Supermicro Announces Fourth Quarter and Full Year Fiscal Year 2021 Financial Results

SAN JOSE, Calif.–(BUSINESS WIRE)–Super Micro Computer, Inc. (Nasdaq: SMCI), a global leader in high-performance, high-efficiency server and storage technology and green computing, today announced fourth quarter and full-year financial results for fiscal year 2021 ended June 30, 2021.

Fourth Quarter of Fiscal Year 2021 Highlights

  • Net sales of $1.07 billion versus $896 million in the third quarter of fiscal year 2021 and $896 million in the same quarter of last year.
  • Gross margin of 13.6% versus 13.7% in the third quarter of fiscal year 2021 and 13.8% in the same quarter of last year.
  • Net income of $39 million versus $18 million in the third quarter of fiscal year 2021 and $18 million in the same quarter of last year.
  • Diluted net income per common share of $0.74 versus $0.35 in the third quarter of fiscal year 2021 and $0.34 in the same quarter of last year.
  • Non-GAAP diluted net income per common share of $0.81 versus $0.50 in the third quarter of fiscal year 2021 and $0.68 in the same quarter of last year.
  • Cash flow generated from operations of $64 million and capital expenditures of $13 million.

Non-GAAP gross margin for the fourth quarter of fiscal year 2021 was 13.7%, which adds back stock-based compensation expense of $0.5 million. Non-GAAP diluted net income per common share for the fourth quarter of fiscal year 2021 was $0.81, which adds back stock-based compensation expense of $7.4 million, special performance bonuses of $0.7 million and controls remediation costs recovery of $0.2 million, less tax effects of $3.4 million.

As of June 30, 2021, total cash and cash equivalents was $232 million and bank debt was $98 million.

Fiscal Year 2021 Summary

Net sales for the fiscal year ended June 30, 2021, were $3.56 billion versus $3.34 billion for the fiscal year ended June 30, 2020. Net income for fiscal year 2021 was $112 million, or $2.09 per diluted share, versus $84 million, or $1.60 per diluted share, for fiscal year 2020. Non-GAAP net income for the fiscal year 2021 was $136 million, or $2.48 per diluted share, versus $150 million, or $2.77 per diluted share, for fiscal year 2020. Non-GAAP net income for the fiscal year 2021 adds back stock-based compensation expense of $28.5 million, special performance bonuses of $5.8 million, executive SEC settlement credit of $2.1 million, and controls remediation costs and other expenses of $1.3 million, less tax effects of $9.0 million.

Business Outlook and Management Commentary

The Company expects net sales of $900 million to $980 million, GAAP net income per diluted share of $0.16 to $0.36 and non-GAAP net income per diluted share of $0.28 to $0.48 for the first quarter of fiscal year 2022 ending September 30, 2021. The Company’s projections for GAAP and non-GAAP net income per diluted share both assume a tax rate of approximately 16% and a fully diluted share count of 53.7 million shares for GAAP and fully diluted share count of 55.0 million shares for non-GAAP. The outlook for Q1 of fiscal year 2022 GAAP net income per diluted share includes approximately $8 million in expected stock-based compensation expense and other expenses that are excluded from non-GAAP net income per diluted share. The Company expects net sales of $4.1 billion to $4.5 billion, GAAP net income per diluted share of at least $2.60 and non-GAAP net income per diluted share of at least $3.00 for fiscal year 2022 ending June 30, 2022. The Company’s projections for GAAP and non-GAAP net income per diluted share both assume a tax rate of approximately 16% and a fully diluted share count of 55.3 million shares for GAAP and fully diluted share count of 56.5 million shares for non-GAAP. The outlook for fiscal year 2022 GAAP net income per diluted share includes approximately $30 million in expected stock-based compensation expense and other expenses that are excluded from non-GAAP net income per diluted share.

“I am pleased to announce that for the first time our quarterly revenue has exceeded one billion dollars. For fiscal Q4 2021, we delivered year-over-year revenue growth of 19%. For fiscal year 2021, our revenue grew 7%. We are gaining market share and finally resumed fast growth starting from the March quarter this year,” said Charles Liang, Chairman and Chief Executive Officer. “We also delivered strong Q4 non-GAAP EPS year-on-year growth of 19% despite elevated operating costs due to the impact of COVID-19. We are shifting a greater portion of our operations and R&D investment to our Taiwan campus, which will result in lower costs. While our Q1 outlook reflects continued pressure from COVID-19 and global shortage headwinds, we are very optimistic about our future. We are committed to accelerating our revenue growth, our products have traction with top-tier customers, we are penetrating key markets, and we are continuing our long history of market share gains.”

