Xyratex Ltd - Report of Foreign Issuer (6-K)
March 27 2008 - 4:28PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE
SECURITIES EXCHANGE ACT OF 1934
March 27, 2008
|
|
Commission File
Number:0001284823
|
XYRATEX
LTD
|
(Translation of
registrants name into English)
|
|
Langstone
Road,
|
Havant
|
PO9 1SA
|
United
Kingdom
|
(Address of principal
executive offices)
|
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or 40-F.
Form 20-F
x
Form
40-F
o
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1)
o
Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7)
o
Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information
to the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act
of 1934. Yes
o
No
x
If Yes is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82:
NEWS RELEASE
For Immediate Release
Xyratex Ltd Announces Results for
the First Quarter Fiscal Year 2008
Havant, UK March 27, 2008
Xyratex Ltd
(Nasdaq: XRTX), a leading provider of enterprise class data storage subsystems
and storage process technology, today announced results for the first fiscal
quarter ended February 29, 2008.
Revenues for the first quarter were $217.1 million, a decrease of 8.2%
compared to revenues of $236.4 million for the same period last year.
For the first quarter, GAAP net loss was $2.2
million, or $0.07 per diluted share, compared to GAAP net income of $10.1
million, or $0.34 per diluted share, in the same period last year. Non-GAAP net
income decreased 94% to $0.7 million, or a diluted earnings per share of $0.03,
compared to non-GAAP net income of $11.9 million, or $0.40 per diluted share,
in the same quarter a year ago.
(1)
Gross profit margin in the first quarter was
15.1%, compared to 19.0% in the same period last year, primarily due to the
decrease in Storage Infrastructure revenues.
Revenues from our Networked Storage Solutions
products were $187.8 million as compared to $163.6 million in the same quarter
a year ago, an increase of 14.8%. Gross profit margin in the Networked Storage
Solutions business was 14.7% as compared to 13.6% a year ago. Revenues from our
Storage Infrastructure products were $29.3 million as compared to $72.8 million
in the same quarter a year ago, a decrease of 59.8%. Gross profit margin in the
Storage Infrastructure business was 18.9% as compared to 31.6% a year ago.
I was pleased with our first quarter results
which were towards the top end of our expectations, which reflected the
continued capital spending constraints in the Hard Drive Industry. As
anticipated we are now seeing evidence of an increase in demand for capital
equipment from our customers and I am encouraged with regard to the healthy
fundamentals we see within the two markets we serve, said Steve Barber, CEO of
Xyratex. Though the global economic conditions remain uncertain, I believe the
markets we serve will remain healthy and that our customers are well positioned
within their respective markets. We will continue to work with our customers to
make them more competitive in their respective markets and remain flexible in
meeting their technology and product demands. We remain focused on executing as
efficiently and effectively as possible in this uncertain economic
environment.
2
The company today also
announced that, effective immediately, Adam Wray has stepped down from his role
as its Executive Vice President of the Storage Infrastructure Division and that
Steve Barber will take a more active role in leading this division. I would
like to personally thank Adam for his contribution to the company and in his
most recent role, for his dedication and leadership in developing the Storage
Infrastructure business to where it is today. I wish Adam every success as he
pursues other interests, said Steve Barber.
Business Highlights
·
We announced a
new High-Performance RAID Controller and Advanced Power Management Software for
our High-Density RAID System. The Xyratex F6412E sets a new standard for
performance and efficiency, delivering up to twice the performance (IOPS) of
the previous generation controller while minimizing electronic waste through
optimal battery design. In addition, the companys new Advanced Power
Management software can save up to 40 percent in power dissipation by
automatically spinning down disk drives when not needed.
·
We announced
that the Xyratex F5412E RAID system is certified for VMware ESX Server 3.5. The
Xyratex F5412E 4Gb FC-SAS/SATA-II RAID product joins the Companys F5402 system
as products certified for use in VMware virtualization environments.
·
We commenced
installation of equipment as part of a major process automation project within
a new production facility for a current Storage Infrastructure customer.
·
We undertook
significant steps to prepare our facilities in Sacramento and Seremban,
Malaysia in anticipation of volume ramps as we move through the fiscal year.
3
Business Outlook
The following statements are based on current
expectations. These statements are forward-looking, and actual results may differ
materially. These statements do not include the potential impact of any future
acquisitions or divestitures.
·
Revenue in the second quarter of 2008 is projected to
be in the range $232 to $252 million.
