Dot Hill Reports First Quarter 2012 Results
Non-GAAP Revenue and EPS exceed guidance
LONGMONT, Colo., May 9, 2012 /PRNewswire/ -- Dot Hill Systems Corp. (NASDAQ:HILL), a leading provider of SAN storage solutions, today announced financial results for the first quarter 2012, or the period ended March 31, 2012.
Financial and Operational Highlights:
- First quarter 2012 non-GAAP revenue of $54.6 million, up from $48.5 million in the first quarter of 2011, and $48.0 million in the fourth quarter of 2011
- Non-GAAP revenues grew 12.5% on a year-over-year basis and 13.7% on a quarter-over-quarter basis
- Tier 2 OEM business grew 123% on a year-over year basis and 37% sequentially, while Channel business increased 99.8% on a year-over-year basis and 15% sequentially
- First quarter 2012 non-GAAP gross margin of 29.3%, up from 25.4% in the prior quarter and up from 25.4% in the first quarter of 2011. This is a six-year non-GAAP gross margin high.
- First quarter 2012 non-GAAP EPS of $0.03, compared to $0.00 in the prior quarter and up from $0.02 in the first quarter of 2011
- Total non-GAAP operating expenses for the first quarter of 2012 were $14.2 million, as compared to $11.4 million for the first quarter of 2011 and $12.3 million for the fourth quarter of 2011
- Cash and cash equivalents of $41.4 million as of March 31, 2012 compared to $46.2 million as of December 31, 2011.
First Quarter 2012 GAAP Financial Detail:
The Company recognized GAAP net revenue of $54.7 million for the first quarter of 2012, compared to $49.2 million for the first quarter of 2011 and $47.0 million for the fourth quarter of 2011. GAAP net revenues grew 11.3% on a year-over-year basis and 16.4% on a quarter-over-quarter basis.
GAAP gross margin for the first quarter of 2012 was 27.7%, compared to 24.6% for the first quarter of 2011 and 17.6% for the fourth quarter of 2011. GAAP operating expenses for the first quarter of 2012 were $17.1 million, as compared to $13.3 million for the first quarter of 2011 and $15.0 million in the fourth quarter of 2011. GAAP net loss for the first quarter of 2012 was $1.9 million, or $(0.03) per share, as compared to a net loss of $1.3 million, or $(0.02) per share, for the first quarter of 2011, and a net loss of $6.6 million, or $(0.12) per share, for the fourth quarter of 2011.
First Quarter 2012 Non-GAAP Financial Detail:
The Company recognized non-GAAP net revenue of $54.6 million for the first quarter of 2012, compared to $48.5 million for the first quarter of 2011 and $48.0 million for the fourth quarter of 2011. Non-GAAP net revenues grew 12.5% on a year-over-year basis and 13.7% on a quarter-over-quarter basis.
Non-GAAP gross margin was 29.3% for the first quarter of 2012, compared to 25.4% for the first quarter of 2011 and 25.4% for the fourth quarter of 2011. The year-over-year improvement in gross margin was attributable to a more favorable customer mix, as well as the leverage of spreading a larger revenue base over fixed supply chain overhead costs. In addition, to the factors outlined for the year-over-year gross margin improvement, quarter-over-quarter improvement in gross margin benefited from lower warranty accruals. Total non-GAAP operating expenses for the first quarter of 2012 were $14.2 million, as compared to $11.4 million for the first quarter of 2011 and $12.3 million for the fourth quarter of 2011. The year-over-year increase in non-GAAP operating expenses was largely attributable to higher R&D investments in new and prospective customer design wins, mid-range products and next generation technology, as well as higher payroll costs.
Non-GAAP net income for the first quarter of 2012 was $1.9 million, or $0.03 per share, as compared to first quarter 2011 non-GAAP net income of $0.9 million, or $0.02 per share, and a fourth quarter 2011 non-GAAP net loss of $0.1 million, or $0.00 per share. Non-GAAP EBITDA for the first quarter of 2012 was positive $2.3 million compared to positive $1.4 million for the first quarter of 2011 and positive $0.1 million for the fourth quarter of 2011.
