SAN JOSE, Calif., Oct. 11, 2010 (GLOBE NEWSWIRE) -- OCZ Technology Group, Inc. (NASDAQ:OCZ), a leading provider of high-performance solid-state drives (SSDs) and memory modules for computing devices and systems, reports its fiscal 2011 second quarter ("Q2'11") results, which ended on August 31, 2010.
On a GAAP basis, net revenue for Q2'11 totaled $38.0 million, compared to $37.8 million reported in fiscal 2010's second quarter ("Q2'10"). Revenue in the Company's core SSD product line totaled $20.2 million, an increase of 81% from the $11.1 million reported in Q2'10.
In August, the Company announced the strategic transition away from certain unprofitable commodity DRAM module products. Pro forma revenue for the Company's continuing products was $29.5 million for the quarter, compared to $23.1 million in Q2'10.
This change has allowed the Company to focus on building its position in its core market for high-performance SSDs, which are commonly used in servers and enterprise storage arrays. SSD's represented 69% of the Company's ongoing business in Q2'11.
On a GAAP basis, which includes the results of the aforementioned discontinued products and related write-offs, net income for Q2'11 was a loss of $7.6 million, or $0.29 per fully diluted share, compared to a loss of $1.7 million, or $0.08 per share in Q2'10. Non-GAAP net loss for Q2'11 was $2.5 million, or $0.09 per fully diluted share, compared to a non-GAAP net loss for Q2'10 of $1.6 million, or $0.08 per share. Reconciliation between GAAP and non-GAAP information is contained in the table below.
"In the second quarter of fiscal 2011, we benefited from continued growth in our enterprise and server SSD business," said Ryan Petersen, Chief Executive Officer of OCZ Technology Group. "We are pleased with the fast paced growth of both our client and enterprise SSD product lines, and the progress we have made in transitioning from unprofitable legacy commodity DRAM products."
Recent Financial Highlights
- SSD unit sales ramped from an average of 15,000 units per month in Q1'11 to over 54,000 units in August, a unit increase of 265%
- SSD revenue increased to $20.2 million in Q2'11, a 81% increase from $11.1 million in Q2'10, and represented 51% sequential growth from $13.3 million reported in Q1'11
- Non-GAAP gross margin increased to 18.0% in Q2'11 from 15.0% in Q1'11
- Non-GAAP net loss decreased to $2.5 million in Q2'11 from $2.7 million in Q1'11
Recent Business Highlights:
- Launch of OCZ-developed High Speed Data Link (HSDL SSD) interface, which allows speeds up to 2.4 x that of current Fiber Channel interfaces; notable acclaim received from industry leading trade press
- Launch of OCZ Ibis Series Enterprise HSDL-equipped SSD, with up to 125K Random Write IOPS with prices below $3 per GB
- Commenced production shipments of eMLC-based drives to enterprise SAN customers
- Selection of OCZ Enterprise class SSDs by SGI Inc., for use in a range of SGI Supercomputing products as well as their Rackable line of servers
- OCZ's RevoDrive PCI-E SSD continues to win accolades from top tier publications including "Editors Choice" awards from Hot Hardware and PC Perspective
- Appointment of industry veteran, Richard Singh, as Sr. Vice President of Sales
- Showcased wide array of SSD products at the 2010 Flash Memory Summit
- Over 30 new client wins for OCZ SSD Product lines
Business Overview:
"We are strongly positioned to continue growing our SSD revenues and move forward with a focus on continuing to deliver market leading high performance SSD products to our customers," said Ryan Petersen, Chief Executive Officer of OCZ Technology. "The discontinuance of our commodity memory products has allowed us to aggressively reallocate resources towards SSD growth."
Mr. Petersen concluded, "As our SSD growth plans continue to exceed expectations, we plan to increase our investment in research and development in order to further solidify our leadership role in SSD technology. We similarly plan to increase our sales and marketing efforts to enable our Tier 1 partners to implement currently available OCZ developed and proprietary technologies and interfaces into their products."
Revenue Segment Information:
To help investors better understand OCZ's historical revenue trends and the pro forma impact of the recent discontinuation of commodity DRAM products, please see the revenue charts below:
Guidance:
For fiscal 2011, OCZ's prior revenue guidance was in the range of $165 million to $180 million, reflecting the impact of the discontinued DRAM products that were announced concurrent with the above revenue guidance range. OCZ re-affirms this guidance and will update investors on such expectations quarterly.