·
Fully diluted earnings are anticipated to be between
$(0.06) loss per share and $0.06 earnings per share on a GAAP basis in the
second quarter. On a non-GAAP basis, fully diluted earnings per share is
anticipated to be between $0.03 and $0.15. Non-GAAP earnings per share excludes
non-cash equity compensation, amortization of intangible assets, certain
non-recurring items and related taxation expense.
Conference Call/Webcast
Information
Xyratex
quarterly results conference call
will be broadcast live via
the internet at www.xyratex.com/investors on Thursday, March 27, 2008 at
2:00 p.m. Pacific Time/5:00 p.m. Eastern Time. You can also access
the conference call by dialing +1 (888) 679-8018 in the United States and +1
(617) 213-4845 outside of the United States, passcode 72136533. The press
release will be posted to the company web site www.xyratex.com.
A
replay will be available through
April 3, 2008
following the
live call by dialing +1 (888) 286-8010 in the United States and +1 (617)
801-6888 outside the United States, replay code 42753368.
(1) Non-GAAP net
income and diluted earnings per share excludes (a) amortization of
intangible assets, (b) equity compensation expense, (c) specified
non-recurring items, such as income from sale of a product line, (d) the
related tax effects and (e)
the effect of changes in
exchange rates on the income tax expense
. Reconciliation of non-GAAP net income and diluted earnings per share
to GAAP net income (loss) and GAAP diluted earnings (loss) per share is
included in a table immediately following the condensed consolidated statements
of cash flow below
.
4
The
intention in providing these non-GAAP measures is to provide supplemental
information regarding the Companys operational performance while recognizing
that they have material limitations and that they should only be referred to
with reference to the corresponding GAAP measure.
The Company believes
that the provision of these non-GAAP financial measures is useful to investors
and investment analysts because it enables comparison to the Companys
historical operating results, those of competitors and other industry participants
and also provides transparency to the measures used by management in
operational and financial decision making. In relation to the specific items
excluded: (a) intangible assets represent costs incurred by the acquired
business prior to acquisition, are not cash costs and will not be replaced when
the assets are fully amortized and therefore the exclusion of these costs
provides management and investors with better visibility of the costs required
to generate revenue over time; (b) equity compensation expense is non-cash
in nature, is outside the control of management during the period in which the
expense is incurred and in addition has not been measured consistently as a
result of the implementation of FAS 123R; (c) the income from the sale of
the product line is non-recurring and does not form part of the Companys core
operations; (d) the exclusion of the related tax effects of excluding
items (a) to (c) is necessary to show the effect on net income of the
change in tax expense that would have been recorded if these items had not been
incurred; (e)
the effect of changes in exchange rates on deferred
tax balances is non-cash and is not comparable across periods or with other
companies.
Safe
Harbor Statement
This press release contains
forwardlooking statements. These statements relate to future events or our
future financial performance, including our projected revenue and fully diluted
earnings per share data (on a GAAP and non-GAAP basis) for the second quarter.
These statements are only predictions and involve known and unknown risks,
uncertainties and other factors that may cause our actual results, levels of
activity, performance or achievements to differ materially from any future
results, levels of activity, performance or achievements expressed or implied
by these forward looking statements. Factors that might cause such a difference
include our inability to compete successfully in the competitive and rapidly
changing marketplace in which we operate, failure to retain key employees,
cancellation or delay of projects and adverse general economic conditions in
the United States and internationally.
5
These risks and other
factors include those listed under Risk Factors and elsewhere in our Annual
Report on Form 20-F as filed with the Securities and Exchange Commission
(File No. 000-50799). In some cases, you can identify forward-looking
statements by terminology such as may, will, should, expects, intends,
plans, anticipates, believes, estimates, predicts, potential, continue,
or the negative of these terms or other comparable terminology. Although we
believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements.
About
Xyratex
Xyratex is a leading provider of enterprise
class data storage subsystems and storage process technology. The company
designs and manufactures enabling technology that provides OEM and disk drive
manufacturer customers with data storage products to support high-performance
storage and data communication networks. Xyratex has over 20 years of
experience in research and development relating to disk drives, storage systems
and high-speed communication protocols.
Founded in 1994 in an MBO from IBM, and with
headquarters in the UK, Xyratex has an established global base with R&D and
operational facilities in Europe, the United States and South East Asia.
For more information, visit www.xyratex.com.
