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| 8-K - 8-K - DOT HILL SYSTEMS CORP | a8-k2q15earningsrelease.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts:
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 Second Quarter 2015 Results and Updates 2015 Guidance
• | 25% Year-over-Year Non-GAAP Revenue Growth |
• | 200% Year-over-Year Non-GAAP EPS Growth |
• | Increases mid-point of full year non-GAAP revenue and non-GAAP EPS guidance |
LONGMONT, Colo. -August 6, 2015 - Dot Hill Systems Corp. (NASDAQ:HILL), a trusted supplier of innovative enterprise class storage systems, reported financial results for the second quarter ended June 30, 2015.
Financial and Operational Highlights:
• | Grew Non-GAAP revenue of $60.6 million in the second quarter of 2015, compared to $60.3 million in the first quarter 2015 and $48.4 million in the second quarter of 2014, or year-over-year growth of 25.2% |
• | Delivered non-GAAP earnings per fully diluted share (EPS) of $0.06 in the second quarter of 2015, compared to $0.06 in the first quarter 2015 and $0.02 in the second quarter of 2014, or year-over-year growth of 200% |
• | Awarded three new patents, bringing the Company’s portfolio to 105 patents |
“The second quarter of 2015 marks the third data point of double digit revenue growth and as such begins to establish the trend line that I have referenced in prior quarters. At $60.6 million, we achieved strong year over year non-GAAP revenue growth of 25%,” stated Dana Kammersgard, president and CEO, Dot Hill Systems. “And with $0.06 of non-GAAP earnings, we achieved 200% growth in EPS, once again reinforcing the operating leverage inherent in our model. I continue to believe we are the only storage company guiding and posting double digit revenue growth with profits growing disproportionately faster.”
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Exhibit 99.1
Second Quarter 2015 GAAP Financial Detail:
• | Net revenue was $61.5 million for the second quarter of 2015, compared to $48.2 million for the second quarter of 2014 and $61.1 million for the first quarter of 2015. |
• | Gross margin for the second quarter of 2015 was 32.7%, compared to 33.2% for the second quarter of 2014 and 34.4% for the first quarter of 2015. |
• | Operating expenses for the second quarter of 2015 were $19.4 million, compared to $16.0 million for the second quarter of 2014 and $17.1 million in the first quarter of 2015. |
• | Net income for the second quarter of 2015 was $0.7 million, or $0.01 per fully diluted share, compared to a net loss of $0.1 million, or ($0.00) per fully diluted share, for the second quarter of 2014, and net income of $3.9 million, or $0.06 per fully diluted share, for the first quarter of 2015. |
First Half 2015 GAAP Financial Detail:
• | Net revenue was $122.7 million for the first half of 2015, compared to $96.4 million for the first half of 2014. |
• | Gross margin for the first half of 2015 was 33.6% compared to 32.4% for the first half of 2014. |
• | Operating expenses were $36.5 million for the first half of 2015, compared to $31.7 million for the same period in 2014. |
• | Net income for the first half of 2015 was $4.6 million compared to a net loss of $0.5 million for the first half of 2014. |
Trailing Twelve Months GAAP Financial Data, Continuing and Discontinued Operations:
• | Total net revenue was $243.9 million for the trailing twelve month period ended June 30, 2015, compared to $207.9 million in the trailing twelve month period ended June 30, 2014. |
• | Gross margin for the trailing twelve month period ended June 20, 2015 was 33.8%, compared to 31.7% in the trailing twelve month period ended June 30, 2014. |
• | Operating expenses were $69.1 million for the trailing twelve month period ended June 30, 2015, compared to $62.4 for the trailing twelve month period ended June 30, 2014. |
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Exhibit 99.1
• | Net income was $13.1 million for the trailing twelve month period ended June 30, 2015, compared to $3.5 million for the trailing twelve month period ended June 30, 2014. |
Second Quarter 2015 Non-GAAP Financial Detail:
• | Non-GAAP net revenue was $60.6 million for the second quarter of 2015, compared to $48.4 million for the second quarter of 2014 and $60.3 million for the first quarter of 2015, or year-over-year growth of 25.2%. |
◦ | Vertical Markets non-GAAP net revenue was $24.8 million for the second quarter of 2015, compared to $20.8 million in the second quarter of 2014 and $35.9 million in the first quarter of 2015, or year-over-growth of 19.5%. |
◦ | Server OEM non-GAAP net revenue was $35.8 million for the second quarter of 2015, compared to $27.7 million in the second quarter of 2014 and $24.3 million in the first quarter of 2015, or year-over-year growth of 29.5%. |
• | Non-GAAP gross margin for the second quarter of 2015 was 32.0%, compared to 33.9% in the second quarter of 2014 and 33.8% in the first quarter of 2015. |
◦ | Vertical Markets non-GAAP gross margin was 41.9% for the second quarter of 2015, compared to 44.7% in the second quarter of 2014 and 42.0% in the first quarter of 2015. |
◦ | Server OEM non-GAAP gross margin was 25.2% for the second quarter of 2015, compared to 25.9% in the second quarter of 2014 and 21.6% in the first quarter of 2015. |
• | Non-GAAP operating expenses for the second quarter of 2015 were $15.4 million, compared to $15.1 million for the second quarter of 2014 and $16.4 million in the first quarter of 2015, or year-over-year growth of 2.2%. |
