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| 8-K - 8-K 1Q15 EARNINGS RELEASE - DOT HILL SYSTEMS CORP | a8-k1q15earningsrelease.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Hanif Jamal
Chief Financial Officer
Tel: 303-845-3377
Email: investors@dothill.com
Jodi Bochert
Investor Relations
Tel: 303-845-3469
Email: investors@dothill.com
Dot Hill Reports First Quarter 2015 Results
Year-over-year non-GAAP total revenue growth of 23% with a 61% increase in Vertical Markets
285% Growth in Year-over-Year non-GAAP Profitability
LONGMONT, Colo. -May 7, 2015 - Dot Hill Systems Corp. (NASDAQ:HILL), a trusted supplier of innovative enterprise class storage systems, reported financial results for the first quarter ended March 31, 2015.
Financial and Operational Highlights:
• | Grew non-GAAP revenue to $60.3 million or over 23% year-over-year |
• | Grew Vertical Markets non-GAAP revenue 61% year-over-year |
• | Achieved non-GAAP gross margin of 33.8%, compared to 33.1% in the first quarter of 2014 |
• | Delivered non-GAAP earnings per fully diluted share of $0.06, compared to $0.02 in the first quarter of 2014 |
• | Teradata has integrated Dot Hill AssuredSAN Ultra48 into its new Data Warehouse Appliance 2800 |
• | Quantum Corp. and Dot Hill announced a new, global go-to-market partnership whereby Quantum will integrate Dot Hill’s full line of enterprise-class disk storage systems into its tiered storage offerings |
• | Awarded 101st patent for write-cache management Innovation to improve performance by up to 100% in demanding storage workload environments |
“The first quarter of 2015 picked up where the fourth quarter of 2014 left off - that is, on a strong note. Especially when considered against the backdrop of what I believe was another flat to down quarter in aggregate for the storage industry at large,” stated Dana Kammersgard, president and CEO, Dot Hill Systems. “At our Analyst Day a couple of weeks ago, we highlighted ‘Growth through Innovation.’ And it really is this innovation, instantiated in products that we have developed in collaboration with our customers, which is driving our growth.”
Exhibit 99.1
First Quarter 2015 GAAP Financial Detail
• | Net revenue was $61.1 million for the first quarter of 2015, compared to $48.2 million for the first quarter of 2014 and $69.1 million for the fourth quarter of 2014. |
• | Gross margin for the first quarter of 2015 was 34.4%, compared to 31.7% for the first quarter of 2014 and 35.2% for the fourth quarter of 2014. |
• | Operating expenses for the first quarter of 2015 were $17.1 million, compared to $15.7 million for the first quarter of 2014 and $15.7 million in the fourth quarter of 2014. |
• | Net income for the first quarter of 2015 was $3.9 million, or $0.06 per fully diluted share, compared to a net loss of $0.4 million, or ($0.01) per fully diluted share, for the first quarter of 2014, and net income of $8.6 million, or $0.14 per fully diluted share, for the fourth quarter of 2014. |
First Quarter 2015 Non-GAAP Financial Detail
• | Non-GAAP net revenue was $60.3 million for the first quarter of 2015, compared to $48.9 million for the first quarter of 2014 and $68.2 million for the fourth quarter of 2014. |
◦ | Vertical Markets non-GAAP net revenue was $35.9 million compared to $22.4 million in the first quarter of 2014 and $38.5 million in the fourth quarter of 2014. |
◦ | Server OEM non-GAAP net revenue decreased to $24.3 million, compared to $26.5 million in the first quarter of 2014 and $29.7 million in the fourth quarter of 2014. |
• | Non-GAAP gross margin for the first quarter of 2015 was 33.8%, compared to 33.1% in the first quarter of 2014 and 34.6% in the fourth quarter of 2014. |
◦ | Vertical Markets non-GAAP gross margin was 42.0%, compared to 43.4% in the first quarter of 2014 and 40.7% in the fourth quarter of 2014. |
◦ | Server OEM non-GAAP gross margin was 21.6%, compared to 24.4% in the first quarter of 2014 and 26.6% in the fourth quarter of 2014. |
• | Non-GAAP operating expenses for the first quarter of 2015 were $16.4 million, compared to $15.1 million for the first quarter of 2014 and $15.0 million in the fourth quarter of 2014. |
• | Non-GAAP contribution margin, which excludes research and development, general and administrative and certain corporate sales and marketing expenses, for the first quarter of 2015 was 27.7%, compared to 26.6% in the first quarter of 2014 and 29.0% in the fourth quarter of 2014. |
