OCZ: Fiscal 4Q10 Financial Results

OCZ Technology
Group, Inc. reports its fourth quarter and year-end results for the
fiscal year 2010, which ended on

Recent Financial Highlights

• SSD revenue increased 246% to $43.3 million for the year and 135%
  to $12.1 million in the fourth quarter
• Generated year-end revenue of $144 million while shifting business
  strategy from legacy DRAM module business to SSDs; discontinued gaming
  PC and PC accessories product lines
• R&D nearly doubled year over year as company invests in SSD
  development
• Raised $15.4 million before costs in March 2010 as part of a
  private transaction to several institutional investors

Recent Business Highlights

• Addition of enterprise SSD clients Bell Micro and Whiptail
  Networks
• Qualified enterprise SSDs with LSI Mega raid products and
  became an official LSI alliance partner
• Launched 4th-generation Z-drive PCIe-based SSD products and
  continued to ramp PCIe-based SSD sales
• Launched the highest capacity standard format SSD currently
  available in the market with 3.5" Colossus Series SSDs with capacities
  of up to 2TB
• Launched Vertex 2 SSD with the highest aligned random write IOPS
  available in a 2.5" format MLC SSD

Business Overview:
"I am pleased with the overall performance of our company as we shift
our strategy away from our legacy products and toward our growth in the
burgeoning SSD market," said Ryan Petersen, Chief Executive Officer
of OCZ Technology. "The past year was transitional for OCZ, and our
revenue growth and gross margins were negatively impacted by a lack of
working capital. However, we recently have disposed of certain product
lines, increased our working capital through a $15.4 million
fundraising, and increased our available credit lines, which we believe
will allow us to increase revenue and gross margins going forward.
Despite a working capital shortage and challenging economic conditions,
we continued to increase sales in our SSD segment, which was driven in
part by increased demand for our enterprise SSD solutions. As the
economy recovers and SSD markets expand, we believe that our portfolio
of SSD products are well positioned for growth in fiscal 2011."

                  Revenues by Products for FY

Financial Overview
For the fiscal year 2010, revenue was $144 million, a decrease of 7.7%
from $156 million in fiscal 2009. The reduction in revenue was primarily
in the Company’s legacy products, which totaled $100.7 million in the
year compared to $143.5 million in 2009, as the group focused its
limited working capital resources on SSD products. Gross profit for the
year totaled $18.7 million, or 13.0% of revenues, compared to $19.8
million, or 12.7% of revenues in fiscal 2009. GAAP net loss was $13.5
million in fiscal 2010 compared to $11.7 million in fiscal 2009. GAAP
diluted loss per share was $0.64 in fiscal 2010 compared to a loss of
$0.56 in fiscal 2009. Non-GAAP adjusted EBITDA was a loss of $6.4
million in fiscal 2010, a decrease of 31% compared to a loss of $9.3
million in fiscal 2009.

Revenue for the fourth quarter was $32.4 million, a decrease of 21% from
$41.1 million in fiscal 2009. The reduction was primarily in the
Company’s legacy products, which totaled $20.3 million in the quarter
compared to $36.0 million in 2009, as the group focused its limited
working capital resources on the SSD products. GAAP net loss was $6.5
million in fiscal 2010 fourth quarter, compared to $0.6 million in the
same period in fiscal 2009. GAAP diluted loss per share was $0.31 in the
fiscal fourth quarter of 2010 compared to a loss of $0.03 in the same
period in fiscal 2009. Non-GAAP adjusted EBITDA was a loss of $3.5
million for the quarter, compared to a gain of $0.1 million in the
fourth quarter of fiscal 2009.

Guidance
For fiscal 2011, OCZ expects revenues to be in the range of $200
million to $215 million, and anticipates achieving positive Non-GAAP
adjusted EBITDA for the fiscal year. As the year progresses, the
Company plans to provide more detailed earnings guidance.