• | Non-GAAP net income for the second quarter of 2015 was $3.9 million, or $0.06 per fully diluted share, compared to $1.3 million, or $0.02 per fully diluted share, for the second quarter of 2014, and $4.0 million, or $0.06 per fully diluted share, for the first quarter of 2015, or year-over-year non-GAAP net income growth of 211%. |
First Half 2015 Non-GAAP Financial Detail:
• | Non-GAAP net revenue for the first half of 2015 was $120.9 million, compared to $97.3 million in the first half of 2014, or year-over-growth of 24.3%. |
◦ | Vertical Markets non-GAAP net revenue was $60.7 million, compared to $43.1 million in the first half of 2014, or year-over-year growth of 40.9%. |
◦ | Server OEM non-GAAP net revenue was $60.1 million in the first half of 2015, compared to $54.2 million in the first half of 2014, or year-over-year growth of 11.0%. |
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Exhibit 99.1
• | Non-GAAP gross margin for the first six months of 2015 was 32.9%, compared to 33.5% in the first six months of 2014. |
◦ | Vertical Markets non-GAAP gross margin was 42.0% in the first six months of 2015, compared to 44.0% in the first six months of 2014. |
◦ | Server OEM gross margin was 23.8% in the first six months of 2015, compared to 25.2% in the first six months of 2014. |
• | Non-GAAP operating expenses for the first half of 2015 were $31.8 million, compared to $30.2 million in the first half of 2014, or year-over-growth of 5.2%. |
• | Non-GAAP net income for the first half of 2015 was $7.9 million, or $0.12 per fully diluted share, compared to $2.3 million, or $0.04 per fully diluted share, for the first half of 2014, or year-over-year non-GAAP net income growth of 246%. |
Trailing Twelve Months non-GAAP Financial Data:
• | Non-GAAP net revenue was $241.1 million for the trailing twelve month period ended June 30, 2015, compared to $209.9 million for the trailing twelve month period ended June 30, 2014, or year-over-year growth of 14.8%. |
◦ | Vertical Markets non-GAAP net revenue was $119.7 million for the trailing twelve month period ended June 30, 2015, compared to $79.5 million in the trailing twelve month period ended June 30, 2014, or year-over-year growth of 50.6%. |
◦ | Server OEM non-GAAP net revenue was $121.4 million for the trailing twelve month period ended June 30, 2015, compared to $130.4 million in the trailing twelve month period ended June 30, 2014, or year-over-year decline of 6.9%. |
• | Non-GAAP gross margin for the trailing twelve month period ended June 30, 2015 was 33.3%, compared to 32.8% for the trailing twelve month period ended June 30, 2014. |
◦ | Vertical Markets non-GAAP gross margin was 41.8% for the trailing twelve month period ended June 30, 2015, compared to 43.1% in the trailing twelve month period ended June 30, 2014. |
◦ | Server OEM non-GAAP gross margin was 24.9% for the trailing twelve month period ended June 30, 2015, compared to 26.6% in the trailing twelve month period ended June 30, 2014. |
• | Non-GAAP operating expenses for the trailing twelve month period ended June 30, 2015 were $61.8 million, compared to $59.5 million for the trailing twelve month period ended June 30, 2014, or year-over-year growth of 3.9%. |
• | Non-GAAP net income for the trailing twelve month period ended June 30, 2015 was $18.1 million, or $0.28 per fully diluted share, compared to $9.3 million, or $0.16 per fully diluted share, for the trailing twelve month period ended June 30, 2014, or year-over-year growth of 95.1%. |
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Exhibit 99.1
“The second quarter was another strong quarter and proof point of sustained growth in our business,” stated Hanif Jamal, CFO, Dot Hill Systems. “What is perhaps more important to us, is that when we look at our trailing twelve month financial metrics and trends, we are right on plan and perhaps a little ahead of plan on some metrics, compared to the goals we established for 2017 at our April Analyst Day.”
Non-GAAP Operating Leverage:
During the Company’s Analyst Day on April 23, 2015, the Company established a non-GAAP operating leverage goal of 18% to 25% through fiscal year ending December 31, 2017 and defined operating leverage as the change in non-GAAP operating profit divided by the change in non-GAAP revenue. For the second quarter of 2015, for the first half of 2015 and for the trailing twelve months ending June 30, 2015, operating leverage relative to comparable prior year periods, was 22%, 24% and 29% respectively.
Balance Sheet:
The Company exited the second quarter of 2015 with cash and cash equivalents of $49.1 million. This compares to $46.3 million at the end of the first quarter of 2015, and $42.2 million at the end of the second quarter of 2014.
Guidance:
For the third quarter of 2015, the Company expects non-GAAP revenues to be between $58 million and $63 million and non-GAAP EPS to be between $0.05 and $0.08. The Company also updated its full year 2015 guidance and is now projecting non-GAAP revenues of $245 million to $260 million and non-GAAP EPS of $0.30 to $0.35. In March 2015, the Company had established full year 2015 non-GAAP revenue guidance of $230 million to $270 million, and non-GAAP EPS guidance of $0.25 to $0.35.
Conference Call Information:
The Company’s second quarter 2015 financial results conference call is scheduled to take place on Thursday, August 6, 2015 at 11:00 a.m. ET. Please join the Company for a live audio webcast at www.dothill.com in the Investor Relations section. If you prefer to join 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# 85161162.
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
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Exhibit 99.1
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.
