Super Micro Computer, Inc. (Nasdaq: SMCI), a global
leader in high-performance, high-efficiency server and storage
technology and green computing, today announced financial results
for its first quarter of fiscal year 2021 ended September 30,
2020.
First Quarter Fiscal Year 2021 Highlights
- Net sales of $762 million versus $896 million in the fourth
quarter of fiscal year 2020 and $800 million in the same quarter of
last year.
- Gross margin of 17.0% versus 13.8% in the fourth quarter of
fiscal year 2020 and 16.4% in the same quarter of last year.
- Net income of $27 million versus $18 million in the fourth
quarter of fiscal year 2020 and $26 million in the same quarter of
last year.
- Diluted net income per common share of $0.49 versus $0.34 in
the fourth quarter of fiscal year 2020 and $0.51 in the same
quarter of last year.
- Non-GAAP diluted net income per common share of $0.55 versus
$0.68 in the fourth quarter of fiscal year 2020 and $0.68 in the
same quarter of last year.
- Cash flow from operations of $121 million and capital
expenditures of $12 million.
Non-GAAP gross margin for the first quarter of fiscal year 2021
was 17.1%, which adds back stock-based compensation expenses of
$0.5 million. Non-GAAP diluted net income per common share for the
first quarter of fiscal year 2021 was $0.55, which adds back
stock-based compensation expenses of $7.2 million, special
performance bonuses of $0.1 million, and other non-recurring
expenses of $0.2 million, and excludes a credit of $2.1 million
from an executive SEC settlement, all net of the related tax
effects.
As of September 30, 2020, total cash, cash equivalents and
restricted cash was $302 million and total bank debt was $36
million. Supermicro completed its previously announced $30 million
share purchase program during Q1 2020.
“We were pleased to deliver Q1 revenue above the midpoint of our
guidance range in a turbulent demand environment," said Charles
Liang, Chairman and CEO. "As expected, a number of our enterprise
customers slowed their spending last quarter, but we are encouraged
to see significant progress and growth with several high profile
customers last quarter. A recent improvement in business trends
gives us confidence in our outlook to resume sequential growth. We
are excited about our robust pipeline of innovative products
extending into the next calendar year. We believe that our Q1
results will mark a near-term bottom as we aim to re-accelerate our
growth through the remainder of fiscal 2021 and drive further
growth in fiscal 2022."
Second Quarter Fiscal Year 2021 Guidance
The Company expects net sales of $780 million to $880 million,
GAAP net income per diluted share of $0.25 to $0.47 and non-GAAP
net income per diluted share of $0.35 to $0.58 for the second
quarter of fiscal year 2021 ending December 31, 2020. The Company’s
projections for GAAP and non-GAAP net income per diluted share both
assume a tax rate of approximately 16% and a fully diluted share
count of 56 million shares. The outlook for Q2 of fiscal year 2021
GAAP net income per diluted share includes approximately $7.0
million in expected stock-based compensation expense that is
excluded from non-GAAP net income per diluted share.
Share Repurchase Authorization
The Company also announced today that, its Board of Directors
has authorized a new stock repurchase program pursuant to which the
Company may repurchase up to $50 million of its common stock. The
stock repurchase program is effective until October 31, 2021 or
until the maximum amount of common stock is repurchased, whichever
occurs first.
"The stock repurchase program reflects our ongoing commitment to
creating value for shareholders," said Charles Liang, Chairman and
CEO of the Company. "We are currently taking an opportunistic
approach to our stock repurchases while we continue to refine our
longer-term capital allocation strategy."
Stock repurchases may be made from time to time at prevailing
prices in the open market, including pursuant to a Rule 10b5-1
plan. There can be no assurance of how many shares will be
repurchased, and the repurchase program may be suspended for
periods or discontinued at any time. The timing and amount of any
shares repurchased will be determined based on an evaluation of
market conditions and other factors. Share repurchases will be
funded with cash on hand.
The Company had approximately 51,782,128 shares of common stock
outstanding on October 31, 2020.
Conference Call and Webcast Information
The Company will hold a phone conference to answer questions
from institutional investors and financial analysts beginning at
2:00 p.m. Pacific Time (PT) on November 3, 2020.
The conference call can be accessed by registering online at:
http://www.directeventreg.com/registration/event/7507107
After registering, a confirmation will be sent through email,
including dial-in details and unique conference call codes.
Registration is open up to the time of the live call, but to ensure
access to the entire call, it is recommended that participants
register at least 10 minutes before the start of the call.
The webcast can be accessed by registering online at:
https://event.on24.com/wcc/r/2626349/BFCD1F879C4694137390AB44F5B94A45
A replay of the webcast will be available shortly after the call
on the Company’s investor relations website (https://ir.supermicro.com) and will remain
accessible for one year.
