SMART Modular Technologies (SMOD)

[eastunder]

SMART Modular Technologies Reports Second Quarter Fiscal 2011 Results

Thursday , March 24, 2011 16:01ET



NEWARK, CA -- (Marketwire) -- 03/24/11 -- SMART Modular Technologies (WWH), Inc. ("SMART" or the "Company") (NASDAQ: SMOD), a leading independent manufacturer of memory modules and solid state storage products, today reported financial results for the second quarter of fiscal 2011 ended February 25, 2011.


Second Quarter Fiscal 2011 Highlights:
-- Net sales of $170.5 million
-- Gross profit of $28.5 million
-- GAAP diluted EPS of $0.00
-- Non-GAAP diluted EPS of $0.08
-- Adjusted EBITDA of $13.6 million


Net sales for the second quarter of fiscal 2011 were $170.5 million, compared to $216.4 million for the first quarter of fiscal 2011, and $160.1 million for the second quarter of fiscal 2010.

Gross profit for the second quarter of fiscal 2011 was $28.5 million, compared to $44.0 million for the first quarter of fiscal 2011, and $42.0 million for the second quarter of fiscal 2010.

On a GAAP basis, net income for the second quarter of fiscal 2011 was $0.2 million or $0.00 per diluted share, compared to $8.0 million or $0.12 per diluted share for the first quarter of fiscal 2011, and $16.1 million, or $0.25 per diluted share for the second quarter of fiscal 2010. The second quarter of fiscal 2011 net income of $0.2 million includes restructuring charges of $2.8 million related to the closure of the Company's Puerto Rico facility.

On a non-GAAP basis, net income was $5.2 million or $0.08 per diluted share for the second quarter of fiscal 2011, compared to $17.6 million or $0.27 per diluted share for the first quarter of fiscal 2011, and net income of $14.9 million or $0.23 per diluted share for the second quarter of fiscal 2010.

Adjusted EBITDA for the second quarter of fiscal 2011 was $13.6 million, compared to $29.6 million for the first quarter of fiscal 2011, and $28.4 million for the second quarter of fiscal 2010.

Please refer to the Non-GAAP Information section and the "Reconciliation of Non-GAAP Financial Measures" table below for further detail on non-GAAP net income and Adjusted EBITDA.

"We are delighted with the growing momentum in our enterprise solid state storage business," commented Iain MacKenzie, President and CEO of SMART. "We continue to have success at broadening our engagements with enterprise customers and believe that we are positioned for meaningful increases in this business during the second half of this fiscal year."

"In the second fiscal quarter our gross profit was negatively impacted by the weaker than anticipated DRAM pricing environment, which primarily affected our business in Brazil," Mr. MacKenzie continued. "Despite this impact, we were able to achieve non-GAAP diluted earnings per share of $0.08, due in large part to the resilience of our business model, prudent cost controls and our continued focus on operational excellence. Pricing in the DRAM market appears to have stabilized, and we believe that our second fiscal quarter marked the trough with respect to earnings."

Business Outlook

The following statements are based upon management's current expectations. These statements are forward-looking, and actual results may differ materially. The Company undertakes no obligation to update these statements.

For the third quarter of fiscal 2011, SMART expects net sales will be in the range of $160 to $180 million and gross profit will be in the range of $29 to $33 million. Net income per diluted share is expected to be in the range of $0.04 to $0.07 on a GAAP basis. On a non-GAAP basis, SMART expects net income per diluted share will be in the range of $0.09 to $0.12. The guidance for the third quarter of fiscal 2011 includes an income tax provision expected to be in the range of $2.8 to $3.1 million. Please refer to the Non-GAAP Information section and the "Reconciliation of Q3-11 Guidance for Non-GAAP Financial Measures" table below for further detail.

Table and continued at:

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