"I am particularly pleased with the performance of our Tier 2 OEM sales team and with the continued traction in our indirect channel sales business," said Dana Kammersgard, president and chief executive officer, Dot Hill Systems. "With respect to our mid-range product launch scheduled for later this year, we have identified launch partners and, based on their feedback, I expect these products to be very competitive from a performance, ease of use, feature functionality and price points of view."
Balance Sheet:
The Company exited the first quarter of 2012 with cash and cash equivalents of $41.4 million compared to $46.3 million at the end of March 2011 and $46.2 million at the end of 2011.
Second Quarter 2012 Outlook:
The Company is targeting second quarter 2012 non-GAAP net revenue in the range of $48 million to $52 million and a non-GAAP EPS in the range of a loss of $0.03 per share to a profit of $0.01 per share.
"Our Q1 2012 revenues benefitted from a spike in demand from one of our 4G infrastructure customers and we expect a reduction in revenue from this customer in the second quarter. While we are guiding to a slight revenue decline in the second quarter, our projected first half of 2012 revenue of $102.5 million based on the mid-point of the guidance range is in line with the current average of the sell side analysts covering Dot Hill," stated Hanif Jamal, chief financial officer, Dot Hill Systems.
Conference Call Information:
Dot Hill's first quarter 2012 financial results conference call is scheduled to take place on Wednesday, May 9, 2012 at 4:30 p.m. ET. Please join us for a live audio webcast at www.dothill.com in the Investor Relations section. If you prefer to join via telephone, please dial 877-303-3196 (U.S.) or 408-427-3864 (International) at least five minutes prior to the start of the call. A replay of the webcast is scheduled to be available for one week on the Dot Hill web site following the conference call. For a telephone replay, dial 855-859-2056 (U.S.) or 404-537-3406 (International) and enter conference ID# 74410103.
About Non-GAAP Financial Measures
The Company's non-GAAP financial measures exclude the impact of stock-based compensation expense, intangible asset amortization, restructuring and severance charges, charges or credits for contingent consideration adjustments, charges for impairment of goodwill and long-lived assets, contra-revenue charges from the extension of customer warrants, specific and significant warranty claims arising from a supplier's defective products, the impact of the company's now exited AssuredUVS business and the effects of foreign currency gains or losses. The Company believes that these non-GAAP financial measures provide meaningful supplemental information to both management and investors that is indicative of the Company's core operating results and facilitates comparison of operating results across reporting periods. The Company used these non-GAAP measures when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. These non-GAAP measures should not be viewed in isolation from or as a substitute for the Company's financial results in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures is attached to this press release.
About Dot Hill
Delivering innovative technology and global support, Dot Hill empowers the OEM and channels community to bring unique storage solutions to market, quickly, easily and cost-effectively. Offering high performance and industry-leading uptime, Dot Hill's RAID technology is the foundation for best-in-class storage solutions offering enterprise-class security, availability and data protection. The Company's products are in use today by the world's leading service and equipment providers, common carriers and advanced technology and telecommunications companies, as well as government agencies and small and medium enterprise customers. Dot Hill solutions are certified to meet rigorous industry standards and military specifications, as well as RoHS and WEEE international environmental standards. Headquartered in Longmont, Colorado, Dot Hill has offices and/or representatives in China, Germany, Japan, United Kingdom, Singapore and the United States. For more information, visit us at http://www.dothill.com.