Cautionary Statement Regarding Forward Looking
Statements
Statements contained in this press release that are not
historical fact may be forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward-looking
statements may relate to, among other things, the second quarter of
fiscal year 2021 guidance, the first quarter of fiscal year 2021
revenue marking a near-term bottom and the ability to execute on
our company strategy during the global COVID-19 pandemic. Such
forward-looking statements do not constitute guarantees of future
performance and are subject to a variety of risks and uncertainties
that could cause our actual results to differ materially from those
anticipated, including: (i) the global COVID-19 pandemic continues
to present significant uncertainties for all parts of our business
including our supply chain, our production operations and customer
demand, (ii) our quarterly operating results may fluctuate, which
could cause rapid declines in our stock price, (iii) as we
increasingly target larger customers and larger sales
opportunities, our customer base may become more concentrated, our
cost of sales may increase, our margins may be lower and our sales
may be less predictable, (iv) if we fail to meet publicly announced
financial guidance or other expectations about our business, our
stock could decline in value, (v) the average sales prices for our
server solutions could decline if customers do not continue to
purchase our latest generation products or additional components,
and (vi) adverse economic conditions may harm our business.
Additional factors that could cause actual results to differ
materially from those projected or suggested in any forward-looking
statements are contained in our filings with the Securities and
Exchange Commission, including those factors discussed under the
caption "Risk Factors" in such filings, particularly in our Annual
Report on Form 10-K for our fiscal year ended June 30, 2020.
Use of Non-GAAP Financial Measures
Non-GAAP gross margin discussed in this press release adds back
stock-based compensation expenses and special performance bonuses.
Non-GAAP diluted net income per common share discussed in this
press release adds back stock-based compensation expenses, special
performance bonuses, and other non-recurring expenses, and excludes
a credit from an executive SEC settlement, which are all adjusted
for the related tax effects of the applicable items. Management
presents non-GAAP financial measures because it considers them to
be important supplemental measures of performance. Management uses
the non-GAAP financial measures for planning purposes, including
analysis of the Company's performance against prior periods, the
preparation of operating budgets and to determine appropriate
levels of operating and capital investments. Management also
believes that the non-GAAP financial measures provide additional
insight for analysts and investors in evaluating the Company's
financial and operational performance. However, these non-GAAP
financial measures have limitations as an analytical tool, and are
not intended to be an alternative to financial measures prepared in
accordance with GAAP. A reconciliation of gross margin to non-GAAP
gross margin and from diluted net income per common share to
non-GAAP diluted net income per common share is included in the
tables below.
About Super Micro Computer, Inc.
Supermicro (Nasdaq:SMCI), the leading innovator in
high-performance, high-efficiency server and storage technology is
a premier provider of advanced server Building Block Solutions® for
Enterprise Data Center, Cloud Computing, Artificial Intelligence,
and Edge Computing Systems worldwide. Supermicro is committed to
protecting the environment through its “We Keep IT Green®”
initiative and provides customers with the most energy-efficient,
environmentally-friendly solutions available on the market.
Supermicro, Server Building Block Solutions, and We Keep IT
Green are trademarks and/or registered trademarks of Super Micro
Computer, Inc.
All other brands, names and trademarks are the property of their
respective owners.
SUPER MICRO COMPUTER,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
(unaudited)
September 30,
June 30,
2020
2020
ASSETS
Current assets:
Cash and cash equivalents
$
300,089
$
210,533
Accounts receivable, net of allowances
322,845
403,745
Inventories
773,856
851,498
Prepaid expenses and other current
assets
82,731
126,985
Total current assets
1,479,521
1,592,761
Investment in equity investee
5,025
2,703
Property, plant and equipment, net
241,852
233,785
Deferred income taxes, net
55,122
54,898
Other assets
35,173
34,499
Total assets
$
1,816,693
$
1,918,646
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
333,359
$
417,673
Accrued liabilities
121,710
155,401
Income taxes payable
6,325
4,700
Short-term debt
24,047
23,704
Deferred revenue
104,247
106,157
Total current liabilities
589,688
707,635
Deferred revenue, non-current
97,576
97,612
Long-term debt, net of debt issuance
costs
11,980
5,697
Other long-term liabilities
44,707
41,995
Total liabilities
743,951
852,939
Stockholders’ equity:
Common stock and additional paid-in
capital
400,157
389,972
Treasury stock
(50,491)
(20,491)
Accumulated other comprehensive gain
(loss)
95
(152)
Retained earnings
722,812
696,211
Total Super Micro Computer, Inc.
