Rackable Systems Posts 1Q Financial Results

Fri. May 08, 2009; Posted: 02:01 AM

May 07, 2009 (Close-Up Media via COMTEX) -- RACK | Quote | Chart | News | PowerRating -- Rackable Systems, a provider of ecological server and storage products for medium to large-scale data centers, announced its financial results for the first quarter of fiscal year 2009.

In a release dated May 5, the company stated:

- Total revenue for the first quarter ending April 4, was $44.4 million, compared to $38.8 million for the fourth quarter of 2008 and $67.8 million in the first quarter of 2008.

- GAAP gross margin from for the first quarter of 2009 was 6.1 percent, compared to (15.5) percent for the fourth quarter of 2008 and 25.9 percent in the first quarter of 2008. Non-GAAP gross margin for the first quarter of 2009 was 6.3 percent, compared to 15.1 percent for the fourth quarter of 2008 and 26.4 percent in the first quarter of 2008.

"I am pleased with our revenue and working capital progress quarter over quarter, but I am not satisfied with the overall results," said Mark J. Barrenechea, president and CEO of Rackable Systems. "Although the economic turmoil will remain a challenge in 2009, we are focused on accelerating innovative products to market, controlling expenses and completing the acquisition of Silicon Graphics' assets, enabling us to achieve better gross margins and customer diversification."

- Rackable Systems ended the first quarter of 2009 with $181.2 million in cash, cash equivalents, long-term and short-term investments, compared to $180.6 million at the end of last quarter.

- The company's lower gross margin was attributed to three factors: first, reducing high-cost inventories of certain components through aggressive pricing; secondly, the significant revenue mix of our large Internet data center business; and finally, increased competitive pressure from various server vendors offering aggressive deals during the quarter.

- GAAP net loss per share from continuing operations was ($0.46) for the first quarter of 2009, compared to GAAP net loss per share of ($0.61) for the fourth quarter of 2008 and GAAP net income per share of $0.09 in the first quarter of 2008. Non-GAAP net loss per share from continuing operations was ($0.24) in the first quarter of 2009, compared to non-GAAP net loss per share of ($0.17) for the fourth quarter of 2008 and non-GAAP net income per share of $0.12 in the first quarter of 2008.

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