Skip to content
AnalystLens

Super Micro Computer Annual Report, Year Ended Jun 30, 2007

Filing Date
Filed August 28, 2007
Period End
June 30, 2007
Securities
SMCISMCIP
In the record · 2016–202610-K1010-Q328-K170

SMCI filed 10 annual reports (10-K), 32 quarterly reports (10-Q) and 170 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’17Oct ’17
  2. FY2019 annual report10-K · Dec ’19Dec ’19
  3. Leadership change8-K · Apr ’22Apr ’22
  4. Leadership change8-K · Jan ’26Jan ’26

01—Abstract

Summary

Summary of the 10-K filed August 28, 2007. Cited figures are marked; the original filing is the authoritative source.

Super Micro Computer, Inc. (filed under the name Super Micro Computer, Inc.; trades on The Nasdaq Global Market as "SMCI") designs, develops, manufactures and sells application optimized, high performance x86 server systems and components.

For fiscal 2007 (year ended June 30, 2007), net sales were $420.4 milliona, up from $302.5 million in fiscal 2006, and net income was $19.3 million versus $16.9 million. Gross profit was $75.0 million, with a gross margin of 17.8% of net sales versus 19.9% in the prior year, as cost of sales rose on higher inventory write-downs and a mix shift toward X7 and PD series motherboards. Operating income was $29.9 million, and diluted EPS was $0.57.

The company stated it has been profitable every year since its 1993 inception. The company completed its initial public offering on April 3, 2007, selling 6,400,000 shares at $8.00b per share, with net proceeds to the company of $42,981,000. Proceeds are earmarked for repaying building loans of about $11.6 million and purchasing a property at 880 Fox Lane, San Jose, for about $11.3 million.

Cash and cash equivalents rose to $50.9 millionc at June 30, 2007, from $16.5 million, and total stockholders' equity increased to $115.9 million from $47.8 million. The filing highlights notable risk concentrations. Ablecom Technology Inc., a related party controlled by members of the founding Liang and Liaw families, accounted for 27.7% of fiscal 2007 cost of sales.

Approximately 67% of net sales came through third-party resellers and distributors. The filing also discloses prior export-control settlements with the U.S. Department of Justice, the Bureau of Industry and Security, and OFAC relating to 2001 to 2003 shipments, with fines totaling roughly $150,000,d $125,000 and $179,000, respectively. Insiders and 5% holders were expected to own about 47.8% of common stock as of August 20, 2007.

02—Key points

Key Highlights

  1. Net sales rose 39.0% to $420.4 million in fiscal 2007 from $302.5 million, driven by higher unit volumes and average selling prices.
  2. Net income grew to $19.3 million (diluted EPS $0.57) from $16.9 million; the company reports profitability every year since its 1993 inception.
  3. Gross margin fell to 17.8% of net sales from 19.9%, reflecting higher cost of sales, a $5.6 million excess and obsolete inventory write-down, and product mix.
  4. The IPO on April 3, 2007 raised net proceeds of $42,981,000 for the company, used to repay building loans and purchase a 880 Fox Lane, San Jose property for about $11.3 million.
  5. Ablecom, a related-party contract manufacturer, represented 27.7% of fiscal 2007 cost of sales, down from 31.3% in fiscal 2006.
  6. Roughly 67% of fiscal 2007 net sales came from third-party resellers and distributors, and 59% came from U.S. customers.
  7. Cash and cash equivalents increased to $50.9 million and stockholders' equity to $115.9 million at June 30, 2007.

03—Questions

Frequently Asked Questions

  1. How did Super Micro Computer perform financially in fiscal 2007?

    Net sales increased 39.0% to $420.4 million and net income rose to $19.3 million from $16.9 million. Income from operations was $29.9 million, and gross profit was $75.0 million, or 17.8% of net sales, down from 19.9% in fiscal 2006.

  2. What did the company do with its IPO proceeds?

    The company sold 6,400,000 shares at $8.00 in its April 3, 2007 IPO, netting $42,981,000 after underwriting discounts and offering expenses. The filing says about $11.6 million is earmarked to repay building loans and about $11.3 million to buy 880 Fox Lane in San Jose. About $15.0 million was invested in auction rate securities.

  3. What are the main customer and supplier concentration risks?

    About 67% of fiscal 2007 net sales came through third-party distributors and resellers, and no customer accounted for 10% or more of net sales. Ablecom, a related-party contract manufacturer, supplied 27.7% of cost of sales, and Intel and AMD are the only microprocessor suppliers.

  4. Does the company have legal or regulatory exposure?

    Yes. The company settled export-control matters with the Department of Justice (plea agreement with a roughly $150,000 fine), the Bureau of Industry and Security (roughly $125,000 fine) and OFAC ($179,000 fine), all relating to shipments to Iran. A French lawsuit by Digitechnic, S.A. seeking $2,416,000 in damages remains pending, and the company believes the claim is without merit.

  5. How concentrated is ownership and control?

    The filing states that executive officers, directors and 5% or greater stockholders were expected to beneficially own about 47.8% of common stock as of August 20, 2007, giving them significant influence over stockholder matters. Charles Liang, the founder, is President, CEO and Chairman.

04—Continue

← View all 10-K filings