Stec: Fiscal 1Q12 Financial Results

STEC, Inc. announced the company’s financial results for the first quarter ended March 31, 2012.

Revenue for the first quarter of 2012 was $50.4 million, a decrease of 46.9% from $94.9 million for the first quarter of 2011 and a decrease of 13.3% from $58.1 million for the fourth quarter of 2011.

GAAP gross profit margin was 35.9% for the first quarter of 2012, compared to 42.4% for the first quarter of 2011 and 41.1% for the fourth quarter of 2011. GAAP diluted loss per share was $0.23 for the first quarter of 2012, compared to diluted earnings per share of $0.27 for the first quarter of 2011 and a diluted loss per share of $0.08 for the fourth quarter of 2011.

Non-GAAP gross profit margin was 36.4% for the first quarter of 2012, compared to 42.5% for the first quarter of 2011 and 41.5% for the fourth quarter of 2011. Non-GAAP diluted loss per share was $0.17 for the first quarter of 2012, compared to diluted earnings per share of $0.32 for the first quarter of 2011 and a diluted loss per share of $0.02 for the fourth quarter of 2011.

Business Outlook
"We continue to qualify our products at both existing and emerging customers," said Manouch Moshayedi, STEC’s chairman and CEO. "We remain encouraged by the increase in overall market activity for enterprise SSDs and are making significant strides with the fourth-generation of our ZeusIOPS SSD, and our MACH16 SSD, PCIe SSD, and EnhanceIO caching software.

"In the face of a growing and competitive market, we are confident in these solutions and in our abilities to innovate to meet our customers’ needs. Although we have experienced longer-than-expected qualification cycles due to the complexity and customization of our products, we anticipate a few customers will qualify some of our products in this quarter, with several others expected to be completed in the third quarter of 2012. However, until qualifications are completed, we cannot accurately project the sales of these products. That said, we believe that the revenue level in the second quarter of 2012 represents a trough period for us. We also believe that our technologies and the products that are built on those technologies will drive future revenue growth."

Current expectation
for the second quarter of 2012 is as follows:

• Revenue to range from $40 million to $42 million.
• Non-GAAP diluted loss per share to range from $0.26 to $0.28.

STEC’s projected non-GAAP loss per share results exclude employee stock compensation expense and other items that the company does not consider indicative of its underlying business performance.