About Segment Financial Reporting
The Server OEM segment consists primarily of large Original Equipment Manufacturers (OEM) 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 that are recognized as processing large amounts of data. Our target Vertical Markets include 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, which quite often generate revenue for their end-user customers. The Company sells to these customers through both Vertical Markets OEM partners that include 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 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 third quarter and full year 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 third quarter and full year 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
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Exhibit 99.1
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
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Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2014 | March 31, 2015 | June 30, 2015 | June 30, 2014 | June 30, 2015 | |||||||||||||||
Net revenue | $ | 48,222 | $ | 61,121 | $ | 61,539 | $ | 96,429 | $ | 122,660 | |||||||||
Cost of goods sold | 32,199 | 40,091 | 41,405 | 65,141 | 81,496 | ||||||||||||||
Gross profit | 16,023 | 21,030 | 20,134 | 31,288 | 41,164 | ||||||||||||||
Operating expenses: | |||||||||||||||||||
Research and development | 9,340 | 10,119 | 9,960 | 18,816 | 20,079 | ||||||||||||||
Sales and marketing | 3,843 | 3,804 | 3,441 | 7,137 | 7,245 | ||||||||||||||
General and administrative | 2,851 | 3,212 | 5,960 | 5,749 | 9,172 | ||||||||||||||
Total operating expenses | 16,034 | 17,135 | 19,361 | 31,702 | 36,496 | ||||||||||||||
Operating income (loss) | (11 | ) | 3,895 | 773 | (414 | ) | 4,668 | ||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income (expense), net | (4 | ) | (14 | ) | (13 | ) | (22 | ) | (27 | ) | |||||||||
Other income (expense), net | 11 | — | — | 21 | — | ||||||||||||||
Total other income (expense), net | 7 | (14 | ) | (13 | ) | (1 | ) | (27 | ) | ||||||||||
Income (loss) before income taxes | (4 | ) | 3,881 | 760 | (415 | ) | 4,641 | ||||||||||||
Income tax expense | 74 | 10 | 75 | 75 | 85 | ||||||||||||||
Net income (loss) | $ | (78 | ) | $ | 3,871 | $ | 685 | $ | (490 | ) | $ | 4,556 | |||||||
Net income (loss) per share: | |||||||||||||||||||
Net income (loss) per share - basic and diluted | $ | (0.00 | ) | $ | 0.06 | $ | 0.01 | $ | (0.01 | ) | $ | 0.07 | |||||||
Weighted average shares used to calculate net income (loss) per share: | |||||||||||||||||||
Basic | 60,159 | 60,760 | 61,292 | 59,920 | 61,027 | ||||||||||||||
Diluted | 60,159 | 64,816 | 66,562 | 59,920 | 65,611 | ||||||||||||||
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Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands) | |||||||
December 31, 2014 | June 30, 2015 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 42,492 | $ | 49,137 | |||
Accounts receivable, net | 43,328 | 44,975 | |||||
Inventories | 11,342 | 9,201 | |||||
Prepaid expenses and other assets | 11,126 | 6,444 | |||||
Total current assets | 108,288 | 109,757 | |||||
Property and equipment, net | 8,764 | 8,923 | |||||
Intangible assets | 2,680 | 4,512 | |||||
Other assets | 500 | 485 | |||||
Total assets | $ | 120,232 | $ | 123,677 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 37,421 | $ | 27,998 | |||
Accrued compensation | 4,015 | 4,684 | |||||
Accrued expenses | 8,039 | 9,837 | |||||
Deferred revenue | 5,319 | 3,836 | |||||
Total current liabilities | 54,794 | 46,355 | |||||
Other long-term liabilities | 2,908 | 2,283 | |||||
Total liabilities | 57,702 | 48,638 | |||||
Stockholders' equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 61 | 62 | |||||
Additional paid-in capital | 336,827 | 342,082 | |||||
Accumulated other comprehensive loss | (3,152 | ) | (455 | ) | |||
Accumulated deficit | (271,206 | ) | (266,650 | ) | |||
Total stockholders' equity | 62,530 | 75,039 | |||||
Total liabilities and stockholders' equity | $ | 120,232 | $ | 123,677 | |||
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Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(INCLUDES RESULTS FROM BOTH DISCONTINUED AND CONTINUING OPERATIONS) | |||||||||||
(In thousands) | |||||||||||
Three Months Ended | |||||||||||
June 30, 2014 | March 31, 2015 | June 30, 2015 | |||||||||
Cash Flows From Operating Activities: | |||||||||||
Net income (loss) | $ | (78 | ) | $ | 3,871 | $ | 685 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 932 | 1,153 | 1,195 | ||||||||
Stock-based compensation expense | 1,054 | 880 | 1,200 | ||||||||
Provision for bad debt expense | 2 | — | 9 | ||||||||
Write-off of property and equipment | 5 | — | — | ||||||||
Foreign currency translation adjustment upon liquidation of foreign subsidiary | — | — | 2,677 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 621 | 1,213 | (2,746 | ) | |||||||
Inventories | 87 | 1,890 | 250 | ||||||||
Prepaid expenses and other assets | 1,306 | 3,680 | 1,013 | ||||||||
Accounts payable | (2,010 | ) | (5,890 | ) | (3,335 | ) | |||||
Accrued compensation and other expenses | (404 | ) | 725 | 1,653 | |||||||
Deferred revenue | 32 | (628 | ) | (852 | ) | ||||||
Other long-term liabilities | 109 | (425 | ) | (197 | ) | ||||||
Net cash provided by operating activities | 1,656 | 6,469 | 1,552 | ||||||||