◦ | Vertical Markets non-GAAP contribution margin for the first quarter of 2015 increased to 35.1%, compared to 33.6% in the first quarter of 2014 and 34.4% in the fourth quarter of 2014. |
◦ | Server OEM non-GAAP contribution margin for the first quarter of 2015 decreased to 19.2%, compared to 22.7% in the first quarter of 2014 and 24.7% in the fourth quarter of 2014. |
• | Non-GAAP net income for the first quarter of 2015 was $4.0 million, or $0.06 per fully diluted share, compared to $1.0 million or $0.02 per share, for the first quarter of 2014, and $8.5 million, or $0.13 per fully diluted share, for the fourth quarter of 2014. |
Exhibit 99.1
Balance Sheet and Cash
The company exited the first quarter of 2015 with cash and cash equivalents of $46.3 million. This compares to $40.3 million at the end of the first quarter of 2014 and $42.5 million at the end of the fourth quarter of 2014.
Second Quarter 2015 Outlook
Non-GAAP net revenue and fully diluted earnings per share for the second quarter of 2015 are expected to be in the range of $58 million to $62 million and $0.04 to $0.08, respectively.
“In summary, Q1 was a very solid start to 2015, and we were able to continue the strong growth and momentum that started in earnest the prior quarter,” said Hanif Jamal, chief financial officer, Dot Hill Systems. “The mid-point of guidance for Q2 that we issued today represents 24% year-over-year growth and about a 3x increase in non-GAAP revenue and earnings per share respectively. More importantly however, it is another data point to substantiate our expectations for a strong year of growth for all of 2015.”
Conference Call Information
Dot Hill's first quarter financial results conference call is scheduled to take place on Thursday, May 7, 2015 at 11:00 am ET. Please join the Company for a live audio webcast at www.dothill.com in the Investor Relations section, or via telephone, please dial 877-303-3196 (U.S.) or 408-427-3864 (International) at least five minutes prior to the start of the call. A replay of the webcast is scheduled to be available for one week on the Dot Hill web site following the conference call. For a telephone replay, dial 855-859-2056 (U.S.) or 404-537-3406 (International) and enter conference ID# 25604625.
About Non-GAAP Financial Measures
The Company’s non-GAAP financial measures exclude the impact of stock-based compensation expense, legal settlements and associated expenses, intangible asset amortization, restructuring and severance charges, charges or credits for contingent consideration adjustments, charges for impairment of goodwill and other long-lived assets, specific and significant warranty claims arising from a supplier’s defective products, the impact of our discontinued AssuredUVS software business and the effects of foreign currency gains or losses. The non-GAAP financial measures include the recognition of revenues and directly related costs associated with long-term AssuredVRA software contracts, which were deferred and amortized in the Company’s GAAP financial statements. The Company used these non-GAAP measures when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. These non-GAAP measures should not be viewed in isolation from or as a substitute for the Company’s financial results in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures is attached to this press release.
Exhibit 99.1
About Segment Financial Reporting
The Server OEM segment consists primarily of large Original Equipment Manufacturers who purchase products from the Company to sell along with their Server products. Major Server OEM customers include Hewlett Packard, Lenovo, Stratus, and AMD. The Vertical Markets segment consists of strategically selected Vertical Markets including Media & Entertainment, Telecommunications Infrastructure, Oil and Gas, Big Data Analytics and Digital Imaging among others. These customers typically embed the Company’s products into solutions for their customers. The Company sells to these customers through either Vertical Markets OEM partners or Embedded Solutions Integrators, as well as through Channel Partners. Major Vertical Markets’ customers include Teradata, Quantum, Motorola, Tektronix, Samsung, Concurrent, Autodesk, and Nokia. The Corporate segment consists primarily of “platform costs” that support both the Server OEM and Vertical Markets segments.
