OCZ Announces 1Q 2012 Earnings: Revenue up 115%, $9.1M Loss
7/7/2011 by: Anshel Sag
Yesterday, OCZ [NASDAQ: OCZ] announced their quarterly earnings for 1Q FY 2012 (calendar 2Q 2011). They reported record net revenues of $73.8M which represented a 115% increase over the same period a year ago. This also represents a 14% increase sequentially over 4Q 2011 (calendar 1Q 2011). This proves that OCZ is capable of growing their revenues at a sustainable rate even compared to sequential quarters.
OCZ also reported record revenues in their SSD business which raked in $69.1M and increase of 418% over the same period a year ago and a 19% increase compared to $58.2M in the previous quarter, fiscal 4Q 2011. This represents 94% of their total revenues, which appears to be the direction OCZ wishes to go in considering their announcement regarding their RAM business; which is now dead. They still have yet to announce what they are going to do with their Power Supply Business (PC Power and Cooling).
Even when taking all of this into consideration and all of these stellar figures, OCZ still remains to show any profitability. This may be their biggest weak point as they have struggled to show profitability in this move towards being an SSD company. Their acquisition of Indilinx may have had a part in that last quarter, but OCZ actually widened their operating losses compared to the previous quarter increasing them from $3.4M in the 1Q 2011 to $4.3M in 1Q 2012. Their net losses were an even worse story. OCZ reported $9.1M losses in 1Q 2012 compared to $4.8M in the same quarter a year ago. These can mostly be attributed to OCZ’s paying off of many previously existing debts and decreasing their financing costs by 20% from last year and 60% from 4Q 2011. This was partially possible as a result of a second round of share offerings which yielded them $93M in net proceeds.
Also, the fair value adjustment of warrants resulted in a non-cash charge of $4.2M which significantly bit into their profitability. In Non-GAAP measurements, OCZ actually posted a $1M profit compared to a $2.2M loss in the same quarter a year ago. Hopefully, OCZ will not in the future continue to incur such problems that will hurt their GAAP profitability. We would love to see them actually post a profit and prove to investors that they are genuinely profitable.
In addition to these figures, OCZ managed to increase their gross margins to 20% in 1Q 2012 from 12.1% the same quarter a year ago. They also improved from 14.6% in 4Q 2011, showing that OCZ is showing steady improvements in almost every single metric of growth for the company. They are also predicting a guidance of $300-$330M in revenue for the remainder of fiscal 2012 meaning that they expect to make on average $75M per quarter for the remainder of fiscal 2012.
In current trading, OCZ is up $1.30 to $9.64 which is a jump of 15% above yesterday’s close of $8.34 based on the premise that OCZ has beaten analysts earnings and that their revenue projections for the coming year are extremely bullish.
OCZ, OCZ Technology, NYSE, SSD, Solid State Drive, SSS, Solid State Storage, PP&C, PC Power & Cooling, Non-GAAP, GAAP, Non-GAAP Profit, GM, gross margin,
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