Cash Flows From Investing Activities: | |||||||||||
Purchases of property and equipment | (437 | ) | (1,517 | ) | (842 | ) | |||||
Purchases of intangible assets | — | (1,342 | ) | (835 | ) | ||||||
Net cash used in investing activities | (437 | ) | (2,859 | ) | (1,677 | ) | |||||
Cash Flows From Financing Activities: | |||||||||||
Shares withheld for tax purposes | (8 | ) | — | (10 | ) | ||||||
Proceeds from sale of stock to employees | 646 | 172 | 3,014 | ||||||||
Net cash provided by (used in) financing activities | 638 | 172 | 3,004 | ||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 17 | 7 | (23 | ) | |||||||
Net Increase in Cash and Cash Equivalents | 1,874 | 3,789 | 2,856 | ||||||||
Cash and Cash Equivalents, beginning of period | 40,322 | 42,492 | 46,281 | ||||||||
Cash and Cash Equivalents, end of period | $ | 42,196 | $ | 46,281 | $ | 49,137 | |||||
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | |||||||||||
Capital expenditures incurred but not paid | $ | 345 | $ | 461 | $ | 970 | |||||
Supplemental Cash Flow Data: | |||||||||||
Cash paid for income taxes | $ | 65 | $ | 98 | $ | 164 | |||||
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Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES | |||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2014 | March 31, 2015 | June 30, 2015 | June 30, 2014 | June 30, 2015 | |||||||||||||||
GAAP net revenue | $ | 48,222 | $ | 61,121 | $ | 61,539 | $ | 96,429 | $ | 122,660 | |||||||||
Long-term software contract royalties | 203 | (854 | ) | (916 | ) | 856 | (1,770 | ) | |||||||||||
Non-GAAP net revenue | $ | 48,425 | $ | 60,267 | $ | 60,623 | $ | 97,285 | $ | 120,890 | |||||||||
GAAP gross profit | $ | 16,023 | $ | 21,030 | $ | 20,134 | $ | 31,288 | $ | 41,164 | |||||||||
GAAP gross margin % | 33.2 | % | 34.4 | % | 32.7 | % | 32.4 | % | 33.6 | % | |||||||||
Stock-based compensation | 95 | 123 | 155 | 159 | 278 | ||||||||||||||
Severance costs | 2 | 4 | — | 75 | 4 | ||||||||||||||
Long-term software contract royalties | 203 | (854 | ) | (916 | ) | 856 | (1,770 | ) | |||||||||||
Long-term software contract costs | 117 | 50 | 50 | 240 | 100 | ||||||||||||||
Non-GAAP gross profit | $ | 16,440 | $ | 20,353 | $ | 19,423 | $ | 32,618 | $ | 39,776 | |||||||||
Non-GAAP gross margin % | 33.9 | % | 33.8 | % | 32.0 | % | 33.5 | % | 32.9 | % | |||||||||
GAAP sales and marketing expenses | $ | 3,843 | $ | 3,804 | $ | 3,441 | $ | 7,137 | $ | 7,245 | |||||||||
GAAP contribution margin | $ | 12,180 | $ | 17,226 | $ | 16,693 | $ | 24,151 | $ | 33,919 | |||||||||
GAAP contribution margin % | 25.3 | % | 28.2 | % | 27.1 | % | 25.0 | % | 27.7 | % | |||||||||
Stock-based compensation | (99 | ) | (116 | ) | (139 | ) | (171 | ) | (255 | ) | |||||||||
Severance costs | — | (21 | ) | (7 | ) | (42 | ) | (28 | ) | ||||||||||
Restructuring charge | — | — | (135 | ) | — | (135 | ) | ||||||||||||
Non-GAAP sales and marketing expenses | $ | 3,744 | $ | 3,667 | $ | 3,160 | $ | 6,924 | $ | 6,827 | |||||||||
Non-GAAP contribution margin | $ | 12,696 | $ | 16,686 | $ | 16,263 | $ | 25,694 | $ | 32,949 | |||||||||
Non-GAAP contribution margin % | 26.2 | % | 27.7 | % | 26.8 | % | 26.4 | % | 27.3 | % | |||||||||
GAAP operating expenses | $ | 16,034 | $ | 17,135 | $ | 19,361 | $ | 31,702 | $ | 36,496 | |||||||||
Currency gain (loss) | 28 | 27 | (2,725 | ) | 101 | (2,698 | ) | ||||||||||||
Stock-based compensation | (959 | ) | (757 | ) | (1,045 | ) | (1,473 | ) | (1,802 | ) | |||||||||
Restructuring charge | — | — | (135 | ) | — | (135 | ) | ||||||||||||
Severance costs | — | (33 | ) | (22 | ) | (83 | ) | (55 | ) | ||||||||||
Non-GAAP operating expenses | $ | 15,103 | $ | 16,372 | $ | 15,434 | $ | 30,247 | $ | 31,806 | |||||||||
GAAP operating income (loss) | $ | (11 | ) | $ | 3,895 | $ | 773 | $ | (414 | ) | $ | 4,668 | |||||||
Currency (gain) loss | (28 | ) | (27 | ) | 2,725 | (101 | ) | 2,698 | |||||||||||
Stock-based compensation | 1,054 | 880 | 1,200 | 1,632 | 2,080 | ||||||||||||||
Long-term software contract royalties | 203 | (854 | ) | (916 | ) | 856 | (1,770 | ) | |||||||||||
Long-term software contract costs | 117 | 50 | 50 | 240 | 100 | ||||||||||||||
Restructuring charge | — | — | 135 | — | 135 | ||||||||||||||
Severance costs | 2 | 37 | 22 | 158 | 59 | ||||||||||||||
Non-GAAP operating income | $ | 1,337 | $ | 3,981 | $ | 3,989 | $ | 2,371 | $ | 7,970 | |||||||||
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Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES | |||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2014 | March 31, 2015 | June 30, 2015 | June 30, 2014 | June 30, 2015 | |||||||||||||||
GAAP net income (loss) | $ | (78 | ) | $ | 3,871 | $ | 685 | $ | (490 | ) | $ | 4,556 | |||||||
Currency (gain) loss | (28 | ) | (27 | ) | 2,725 | (101 | ) | 2,698 | |||||||||||
Stock-based compensation | 1,054 | 880 | 1,200 | 1,632 | 2,080 | ||||||||||||||
Other income | (17 | ) | — | — | (27 | ) | — | ||||||||||||
Long-term software contract royalties | 203 | (854 | ) | (916 | ) | 856 | (1,770 | ) | |||||||||||
Long-term software contract costs | 117 | 50 | 50 | 240 | 100 | ||||||||||||||
Restructuring charge | — | — | 135 | — | 135 | ||||||||||||||
Severance costs | 2 | 37 | 22 | 158 | 59 | ||||||||||||||
Non-GAAP net income | $ | 1,253 | $ | 3,957 | $ | 3,901 | $ | 2,268 | $ | 7,858 | |||||||||