About Dot Hill
Leveraging its proprietary Assured family of storage solutions, Dot Hill solves many of today’s most challenging storage problems - helping IT to improve performance, increase availability, simplify operations, and reduce costs. Dot Hill’s solutions combine breakthrough software with the industry’s most flexible and extensive hardware platform and automated management to deliver best-in-class solutions. Headquartered in Longmont, Colorado, Dot Hill has offices and/or representatives in China, Germany, India, Japan, Singapore, and the United States.
Statements contained in this press release regarding matters that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such statements include statements regarding future opportunities for additional business and the stage of such opportunities relative to a final binding agreement, prospects for Dot Hill’s continued growth, and Dot Hill’s projected financial results for the second quarter of 2015. The risks that contribute to the uncertain nature of the forward-looking statements include, among other things: the risk that actual financial results for the second quarter of 2015 may be different from the financial guidance provided in this press release; the risks associated with macroeconomic factors that are outside of Dot Hill’s control; the risk that projected future opportunities may never fully develop into ongoing business relationships and/or binding contractual agreements; the fact that no Dot Hill customer agreements provide for mandatory minimum purchase requirements; the risk that one or more of Dot Hill’s OEM or other customers may cancel or reduce orders, not order as forecasted or terminate their agreements with Dot Hill; the risk that Dot Hill’s new products may not prove to be popular; the risk that one or more of Dot Hill’s suppliers or subcontractors may fail to perform or may terminate their agreements with Dot Hill; the risk that vertical markets’ sales may not ramp as expected; unforeseen product quality, technological, intellectual property, personnel or engineering issues and any costs that may result from such issues; and the additional risks set forth in Dot Hill’s most recent Form10-K filed with the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made. Dot Hill undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.
HILL-F
Exhibit 99.1
DOT HILL SYSTEMS CORP. | ||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, 2014 | December 31, 2014 | March 31, 2015 | ||||||||||
Net revenue | $ | 48,207 | $ | 69,115 | $ | 61,121 | ||||||
Cost of goods sold | 32,942 | 44,790 | 40,091 | |||||||||
Gross profit | 15,265 | 24,325 | 21,030 | |||||||||
Operating expenses: | ||||||||||||
Research and development | 9,476 | 9,313 | 10,119 | |||||||||
Sales and marketing | 3,294 | 3,846 | 3,804 | |||||||||
General and administrative | 2,898 | 2,537 | 3,212 | |||||||||
Total operating expenses | 15,668 | 15,696 | 17,135 | |||||||||
Operating income (loss) | (403 | ) | 8,629 | 3,895 | ||||||||
Other income (expense): | ||||||||||||
Interest income (expense), net | (18 | ) | (10 | ) | (14 | ) | ||||||
Other income (expense), net | 10 | (8 | ) | — | ||||||||
Total other income (expense), net | (8 | ) | (18 | ) | (14 | ) | ||||||
Income (loss) before income taxes | (411 | ) | 8,611 | 3,881 | ||||||||
Income tax expense | 1 | 106 | 10 | |||||||||
Net income (loss) | $ | (412 | ) | $ | 8,505 | $ | 3,871 | |||||