Statements contained in this press release regarding matters that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include statements regarding the contributions of Mr. Rudolph to Dot Hill's strategic initiatives and the future success of Dot Hill. The risks that contribute to the uncertain nature of the forward-looking statements include: the risks associated with macroeconomic factors that are outside of Dot Hill's control; the fact that no Dot Hill customer agreements provide for mandatory minimum purchase requirements; the risk that one or more of Dot Hill's OEM or other customers may cancel or reduce orders, not order as forecasted or terminate their agreements with Dot Hill; the risk that Dot Hill's new products may not prove to be popular; the risk that one or more of Dot Hill's suppliers or subcontractors may fail to perform or may terminate their agreements with Dot Hill; the risk that sales through channel partners may not materialize; unforeseen product quality, technological, intellectual property, personnel or engineering issues; and the additional risks set forth in the Company's most recent Forms 10-Q and 10-K filed with the Securities and Exchange Commission by Dot Hill. All forward-looking statements contained in this press release speak only as of the date on which they were made. Dot Hill undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.
HILL-F
Contact:
Hanif Jamal
Chief Financial Officer
Tel: 303-845-3377
Email: [email protected]
Jodi Bochert
Investor Relations
Tel: 303-845-3469
Email: [email protected]
Peter Seltzberg
Hayden IR
Tel: 646-415-8972
Email: [email protected]
| DOT HILL SYSTEMS CORP. |
||||||
| UNAUDITED STATEMENTS OF OPERATIONS |
||||||
| (In thousands, except per share amounts) |
||||||
| Three Months Ended |
||||||
| March 31, |
December 31, |
March 31, |
||||
| Net revenue |
$ 49,174 |
$ 47,037 |
$ 54,744 |
|||
| Cost of goods sold |
37,072 |
38,743 |
39,570 |
|||
| Gross profit |
12,102 |
8,294 |
15,174 |
|||
| Operating expenses: |
||||||
| Research and development |
7,986 |
9,113 |
9,942 |
|||
| Sales and marketing |
3,033 |
3,426 |
3,533 |
|||
| General and administrative |
2,341 |
2,430 |
3,068 |
|||
| Restructuring charge (recoveries) |
(41) |
13 |
601 |
|||
| Total operating expenses |
13,319 |
14,982 |
17,144 |
|||
| Operating income (loss) |
(1,217) |
(6,688) |
(1,970) |
|||
| Other income: |
||||||
| Interest income (expense), net |
(6) |
45 |
8 |
|||
| Other income (expense), net |
2 |
(44) |
3 |
|||
| Total other income (expense), net |
(4) |
1 |
11 |
|||
| Income (loss) before income taxes |
(1,221) |
(6,687) |
(1,959) |
|||
| Income tax expense |
50 |
(61) |
(91) |
|||
| Net income (loss) |
$ (1,271) |
$ (6,626) |
$ (1,868) |
|||
| Net income (loss) per basic and diluted share |
$ (0.02) |
$ (0.12) |
$ (0.03) |
|||
| Shares used to compute net income (loss): |
||||||
| per share |
||||||
| Basic |
54,334 |
55,357 |
56,030 |
|||
| Diluted |
54,334 |
55,357 |
56,030 |
|||
| DOT HILL SYSTEMS CORP. |
|||||
| UNAUDITED BALANCE SHEETS |
|||||
| (In thousands, except par value data) |
|||||
| December 31, |
March 31, |
||||
| 2011 |
2012 |
||||
| Assets |
|||||
| Current assets: |
|||||
| Cash and cash equivalents |
$ 46,168 |