Non-GAAP net income per share | |||||||||||||||||||
Basic | $ | 0.02 | $ | 0.07 | $ | 0.06 | $ | 0.04 | $ | 0.13 | |||||||||
Diluted | $ | 0.02 | $ | 0.06 | $ | 0.06 | $ | 0.04 | $ | 0.12 | |||||||||
Weighted average shares used to calculate net income per share: | |||||||||||||||||||
Basic | 60,159 | 60,760 | 61,292 | 59,920 | 61,027 | ||||||||||||||
Diluted | 63,806 | 64,816 | 66,562 | 63,834 | 65,611 | ||||||||||||||
Non-GAAP net income | $ | 1,253 | $ | 3,957 | $ | 3,901 | $ | 2,268 | $ | 7,858 | |||||||||
Interest expense | 4 | 14 | 13 | 22 | 27 | ||||||||||||||
Income tax expense | 74 | 10 | 75 | 75 | 85 | ||||||||||||||
Depreciation | 932 | 1,153 | 1,195 | 1,891 | 2,348 | ||||||||||||||
Non-GAAP EBITDA | $ | 2,263 | $ | 5,134 | $ | 5,184 | $ | 4,256 | $ | 10,318 | |||||||||
12
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR SERVER OEM SEGMENT | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2014 | March 31, 2015 | June 30, 2015 | June 30, 2014 | June 30, 2015 | |||||||||||||||
Server OEM GAAP net revenue | $ | 27,463 | $ | 25,178 | $ | 36,733 | $ | 53,317 | $ | 61,911 | |||||||||
Long-term software contract royalties | 203 | (854 | ) | (916 | ) | 856 | (1,770 | ) | |||||||||||
Server OEM non-GAAP net revenue | $ | 27,666 | $ | 24,324 | $ | 35,817 | $ | 54,173 | $ | 60,141 | |||||||||
Server OEM GAAP gross profit | $ | 6,783 | $ | 5,996 | $ | 9,803 | $ | 12,387 | $ | 15,799 | |||||||||
Server OEM GAAP gross margin % | 24.7 | % | 23.8 | % | 26.7 | % | 23.2 | % | 25.5 | % | |||||||||
Stock-based compensation | 59 | 58 | 101 | 100 | 159 | ||||||||||||||
Severance costs | 2 | 2 | — | 49 | 2 | ||||||||||||||
Long-term software contract royalties | 203 | (854 | ) | (916 | ) | 856 | (1,770 | ) | |||||||||||
Long-term software contract costs | 117 | 50 | 50 | 240 | 100 | ||||||||||||||
Server OEM non-GAAP gross profit | $ | 7,164 | $ | 5,252 | $ | 9,038 | $ | 13,632 | $ | 14,290 | |||||||||
Server OEM non-GAAP gross margin % | 25.9 | % | 21.6 | % | 25.2 | % | 25.2 | % | 23.8 | % | |||||||||
Server OEM GAAP sales and marketing expenses | $ | 541 | $ | 602 | $ | 614 | $ | 1,023 | $ | 1,216 | |||||||||
Server OEM GAAP contribution margin | $ | 6,242 | $ | 5,394 | $ | 9,189 | $ | 11,364 | $ | 14,583 | |||||||||
Server OEM GAAP contribution margin % | 22.7 | % | 21.4 | % | 25.0 | % | 21.3 | % | 23.6 | % | |||||||||
Stock-based compensation | (21 | ) | (21 | ) | (28 | ) | (36 | ) | (49 | ) | |||||||||
Severance costs | — | (4 | ) | (1 | ) | (9 | ) | (5 | ) | ||||||||||
Server OEM non-GAAP sales and marketing expenses | $ | 520 | $ | 577 | $ | 585 | $ | 978 | $ | 1,162 | |||||||||
Server OEM non-GAAP contribution margin | $ | 6,644 | $ | 4,675 | $ | 8,453 | $ | 12,654 | $ | 13,128 | |||||||||
Server OEM non-GAAP contribution margin % | 24.0 | % | 19.2 | % | 23.6 | % | 23.4 | % | 21.8 | % | |||||||||
Server OEM GAAP operating income | $ | 6,242 | $ | 5,394 | $ | 9,189 | $ | 11,364 | $ | 14,583 | |||||||||
Stock-based compensation | 80 | 79 | 129 | 136 | 208 | ||||||||||||||
Severance costs | 2 | 6 | 1 | 58 | 7 | ||||||||||||||
Long-term software contract royalties | 203 | (854 | ) | (916 | ) | 856 | (1,770 | ) | |||||||||||
Long-term software contract costs | 117 | 50 | 50 | 240 | 100 | ||||||||||||||
Server OEM non-GAAP operating income | $ | 6,644 | $ | 4,675 | $ | 8,453 | $ | 12,654 | $ | 13,128 | |||||||||
13
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR VERTICAL MARKETS SEGMENT | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2014 | March 31, 2015 | June 30, 2015 | June 30, 2014 | June 30, 2015 | |||||||||||||||
Vertical Markets GAAP and non-GAAP net revenue | $ | 20,759 | $ | 35,943 | $ | 24,806 | $ | 43,112 | $ | 60,749 | |||||||||
Vertical Markets GAAP gross profit | $ | 9,240 | $ | 15,034 | $ | 10,331 | $ | 18,901 | $ | 25,365 | |||||||||
Vertical Markets GAAP gross margin % | 44.5 | % | 41.8 | % | 41.6 | % | 43.8 | % | 41.8 | % | |||||||||
Stock-based compensation | 36 | 65 | 54 | 58 | 119 | ||||||||||||||
Severance costs | — | 2 | — | 27 | 2 | ||||||||||||||
Vertical Markets non-GAAP gross profit | $ | 9,276 | $ | 15,101 | $ | 10,385 | $ | 18,986 | $ | 25,486 | |||||||||
Vertical Markets non-GAAP gross margin % | 44.7 | % | 42.0 | % | 41.9 | % | 44.0 | % | 42.0 | % | |||||||||
Vertical Markets GAAP sales and marketing expenses | $ | 2,478 | $ | 2,548 | $ | 2,044 | $ | 4,732 | $ | 4,592 | |||||||||
Vertical Markets GAAP contribution margin | $ | 6,762 | $ | 12,486 | $ | 8,287 | $ | 14,169 | $ | 20,773 | |||||||||
Vertical Markets GAAP contribution margin % | 32.6 | % | 34.7 | % | 33.4 | % | 32.9 | % | 34.2 | % | |||||||||
Stock-based compensation | (45 | ) | (58 | ) | (61 | ) | (78 | ) | (119 | ) | |||||||||
Severance costs | — | (10 | ) | (4 | ) | (19 | ) | (14 | ) | ||||||||||
Restructuring charge | — | — | (135 | ) | — | (135 | ) | ||||||||||||
Vertical Markets non-GAAP sales and marketing expenses | $ | 2,433 | $ | 2,480 | $ | 1,844 | $ | 4,635 | $ | 4,324 | |||||||||
Vertical Markets non-GAAP contribution margin | $ | 6,843 | $ | 12,621 | $ | 8,541 | $ | 14,351 | $ | 21,162 | |||||||||
Vertical Markets non-GAAP contribution margin % | 33.0 | % | 35.1 | % | 34.4 | % | 33.3 | % | 34.8 | % | |||||||||
Vertical Markets GAAP operating income | $ | 6,762 | $ | 12,486 | $ | 8,287 | $ | 14,169 | $ | 20,773 | |||||||||