Net income (loss) per share - basic and diluted | $ | (0.01 | ) | $ | 0.14 | $ | 0.06 | |||||
Weighted average shares used to calculate net income (loss) per share: | ||||||||||||
Basic | 59,678 | 60,615 | 60,760 | |||||||||
Diluted | 59,678 | 64,307 | 64,816 | |||||||||
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands) | |||||||
December 31, 2014 | March 31, 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 42,492 | $ | 46,281 | |||
Accounts receivable, net | 43,328 | 42,180 | |||||
Inventories | 11,342 | 9,452 | |||||
Prepaid expenses and other assets | 11,126 | 7,660 | |||||
Total current assets | 108,288 | 105,573 | |||||
Property and equipment, net | 8,764 | 9,112 | |||||
Intangible assets | 2,680 | 3,332 | |||||
Other assets | 500 | 288 | |||||
Total assets | $ | 120,232 | $ | 118,305 | |||
Liabilities and Stockholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 37,421 | $ | 30,829 | |||
Accrued compensation | 4,015 | 3,260 | |||||
Accrued expenses | 8,039 | 9,594 | |||||
Deferred revenue | 5,319 | 4,692 | |||||
Total current liabilities | 54,794 | 48,375 | |||||
Other long-term liabilities | 2,908 | 2,484 | |||||
Total liabilities | 57,702 | 50,859 | |||||
Stockholders' equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 61 | 61 | |||||
Additional paid-in capital | 336,827 | 337,879 | |||||
Accumulated other comprehensive loss | (3,152 | ) | (3,159 | ) | |||
Accumulated deficit | (271,206 | ) | (267,335 | ) | |||
Total stockholders' equity | 62,530 | 67,446 | |||||
Total liabilities and stockholders' equity | $ | 120,232 | $ | 118,305 | |||
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(In thousands) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2014 | December 31, 2014 | March 31, 2015 | |||||||||
Cash Flows From Operating Activities: | |||||||||||
Net income (loss) | $ | (412 | ) | $ | 8,505 | $ | 3,871 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 959 | 1,092 | 1,153 | ||||||||
Stock-based compensation expense | 578 | 748 | 880 | ||||||||
Provision for bad debt expense | — | (3 | ) | — | |||||||
Write-off of property and equipment | — | 58 | — | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 9,240 | (6,473 | ) | 1,213 | |||||||
Inventories | (1,122 | ) | (4,357 | ) | 1,890 | ||||||
Prepaid expenses and other assets | 1,238 | (3,414 | ) | 3,680 | |||||||
Accounts payable | (7,112 | ) | 6,617 | (5,890 | ) | ||||||
Accrued compensation and other expenses | (2,809 | ) | 1,040 | 725 | |||||||
Deferred revenue | 799 | 57 | (628 | ) | |||||||
Other long-term liabilities | (252 | ) | (1,788 | ) | (425 | ) | |||||
Net cash provided by operating activities | 1,107 | 2,082 | 6,469 | ||||||||
Cash Flows From Investing Activities: | |||||||||||
Purchases of property and equipment | (995 | ) | (1,128 | ) | (1,517 | ) | |||||
Purchases of intangible assets | — | (1,445 | ) | (1,342 | ) | ||||||
Net cash used in investing activities | (995 | ) | (2,573 | ) | (2,859 | ) | |||||
Cash Flows From Financing Activities: | |||||||||||
Payments on bank borrowings | (2,000 | ) | — | — | |||||||
Shares withheld for tax purposes | (72 | ) | (3 | ) | — | ||||||
Proceeds from sale of stock to employees | 1,854 | 660 | 172 | ||||||||
Net cash provided by (used in) financing activities | (218 | ) | 657 | 172 | |||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 22 | (43 | ) | 7 | |||||||