Contacts:
Xyratex
Investor Relations
Brad Driver
Tel: +1 (408) 325-7260
Email: bdriver@us.xyratex.com
Website: www.xyratex.com
6
XYRATEX LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
Three Months Ended,
|
|
|
|
February 29,
|
|
February 28,
|
|
|
|
2008
|
|
2007
|
|
|
|
(US dollars in thousands, except per
share amounts)
|
|
Revenues:
|
|
|
|
|
|
Networked Storage
Solutions
|
|
$
|
187,776
|
|
$
|
163,616
|
|
Storage Infrastructure
|
|
29,278
|
|
72,791
|
|
Total revenues
|
|
217,054
|
|
236,407
|
|
|
|
|
|
|
|
Cost of revenues
|
|
184,283
|
|
191,372
|
|
Gross profit:
|
|
|
|
|
|
Networked Storage
Solutions
|
|
27,599
|
|
22,286
|
|
Storage Infrastructure
|
|
5,526
|
|
22,994
|
|
Equity compensation
|
|
(354
|
)
|
(245
|
)
|
Total gross profit
|
|
32,771
|
|
45,035
|
|
Operating expenses:
|
|
|
|
|
|
Research and development
|
|
19,279
|
|
18,794
|
|
Selling, general and
administrative
|
|
14,979
|
|
14,800
|
|
Amortization of intangible
assets
|
|
1,379
|
|
1,651
|
|
Total operating expenses
|
|
35,637
|
|
35,245
|
|
Operating income (loss)
|
|
(2,866
|
)
|
9,790
|
|
Other income
|
|
|
|
890
|
|
Interest income, net
|
|
899
|
|
655
|
|
Income (loss) before
income taxes
|
|
(1,967
|
)
|
11,335
|
|
Provision (benefit) for
income taxes
|
|
252
|
|
1,221
|
|
Net income (loss)
|
|
$
|
(2,219
|
)
|
$
|
10,114
|
|
|
|
|
|
|
|
Net earnings (loss) per
share:
|
|
|
|
|
|
Basic
|
|
$
|
(0.08
|
)
|
$
|
0.35
|
|
Diluted
|
|
$
|
(0.07
|
)
|
$
|
0.34
|
|
|
|
|
|
|
|
Weighted average common
shares (in thousands), used in computing net earnings (loss) per share:
|
|
|
|
|
|
Basic
|
|
29,125
|
|
28,847
|
|
Diluted
|
|
29,738
|
|
29,699
|
|
7
XYRATEX LTD
UNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEETS
|
|
February 29,
|
|
November 30,
|
|
|
|
2008
|
|
2007
|
|
|
|
(US dollars and amounts in
thousands)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
57,866
|
|
$
|
70,678
|
|
Accounts receivable, net
|
|
101,544
|
|
122,327
|
|
Inventories
|
|
113,131
|
|
91,662
|
|
Prepaid expenses
|
|
3,934
|
|
2,994
|
|
Deferred income taxes
|
|
2,926
|
|
3,000
|
|
Other current assets
|
|
6,281
|
|
8,275
|
|
Total current assets
|
|
285,682
|
|
298,936
|
|
Property, plant and
equipment, net
|
|
37,952
|
|
37,421
|
|
Intangible assets, net
|
|
54,282
|
|
54,175
|
|
Deferred income taxes
|
|
18,953
|
|
19,743
|
|
Total assets
|
|
$
|
396,869
|
|
$
|
410,275
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
92,747
|
|
$
|
96,046
|
|
Employee compensation and
benefits payable
|
|
11,385
|
|
13,280
|
|
Deferred revenue
|
|
8,194
|
|
15,212
|
|
Income taxes payable
|
|
1,537
|
|
1,165
|
|
Other accrued liabilities
|
|
12,907
|
|
11,311
|
|
Total current
liabilities
|
|
126,770
|
|
137,014
|
|
Long-term debt
|
|
|
|
|
|
Total liabilities
|
|
126,770
|
|
137,014
|
|
|
|
|
|
|
|
Shareholders equity
|
|
|
|
|
|
Common shares of Xyratex
Ltd (in thousands), par value $0.01 per share 70,000 authorized, 29,214 and
29,117 issued and outstanding
|
|
292
|
|
291
|
|
Additional paid-in capital
|
|
359,099
|
|
356,268
|
|
Accumulated other
comprehensive income
|
|
688
|
|
1,847
|
|
Accumulated deficit
|
|
(89,980
|
)
|
(85,145
|
)
|
Total shareholders
equity
|
|
270,099
|
|
273,261
|
|
Total liabilities and
shareholders equity
|
|
$
|
396,869
|
|
$
|
410,275
|
|
8
XYRATEX LTD
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
Three Months Ended
|
|
|
|
February 29,
|
|
February 28,
|
|
|
|
2008
|
|
2007
|
|
|
|
(US dollars in thousands)
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(2,219
|
)
|
$
|
10,114
|
|
