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 second quarter of fiscal year 2021 ended December 31,
2020.
Second Quarter Fiscal Year 2021 Highlights
- Net sales of $830 million versus $762 million in the first
quarter of fiscal year 2021 and $871 million in the same quarter of
last year.
- Gross margin of 16.4% versus 17.0% in the first quarter of
fiscal year 2021 and 15.9% in the same quarter of last year.
- Net income of $28 million versus $27 million in the first
quarter of fiscal year 2021 and $24 million in the same quarter of
last year.
- Diluted net income per common share of $0.52 versus $0.49 in
the first quarter of fiscal year 2021 and $0.46 in the same quarter
of last year.
- Non-GAAP diluted net income per common share of $0.63 versus
$0.55 in the first quarter of fiscal year 2021 and $0.57 in the
same quarter of last year.
- Cash flow from operations of $63 million and capital
expenditures of $14 million.
Non-GAAP gross margin for the second quarter of fiscal year 2021
was 16.4%, which adds back stock-based compensation expenses of
$0.4 million. Non-GAAP diluted net income per common share for the
second quarter of fiscal year 2021 was $0.63, which adds back
stock-based compensation expenses of $6.5 million and special
performance bonuses of $2.5 million, net of the related tax
effects.
As of December 31, 2020, total cash, cash equivalents and
restricted cash was $317 million and total bank debt was $45
million. Supermicro completed its previously announced $50 million
share repurchase program on January 6, 2021.
“We were pleased to deliver Q2 revenue at the midpoint of our
guidance range driven by strong sequential growth in sales to our
international customers in a variety of countries, which
demonstrates the breadth and strength of our channel partnerships
around the world," said Charles Liang, Chairman and CEO. "Recently
strong bookings also give us confidence in our outlook to resume
year-over-year growth in Q3. We are excited about our robust
pipeline of innovative products and aim to continue to grow through
the remainder of fiscal 2021 and drive further growth in fiscal
2022."
Third Quarter Fiscal Year 2021 Guidance
The Company expects net sales of $790 million to $870 million,
GAAP net income per diluted share of $0.22 to $0.42 and non-GAAP
diluted net income per common share of $0.37 to $0.57 for the third
quarter of fiscal year 2021 ending March 31, 2021. The Company’s
projections for GAAP and non-GAAP diluted net income per common
share both assume a tax rate of approximately 16% and a fully
diluted share count of 54.5 million shares. The outlook for Q3 of
fiscal year 2021 GAAP diluted net income per common share includes
approximately $7.0 million in expected stock-based compensation
expense and $2.5 million in special performance bonuses, both net
of tax effects, that are excluded from non-GAAP diluted net income
per common share.
Chief Financial Officer Transition
On January 29, 2021, Mr. Kevin Bauer, Senior Vice President,
Chief Financial Officer, and Corporate Secretary of Supermicro, who
serves as the Company’s principal financial officer and principal
accounting officer, resigned from his positions with the Company to
pursue other interests. Mr. David Weigand, currently Senior Vice
President and Chief Compliance Officer, has been appointed as the
Senior Vice President, Chief Financial Officer, and Corporate
Secretary.
Mr. Bauer will remain at the company for a transition period
through February 2021. Kevin Bauer commented, “I have enjoyed
working with Charles and the very dedicated Supermicro team and
helping the Company through challenging times over the last four
years. I am most proud of our work enhancing our company's finance
function, providing a stronger foundation for the Company to
continue to grow, as well as our focus on improving operations to
generate cash, which enabled a return of capital to
shareholders."
"I am pleased to announce the appointment of David Weigand as
Senior Vice President & Chief Financial Officer," said
Supermicro Chairman and CEO Charles Liang. "Kevin has made valuable
contributions to Supermicro as a key member of our executive team.
His diligent efforts have helped to lay the foundation for
Supermicro’s next phase of growth. We wish Kevin well in his future
endeavors.”
Mr. Weigand joined the company in May 2018 as Senior Vice
President & Chief Compliance Officer. He previously held
executive positions at HPE and at Renesas Electronics America, Inc,
where he was Chief Financial Officer."
Share Repurchase Authorization
The Company also announced today a new stock repurchase program
pursuant to which the Company may repurchase up to $200 million of
its common stock. The stock repurchase program is effective until
July 31, 2022 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 stockholders and our very positive long-term
view of our business opportunities," said Charles Liang, Chairman
and CEO of the Company.
