Skip to content
AnalystLens

Super Micro Computer Annual Report, Year Ended Jun 30, 2009

Filing Date
Filed August 31, 2009
Period End
June 30, 2009
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 31, 2009. Cited figures are marked; the original filing is the authoritative source.

Super Micro Computer, Inc. (Nasdaq: SMCI) reported net sales of $505.6 milliona for fiscal year 2009 (ended June 30, 2009), down from $540.5 million in fiscal 2008, with net income of $16.1 million compared with $25.4 million a year earlier.

The filing attributes the sales decline primarily to reduced information technology spending during the global economic downturn, with delayed customer orders ahead of Intel's Nehalem launch also cited. Gross margin fell to 17.5% of net sales from 19.2%, driven by competitive pricing pressure, while research and development spending rose to $34.5 millionb, or 6.8% of net sales, reflecting continued investment in in-house product development. The company states it has been profitable every year since it commenced operations in 1993.

The balance sheet remained solid, with cash and cash equivalents of $70.3 millionc, total assets of $283.1 million and stockholders' equity of $178.6 million at June 30, 2009. Operating cash flow was $21.8 million. Inventory rose to $90.0 million and days sales of inventory increased to 76 days from 63, while days sales outstanding rose to 34 days from 28.

The company repurchased 445,028 shares for $2.0 milliond and paid off its building loans in July and August 2009. Roughly $14.6 million of auction rate securities remain illiquid, though about $3.2 million were redeemed at par in July and August 2009. Key risk areas disclosed include heavy reliance on related-party contract manufacturer Ablecom Technology, which accounted for 22.1% of cost of sales, dependence on Intel and AMD as sole microprocessor suppliers, a pending Digitechnic lawsuit in France with a hearing held June 15, 2009, and concentration of ownership, with insiders beneficially owning approximately 38.3% of common stock.

02—Key points

Key Highlights

  1. Net sales fell 6.5% to $505.6 million from $540.5 million, primarily due to lower unit volumes; server system sales declined 6.0%.
  2. Net income declined to $16.1 million ($0.41 diluted EPS) from $25.4 million ($0.65 diluted EPS) in fiscal 2008.
  3. Gross profit as a percentage of net sales declined to 17.5% from 19.2%, reflecting competitive pricing pressure.
  4. Research and development expenses rose 13.0% to $34.5 million, or 6.8% of net sales, reflecting continued in-house product development.
  5. Cash and cash equivalents of $70.3 million and operating cash flow of $21.8 million; the company paid off $10.2 million in building loans in July and August 2009.
  6. Inventory increased to $90.0 million, with days sales of inventory rising to 76 days from 63 days.
  7. Ablecom Technology, a related party controlled by the CEO's family, supplied 22.1% of cost of sales, and about $14.6 million of auction rate securities remain illiquid.

03—Questions

Frequently Asked Questions

  1. Why did revenue decline in fiscal 2009?

    The filing says the decline was primarily attributable to reductions in information technology spending in response to the global economic downturn, with delayed customer orders ahead of Intel's Nehalem microprocessor release also contributing to a lesser extent. Unit volumes decreased 15.4%, while the average selling price of server systems rose to approximately $1,250 from $1,200.

  2. Why did gross margin and net income decline?

    The filing attributes the decline in profitability mainly to lower net sales and, to a lesser extent, to a reduction in gross profit as a percentage of net sales, which it ties to increasing pricing pressure, partly offset by cost-saving programs. Gross profit as a percentage of net sales fell to 17.5% from 19.2%.

  3. How strong is the company's liquidity and balance sheet?

    At June 30, 2009, cash and cash equivalents were $70.3 million and total stockholders' equity was $178.6 million. Working capital was $131.0 million. The company stated it has sufficient cash on hand to operate over the next 12 months and paid off its building loans in July and August 2009, though it still held about $14.6 million of auction rate securities at year-end.

  4. What are the main concentration and related-party risks?

    Ablecom Technology, a Taiwan-based contract manufacturer whose largest shareholder is the brother of CEO Charles Liang, accounted for approximately 22.1% of cost of sales in fiscal 2009. Intel and AMD are the only microprocessor suppliers, and the company has no long-term supply agreements. Executive officers, directors and 5% holders together beneficially owned approximately 38.3% of common stock.

04—Continue

← View all 10-K filings