Conference Call and Webcast Information

Supermicro will hold a public webcast at 2:00 p.m. PDT today to discuss the results for its fourth quarter and full-year fiscal 2021 financial results. Those wishing to access the live webcast may use the following link:

https://event.on24.com/wcc/r/3195684/8DCDB8BCDC914B20C703A18392CAE17B

The conference call can be accessed by registering online at:

http://www.directeventreg.com/registration/event/5254758

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 first quarter of the fiscal year 2022 and full fiscal year 2022 guidance, the ability to lower costs, accelerate revenue growth, penetrate key markets and gain market share, and the ability to execute on the Company’s 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 expense, special performance bonuses and other expenses. Non-GAAP operating expenses discussed in this press release adds back stock-based compensation expense, legal settlement costs, special performance bonuses , other expenses, controls remediation, and executive SEC settlement credit. Non-GAAP income from operations discussed in this press release adds back stock-based compensation expense, legal settlement costs, special performance bonuses, other expenses, controls remediation and executive SEC settlement credit. Non-GAAP diluted net income and non-GAAP net income per common share discussed in this press release adds back stock-based compensation expense, special performance bonuses, legal settlement costs, other expenses, controls remediation, executive SEC settlement credit and less 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 each of the foregoing non-GAAP measures to the corresponding GAAP metric is included in the tables below.

About Super Micro Computer, Inc.

Supermicro (Nasdaq: SMCI), the leading innovator in high-performance, high-efficiency server 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.

SMCI-F

 

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

 

 

June 30,

 

June 30,

 

2021

 

2020

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

232,266

 

 

$

210,533

 

 

Accounts receivable, net of allowances

463,834

 

 

403,745

 

 

Inventories

1,040,964

 

 

851,498

 

 

Prepaid expenses and other current assets

130,195

 

 

126,985

 

 

Total current assets

1,867,259

 

 

1,592,761

 

 

Investment in equity investee

4,578

 

 

2,703

 

 

Property, plant and equipment, net

274,713

 

 

233,785

 

 

Deferred income taxes, net

63,288

 

 

54,898

 

 

Other assets

32,126

 

 

34,499

 

 

Total assets

$

2,241,964

 

 

$

1,918,646

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

612,336

 

 

$

417,673

 

 

Accrued liabilities

178,850

 

 

155,401

 

 

Income taxes payable

12,741

 

 

4,700

 

 

Short-term debt

63,490

 

 

23,704

 

 

Deferred revenue

101,479

 

 

106,157

 

 

Total current liabilities

968,896

 

 

707,635

 

 

Deferred revenue, non-current

100,838

 

 

97,612

 

 

Long-term debt

34,700

 

 

5,697

 

 

Other long-term liabilities

41,132

 

 

41,995

 

 

Total liabilities

1,145,566

 

 

852,939

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock and Additional Paid In Capital

438,012

 

 

389,972

 

 

Treasury stock

 

 

(20,491

)

 

Accumulated other comprehensive loss

453

 

 

(152

)

 

Retained earnings

657,760

 

 

696,211

 

 

Total Super Micro Computer, Inc. stockholders’ equity

1,096,225

 

 

1,065,540

 

 

Noncontrolling interest

173

 

 

167

 

 

Total stockholders’ equity

1,096,398

 

 

1,065,707

 

 

Total liabilities and stockholders’ equity

$

2,241,964

 

 

$

1,918,646

 

 

 

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 
Three Months Ended June 30, Years Ended June 30,

2021

 

 

2020

 

 

2021

 

 

2020

 

Net sales $

1,068,985

 

$

896,126

 

$

3,557,422

 

$

3,339,281

 

Cost of sales

923,474

 

772,609

 

3,022,884

 

2,813,071

 

Gross profit

145,511

 

123,517

 

534,538

 

526,210

 

Operating expenses:
Research and development

58,930

 

66,748

 

224,369

 

221,478

 

Sales and marketing

22,825

 

21,080

 

85,683

 

85,137

 

General and administrative

24,675

 

26,261

 

100,539

 

133,941

 

Total operating expenses

106,430

 

114,089

 

410,591

 

440,556

 