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 50,651,054 shares of common stock
outstanding on December 31, 2020.
Conference Call and Webcast Information
Those wishing to access the live webcast may use the
following link:
https://event.on24.com/wcc/r/2948024/CEA438C854C8F5B97595A20EDCBF99CB
The conference call can be accessed by registering online
at: http://www.directeventreg.com/registration/event/9126449
After registering, a confirmation will be sent through email,
including dial-in details and unique conference call codes for
entry. Registration is open during the live call, but to ensure
connectivity for the full call, it is
recommended that participants register a day in advance and
dial-in for the call at least 10 minutes before the start of the
call.
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 third quarter of
fiscal year 2021 guidance, our ability to grow through the
remainder of fiscal 2021 and drive further growth in fiscal 2022,
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 other expenses. 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)
December 31,
June 30,
2020
2020
ASSETS
Current assets:
Cash and cash equivalents
$
315,610
$
210,533
Accounts receivable, net of allowances
323,021
403,745
Inventories
807,431
851,498
Prepaid expenses and other current
assets
98,211
126,985
Total current assets
1,544,273
1,592,761
Investment in equity investee
3,862
2,703
Property, plant and equipment, net
255,406
233,785
Deferred income taxes, net
55,781
54,898
Other assets
34,750
34,499
Total assets
$
1,894,072
$
1,918,646
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
396,288
$
417,673
Accrued liabilities
141,698
155,401
Income taxes payable
10,555
4,700
Short-term debt
24,921
23,704
Deferred revenue
99,509
106,157
Total current liabilities
672,971
707,635
Deferred revenue, non-current
95,396
97,612
Long-term debt, net of debt issuance
costs
20,577
5,697
Other long-term liabilities
40,908
41,995
Total liabilities
829,852
852,939
Stockholders’ equity:
Common stock and additional paid-in
capital
410,522
389,972
Treasury stock
—
(20,491
)
Accumulated other comprehensive gain
(loss)
396
(152
)
Retained earnings
653,129
696,211
Total Super Micro Computer, Inc.
stockholders’ equity
1,064,047
1,065,540
Noncontrolling interest
173
167
Total stockholders’ equity
1,064,220
1,065,707
Total liabilities and stockholders’
equity
$
1,894,072
$
1,918,646
SUPER MICRO COMPUTER,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except share
and per share amounts)
(unaudited)
Three Months Ended
December 31,
Six Months Ended
December 31,
2020
2019
2020
2019
Net sales
$
830,306
$
870,943
$
1,592,556
$
1,670,747
Cost of sales
694,211
732,539
1,326,546
1,401,414
Gross profit
136,095
138,404
266,010
269,333
Operating expenses:
Research and development
52,729
55,572
107,527
105,144
Sales and marketing
20,740
21,977
41,032
42,171
General and administrative
25,261
33,040
49,640
61,338
Total operating expenses
98,730
110,589
198,199
208,653
Income from operations
37,365
27,815
67,811
60,680
Other income (expense), net
(2,539
)
(416
)
(3,380
)
1,173
Interest expense
(569
)
(560
)
(1,243
)
(1,112
)
Income before income tax provision
34,257
26,839
63,188
60,741
Income tax provision
(5,108
)
(2,113
)
(8,768
)
(10,681
)
Share of income from equity investee, net
of taxes
(1,475
)
(1,020
)
(145
)
(9
)
Net income
$
27,674
$
23,706
$
54,275
$
50,051
Net income per common share:
Basic
$
0.54
$
0.47
$
1.05
$
1.00
Diluted
$
0.52
$
0.46
$
1.00
$
0.97
Weighted-average shares used in
calculation of net income per common share:
Basic
51,499
50,181
51,914
50,129
Diluted
53,584
52,009
54,005
51,758
Stock-based compensation is included in
the following cost and expense categories by period (in
thousands):
Three Months Ended
December 31,
Six Months Ended
December 31,
2020
2019
2020
2019
Cost of sales
$
407
$
384
$
910
$
779
Research and development
3,339
3,126
7,041
6,256
Sales and marketing
497
423
1,014
859
General and administrative
2,210
1,031
4,658
2,124
Stock-based compensation expense
$
6,453
$
4,964
$
13,623
$
10,018
SUPER MICRO COMPUTER,
INC.
