Supermicro Announces 4th Quarter 2014 Financial Results 

Super Micro Computer, Inc. today announced fourth quarter and full-year financial results for the fiscal year ended June 30, 2014.

Fiscal 4th Quarter Highlights

• Quarterly net sales of $428.1 million, up 14.5% from the third quarter of fiscal year 2014 and up 32.8% from the same quarter of last year.
• GAAP net income before income tax provision of $26.3 million, up 23.5% from the third quarter of fiscal year 2014 and up 114.3% from the same quarter of last year.
• GAAP net income of $16.5 million, down 0.2% from the third quarter of fiscal year 2014 and up 96.4% from the same quarter of last year.
• GAAP gross margin of 15.5%, up from 15.3% in the third quarter of fiscal year 2014 and up from 14.3% in the same quarter of last year.
• Server solutions accounted for 55.2% of net sales compared with 50.1% in the third quarter of fiscal year 2014 and 47.4% in the same quarter of last year.

Net sales for the fourth quarter ended June 30, 2014 totaled $428.1 million, up 14.5% from $373.8 million in the third quarter of fiscal year 2014. No customer accounted for more than 10% of net sales during the quarter ended June 30, 2014.

GAAP net income for the fourth quarter of fiscal year 2014 was $16.5 million or $0.34 per diluted share, an increase of 96.4% from the net income of $8.4 million, or $0.19 per diluted share in the same period a year ago. Included in net income for the quarter is $2.9 million of stock-based compensation expense (pre-tax). Excluding this item and the related tax effect, non-GAAP net income for the fourth quarter was $19.4 million, or $0.40 per diluted share, compared to non-GAAP net income of $11.3 million, or $0.26 per diluted share, in the same quarter of the prior year. On a sequential basis, non-GAAP net income increased from the third quarter of fiscal year 2014 by $1.6 million or $0.03 per diluted share.

GAAP gross margin for the fourth quarter was 15.5% compared to 14.3% in the same period a year ago. Non-GAAP gross margin for the fourth quarter was 15.6% compared to 14.4% in the same period a year ago. GAAP gross margin and Non-GAAP gross margin for the third quarter of fiscal year 2014 were 15.3% and 15.4%, respectively.

The GAAP income tax provision was $9.8 million or 37.2% of income before tax provision compared to $3.9 million or 31.4% in the same period a year ago and $4.8 million or 22.3% in the third quarter of fiscal year 2014. The increase from prior year was due to the reinstatement of the R&D tax credit in that quarter. The increase from prior quarter was due to a lower deduction for stock-based compensation expense and an increase in taxable income in the current quarter.

The Company's cash and cash equivalents and short and long term investments at June 30, 2014 were $99.6 million compared to $95.7 million at June 30, 2013. Free cash flow for the year ended June 30, 2014 was $(34.0) million primarily due to the purchase of real property in San Jose, California for $30.1 million.

Fiscal Year 2014 Summary

Net sales for the fiscal year ended June 30, 2014 were $1,467.2 million, up 26.2% from $1,162.6 million for the fiscal year ended June 30, 2013. GAAP net income for fiscal year 2014 increased to $54.2 million, or $1.16 per diluted share, an increase of 154.5% from $21.3 million, or $0.48 per diluted share, for fiscal year 2013. Excluding $11.1 million of stock based-compensation expense and related tax effect, non-GAAP net income for the fiscal year 2014 was $62.9 million or $1.34 per diluted share, an increase of 95.4% compared to $32.2 million or $0.73 per diluted share for fiscal year 2013.

Business Outlook & Management Commentary

The Company expects net sales of $395 million to $435 million for the first quarter of fiscal year 2015 ending September 30, 2014. The Company expects non-GAAP earnings per diluted share of approximately $0.36 to $0.42 for the first quarter.

“In the fourth quarter, we achieved $428.1 million revenue or 32.8% growth over last year which marked the third straight quarter of record revenues and keeps us on a path to reach our goal of achieving $2 billion annual run rate in the coming fiscal year 2015. Revenue growth was driven by higher sales into virtualization and cloud applications to internet data centers totaling 17.8% of fourth quarter revenue or 150% higher than last year which helped us to achieve record revenue for system sales of 55.2% of revenue. With this strong revenue growth combined with operating expense leverage, we achieved record profits,” said Charles Liang, Chairman and CEO. “We are looking forward to the new fiscal year and we have been preparing to be a strong market leader in the upcoming technology refresh cycle related to the Intel Grantley (Haswell new processor) launch. We have created new X10 based product lines optimized for Grantley which includes our new Ultra server architecture, our new Data Center Optimized line, and our TwinPro line to just name a few of the many products that will lead the industry in innovation and time to market.”

It is currently expected that the outlook will not be updated until the Company’s next quarterly earnings announcement, notwithstanding subsequent developments. However, the Company may update the outlook or any portion thereof at any time. Such updates will take place only by way of a news release or other broadly disseminated disclosure available to all interested parties in accordance with Regulation FD.