Xyratex: Fiscal 1Q12 Financial Results

Xyratex Ltd announced results for the first fiscal quarter ended February 29, 2012.

Revenues for the first quarter were $295.7 million, a decrease of 18% compared to revenues of $360.5 million for the same period last year.

For the first quarter, GAAP net income was $10.9 million, or $0.38 per diluted share, compared to GAAP net income of $4.7 million, or $0.15 per diluted share, in the same period last year. Non-GAAP net income was $11.4 million, or $0.40 per diluted share, compared to non-GAAP net income of $7.5 million, or $0.24 per diluted share, in the same quarter a year ago.

Gross profit margin in the first quarter was 17.9%, compared to 13.7% in the same period last year and 17.7% in the prior quarter. The increase from last year primarily reflects changes in customer mix of sales of our enterprise data storage solutions.

The company declared its third dividend in the first quarter. The cash dividend was set at $0.065 per share. Cash balance amounted to $155.8 million at the end of the first quarter, an increase of $23.2 million from the prior quarter.

The company also announced that its Board of Directors has approved a quarterly cash dividend of $0.075 per share, which represents an increase of $0.01 per share from the prior quarter. The dividend will be payable on April 26, 2012 to shareholders of record as of the close of business on April 12, 2012. This dividend represents a quarterly payout of approximately $1.8 million in aggregate, or $7.2 million on an annualized basis.

"I was pleased with our first quarter results, with revenues in line with our expectations and net income at the high end of our expectations as a result of better than expected gross margins across our product ranges and lower expenditures. As we had anticipated in January, our ability to meet our enterprise data storage customers’ demand requirements has been slightly impacted by a limited supply of enterprise disk drives. While the situation is improving each day, we are working hard to ensure we secure as many drives as possible to meet the demand of our customers," said Steve Barber, CEO of Xyratex. "We are extremely focused on executing with regard to all the new opportunities that we have as a result of entering into the High Performance Computing space this year with our ClusterStor product line and working closely with our HDD customers now that the acquisitions by Seagate and Western Digital have been completed. The opportunities in both industries that we serve are numerous, and I believe we are well positioned to capitalize on them through the end of the year and beyond."

Business Outlook
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Our forecast ranges are wider than normal due to the uncertainty surrounding disk drive availability following the flooding in Thailand last fall.   

• Revenue in the second fiscal quarter of 2012 is projected to be in the range of $297 to $357 million.
• Fully diluted earnings per share is anticipated to be between $0.08 and $0.35 on a GAAP basis in the second quarter. On a non-GAAP basis, fully diluted earnings per share is anticipated to be between $0.16 and $0.43. Non-GAAP earnings per share excludes amortization of intangible assets, equity compensation expense, specified non-recurring items and related taxation expense.