OCZ Technology Issues Update for Investors – Stock Jumps Up Nearly 30%Wed, Apr 17, 2013 - 4:09 PM
OCZ Technology Group today gave investors a business update for the fourth quarter of 2013. Investors must like what they heard as shares of OCZ stock jumped up nearly 30% today on hopes of improvements! The full update can be found in our forums, but here is a snip of it:
The Company is disclosing certain preliminary information about its fourth quarter of fiscal 2013 that ended on February 28, 2013, subject to certain closing procedures and further review by the Company and its auditors. As previously reported the Company estimated that revenue in each of the unreported quarters ending August 31, 2012 and November 30, 2012 is in the range of $65 million to $85 million. This range takes into effect the impact of the reclassification of certain customer costs from operating expenses to revenue, the significant reduction in channel inventory, the timing of revenue recognition and reserves for product returns. The preliminary revenue range for the unreported fourth quarter of fiscal 2013 is estimated to be between $65 million and $70 million. The Company also expects positive gross margins for the fourth quarter. This is an indication that the operating adjustments regarding restructuring and the restatement are behind the Company. Gross margins will continue to improve in the coming quarters due to the streamlining of products and focus on enterprise business. Operating expenses are estimated to be between $23 million and $26 million for the fourth quarter and include non-recurring restatement related charges of approximately $4 million which includes the completion of the internal investigation and other legal matters. The company’s inventory levels also continued to improve as inventory on hand at the end of the fourth quarter was less than $50 million and channel inventory was at a 2-year low of less than $20 million.
Unshipped backlog for the fourth quarter was approximately $18 million, as NAND flash supply constrained revenue in the quarter and suppliers are allocating certain NAND flash products. NAND supply is expected to affect our first quarter of fiscal 2014 as well. The Company’s strategy to diversify NAND vendors has helped during this timeframe and is planning for and expects the supply of flash to continue to be tight throughout calendar 2013.
The Company also launched its first drives using leading-edge 20 nanometer (nm) flash and expects the majority of product lines to transition to this technology node by the end of its second fiscal quarter. The Company will also move the majority of its consumer drives to in-house controller technology in this same timeframe. Utilizing the Company’s proprietary Barefoot 3 controller, the Vector Series of SATA solid state drives continue to ramp in volume in the high-end client market and is recognized by leading independent trade publications as a performance leader in both sequential transfers and sustained performance, most recently winning Editor’s Choice Awards from PC Gamer and Maximum PC magazines. Moving forward the Company will continue to leverage next generation versions of the Barefoot 3 controller with the latest generation flash devices to offer customers the best balance of performance, reliability and value.
“While we know our shareholders are disappointed in our inability to becoming current on our financials by the April 8th NASDAQ deadline,” stated Ralph Schmitt, CEO of OCZ Technology, “the OCZ team and our auditors are working diligently in bringing this to closure as our review procedures for the accounting of the restatement is taking longer than we had anticipated in an effort to ensure that it is accounted for appropriately. The restatement progress does not change the fact that our business continues to operate effectively and we continue to improve our operational situation.”