stockholders’ equity
1,072,573
1,065,540
Noncontrolling interest
169
167
Total stockholders’ equity
1,072,742
1,065,707
Total liabilities and stockholders’
equity
$
1,816,693
$
1,918,646
SUPER MICRO COMPUTER,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except share
and per share amounts)
(unaudited)
Three Months Ended
September 30,
2020
2019
Net sales
$
762,250
$
799,804
Cost of sales
632,335
668,875
Gross profit
129,915
130,929
Operating expenses:
Research and development
54,798
49,572
Sales and marketing
20,292
20,194
General and administrative
24,379
28,298
Total operating expenses
99,469
98,064
Income from operations
30,446
32,865
Other income (expense), net
(841)
1,589
Interest expense
(674)
(552)
Income before income tax provision
28,931
33,902
Income tax provision
(3,660)
(8,568)
Share of income from equity investee, net
of taxes
1,330
1,011
Net income
$
26,601
$
26,345
Net income per common share:
Basic
$
0.51
$
0.52
Diluted
$
0.49
$
0.51
Weighted-average shares used in
calculation of net income per common share:
Basic
52,329
50,274
Diluted
54,426
51,704
Stock-based compensation is included in
the following cost and expense categories by period (in
thousands):
Three Months Ended
September 30,
2020
2019
Cost of sales
$
503
$
395
Research and development
3,702
3,130
Sales and marketing
517
436
General and administrative
2,448
1,093
Stock-based compensation expense
$
7,170
$
5,054
SUPER MICRO COMPUTER,
INC.
SELECTED CASH FLOW
INFORMATION
(in thousands)
(unaudited)
Three Months Ended
September 30,
2020
2019
Net cash provided by operating
activities
$
120,555
$
5,560
Net cash used in investing activities
(11,851)
(13,325)
Net cash used in financing activities
(19,327)
(1,715)
Effect of exchange rate fluctuations on
cash
185
(38)
Net increase (decrease) in cash, cash
equivalents and restricted cash
89,562
(9,518)
Cash, cash equivalents and restricted cash
at the beginning of the period
212,390
262,140
Cash, cash equivalents and restricted cash
at the end of the period
$
301,952
$
252,622
SUPER MICRO COMPUTER,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(in thousands, except share
and per share amounts)
(unaudited)
Three Months Ended
September 30, 2020
June 30, 2020
September 30, 2019
GAAP GROSS PROFIT
$
129,915
$
123,517
$
130,929
Stock-based compensation
503
355
395
Special performance bonuses
—
1,201
—
Other expenses
20
39
—
Non-GAAP GROSS PROFIT
$
130,438
$
125,112
$
131,324
GAAP GROSS MARGIN
17.0
%
13.8
%
16.4
%
Stock-based compensation expenses
0.1
%
—
%
—
%
Special performance bonuses
—
%
0.2
%
—
%
Other expenses
—
%
—
%
—
%
Non-GAAP GROSS MARGIN
17.1
%
14.0
%
16.4
%
GAAP OPERATING EXPENSE
$
99,469
$
114,089
$
98,064
Stock-based compensation
(6,667)
(5,011)
(4,659)
Executive SEC settlement
2,122
—
—
Special performance bonuses
(90)
(16,224)
—
Other expenses
(221)
(638)
—
Controls remediation
—
(1,004)
(7,660)
Non-GAAP OPERATING EXPENSE
$
94,613
$
91,212
$
85,745
GAAP INCOME FROM OPERATIONS
$
30,446
$
9,428
$
32,865
Stock-based compensation
7,170
5,366
5,054
Executive SEC settlement
(2,122)
—
—
Special performance bonuses
90
17,425
—
Other expenses
241
677
—
Controls remediation
—
1,004
7,660
Non-GAAP INCOME FROM OPERATIONS
$
35,825
$
33,900
$
45,579
GAAP NET INCOME
$
26,601
$
18,450
$
26,345
Stock-based compensation
7,170
5,366
5,054
Executive SEC settlement
(2,122)
—
—
Special performance bonuses
90
17,425
—
Other expenses
241
677
—
Controls remediation
—
1,004
7,660
Adjustments to tax provision
(1,183)
(5,101)
(3,049)
Non-GAAP NET INCOME
$
30,797
$
37,821
$
36,010
GAAP NET INCOME PER COMMON SHARE –
BASIC
$
0.51
$
0.35
$
0.52
Impact of Non-GAAP adjustments
0.08
0.37
0.20
Non-GAAP NET INCOME PER COMMON SHARE –
BASIC
$
0.59
$
0.72
$
0.72
GAAP NET INCOME PER COMMON SHARE –
DILUTED
$
0.49
$
0.34
$
0.51
Impact of Non-GAAP adjustments
0.06
0.34
0.17
Non-GAAP NET INCOME PER COMMON SHARE –
DILUTED
$
0.55
$
0.68
$
0.68
WEIGHTED-AVERAGE SHARES USED IN COMPUTING
NET INCOME PER COMMON SHARE
BASIC – GAAP
52,329
52,240
50,274
BASIC - Non-GAAP
52,329
52,240
50,274
DILUTED – GAAP
54,426
54,218
51,704
DILUTED - Non-GAAP
55,883
55,595
53,325
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201103005730/en/
Investor Relations Contact James Kisner Vice President,
Investor Relations (669) 284-1259 email:
ir@supermicro.com
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