Stock-based compensation | 81 | 123 | 115 | 136 | 238 | ||||||||||||||
Severance costs | — | 12 | 4 | 46 | 16 | ||||||||||||||
Restructuring charge | — | — | 135 | — | 135 | ||||||||||||||
Vertical Markets non-GAAP operating income | $ | 6,843 | $ | 12,621 | $ | 8,541 | $ | 14,351 | $ | 21,162 | |||||||||
14
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR CORPORATE SEGMENT | |||||||||||||||||||
(In thousands) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2014 | March 31, 2015 | June 30, 2015 | June 30, 2014 | June 30, 2015 | |||||||||||||||
Corporate GAAP sales and marketing expenses | $ | 824 | $ | 654 | $ | 783 | $ | 1,382 | $ | 1,437 | |||||||||
Corporate GAAP contribution margin | $ | (824 | ) | $ | (654 | ) | $ | (783 | ) | $ | (1,382 | ) | $ | (1,437 | ) | ||||
Stock-based compensation | (33 | ) | (37 | ) | (50 | ) | (57 | ) | (87 | ) | |||||||||
Severance costs | — | (7 | ) | (2 | ) | (14 | ) | (9 | ) | ||||||||||
Corporate non-GAAP sales and marketing expenses | $ | 791 | $ | 610 | $ | 731 | $ | 1,311 | $ | 1,341 | |||||||||
Corporate non-GAAP contribution margin | $ | (791 | ) | $ | (610 | ) | $ | (731 | ) | $ | (1,311 | ) | $ | (1,341 | ) | ||||
Corporate GAAP research and development expenses | $ | 9,340 | $ | 10,119 | $ | 9,960 | $ | 18,816 | $ | 20,079 | |||||||||
Stock-based compensation | (347 | ) | (386 | ) | (467 | ) | (607 | ) | (853 | ) | |||||||||
Severance costs | — | (12 | ) | (5 | ) | (40 | ) | (17 | ) | ||||||||||
Corporate non-GAAP research and development expenses | $ | 8,993 | $ | 9,721 | $ | 9,488 | $ | 18,169 | $ | 19,209 | |||||||||
Corporate GAAP general and administrative expenses | $ | 2,851 | $ | 3,212 | $ | 5,960 | $ | 5,749 | $ | 9,172 | |||||||||
Currency gain (loss) | 28 | 27 | (2,725 | ) | 101 | (2,698 | ) | ||||||||||||
Stock-based compensation | (513 | ) | (255 | ) | (439 | ) | (695 | ) | (694 | ) | |||||||||
Severance costs | — | — | (10 | ) | (1 | ) | (10 | ) | |||||||||||
Corporate non-GAAP general and administrative expenses | $ | 2,366 | $ | 2,984 | $ | 2,786 | $ | 5,154 | $ | 5,770 | |||||||||
Corporate GAAP operating loss | $ | (13,015 | ) | $ | (13,985 | ) | $ | (16,703 | ) | $ | (25,947 | ) | $ | (30,688 | ) | ||||
Currency (gain) loss | (28 | ) | (27 | ) | 2,725 | (101 | ) | 2,698 | |||||||||||
Stock-based compensation | 893 | 678 | 956 | 1,359 | 1,634 | ||||||||||||||
Severance costs | — | 19 | 17 | 55 | 36 | ||||||||||||||
Corporate non-GAAP operating loss | $ | (12,150 | ) | $ | (13,315 | ) | $ | (13,005 | ) | $ | (24,634 | ) | $ | (26,320 | ) | ||||
15
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||||||||||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES | |||||||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, 2014 | March 31, 2015 | June 30, 2015 | June 30, 2014 | June 30, 2015 | |||||||||||||||
GAAP income (loss) per share | $ | (0.00 | ) | $ | 0.06 | $ | 0.01 | $ | (0.01 | ) | $ | 0.07 | |||||||
Currency (gain) loss | — | (0.00 | ) | 0.04 | 0.00 | 0.04 | |||||||||||||
Stock-based compensation | 0.02 | 0.01 | 0.02 | 0.03 | 0.03 | ||||||||||||||
Long-term software contract royalties | 0.00 | (0.01 | ) | (0.01 | ) | 0.01 | (0.03 | ) | |||||||||||
Long-term software contract costs | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||
Other adjustments | — | — | — | 0.01 | 0.01 | ||||||||||||||
Non-GAAP income per share* | $ | 0.02 | $ | 0.06 | $ | 0.06 | $ | 0.04 | $ | 0.12 | |||||||||
Weighted average shares used to calculate earnings per share: | |||||||||||||||||||
Basic | 60,159 | 60,760 | 61,292 | 59,920 | 61,027 | ||||||||||||||
Diluted | 63,806 | 64,816 | 66,562 | 63,834 | 65,611 | ||||||||||||||
* Per share data may not always add to the total for the period because each figure is independently calculated. | |||||||||||||||||||
16
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR TRAILING 12 MONTHS | |||||||
(In thousands) | |||||||
Trailing 12 Months | |||||||
Q3 2013 through Q2 2014 | Q3 2014 through Q2 2015 | ||||||
GAAP net revenue from continuing operations | $ | 207,831 | $ | 243,896 | |||
GAAP revenue from discontinued operations | 28 | — | |||||
Total GAAP net revenue, from continuing and discontinued operations | $ | 207,859 | $ | 243,896 | |||
AssuredUVS revenue | (28 | ) | — | ||||
Long-term software contract royalties | 2,084 | (2,812 | ) | ||||
Total non-GAAP net revenue | $ | 209,915 | $ | 241,084 | |||
GAAP gross profit from continuing operations | $ | 65,911 | $ | 82,451 | |||
GAAP gross margin % from continuing operations | 31.7 | % | 33.8 | % | |||
GAAP gross profit from discontinued operations | 28 | — | |||||
GAAP gross profit from continuing and discontinued operations | $ | 65,939 | $ | 82,451 | |||
GAAP gross margin % from continuing and discontinued operations | 31.7 | % | 33.8 | % | |||
Stock-based compensation | 314 | 469 | |||||
Severance costs | 92 | 4 | |||||
AssuredUVS revenue | (28 | ) | — | ||||
Power supply component failures | 69 | (100 | ) | ||||
Long-term software contract royalties | 2,084 | (2,812 | ) | ||||
Long-term software contract costs | 418 | 200 | |||||
Non-GAAP gross profit | $ | 68,888 | $ | 80,212 | |||
Non-GAAP gross margin % | 32.8 | % | 33.3 | % | |||
GAAP sales and marketing expenses | $ | 14,292 | $ | 14,613 | |||