Net Increase (Decrease) in Cash and Cash Equivalents | (84 | ) | 123 | 3,789 | |||||||
Cash and Cash Equivalents, beginning of period | 40,406 | 42,369 | 42,492 | ||||||||
Cash and Cash Equivalents, end of period | $ | 40,322 | $ | 42,492 | $ | 46,281 | |||||
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | |||||||||||
Capital expenditures incurred but not paid | $ | 995 | $ | 948 | $ | 461 | |||||
Supplemental Cash Flow Data: | |||||||||||
Cash paid for income taxes | $ | 195 | $ | 254 | $ | 98 | |||||
Exhibit 99.1
DOT HILL SYSTEMS CORP. | ||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, 2014 | December 31, 2014 | March 31, 2015 | ||||||||||
GAAP net revenue | $ | 48,207 | $ | 69,115 | $ | 61,121 | ||||||
Long-term software contract royalties | 653 | (892 | ) | (854 | ) | |||||||
Non-GAAP net revenue | $ | 48,860 | $ | 68,223 | $ | 60,267 | ||||||
GAAP gross profit | $ | 15,265 | $ | 24,325 | $ | 21,030 | ||||||
GAAP gross margin % | 31.7 | % | 35.2 | % | 34.4 | % | ||||||
Stock-based compensation | 64 | 93 | 123 | |||||||||
Severance costs | 73 | — | 4 | |||||||||
Long-term software contract royalties | 653 | (892 | ) | (854 | ) | |||||||
Long-term software contract costs | 123 | 50 | 50 | |||||||||
Non-GAAP gross profit | $ | 16,178 | $ | 23,576 | $ | 20,353 | ||||||
Non-GAAP gross margin % | 33.1 | % | 34.6 | % | 33.8 | % | ||||||
GAAP sales and marketing expenses | $ | 3,294 | $ | 3,846 | $ | 3,804 | ||||||
GAAP contribution margin | $ | 11,971 | $ | 20,479 | $ | 17,226 | ||||||
GAAP contribution margin % | 24.8 | % | 29.6 | % | 28.2 | % | ||||||
Stock-based compensation | (72 | ) | (80 | ) | (116 | ) | ||||||
Severance costs | (42 | ) | (2 | ) | (21 | ) | ||||||
Non-GAAP sales and marketing expenses | $ | 3,180 | $ | 3,764 | $ | 3,667 | ||||||
Non-GAAP contribution margin | $ | 12,998 | $ | 19,812 | $ | 16,686 | ||||||
Non-GAAP contribution margin % | 26.6 | % | 29.0 | % | 27.7 | % | ||||||
GAAP operating expenses | $ | 15,668 | $ | 15,696 | $ | 17,135 | ||||||
Currency (loss) gain | 73 | (71 | ) | 27 | ||||||||
Stock-based compensation | (514 | ) | (655 | ) | (757 | ) | ||||||
Severance costs | (83 | ) | (19 | ) | (33 | ) | ||||||
Non-GAAP operating expenses | $ | 15,144 | $ | 14,951 | $ | 16,372 | ||||||
GAAP operating income | $ | (403 | ) | $ | 8,629 | $ | 3,895 | |||||
Currency (gain) loss | (73 | ) | 71 | (27 | ) | |||||||
Stock-based compensation | 578 | 748 | 880 | |||||||||
Long-term software contract royalties | 653 | (892 | ) | (854 | ) | |||||||
Long-term software contract costs | 123 | 50 | 50 | |||||||||
Severance costs | 156 | 19 | 37 | |||||||||
Non-GAAP operating income | $ | 1,034 | $ | 8,625 | $ | 3,981 | ||||||
Exhibit 99.1
Three Months Ended | ||||||||||||
March 31, 2014 | December 31, 2014 | March 31, 2015 | ||||||||||
GAAP net income | $ | (412 | ) | $ | 8,505 | $ | 3,871 | |||||
Currency (gain) loss | (73 | ) | 71 | (27 | ) | |||||||
Stock-based compensation | 578 | 748 | 880 | |||||||||
Other income | (10 | ) | — | — | ||||||||
Long-term software contract royalties | 653 | (892 | ) | (854 | ) | |||||||
Long-term software contract costs | 123 | 50 | 50 | |||||||||
Severance costs | 156 | 19 | 37 | |||||||||
Non-GAAP net income | $ | 1,015 | $ | 8,501 | $ | 3,957 | ||||||
Non-GAAP net income per share | ||||||||||||
Basic | $ | 0.02 | $ | 0.14 | $ | 0.07 | ||||||
Diluted | $ | 0.02 | $ | 0.13 | $ | 0.06 | ||||||
Weighted average shares used to calculate net income per share: | ||||||||||||
