Smart Modular Technologies: Fiscal 3Q10 Financial Results

(in US$ millions)	3Q09	3Q10	9 mo. 09	9 mo. 10
Revenues	91.6	201.2	341.5	484.4
*Growth*		120%		*42%*
Net income (loss)	(2.4)	14.9	(11.1)	35.6

SMART Modular Technologies (WWH), Inc. reported financial results for the third quarter of fiscal 2010 ended May 28, 2010.

Third Quarter Fiscal 2010 Highlights:

Net sales of $201.2 million
Gross profit of $45.5 million
GAAP diluted EPS of $0.23
Non-GAAP diluted EPS of $0.26
Adjusted EBITDA of $29.8 million

Net sales for the third quarter of fiscal 2010 were $201.2 million, compared to $160.1 million for the second quarter of fiscal 2010, and $91.6 million for the third quarter of fiscal 2009.

Gross profit for the third quarter of fiscal 2010 was $45.5 million, compared to $42.0 million for the second quarter of fiscal 2010, and $18.6 million for the third quarter of fiscal 2009.

On a GAAP basis, net income for the third quarter of fiscal 2010 was $14.9 million or $0.23 per diluted share, compared with $16.1 million, or $0.25 per diluted share for the second quarter of fiscal 2010, and a net loss of $2.4 million, or a net loss of $0.04 per share for the third quarter of fiscal 2009.

On a non-GAAP basis, net income was $17.3 million or $0.26 per diluted share for the third quarter of fiscal 2010, compared with $14.9 million or $0.23 per diluted share for the second quarter of fiscal 2010, and net income of $0.9 million or $0.01 per diluted share for the third quarter of fiscal 2009.

Adjusted EBITDA for the third quarter of fiscal 2010 was $29.8 million, compared to $28.4 million for the second quarter of fiscal 2010, and $5.2 million for the third quarter of fiscal 2009.

"The strength of SMART’s third quarter fiscal 2010 provides continued evidence of the success of our strategic initiatives and the strength of end user demand in our key markets in the U.S., Brazil and Asia. This end user demand, combined with a stable DRAM market and our enhanced operating efficiencies, have combined to drive our better than expected financial results," commented Iain MacKenzie, President and CEO of SMART. "During the quarter we continued to ramp our investment in Brazil as well as in our enterprise solid state storage business in order to solidify and grow our position within these rapidly expanding markets."

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 fourth quarter of fiscal 2010, SMART estimates net sales will be in the range of $200 to $210 million, gross profit in the range of $44 to $47 million, and net income per diluted share in the range of $0.19 to $0.21 on a GAAP basis. On a non-GAAP basis, SMART estimates net income per diluted share will be in the range of $0.22 to $0.24. The guidance for the fourth quarter of fiscal 2010 includes an income tax provision estimated in the range of $8.0 to $8.4 million.

To read the earnings call transcript