated in the range of $7.8 million to $8.4 million.
Comments
Abstracts of the earnings call transcript
Iain MacKenzie, President and CEO:
"We are investing to address the growing enterprise Solid State storage
market to increase module capacity and to launch Flash packaging in
Brazil. We expect to see meaningful traction from these initiatives
later this calendar year.
"Last quarter, we indicated that several defense customers were
evaluating our Xcel-10 SATA 2.6 iTemp drive. We have recently been
awarded a meaningful contract for this product. Our customer indicated
that SMART solution was chosen over other competitors primarily due to
its performance and rugged design. We expect to commence shipments this
fiscal third quarter. We are starting to see more testing of these SSDs
in ground-based military applications, many of which tend to drive
significantly greater volumes than sea and air-based applications.
"On January 5, we announced our XceedIOPS SATA SSD based on MEMLC
technology. This further demonstrates our belief that MLC for Enterprise
is a game-changer that will allow wider acceptance and growth of SSD
solutions. We believe this to be the case, because MLC is just over half
the cost of SLC, doubles the overall SSD capacity, and still meets the
required enterprise specifications of greater than five years of life
under worst-case conditions.
"As you may recall, last quarter, we mentioned that we received our first
evaluation order for this product from a major OEM, and we remain on
track to begin shipping against that order during this fiscal third
quarter. This customer has since awarded a second evaluation order. We
continue to expect that we will ultimately achieve production release
status for this SATA drive in the next few months. In addition, we are
now engaged at several major OEMs with this product."
Barry Zwarenstein, Senior VP, Finance and CFO:
"Second quarter sales of $160.1 million were broken down by geography as
follows: PC, 42%; network and telecom, 23%; service, 20%; logistics, 6%;
industrial, 4%; storage, 4%; printers, 1%."