Basic | 59,678 | 60,615 | 60,760 | |||||||||
Diluted | 63,912 | 64,307 | 64,816 | |||||||||
Non-GAAP net income | $ | 1,015 | $ | 8,501 | $ | 3,957 | ||||||
Interest expense | 18 | 10 | 14 | |||||||||
Income tax expense | 1 | 106 | 10 | |||||||||
Depreciation | 959 | 1,092 | 1,153 | |||||||||
Non-GAAP EBITDA | $ | 1,993 | $ | 9,709 | $ | 5,134 | ||||||
Exhibit 99.1
DOT HILL SYSTEMS CORP. | ||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR SERVER OEM SEGMENT | ||||||||||||
(In thousands) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, 2014 | December 31, 2014 | March 31, 2015 | ||||||||||
Server OEM GAAP net revenue | $ | 25,854 | $ | 30,620 | $ | 25,178 | ||||||
Long-term software contract royalties | 653 | (892 | ) | (854 | ) | |||||||
Server OEM non-GAAP net revenue | $ | 26,507 | $ | 29,728 | $ | 24,324 | ||||||
Server OEM GAAP gross profit | $ | 5,604 | $ | 8,704 | $ | 5,996 | ||||||
Server OEM GAAP gross margin % | 21.7 | % | 28.4 | % | 23.8 | % | ||||||
Stock-based compensation | 41 | 46 | 58 | |||||||||
Severance costs | 47 | — | 2 | |||||||||
Long-term software contract royalties | 653 | (892 | ) | (854 | ) | |||||||
Long-term software contract costs | 123 | 50 | 50 | |||||||||
Server OEM non-GAAP gross profit | $ | 6,468 | $ | 7,908 | $ | 5,252 | ||||||
Server OEM non-GAAP gross margin % | 24.4 | % | 26.6 | % | 21.6 | % | ||||||
Server OEM GAAP sales and marketing expenses | $ | 482 | $ | 581 | $ | 602 | ||||||
Server OEM GAAP contribution margin | $ | 5,122 | $ | 8,123 | $ | 5,394 | ||||||
Server OEM GAAP contribution margin % | 19.8 | % | 26.5 | % | 21.4 | % | ||||||
Stock-based compensation | (15 | ) | (14 | ) | (21 | ) | ||||||
Severance costs | (9 | ) | — | (4 | ) | |||||||
Server OEM non-GAAP sales and marketing expenses | $ | 458 | $ | 567 | $ | 577 | ||||||
Server OEM non-GAAP contribution margin | $ | 6,010 | $ | 7,341 | $ | 4,675 | ||||||
Server OEM non-GAAP contribution margin % | 22.7 | % | 24.7 | % | 19.2 | % | ||||||
Server OEM GAAP operating income | $ | 5,122 | $ | 8,123 | $ | 5,394 | ||||||
Stock-based compensation | 56 | 60 | 79 | |||||||||
Severance costs | 56 | — | 6 | |||||||||
Long-term software contract royalties | 653 | (892 | ) | (854 | ) | |||||||
Long-term software contract costs | 123 | 50 | 50 | |||||||||
Server OEM non-GAAP operating income | $ | 6,010 | $ | 7,341 | $ | 4,675 | ||||||
Exhibit 99.1
DOT HILL SYSTEMS CORP. | ||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR VERTICAL MARKETS SEGMENT | ||||||||||||
(In thousands) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, 2014 | December 31, 2014 | March 31, 2015 | ||||||||||
Vertical Markets GAAP and non-GAAP net revenue | $ | 22,353 | $ | 38,495 | $ | 35,943 | ||||||
Vertical Markets GAAP gross profit | $ | 9,661 | $ | 15,621 | $ | 15,034 | ||||||
Vertical Markets GAAP gross margin % | 43.2 | % | 40.6 | % | 41.8 | % | ||||||
Stock-based compensation | 23 | 47 | 65 | |||||||||
Severance costs | 26 | — | 2 | |||||||||
Vertical Markets non-GAAP gross profit | $ | 9,710 | $ | 15,668 | $ | 15,101 | ||||||
Vertical Markets non-GAAP gross margin % | 43.4 | % | 40.7 | % | 42.0 | % | ||||||
Vertical Markets GAAP sales and marketing expenses | $ | 2,254 | $ | 2,452 | $ | 2,548 | ||||||
Vertical Markets GAAP contribution margin | $ | 7,407 | $ | 13,169 | $ | 12,486 | ||||||
Vertical Markets GAAP contribution margin % | 33.1 | % | 34.2 | % | 34.7 | % | ||||||