GAAP contribution margin from continuing operations | $ | 51,619 | $ | 67,838 | |||
GAAP contribution margin % from continuing operations | 24.8 | % | 27.8 | % | |||
Stock-based compensation | (298 | ) | (437 | ) | |||
Severance costs | (46 | ) | (30 | ) | |||
Restructuring charge | — | (135 | ) | ||||
Non-GAAP sales and marketing expenses | $ | 13,948 | $ | 14,011 | |||
Non-GAAP contribution margin | $ | 54,940 | $ | 66,201 | |||
Non-GAAP contribution margin % | 26.2 | % | 27.5 | % | |||
GAAP operating expenses from continuing operations | $ | 62,322 | $ | 69,066 | |||
GAAP operating expenses from discontinued operations | 69 | — | |||||
GAAP operating expenses for continuing and discontinued operations | $ | 62,391 | $ | 69,066 | |||
Currency loss | (55 | ) | (2,885 | ) | |||
Stock-based compensation | (2,651 | ) | (3,125 | ) | |||
AssuredUVS expenses | (8 | ) | — | ||||
Long-term software contract deferred costs | (12 | ) | — | ||||
Legal settlement | — | (1,000 | ) | ||||
Restructuring charge | (46 | ) | (135 | ) | |||
Severance costs | (98 | ) | (85 | ) | |||
Non-GAAP operating expenses | $ | 59,521 | $ | 61,836 | |||
17
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR TRAILING 12 MONTHS | |||||||
(In thousands) | |||||||
Trailing 12 Months | |||||||
Q3 2013 through Q2 2014 | Q3 2014 through Q2 2015 | ||||||
GAAP operating income from continuing operations | $ | 3,589 | $ | 13,385 | |||
GAAP operating loss from discontinued operations | (41 | ) | — | ||||
GAAP operating income for continuing and discontinued operations | $ | 3,548 | $ | 13,385 | |||
Currency loss | 55 | 2,885 | |||||
Stock-based compensation | 2,965 | 3,594 | |||||
AssuredUVS expenses, less AssuredUVS revenue | (20 | ) | — | ||||
Power supply component failures | 69 | (100 | ) | ||||
Long-term software contract royalties | 2,084 | (2,812 | ) | ||||
Long-term software contract costs | 418 | 200 | |||||
Long-term software contract deferred costs | 12 | — | |||||
Legal settlement | — | 1,000 | |||||
Restructuring charge | 46 | 135 | |||||
Severance costs | 190 | 89 | |||||
Non-GAAP operating income | $ | 9,367 | $ | 18,376 | |||
GAAP net income from continuing operations | $ | 3,521 | $ | 13,101 | |||
GAAP net loss from discontinued operations | (42 | ) | — | ||||
GAAP net income for continuing and discontinued operations | $ | 3,479 | $ | 13,101 | |||
Currency loss | 55 | 2,885 | |||||
Stock-based compensation | 2,965 | 3,594 | |||||
Other income | (27 | ) | — | ||||
AssuredUVS expenses, less AssuredUVS revenue | (20 | ) | — | ||||
Power supply component failures | 69 | (100 | ) | ||||
Long-term software contract royalties | 2,084 | (2,812 | ) | ||||
Long-term software contract costs | 418 | 200 | |||||
Long-term software contract deferred costs | 12 | — | |||||
Legal settlement | — | 1,000 | |||||
Restructuring charge | 46 | 135 | |||||
Severance costs | 190 | 89 | |||||
Non-GAAP net income | $ | 9,271 | $ | 18,092 | |||
Non-GAAP net income per share | $ | 0.16 | $ | 0.28 | |||
Non-GAAP net income | $ | 9,271 | $ | 18,092 | |||
Interest expense | 21 | 41 | |||||
Income tax expense | 43 | 237 | |||||
Depreciation | 3,553 | 4,429 | |||||
Non-GAAP EBITDA | $ | 12,888 | $ | 22,799 | |||
18
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR SERVER OEM SEGMENT FOR TRAILING 12 MONTHS | |||||||
(In thousands) | |||||||
Trailing 12 Months | |||||||
Q3 2013 through Q2 2014 | Q3 2014 through Q2 2015 | ||||||
Server OEM GAAP net revenue | $ | 128,232 | $ | 124,174 | |||
Long-term software contract royalties | 2,084 | (2,812 | ) | ||||
Server OEM non-GAAP net revenue | $ | 130,416 | $ | 121,362 | |||
Server OEM GAAP gross profit | $ | 31,795 | $ | 32,623 | |||
Server OEM GAAP gross margin % | 24.8 | % | 26.3 | % | |||
Stock-based compensation | 214 | 272 | |||||
Severance costs | 61 | 2 | |||||
Power supply component failures | 69 | (100 | ) | ||||
Long-term software contract royalties | 2,084 | (2,812 | ) | ||||
Long-term software contract costs | 418 | 200 | |||||
Server OEM non-GAAP gross profit | $ | 34,641 | $ | 30,185 | |||
Server OEM non-GAAP gross margin % | 26.6 | % | 24.9 | % | |||
Server OEM GAAP sales and marketing expenses | $ | 2,085 | $ | 2,313 | |||
Server OEM GAAP contribution margin | $ | 29,710 | $ | 30,310 | |||
Server OEM GAAP contribution margin % | 23.2 | % | 24.4 | % | |||
Stock-based compensation | (63 | ) | (81 | ) | |||
Severance costs | (10 | ) | (5 | ) | |||
Server OEM non-GAAP sales and marketing expenses | $ | 2,012 | $ | 2,227 | |||
Server OEM non-GAAP contribution margin | $ | 32,629 | $ | 27,958 | |||
Server OEM non-GAAP contribution margin % | 25.0 | % | 23.0 | % | |||
Server OEM GAAP operating income | $ | 29,710 | $ | 30,310 | |||
Stock-based compensation | 277 | 353 | |||||
Severance costs | 71 | 7 | |||||
Power supply component failures | 69 | (100 | ) | ||||
Long-term software contract royalties | 2,084 | (2,812 | ) | ||||
Long-term software contract costs | 418 | 200 | |||||
Server OEM non-GAAP operating income | $ | 32,629 | $ | 27,958 | |||
19
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR VERTICAL MARKETS SEGMENT FOR TRAILING 12 MONTHS | |||||||
(In thousands) | |||||||
Trailing 12 Months | |||||||
Q3 2013 through Q2 2014 | Q3 2014 through Q2 2015 | ||||||
Vertical Markets GAAP net revenue from continuing operations | $ | 79,499 | $ | 119,722 | |||
