Xyratex: Fiscal 4Q13 Financial Results

 Xyratex Ltd announced results for the fourth fiscal quarter and fiscal year ended November 30, 2013.

Revenues for the fourth quarter were $185.3 million, a decrease of 30.2% compared to revenues of $265.4 million for the same period in the prior year.

Revenues for fiscal year 2013 were $814 million, a decrease of 29.7% compared to revenues of $1,159 million for fiscal year 2012.

These year over year declines were principally related to the continued reduction in revenue from NetApp with the current program coming to an end in our current quarter as previously announced.

Gross profit margin in the fourth quarter was 22.2%, compared to 14.5% in the same period in the prior year and 20.9% in the prior quarter. Gross profit margin for fiscal year 2013 was 21% compared to 16.9% in the previous year. The increases from last year reflect a favorable variation in customer and product mix in our Enterprise Data Storage Solutions product segment as well as improved margins for newer products in our Capital Equipment segment.

For the fourth quarter of fiscal 2013, GAAP net loss was $21.4 million, or $0.78 per share, compared to a GAAP net loss of $7.9 million, or $0.29 per share, in the same period in the prior year. Non-GAAP net loss was $0.8 million, or $0.03 per share, compared to a non-GAAP net loss of $6.4 million, or $0.24 per share, in the same quarter a year ago.

GAAP net loss for fiscal year 2013 was $21.2 million, or $0.77 per share, compared to GAAP net income of $17.7 million, or $0.63 per diluted share, for fiscal year 2012. Non-GAAP net income for fiscal year 2013 decreased to $4.2 million, or $0.15 per diluted share, compared to $24.6 million, or $0.87 per diluted share, for fiscal year 2012.

Included in both the 2013 fiscal fourth quarter and full year GAAP results, but excluded from the non-GAAP results, is a non-cash valuation allowance against the deferred tax asset of $19.2 million. This valuation allowance relates primarily to UK tax losses which have been recorded as a result of certain tax concessions in the UK and the tax structure of the overall Xyratex Ltd group. This valuation allowance does not indicate in itself that the overall Xyratex Ltd group will not be profitable in future fiscal periods.

Today, the company also announced that its board of directors has approved a quarterly cash dividend of $0.075 per share, unchanged from the prior quarter. The dividend will be payable on February 17, 2014 to shareholders of record as of the close of business on February 4, 2014. This dividend represents a quarterly payout of approximately $2.1 million in aggregate, or $8.4 million on an annualized basis.

Given the Company’s announcement on December 23, 2013 that it has entered into a definitive agreement to be acquired by Seagate Technology plc, the company is not providing an outlook for its fiscal 2014 first quarter.