Supermicro yesterday announced senior management shuffling including prominent departures, the completion of an audit linked to its delayed Nasdaq filings, and also issued preliminary financial information for the quarter ending last December (Q2 2018 for the company). While Supermicro’s business remains robust, the company continues to be dogged by its failure to file required financial reports in 2017.
Supermicro reported the resignations of CFO Howard Hideshima, SVP international sales Wally Liaw (also from the board of directors), and SVP worldwide Sales Phidias Chou. The company declined to comment if there was a link between the just completed audit and the departures.
Kevin Bauer was named SVP CFO. Bauer joined Supermicro in January 2017 and has previously served as SVP, Corporate Development and Strategy. Prior to joining Supermicro, Mr. Bauer was the Senior Vice President and Chief Financial Officer of Pericom Semiconductor Corporation from February 2014 until its sale to Diodes Inc. in November 2015 and, thereafter, assisted Diodes with the integration of Pericom until November 2016. Don Clegg, VP Marketing and Business development, was named interim head of worldwide sales.
On last week’s analyst call Peter Hayes, SVP, investor relations said, “[T]he company has completed the previously disclosed investigation conducted by the audit committee. Additional time is required to analyze the impact if any other results of the investigation on the company’s historical financial statement, as well as to conduct additional reviews before the company will be able to finalize its annual report on Form 10-K for the fiscal year ended June 30, 2017.
“The company is unable at this time to provide a date as to when the Form 10-K will be filed or to predict whether the company’s historical financial statements will be adjusted or if so the amount of any such adjustment. The company intends to file its quarterly reports on Form 10-Q for the quarters ended September 30 and December 31, 2017 promptly after filing the Form 10-K.” Supermicro is currently facing a March 13, 2018 deadline for its late filings.
Chairman and CEO Charles Liang was bullish on the business. “Our second quarter revenues were in the range of $840 million to $850 million surpassing our quarterly guidance and exceeds our long-term guidance of reaching the $3 billion of run rate by December 2017,” said Liang. “In this seasonally strong quarter we achieved over 30% revenue growth year-over-year and we saw the [past supplement] throughout our quarter. We grew in all market vertical including accelerated, AI, machine learning, storage, IoT embedded, Internet data center, cloud and particularly strong growth with large enterprise customers.”
As with many computer makers, margins of late have been squeezed by pricing – primarily DRAM and NVRAM – supply shortage. Supermicro is a leading manufacturer (OEM and ODM) of HPC servers, datacenter servers, and storage products.
Here’s a summary of the key filing issues, taken from a Supermicro release in November after receiving a letter of non-compliance from Nasdaq:
“The Letter was sent as a result of the Company’s delay in filing its Quarterly Report on Form 10-Q for the period ended September 30, 2017 (the “Form 10-Q”) and its continued delay in filing its Annual Report on Form 10-K for the fiscal year ended June 30, 2017 (the “Form 10-K”). The Company previously submitted a plan of compliance to NASDAQ on November 10, 2017 (the “Plan) with respect to its delay in filing the Form 10-K (the “Initial Delinquent Filing”).
“As previously disclosed by the Company, additional time is needed for the Company to compile and analyze certain information and documentation and finalize its financial statements as of and for the year ended June 30, 2017, as well as complete a related audit committee investigation, in order to permit the Company’s independent registered public accounting firm to complete its audit of the financial statements and the Company’s internal controls over financial reporting as of June 30, 2017.”