$ 41,447 |
|||
| Accounts receivable, net |
31,697 |
35,138 |
|||
| Inventories |
5,251 |
4,753 |
|||
| Prepaid expenses and other assets |
7,896 |
12,681 |
|||
| Total current assets |
91,012 |
94,019 |
|||
| Property and equipment, net |
4,972 |
5,387 |
|||
| Intangible assets, net |
2,601 |
2,160 |
|||
| Other assets |
294 |
738 |
|||
| Total assets |
$ 98,879 |
$ 102,304 |
|||
| Liabilities and stockholders' equity |
|||||
| Current liabilities: |
|||||
| Accounts payable |
$ 31,434 |
$ 36,710 |
|||
| Accrued compensation |
5,049 |
4,113 |
|||
| Accrued expenses |
10,860 |
10,445 |
|||
| Deferred revenue |
883 |
773 |
|||
| Restructuring accrual |
1,328 |
1,739 |
|||
| Current portion of long-term note payable |
71 |
- |
|||
| Total current liabilities |
49,625 |
53,780 |
|||
| Other long-term liabilities |
552 |
426 |
|||
| Total liabilities |
50,177 |
54,206 |
|||
| Commitments and Contingencies |
|||||
| Stockholders' equity: |
|||||
| Preferred Stock |
- |
- |
|||
| Common Stock |
58 |
58 |
|||
| Additional paid-in capital |
321,681 |
322,870 |
|||
| Accumulated other comprehensive loss |
(3,662) |
(3,587) |
|||
| Accumulated deficit |
(269,375) |
(271,243) |
|||
| Total stockholders' equity |
48,702 |
48,098 |
|||
| Total liabilities and stockholders' equity |
$ 98,879 |
$ 102,304 |
|||
| DOT HILL SYSTEMS CORP. |
||||||
| UNAUDITED STATEMENTS OF CASH FLOWS |
||||||
| (In thousands) |
||||||
| Three Months Ended |
||||||
| March 31, |
December 31, |
March 31, |
||||
| Cash Flows From Operating Activities: |
||||||
| Net income (loss) |
$ (1,271) |
$ (6,626) |
$ (1,868) |
|||
| Adjustments to reconcile net income (loss) to net cash |
||||||
| provided by (used in) operating activities: |
||||||
| Depreciation and amortization |
1,049 |
845 |
1,085 |
|||
| Stock-based compensation expense |
803 |
1,390 |
1,142 |
|||
| Loss on write-off of fixed assets |
- |
- |
123 |
|||
| Issuance of warrant to customer |
- |
1,007 |
- |
|||
| Changes in operating assets and liabilities, net of effects of business acquisition: |
||||||
| Accounts receivable |
8,003 |
(6,748) |
(3,469) |
|||
| Inventories |
2,190 |
(57) |
496 |
|||
| Prepaid expenses and other assets |
(46) |
(2,512) |
(5,250) |
|||
| Accounts payable |
(8,489) |
9,824 |
4,543 |
|||
| Accrued compensation and other expenses |
(1,022) |
4,370 |
(1,286) |
|||
| Deferred revenue |
220 |
(35) |
(96) |
|||
| Restructuring accrual |
(243) |
(238) |
411 |
|||
| Other long-term liabilities |
(244) |
(109) |
(118) |
|||
| Net cash provided by (used in) operating activities |
950 |
1,111 |
(4,287) |
|||
| Cash Flows From Investing Activities: |
||||||
| Purchases of property and equipment |
(604) |
(469) |
(327) |
|||
| Net cash used in investing activities |
(604) |
(469) |
(327) |
|||
| Cash Flows From Financing Activities: |
||||||
| Principal payment of note and loan payable |
(68) |
(193) |
(71) |
|||
| Shares withheld for tax purposes |
(191) |
(78) |
(401) |
|||
| Common stock issued under stock plans |
536 |
28 |
448 |
|||
| Net cash provided by (used in) financing activities |
277 |
(243) |
(24) |
|||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents |
(46) |
97 |
(83) |
|||
| Net Increase (Decrease) in Cash and Cash Equivalents |
