Dot Hill Expects Revenue Between $65.0 and $65.5 million for 4Q10

Dot Hill Systems Corp. expects to report net revenue, gross margin and earnings per share results for the quarter ended December 31, 2010 to exceed the guidance provided by the company on November 3, 2010.

Based upon preliminary results for 4Q10,
the company expects to report:

Net revenue in the range of $65.0 to $65.5 million, compared to previous guidance of $58.0 to $62.0 million.
Non-GAAP gross margin to be in the range of 21% to 22%, compared to previous guidance of 19% to 20%.
Non-GAAP earnings per share in the range of $0.02 to $0.04 on a fully diluted basis, compared to previous guidance of a range of a loss of $0.03 to a profit of $0.01.
Cash and cash equivalents are expected to be approximately $45.7 million, up from $41.8 million at the end of the third quarter of 2010.
Management still expects non-GAAP operating expenses for the fourth quarter of 2010 to be within the guidance range of $12.0 to $12.5 million established on November 3, 2010.

The company attributes the expected net revenue results to strength across all geographies and sales channels in spite of its intentional early termination of its NetApp agreement, effective December 1, 2010.

"I am pleased with the progress we have made in the fourth quarter of 2010," commented Dana Kammersgard, the company’s president and chief executive officer. "These projected results represent another proof point that our strategy to expand gross margin and create a sustainably profitable business model is on track."

Hanif Jamal, the company’s senior vice president and chief financial officer stated: "We are encouraged by our preliminary financial results for the fourth quarter of 2010. With respect to the first quarter of 2011, we continue to maintain the same outlook that we provided at the third quarter of 2010 earnings call and anticipate a decline in net revenues due to seasonal factors and the termination of our relationship with NetApp and currently project non-GAAP earnings per share to be at or around a break-even level."

Dot Hill is still awaiting the completion of the audit of its 2010 financial results and anticipates that it will release final results and first quarter 2011 guidance on its regularly scheduled conference call which is expected to take place in the first half of March 2011.