SELECTED CASH FLOW
INFORMATION
(in thousands)
(unaudited)
Six Months Ended
December 31,
2020
2019
Net cash provided by operating
activities
$
183,802
$
87,153
Net cash used in investing activities
(25,551
)
(23,339
)
Net cash used in financing activities
(53,697
)
(2,076
)
Effect of exchange rate fluctuations on
cash
540
175
Net increase in cash, cash equivalents and
restricted cash
105,094
61,913
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
$
317,484
$
324,053
SUPER MICRO COMPUTER,
INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(in thousands, except share
and per share amounts)
(unaudited)
Three Months Ended December
31,
Six Months Ended
December 31,
2020
2019
2020
2019
GAAP GROSS PROFIT
$
136,095
$
138,404
$
266,010
$
269,333
Stock-based compensation
407
384
910
779
Other expenses
—
—
20
—
Non-GAAP GROSS PROFIT
$
136,502
$
138,788
$
266,940
$
270,112
GAAP GROSS MARGIN
16.4
%
15.9
%
16.7
%
16.1
%
Stock-based compensation expenses
—
%
—
%
0.1
%
0.1
%
Other expenses
—
%
—
%
—
%
—
%
Non-GAAP GROSS MARGIN
16.4
%
15.9
%
16.8
%
16.2
%
GAAP OPERATING EXPENSE
$
98,730
$
110,589
$
198,199
$
208,653
Stock-based compensation
(6,046
)
(4,580
)
(12,713
)
(9,239
)
Executive SEC settlement
—
—
2,122
—
Special performance bonuses
(2,531
)
—
(2,621
)
—
Other expenses
—
—
(221
)
—
Controls remediation
—
(3,759
)
—
(11,419
)
Non-GAAP OPERATING EXPENSE
$
90,153
$
102,250
$
184,766
$
187,995
GAAP INCOME FROM OPERATIONS
$
37,365
$
27,815
$
67,811
$
60,680
Stock-based compensation
6,453
4,964
13,623
10,018
Executive SEC settlement
—
—
(2,122
)
—
Special performance bonuses
2,531
—
2,621
—
Other expenses
—
—
241
—
Controls remediation
—
3,759
—
11,419
Non-GAAP INCOME FROM OPERATIONS
$
46,349
$
36,538
$
82,174
$
82,117
GAAP TAX EXPENSE
$
5,108
$
2,113
$
8,768
$
10,681
Adjustments to tax provision
1,977
2,007
3,160
5,056
Non-GAAP TAX EXPENSE
$
7,085
$
4,120
$
11,928
$
15,737
GAAP NET INCOME
$
27,674
$
23,706
$
54,275
$
50,051
Stock-based compensation
6,453
4,964
13,623
10,018
Executive SEC settlement
—
—
(2,122
)
—
Special performance bonuses
2,531
—
2,621
—
Other expenses
—
—
241
—
Controls remediation
—
3,759
—
11,419
Adjustments to tax provision
(1,977
)
(2,007
)
(3,160
)
(5,056
)
Non-GAAP NET INCOME
$
34,681
$
30,422
$
65,478
$
66,432
GAAP NET INCOME PER COMMON SHARE –
BASIC
$
0.54
$
0.47
$
1.05
$
1.00
Impact of Non-GAAP adjustments
0.13
0.14
0.21
0.33
Non-GAAP NET INCOME PER COMMON SHARE –
BASIC
$
0.67
$
0.61
$
1.26
$
1.33
GAAP NET INCOME PER COMMON SHARE –
DILUTED
$
0.52
$
0.46
$
1.00
$
0.97
Impact of Non-GAAP adjustments
0.11
0.11
0.18
0.28
Non-GAAP NET INCOME PER COMMON SHARE –
DILUTED
$
0.63
$
0.57
$
1.18
$
1.25
WEIGHTED-AVERAGE SHARES USED IN COMPUTING
NET INCOME PER COMMON SHARE
BASIC – GAAP
51,499
50,181
51,914
50,129
BASIC - Non-GAAP
51,499
50,181
51,914
50,129
DILUTED – GAAP
53,584
52,009
54,005
51,758
DILUTED - Non-GAAP
55,133
53.572
55,508
53,350
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version on businesswire.com: https://www.businesswire.com/news/home/20210202006144/en/
Investor Relations Contact James Kisner, CFA Vice
President, Investor Relations (669) 284-1259 email:
ir@supermicro.com
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