Stock-based compensation | (33 | ) | (40 | ) | (58 | ) | ||||||
Severance costs | (19 | ) | (1 | ) | (10 | ) | ||||||
Vertical Markets non-GAAP sales and marketing expenses | $ | 2,202 | $ | 2,411 | $ | 2,480 | ||||||
Vertical Markets non-GAAP contribution margin | $ | 7,508 | $ | 13,257 | $ | 12,621 | ||||||
Vertical Markets non-GAAP contribution margin % | 33.6 | % | 34.4 | % | 35.1 | % | ||||||
Vertical Markets GAAP operating income | $ | 7,407 | $ | 13,169 | $ | 12,486 | ||||||
Stock-based compensation | 56 | 87 | 123 | |||||||||
Severance costs | 45 | 1 | 12 | |||||||||
Vertical Markets non-GAAP operating income | $ | 7,508 | $ | 13,257 | $ | 12,621 | ||||||
Exhibit 99.1
DOT HILL SYSTEMS CORP. | ||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR CORPORATE SEGMENT | ||||||||||||
(In thousands) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, 2014 | December 31, 2014 | March 31, 2015 | ||||||||||
Corporate GAAP sales and marketing expenses | $ | 558 | $ | 813 | $ | 654 | ||||||
Corporate GAAP contribution margin | $ | (558 | ) | $ | (813 | ) | $ | (654 | ) | |||
Stock-based compensation | (24 | ) | (26 | ) | (37 | ) | ||||||
Severance costs | (14 | ) | (1 | ) | (7 | ) | ||||||
Corporate non-GAAP sales and marketing expenses | $ | 520 | $ | 786 | $ | 610 | ||||||
Corporate non-GAAP contribution margin | $ | (520 | ) | $ | (786 | ) | $ | (610 | ) | |||
Corporate GAAP research and development expenses | $ | 9,476 | $ | 9,313 | $ | 10,119 | ||||||
Stock-based compensation | (260 | ) | (356 | ) | (386 | ) | ||||||
Severance costs | (40 | ) | (17 | ) | (12 | ) | ||||||
Corporate non-GAAP research and development expenses | $ | 9,176 | $ | 8,940 | $ | 9,721 | ||||||
Corporate GAAP general and administrative expenses | $ | 2,898 | $ | 2,537 | $ | 3,212 | ||||||
Currency (loss) gain | 73 | (71 | ) | 27 | ||||||||
Stock-based compensation | (182 | ) | (219 | ) | (255 | ) | ||||||
Severance costs | (1 | ) | — | — | ||||||||
Corporate non-GAAP general & administrative expenses | $ | 2,788 | $ | 2,247 | $ | 2,984 | ||||||
Corporate GAAP operating loss | $ | (12,932 | ) | $ | (12,663 | ) | $ | (13,985 | ) | |||
Currency (gain) loss | (73 | ) | 71 | (27 | ) | |||||||
Stock-based compensation | 466 | 601 | 678 | |||||||||
Severance costs | 55 | 18 | 19 | |||||||||
Corporate non-GAAP operating loss | $ | (12,484 | ) | $ | (11,973 | ) | $ | (13,315 | ) | |||
Exhibit 99.1
DOT HILL SYSTEMS CORP. | ||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES | ||||||||||||
(In thousands, except per share amounts) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, 2014 | December 31, 2014 | March 31, 2015 | ||||||||||
GAAP income (loss) per share | $ | (0.01 | ) | $ | 0.14 | $ | 0.06 | |||||
Currency (gain) loss | — | 0.00 | (0.00 | ) | ||||||||
Stock-based compensation | 0.01 | 0.01 | 0.01 | |||||||||
Long-term software contract royalties | 0.01 | (0.01 | ) | (0.01 | ) | |||||||
Long-term software contract costs | — | 0.00 | 0.00 | |||||||||
Other adjustments | 0.01 | (0.01 | ) | — | ||||||||
Non-GAAP income per share* | $ | 0.02 | $ | 0.13 | $ | 0.06 | ||||||
Weighted average shares used to calculate income per share: | ||||||||||||
Basic | 59,678 | 60,615 | 60,760 | |||||||||
Diluted | 63,912 | 64,307 | 64,816 | |||||||||
* Per share data may not always add to the total for the period because each figure is independently calculated. | ||||||||||||