577 |
496 |
(4,721) |
|||
| Cash and Cash Equivalents, beginning of period |
45,732 |
45,672 |
46,168 |
|||
| Cash and Cash Equivalents, end of period |
$ 46,309 |
$ 46,168 |
$ 41,447 |
|||
| Supplemental Disclosures of Non-Cash Investing and |
||||||
| Financing Activities: |
||||||
| Capital assets acquired but not paid |
$ 223 |
$ 1,540 |
$ 855 |
|||
| DOT HILL SYSTEMS CORP. |
|||||
| UNAUDITED RECONCILIATION OF NON-GAAP MEASURES |
|||||
| (In thousands, except per share amounts) |
|||||
| Three Months Ended |
|||||
| March 31, |
December 31, |
March 31, |
|||
| Net revenue, as reported |
$ 49,174 |
$ 47,037 |
$ 54,744 |
||
| Effect of ITC Revenue |
(631) |
(16) |
(147) |
||
| Effect of issuance of warrant to customer |
- |
1,007 |
- |
||
| Non-GAAP net revenue |
$ 48,543 |
$ 48,028 |
$ 54,597 |
||
| Gross profit, as reported |
$ 12,102 |
$ 8,294 |
$ 15,174 |
||
| Effect of stock-based compensation |
133 |
158 |
172 |
||
| Effect of severance costs |
- |
- |
6 |
||
| Effect of issuance of warrant to customer |
- |
1,007 |
- |
||
| Effect of ITC Revenue |
(631) |
(16) |
(147) |
||
| Effect of ITC Expenses |
222 |
293 |
356 |
||
| Effect of power supply component failures |
- |
1,970 |
- |
||
| Effect of intangible asset amortization |
520 |
493 |
441 |
||
| Non-GAAP gross profit |
$ 12,346 |
$ 12,199 |
$ 16,002 |
||
| Operating expenses, as reported |
$ 13,319 |
$ 14,982 |
$ 17,144 |
||
| Effect of currency gain (loss) |
(58) |
(147) |
(376) |
||
| Effect of stock-based compensation |
(670) |
(1,232) |
(970) |
||
| Effect of contingent consideration adjustment |
- |
(21) |
- |
||
| Effect of ITC Expenses |
(1,278) |
(1,233) |
(956) |
||
| Effect of restructuring (charge) recoveries |
41 |
(13) |
(601) |
||
| Effect of severance costs |
- |
- |
(9) |
||
| Non-GAAP operating expenses |
$ 11,354 |
$ 12,336 |
$ 14,232 |
||
| Net income (loss), as reported |
$ (1,271) |
$ (6,626) |
$ (1,868) |
||
| Effect of currency (gain) loss |
58 |
147 |
376 |
||
| Effect of stock-based compensation |
803 |
1,390 |
1,142 |
||
| Effect of contingent consideration adjustment |
- |
21 |
- |
||
| Effect of restructuring charge (recoveries) |
(41) |
13 |
601 |
||
| Effect of intangible asset amortization |
520 |
493 |
441 |
||
| Effect of power supply component failures |
- |
1,970 |
- |
||
| Effect of ITC Expenses |
1,500 |
1,526 |
1,312 |
||
| Effect of ITC Revenue |
(631) |
(16) |
(147) |
||
| Effect of severance costs |
- |
- |
15 |
||
| Effect of issuance of warrant to customer |
- |
1,007 |
- |
||
| Non-GAAP net income (loss) |
$ 938 |
$ (75) |
$ 1,872 |
||
| Non-GAAP net income (loss) per share: |
|||||
| Basic |
$ 0.02 |
$ (0.00) |
$ 0.03 |
||
| Diluted |
$ 0.02 |
$ (0.00) |
$ 0.03 |
||
| Weighted average shares used to calculate net income (loss) per share: |
|||||
| Basic |
54,334 |
55,357 |
56,030 |
||
| Diluted |
55,644 |
55,357 |
57,094 |
||
| Non-GAAP net income (loss) |
$ 938 |
$ (75) |
$ 1,872 |
||
| Interest expense |
6 |
8 |
7 |
||
| Income tax expense |
50 |
(61) |
(91) |
||
| Depreciation less ITC |
431 |
219 |
545 |
||
| Non-GAAP EBITDA |
$ 1,425 |
$ 91 |
$ 2,333 |
||
SOURCE Dot Hill Systems Corp.
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article