Super Micro Computer, Inc. (SMCI) has reported 1.22 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $13.53 million, or $0.26 a share in the quarter, compared with $13.70 million, or $0.27 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $16.67 million, or $0.32 a share compared with $16.49 million or $0.32 a share, a year ago.
Revenue during the quarter went up marginally by 1.80 percent to $528.97 million from $519.62 million in the previous year period. Gross margin for the quarter expanded 124 basis points over the previous year period to 15.14 percent. Total expenses were 96.18 percent of quarterly revenues, up from 95.87 percent for the same period last year. That has resulted in a contraction of 31 basis points in operating margin to 3.82 percent.
Operating income for the quarter was $20.20 million, compared with $21.44 million in the previous year period.
However, the adjusted operating income for the quarter stood at $24.71 million compared to $25.32 million in the prior year period. At the same time, adjusted operating margin contracted 20 basis points in the quarter to 4.67 percent from 4.87 percent in the last year period.
"We are pleased that Supermicro was able to report revenues and profits at the higher end of our expectations for the first quarter. Strong growth from storage, IoT Embedded, and accelerated computing contributed to our results. Although internet datacenter and cloud were lower than previous quarters and same quarter last year, we have many opportunities to win more business in the coming quarters to increase utilization of our current capacity" said Charles Liang, president and chief executive officer.
For the second-quarter, Super Micro Computer forecasts revenue to be in the range of $570 million to $640 million. On an adjusted basis, the company expects diluted earnings per share to be in the range of $0.38 to $0.52.
Operating cash flow turns negative
Super Micro Computer, Inc. has spent $11.04 million cash to meet operating activities during the quarter as against cash inflow of $20.31 million in the last year period. The company has spent $11.53 million cash to meet investing activities during the quarter as against cash outgo of $7.66 million in the last year period.
The company has spent $12.03 million cash to carry out financing activities during the quarter as against cash inflow of $2.61 million in the last year period.
Cash and cash equivalents stood at $146.70 million as on Sep. 30, 2016, up 32.28 percent or $35.80 million from $110.89 million on Sep. 30, 2015.
Working capital increases
Super Micro Computer, Inc. has recorded an increase in the working capital over the last year. It stood at $573.88 million as at Sep. 30, 2016, up 19.75 percent or $94.65 million from $479.23 million on Sep. 30, 2015. Current ratio was at 2.38 as on Sep. 30, 2016, up from 2.14 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 48 days for the quarter from 92 days for the last year period. Days sales outstanding went up to 57 days for the quarter compared with 55 days for the same period last year.
Days inventory outstanding has decreased to 51 days for the quarter compared with 95 days for the previous year period. At the same time, days payable outstanding went up to 60 days for the quarter from 58 for the same period last year.
Debt moves up marginally
Super Micro Computer, Inc. has witnessed an increase in total debt over the last one year. It stood at $98.20 million as on Sep. 30, 2016, up 3.57 percent or $3.39 million from $94.81 million on Sep. 30, 2015. Total debt was 8.04 percent of total assets as on Sep. 30, 2016, compared with 8.76 percent on Sep. 30, 2015. Debt to equity ratio was at 0.14 as on Sep. 30, 2016, down from 0.15 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 61.22 for the quarter from 66.17 for the same period last year.
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