OCZ Technology: Fiscal 4Q12 Financial Results

OCZ Technology Group, Inc. reports its fourth quarter (Q4’12) and
year-end results for the fiscal year 2012, (FY’12), which ended on
February 29, 2012.

Financial Highlights

• Fiscal year 2012, net revenue increased 92% to $365.8 million compared
  with fiscal year 2011 net revenue of $190.1 million. Net revenue in
  Q4’12 was a record $110.4 million, and increased 71% compared with net
  revenue of $64.6 million reported in Q4’11.
• Fiscal year 2012, SSD revenue was $338.9 million, up 154% compared with
  $133.2 million in fiscal year 2011. Q4’12 SSD revenue reached a record
  $103.2 million; an increase of 77% compared with Q4’11 SSD revenue of
  $58.2 million.
• Fiscal year 2012 gross margins increased to 22.5% compared to 12.7% with
  fiscal year 2011. Q4’12 gross margin increased to 25.0% compared with
  16.6% in Q4’11, and 22.5% in Q3’12.
• Net loss for Q4’12 was $10.9 million or $0.19 loss per share compared
  with a net loss of $9.3 million or $0.27 loss per share in Q4’11.
• Non-GAAP net loss for Q4’12 was $6.0 million or $0.11 loss per share as
  compared with a non-GAAP net loss for Q4’11 of $0.8 million or $0.02
  loss per share.

"In reflecting on fiscal 2012, we are extremely pleased with the
progress the company has made both financially and operationally, this
is highlighted by the fact that based on recent market data from
independent analysts, we have achieved our goal to become the world’s
largest independent SSD manufacturer," said Ryan Petersen, CEO of OCZ
Technology. "Our ongoing investments have enabled us to build a strong
foundation of core technology, support continued high levels of revenue
growth, increase gross profit margins, and a move towards a vertically
integrated business model."

"Consistent with our stated objectives, we have successfully integrated
numerous technology focused acquisitions, increased SSD revenues, and
built out a cost effective supply chain and manufacturing operation. Our
continued execution will allow us to support ongoing growth initiatives
and deliver significant operational leverage as we scale. We believe we
are better positioned than ever before to take advantage of the
opportunity that the SSD market presents," added Petersen.

Recent Business Highlights

• Net revenue for SAN replacement products has ramped since
  release in August and exited the year at over $8 million per quarter.
• Introduced, well ahead of schedule, the Vertex 4 SATA III series of SSDs
  featuring the company’s advanced Indilinx Everest 2 controller
  platform, which delivers performance for SATA-based drives of 120,000
  random IOPS.
• OCZ was named to CRN’s 2012 Data Center 100 list for its lineup of
  performance oriented solutions and continued innovation to make SSDs the
  storage of choice for server and data center infrastructures.
• In January, it acquired SANRAD Ltd., which provided OCZ with its VXL
  Virtualization and Flash Caching software technology for its Z-Drive R4
  Solutions in VMware, Citrix Xen and Microsoft Hyper-V environments;
  subsequently, VXL was brought to market in late February.
• In February and March, it completed a $110 million public offering to
  support our continued growth objectives, including initiatives to move
  to NAND wafer purchasing and to support growth of our SAN replacement
  products.
• It expands its OEM and Enterprise customer base throughout Fiscal 2012,
  building a foundation for the company’s future. OCZ grew customer base
  which is highlighted by public collaborations with companies such as
  Intel, Quanta Computer, Amazon, Drobo, Hitachi, SK communications, NTT,
  Fujistu, John Hopkins, Colfax, LG Electronics, Wortman, Peer 1, SGI,
  Olive, Voxel, PSSC Labs, Penguin, Ciaratech, Honda, and Chevron, among  others.

                          
Quarterly net revenue by product groups

Business Outlook:

• OCZ expects net revenue for its first fiscal quarter ending May 31, 2012 (Q1’13), to be in the range of $110 to $120 million.
• It expects net revenue for its fiscal year ending February 28, 2013
  (FY’13) to be in the range of $630 to $700 million. This represents a
  growth rate of approximately 80% at the midpoint; we expect, based on
  historical trends, revenue to be weighted to the second half of the
  year, with approximately 60% to 65% of revenue to occur in the second
  half of the year.
• Non-GAAP gross margins are expected to increase slightly for Q1’13 and
  to exit the year in excess of 30%, with typical sequential gross margin
  increases of 100 to 250 basis points per quarter throughout the fiscal
  year, subject to changes in product mix as the SSD landscape continues
  to evolve.
• OCZ expects non-GAAP operating expenses for Q1’13, to be in the range of
  $37 to $39 million with expenses exiting the year at between $43 and
  $47 million per quarter, as OCZ continues to invest in its ongoing
  growth objectives.

To read the earnings call
transcript