Income from operations

39,081

 

9,428

 

123,947

 

85,654

 

Other income (expense), net

(1,471

)

(700

)

(2,834

)

1,410

 

Interest expense

(635

)

(606

)

(2,485

)

(2,236

)

Income before income tax

36,975

 

8,122

 

118,628

 

84,828

 

Income tax benefit (provision)

1,605

 

6,860

 

(6,936

)

(2,922

)

Share of income (loss) from equity investee, net of taxes

582

 

3,468

 

173

 

2,402

 

Net income $

39,162

 

$

18,450

 

$

111,865

 

$

84,308

 

Net income per common share:
Basic $

0.78

 

$

0.35

 

$

2.19

 

$

1.65

 

Diluted $

0.74

 

$

0.34

 

$

2.09

 

$

1.60

 

Weighted-average shares used in calculation of net income per common share:
Basic

50,230

 

52,240

 

51,157

 

50,987

 

Diluted

52,782

 

54,218

 

53,507

 

52,838

 

 

Stock-based compensation is included in the following cost and expense categories by period (in thousands):

 

Three Months Ended June 30,

 

Years Ended June 30,

2021

 

 

2020

 

 

2021

 

 

2020

 

Cost of sales $

450

 

$

355

 

$

1,762

 

$

1,504

 

Research and development

3,661

 

2,903

 

14,030

 

12,202

 

Sales and marketing

505

 

404

 

2,022

 

1,680

 

General and administrative

2,816

 

1,704

 

10,735

 

4,803

 

Stock-based compensation expense $

7,432

 

$

5,366

 

$

28,549

 

$

20,189

 

 

SUPER MICRO COMPUTER, INC.

SELECTED CASH FLOW INFORMATION

(in thousands)

(unaudited)

 

 

Years Ended June 30,

 

2021

 

 

2020

 

 

Net cash provided by (used in) operating activities

$

122,955

 

 

 

$

(30,334

)

 

 

Net cash used in investing activities

(58,016

)

 

 

(43,588

)

 

 

Net cash (used in) provided by financing activities

(44,440

)

 

 

23,796

 

 

 

Effect of exchange rate fluctuations on cash

560

 

 

 

376

 

 

 

Net change in cash equivalents and restricted cash

21,059

 

 

 

(49,750

)

 

 

Cash, cash equivalents and restricted cash at the beginning of the year

212,390

 

 

 

262,140

 

 

 

Cash, cash equivalents and restricted cash at the end of the year

$

233,449

 

 

 

$

212,390

 

 

 

 

SUPER MICRO COMPUTER, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except share and per share amounts)

(unaudited)

 

 

Three Months Ended

June 30,

 

Twelve Months Ended

June 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

GAAP GROSS PROFIT

$

145,511

 

 

 

$

123,517

 

 

 

$

534,538

 

 

 

$

526,210

 

 

Stock-based compensation

450

 

 

 

355

 

 

 

1,762

 

 

 

1,504

 

 

Special performance bonuses

 

 

 

1,201

 

 

 

 

 

 

4,072

 

 

Other expenses

 

 

 

39

 

 

 

20

 

 

 

39

 

 

NON-GAAP GROSS PROFIT

$

145,961

 

 

 

$

125,112

 

 

 

$

536,320

 

 

 

$

531,825

 

 

 

 

 

 

 

 

 

 

GAAP GROSS MARGIN

13.6

 

%

 

13.8

 

%

 

15.0

 

%

 

15.8

 

%

Stock-based compensation

0.1

 

%

 

0.0

 

%

 

0.1

 

%

 

0.0

 

%

Special performance bonuses

0.0

 

%

 

0.2

 

%

 

0.0

 

%

 

0.1

 

%

Other expenses

0.0

 

%

 

0.0

 

%

 

0.0

 

%

 

0.0

 

%

NON-GAAP GROSS MARGIN

13.7

 

%

 

14.0

 

%

 

15.1

 

%

 

15.9

 

%

 

 

 

 

 

 

 

 

GAAP OPERATING EXPENSES

$

106,430

 

 

 

$

114,089

 

 

 

$

410,591

 

 

 

$

440,556

 

 

Stock-based compensation

(6,982

)

 

 

(5,011

)

 

 

(26,787

)

 

 

(18,685

)

 

Legal settlement costs

 

 

 

 

 

 

 

 

 

(17,500

)

 

