Supermicro Announces Second Quarter Fiscal Year 2021 Financial Results
SAN JOSE, Calif., Feb. 3, 2021 -- Super Micro Computer, Inc., a global leader in high-performance, high-efficiency server and storage technology and green computing, has 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.
About Super Micro Computer, Inc.
Supermicro (Nasdaq:SMCI), a 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.
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SUPER MICRO COMPUTER, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) |
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December 31, |
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June 30, |
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2020 |
|
2020 |
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ASSETS |
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Current assets: |
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|
|
|||||
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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 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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|
|
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Accounts payable |
$ |
396,288 |
|
|
$ |
417,673 |
|
|
|
Accrued liabilities |
141,698 |
|
|
155,401 |
|
|
||
|
Income taxes payable |
10,555 |
|
|
4,700 |
|
|
||
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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 |
|
|
||
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Total liabilities |
829,852 |
|
|
852,939 |
|
|
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Stockholders’ equity: |
|
|
|
|||||
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Common stock and additional paid-in capital |
410,522 |
|
|
389,972 |
|
|
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Treasury stock |
— |
|
|
(20,491 |
) |
|
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Accumulated other comprehensive gain (loss) |
396 |
|
|
(152 |
) |
|
||
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Retained earnings |
653,129 |
|
|
696,211 |
|
|
||
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Total Super Micro Computer, Inc. stockholders’ equity |
1,064,047 |
|
|
1,065,540 |
|
|
||
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Noncontrolling interest |
173 |
|
|
167 |
|
|
||
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Total stockholders’ equity |
1,064,220 |
|
|
1,065,707 |
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|
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Total liabilities and stockholders’ equity |
$ |
1,894,072 |
|
|
$ |
1,918,646 |
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SUPER MICRO COMPUTER, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) |
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Three Months Ended |
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Six Months Ended |
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|
|
2020 |
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|
|
|
2019 |
|
|
|
|
2020 |
|
|
|
|
2019 |
|
|
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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: |
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|
|
|
|
|
|
|
|
|
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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 |
) |
|
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Share of income from equity investee, net of taxes |
|
(1,475 |
) |
|
|
|
(1,020 |
) |
|
|
|
(145 |
) |
|
|
|
(9 |
) |
|
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Net income |
$ |
27,674 |
|
|
|
$ |
23,706 |
|
|
|
$ |
54,275 |
|
|
|
$ |
50,051 |
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Net income per common share: |
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|
|
|
|
|
|
|
|
|
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Basic |
$ |
0.54 |
|
|
|
$ |
0.47 |
|
|
|
$ |
1.05 |
|
|
|
$ |
1.00 |
|
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Diluted |
$ |
0.52 |
|
|
|
$ |
0.46 |
|
|
|
$ |
1.00 |
|
|
|
$ |
0.97 |
|
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Weighted-average shares used in calculation of net income per common share: |
|
|
|
|
|
|
|
|
|
|
|||||||||
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Basic |
|
51,499 |
|
|
|
|
50,181 |
|
|
|
|
51,914 |
|
|
|
|
50,129 |
|
|
|
Diluted |
|
53,584 |
|
|
|
|
52,009 |
|
|
|
|
54,005 |
|
|
|
|
51,758 |
|
|
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Stock-based compensation is included in the following cost and expense categories by period (in thousands): |
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Three Months Ended |
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Six Months Ended |
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|
|
|
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 |
|
|
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SUPER MICRO COMPUTER, INC. SELECTED CASH FLOW INFORMATION (in thousands) (unaudited) |
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Six Months Ended |
|||||||||
|
|
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 |
|
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Click here for the full announcement.
Source: SUPER MICRO COMPUTER, INC.