Fiscal 2nd Quarter Conference Call:
OCZ will host conference call on Monday, October 11, 2010 at 1:00PM ET (10:00AM PT). All interested parties can join the call by dialing (877) 372-0867 or (253) 237-1170. Please call-in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until October 25, 2010. To access the archived conference call, please dial (800) 642-1687 or (706) 645-9291 and enter replay passcode 15520649.
A live audio webcast of the conference call will be available by visiting the conference call section of OCZ's website at , which will be archived for replay. Please connect at least 15 minutes prior to the conference call to ensure adequate time for connection
About OCZ Technology Group, Inc.
Founded in 2002, San Jose, CA-based OCZ Technology Group, Inc. ("OCZ"), is a leader in the design, manufacturing, and distribution of high performance and reliable Solid-State Drives (SSDs) and premium computer components. OCZ has built on its expertise in high-speed memory to become a leader in the SSD market, a technology that competes with traditional rotating magnetic hard disk drives (HDDs). SSDs are faster, more reliable, generate less heat and use significantly less power than the HDDs used in the majority of computers today. In addition to SSD technology, OCZ also offers high performance components for computing devices and systems, including enterprise-class power management products as well as leading-edge computer gaming solutions. For more information, please visit: www.ocztechnology.com.
The OCZ Technology Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7439
Forward-Looking Statements
Certain statements in this release relate to future events and expectations and as such constitute forward-looking statements involving known and unknown factors that may cause actual results of OCZ Technology Group, Inc. to be different from those expressed or implied in the forward-looking statements. In this context, words such as "will," "would," "expect," "anticipate," "should" or other similar words and phrases often identify forward-looking statements made on behalf of OCZ. It is important to note that actual results of OCZ may differ materially from those described or implied in such forward-looking statements based on a number of factors and uncertainties, including, but not limited to, market acceptance of OCZ's products and OCZ's ability to continually develop enhanced products; adverse changes both in the general macro-economic environment as well as in the industries OCZ serves, including computer manufacturing, traditional and online retailers, information storage, internet search and content providers and computer system integrators; OCZ's ability to efficiently manage material and inventory, including integrated circuit chip costs and freight costs; and OCZ's ability to generate cash from operations, secure external funding for its operations and manage its liquidity needs. Other general economic, business and financing conditions and factors are described in more detail in "Item 1A – Risk Factors" in Part I in OCZ's Annual Report on Form 10-K filed with the SEC on May 20, 2010. The filing is available both at www.sec.gov as well as via OCZ's website at www.ocztechnology.com. OCZ does not undertake to update its forward-looking statements.
Non-GAAP Financial Measures
OCZ provides Adjusted EBITDA and EBIDTA as supplemental non-GAAP financial measures to its investors as a complement to net income/loss. An explanation and reconciliation of EBITDA and Adjusted EBITDA to net income/loss is set forth below. OCZ believes that providing Adjusted EBITDA and EBITDA ,both non-GAAP measures to its investors, in addition to corresponding income statement measures, provides investors the benefit of viewing OCZ's performance using a financial metric that the management team uses in making many key decisions and understanding how OCZ's "core operating performance" and its results of operations may look in the future. OCZ believes that providing this information allows OCZ's investors greater transparency and a better understanding of OCZ's core financial performance. EBITDA is not in accordance with, or an alternative for, generally accepted accounting principles in the United States of America. Non-GAAP measures should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.
Calculation of Adjusted EBITDA
Adjusted EBITDA is calculated as net income/loss excluding the impact of taxes, net interest income/expense, depreciation and amortization, as well as inventory adjustments for discontinued products, severance cost, lease termination costs, goodwill and intangible impairment, non-cash charges related to stock options and warrants, and certain other one-time charges and credits specifically identified in the non-GAAP reconciliation schedules set forth below. OCZ uses adjusted EBITDA in evaluating OCZ's historical and prospective cash usage, as well as its cash usage relative to its competitors. Specifically, management uses this non-GAAP measure to further understand and analyze the cash used in/generated from OCZ's core operations. OCZ believes that by excluding these non-cash and non-recurring charges, more accurate expectations of its future cash needs can be assessed in addition to providing a better understanding of the actual cash used in or generated from core operations for the periods presented. OCZ further believes that providing this information allows OCZ's investors greater transparency and a better understanding of OCZ's core financial results.
CONTACT: OCZ Technology Group, Inc. Ryan Petersen, CEO 408-733-8400 The Investor Relations Group Investor Relations: Adam Holdsworth 212-825-3210 Public Relations: Mike Graff 212-825-3210