Executive SEC settlement

 

 

 

 

 

 

2,122

 

 

 

 

 

Special performance bonuses

(672

)

 

 

(16,224

)

 

 

(5,801

)

 

 

(23,682

)

 

Other expenses

 

 

 

(638

)

 

 

(221

)

 

 

(638

)

 

Controls remediation

163

 

 

 

(1,004

)

 

 

(1,076

)

 

 

(13,863

)

 

NON-GAAP OPERATING EXPENSES

$

98,939

 

 

 

$

91,212

 

 

 

$

378,828

 

 

 

$

366,188

 

 

 

 

 

 

 

 

 

 

GAAP INCOME FROM OPERATIONS

$

39,081

 

 

 

$

9,428

 

 

 

$

123,947

 

 

 

$

85,654

 

 

Stock-based compensation

7,432

 

 

 

5,366

 

 

 

28,549

 

 

 

20,189

 

 

Legal settlement costs

 

 

 

 

 

 

 

 

 

17,500

 

 

Executive SEC settlement

 

 

 

 

 

 

(2,122

)

 

 

 

 

Special performance bonuses

672

 

 

 

17,425

 

 

 

5,801

 

 

 

27,754

 

 

Other expenses

 

 

 

677

 

 

 

241

 

 

 

677

 

 

Controls remediation

(163

)

 

 

1,004

 

 

 

1,076

 

 

 

13,863

 

 

NON-GAAP INCOME FROM OPERATIONS

$

47,022

 

 

 

$

33,900

 

 

 

$

157,492

 

 

 

$

165,637

 

 

 

 

 

 

 

 

 

 

GAAP NET INCOME

$

39,162

 

 

 

$

18,450

 

 

 

111,865

 

 

 

84,308

 

 

Stock-based compensation

7,432

 

 

 

5,366

 

 

 

28,549

 

 

 

20,189

 

 

Legal settlement costs

 

 

 

 

 

 

 

 

 

17,500

 

 

Executive SEC settlement

 

 

 

 

 

 

(2,122

)

 

 

 

 

Special performance bonuses

672

 

 

 

17,425

 

 

 

5,801

 

 

 

27,754

 

 

Other expenses

 

 

 

677

 

 

 

241

 

 

 

677

 

 

Controls remediation

(163

)

 

 

1,004

 

 

 

1,076

 

 

 

13,863

 

 

Adjustments to tax provision

(3,373

)

 

 

(5,101

)

 

 

(9,006

)

 

 

(13,969

)

 

NON-GAAP NET INCOME

$

43,730

 

 

 

$

37,821

 

 

 

$

136,404

 

 

 

$

150,322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP NET INCOME PER COMMON SHARE – BASIC

$

0.78

 

 

 

$

0.35

 

 

 

$

2.19

 

 

 

$

1.65

 

 

Impact of NON-GAAP adjustments

0.09

 

 

 

0.37

 

 

 

0.48

 

 

 

1.30

 

 

NON-GAAP NET INCOME PER COMMON SHARE – BASIC

$

0.87

 

 

 

$

0.72

 

 

 

$

2.67

 

 

 

$

2.95

 

 

 

 

 

 

 

 

 

 

GAAP NET INCOME PER COMMON SHARE – DILUTED

$

0.74

 

 

 

$

0.34

 

 

 

$

2.09

 

 

 

$

1.60

 

 

Impact of NON-GAAP adjustments

0.07

 

 

 

0.34

 

 

 

0.39

 

 

 

1.17

 

 

NON-GAAP NET INCOME PER COMMON SHARE – DILUTED

$

0.81

 

 

 

$

0.68

 

 

 

$

2.48

 

 

 

$

2.77

 

 

 

 

 

 

 

 

 

 

WEIGHTED-AVERAGE SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC – GAAP

50,230

 

 

 

52,240

 

 

 

51,157

 

 

 

50,987

 

 

BASIC – NON-GAAP

50,230

 

 

 

52,240

 

 

 

51,157

 

 

 

50,987

 

 

 

 

 

 

 

 

 

 

DILUTED – GAAP

52,782

 

 

 

54,218

 

 

 

53,507

 

 

 

52,838

 

 

DILUTED – NON-GAAP

54,082

 

 

 

55,595

 

 

 

54,910

 

 

 

54,317

 

 

 

Contacts

Investor Relations Contact:
Avelina Kauffman

email: ir@supermicro.com