Adjustments to reconcile
net income (loss) to net cash
provided by
operating activities:
|
|
|
|
|
|
Depreciation
|
|
3,485
|
|
3,037
|
|
Amortization of intangible
assets
|
|
1,379
|
|
1,651
|
|
Non-cash equity
compensation
|
|
2,200
|
|
1,660
|
|
Changes in assets and
liabilities, net of impact of acquisitions and divestitures
|
|
|
|
|
|
Accounts receivable
|
|
20,783
|
|
(6,996
|
)
|
Inventories
|
|
(21,469
|
)
|
6,443
|
|
Prepaid expenses and other
current assets
|
|
(602
|
)
|
(2,995
|
)
|
Accounts payable
|
|
(3,299
|
)
|
3,451
|
|
Employee compensation and
benefits payable
|
|
(1,895
|
)
|
(5,306
|
)
|
Deferred revenue
|
|
(7,018
|
)
|
(3,458
|
)
|
Income taxes payable
|
|
372
|
|
558
|
|
Deferred income taxes
|
|
(125
|
)
|
608
|
|
Other accrued liabilities
|
|
1,596
|
|
(502
|
)
|
Net cash provided by/(used
in) operating activities
|
|
(6,812
|
)
|
8,265
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Investments in property,
plant and equipment
|
|
(4,016
|
)
|
(3,642
|
)
|
Acquisition of intangible
assets
|
|
|
|
(4,790
|
)
|
Acquisition of business,
net of cash received
|
|
|
|
(1,661
|
)
|
Net cash used in investing
activities
|
|
(4,016
|
)
|
(10,093
|
)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Payments of long-term
borrowings
|
|
|
|
(1,000
|
)
|
Repurchases of common
shares
|
|
(2,618
|
)
|
|
|
Proceeds from issuance of
shares
|
|
634
|
|
502
|
|
Net cash used in financing
activities
|
|
(1,984
|
)
|
(498
|
)
|
Change in cash and cash
equivalents
|
|
(12,812
|
)
|
(2,326
|
)
|
Cash and cash equivalents
at beginning of period
|
|
70,678
|
|
56,921
|
|
Cash and cash equivalents
at end of period
|
|
$
|
57,866
|
|
$
|
54,595
|
|
9
XYRATEX LTD
SUPPLEMENTAL INFORMATION
|
|
Three Months Ended
|
|
|
|
February 29,
|
|
February 28,
|
|
|
|
2008
|
|
2007
|
|
|
|
(US dollars in thousands, except
per share amounts)
|
|
Summary Reconciliation
Of GAAP Net Income (Loss) To Non-GAAP Net Income
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
|
|
$
|
(2,219
|
)
|
$
|
10,114
|
|
|
|
|
|
|
|
Amortization of intangible
assets
|
|
1,379
|
|
1,651
|
|
Equity compensation
|
|
2,200
|
|
1,660
|
|
Other income
|
|
|
|
(890
|
)
|
Tax effect of non-GAAP
adjustments
|
|
(1,073
|
)
|
(674
|
)
|
Effect on deferred tax of
changes to UK exchange rates
|
|
462
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
$
|
749
|
|
$
|
11,861
|
|
|
|
Summary Reconciliation Of Diluted GAAP Earnings
(Loss) Per Share To Diluted Non-GAAP Earnings Per Share
|
|
|
|
|
|
|
|
Diluted GAAP earnings
(loss) per share
|
|
$
|
(0.07
|
)
|
$
|
0.34
|
|
|
|
|
|
|
|
Amortization of intangible
assets
|
|
0.05
|
|
0.06
|
|
Equity compensation
|
|
0.07
|
|
0.05
|
|
Other income
|
|
|
|
(0.03
|
)
|
Tax effect of non-GAAP
adjustments
|
|
(0.04
|
)
|
(0.02
|
)
|
Effect on deferred tax of
changes to UK exchange rates
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Diluted non-GAAP earnings
per share
|
|
$
|
0.03
|
|
$
|
0.40
|
|
|
|
|
|
|
|
Summary Of Equity
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
$
|
354
|
|
$
|
245
|
|
Research and development
|
|
708
|
|
491
|
|
Selling, general and
administrative
|
|
1,138
|
|
924
|
|
|
|
|
|
|
|
Total equity compensation
|
|
$
|
2,200
|
|
$
|
1,660
|
|
|
|
|
|
|
|
|
|
|
10
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
|
|
|
XYRATEX LTD
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
Date: March 27, 2008
|
|
By:
|
/s/ Richard Pearce
|
|
|
|
|
Name: Richard Pearce
|
|
|
|
Title: Chief Financial Officer
|
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