Dot Hill Cuts 4Q12 Outlook

Dot Hill Systems Corporation updated its guidance for the fourth quarter of 2012.

Management now expects net revenue to be in the range of $46.0 million to $46.5 million and non-GAAP EPS to be between $(0.03) to $(0.05), below the prior revenue guidance of $48 million to $53 million and the non-GAAP EPS range of $(0.03) to $0.02, provided on November 8, 2012.

The company attributed these expected results primarily to macro-economic conditions resulting in softness in demand for certain of its customers.

"While our anticipated fourth quarter financial results were negatively impacted by macro-economic pressures, I am encouraged with progress we continue to make on several fronts, which longer term, will hedge the impact that certain customers can have on our results," stated Dana Kammersgard, president and CEO, Dot Hill. "As examples, we seeded eighteen new AssuredSAN Pro 5000 Series units into prospects, and two of these were converted to revenue within the quarter. We will continue to seed the market and expect several more conversions this month. To date, the feedback has been excellent, in particular with respect to deployments in server virtualization environments. Moreover, we added to our AssuredSAN 4000 series pipeline, bringing the total to seven OEM customers now in various stages of customization or launch preparation. Most importantly, our initiative to increase our vertical markets business is also coming to fruition, with anticipated total 2012 vertical markets revenue rising more than 35% compared to 2011. Additionally, our technology continues to capture market share. AMD has selected Dot Hill’s AssuredVRA Virtual RAID Adapter software as the exclusive RAID data protection product to accompany certain of AMD’s chipsets starting in the first quarter of 2013. We also received our first patent granted in association with our RealStor real time tiering software, further reinforcing the strength of our intellectual property."

The company has not completed its 2012 financial review process and stated that there may be a number of items that could impact its current estimated fourth quarter 2012 financial results. The results and conclusions of these assessments could impact the company’s fourth quarter 2012 GAAP and Non-GAAP financial results.

"Although it is too early to provide you with an outlook for 2013, I am pleased with the depth and development progress of our new customer pipeline," said Hanif Jamal, CFO, Dot Hill. "We believe it positions the company for revenue and non-GAAP EPS growth in 2013 which we expect will accelerate in 2014. We plan to review our vision and accomplishments at several investor conferences this month. We welcome you to attend our presentation at the Sidoti Conference in New York City later today, the Needham Conference on January 17th in New York City and the Noble Financial Conference, in Southern Florida on January 22nd to 23rd. Additionally, we have scheduled our Analyst Day for April 10th in New York City and will provide greater specifics for this event at a later date."