GAAP revenue from discontinued operations | 28 | — | |||||
Vertical Markets GAAP net revenue from continuing and discontinued operations | $ | 79,527 | $ | 119,722 | |||
AssuredUVS revenue | (28 | ) | — | ||||
Vertical Markets non-GAAP net revenue | $ | 79,499 | $ | 119,722 | |||
Vertical Markets GAAP gross profit from continuing operations | $ | 34,116 | $ | 49,828 | |||
Vertical Markets GAAP gross margin % from continuing operations | 42.9 | % | 41.6 | % | |||
Vertical Markets GAAP gross profit from discontinued operations | 28 | — | |||||
Vertical Markets GAAP gross profit from continuing and discontinued operations | $ | 34,144 | $ | 49,828 | |||
Vertical Markets GAAP gross margin % from continuing and discontinued operations | 42.9 | % | 41.6 | % | |||
Stock-based compensation | 100 | 197 | |||||
Severance costs | 31 | 2 | |||||
AssuredUVS revenue | (28 | ) | — | ||||
Vertical Markets non-GAAP gross profit | $ | 34,247 | $ | 50,027 | |||
Vertical Markets non-GAAP gross margin % | 43.1 | % | 41.8 | % | |||
Vertical Markets GAAP sales and marketing expenses | $ | 9,411 | $ | 9,637 | |||
Vertical Markets GAAP contribution margin from continuing operations | $ | 24,705 | $ | 40,191 | |||
Vertical Markets GAAP contribution margin % from continuing operations | 31.1 | % | 33.6 | % | |||
Stock-based compensation | (135 | ) | (210 | ) | |||
Severance costs | (21 | ) | (15 | ) | |||
Restructuring recovery | — | (135 | ) | ||||
Vertical Markets non-GAAP sales and marketing expenses | $ | 9,255 | $ | 9,277 | |||
Vertical Markets non-GAAP contribution margin | $ | 24,992 | $ | 40,750 | |||
Vertical Markets non-GAAP contribution margin % | 31.4 | % | 34.0 | % | |||
Vertical Markets GAAP operating income from continuing operations | $ | 24,705 | $ | 40,191 | |||
Vertical Markets GAAP operating income from discontinued operations | 28 | — | |||||
Vertical Markets GAAP operating income (loss) from continuing and discontinued operations | $ | 24,733 | $ | 40,191 | |||
Stock-based compensation | 235 | 407 | |||||
Severance costs | 52 | 17 | |||||
AssuredUVS revenue | (28 | ) | — | ||||
Restructuring charge | — | 135 | |||||
Vertical Markets non-GAAP operating income | $ | 24,992 | $ | 40,750 | |||
20
Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR CORPORATE SEGMENT FOR TRAILING 12 MONTHS | |||||||
(In thousands) | |||||||
Trailing 12 Months | |||||||
Q3 2013 through Q2 2014 | Q3 2014 through Q2 2015 | ||||||
Corporate GAAP sales and marketing expenses | $ | 2,796 | $ | 2,663 | |||
Corporate GAAP contribution margin | $ | (2,796 | ) | $ | (2,663 | ) | |
Stock-based compensation | (100 | ) | (146 | ) | |||
Severance costs | (15 | ) | (10 | ) | |||
Corporate non-GAAP sales and marketing expenses | $ | 2,681 | $ | 2,507 | |||
Corporate non-GAAP contribution margin | $ | (2,681 | ) | $ | (2,507 | ) | |
Corporate GAAP research and development expenses | $ | 36,527 | $ | 38,908 | |||
Stock-based compensation | (1,083 | ) | (1,550 | ) | |||
Long-term software contract deferred costs | (12 | ) | — | ||||
Severance costs | (47 | ) | (45 | ) | |||
Corporate non-GAAP research and development expenses | $ | 35,385 | $ | 37,313 | |||
Corporate GAAP general and administrative expenses from continuing operations | $ | 11,503 | $ | 15,545 | |||
Corporate GAAP general and administrative expenses from discontinued operations | 69 | — | |||||
Corporate GAAP general and administrative expenses from continuing and discontinued operations | $ | 11,572 | $ | 15,545 | |||
Currency loss | (55 | ) | (2,885 | ) | |||
Stock-based compensation | (1,270 | ) | (1,138 | ) | |||
AssuredUVS expenses | (8 | ) | — | ||||
Restructuring charge | (46 | ) | — | ||||
Legal settlement | — | (1,000 | ) | ||||
Severance costs | (5 | ) | (10 | ) | |||
Corporate non-GAAP general and administrative expenses | $ | 10,188 | $ | 10,512 | |||
Corporate GAAP operating loss from continuing operations | $ | (50,826 | ) | $ | (57,116 | ) | |
Corporate GAAP operating loss from discontinued operations | (69 | ) | — | ||||
Corporate GAAP operating loss from continuing and discontinued operations | $ | (50,895 | ) | $ | (57,116 | ) | |
Currency loss | 55 | 2,885 | |||||
Stock-based compensation | 2,453 | 2,834 | |||||
AssuredUVS expenses | 8 | — | |||||
Long-term software contract deferred costs | 12 | — | |||||
Restructuring charge | 46 | — | |||||
Legal settlement | — | 1,000 | |||||
Severance costs | 67 | 65 | |||||
Corporate non-GAAP operating loss | $ | (48,254 | ) | $ | (50,332 | ) | |
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Exhibit 99.1
DOT HILL SYSTEMS CORP. | |||||||
UNAUDITED RECONCILIATION OF CONSOLIDATED NON-GAAP MEASURES FOR TRAILING 12 MONTHS | |||||||
(Per share amounts) | |||||||
Trailing 12 Months | |||||||
Q3 2013 through Q2 2014 | Q3 2014 through Q2 2015 | ||||||
GAAP income per share | $ | 0.06 | $ | 0.20 | |||
Currency loss | 0.00 | 0.04 | |||||
Stock-based compensation | 0.05 | 0.05 | |||||
Long-term software contract royalties | 0.02 | (0.03 | ) | ||||
Legal settlement | 0.00 | 0.02 | |||||
Other adjustments | 0.03 | 0.00 | |||||
Non-GAAP income per share* | $ | 0.16 | $ | 0.28 | |||
* Per share data may not always add to the total for the period because each figure is independently calculated. | |||||||
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