8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 31, 2007

SUPER MICRO COMPUTER, INC.

(Exact name of registrant specified in its charter)

Delaware	001-33383	77-0353939
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

980 Rock Avenue, San Jose, California 95131

(Address of principal executive offices, including Zip Code)

Registrant’s telephone, including area code: (408) 503-8000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On October 31, 2007, Super Micro Computer, Inc. (the “Company”) issued a press release announcing its operating and financial results for the first quarter of fiscal year 2008 ended September 30, 2007. A copy of the press release is being furnished as Exhibit 99.1 and is incorporated herein in its entirety by reference.

The information in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, unless expressly incorporated by specific reference to such filing. Furthermore, such information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

Exhibit Number	Description
99.1	Press Release of Super Micro Computer, Inc. dated October 31, 2007 announcing its operating and financial results for the first quarter of fiscal year 2008 ended September 30, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SUPER MICRO COMPUTER, INC.
Date: October 31, 2007	By:	/s/ Charles Liang
		President and Chief Executive Officer

Exhibit Index

Exhibit Number	Description
99.1	Press Release of Super Micro Computer, Inc. dated October 31, 2007 announcing its operating and financial results for the first quarter fiscal year 2008.

EX-99.1

Exhibit 99.1

Super Micro Computer, Inc. Announces 1^st Quarter Fiscal Year 2008 Financial Results

SAN JOSE, Calif., October 31, 2007 (BUSINESS WIRE) — Super Micro Computer, Inc. (NASDAQ:SMCI), a leader in application optimized, high performance server solutions, today announced first quarter financial results for fiscal year 2008.

Q1 Fiscal Year 2008 Highlights

• Quarterly net sales of $117.9 million, up 6.3% and 30.8% from the fourth quarter fiscal year 2007 and year-ago first quarter in fiscal year 2007, respectively

• Net income of $5.8 million, or $0.15 per diluted share, up 5.6% and 20.8% from fourth quarter fiscal year 2007 and year-ago first quarter in fiscal year 2007, respectively

• Server Solutions accounted for 38.6% of net sales

• Started volume shipment of Supermicro SuperBlade(TM) servers.

Q1 Fiscal 2008 Financial Results

Net sales for the first quarter ended September 30, 2007 was $117.9 million, up 30.8% from $90.2 million in the first quarter of fiscal year 2007. Net sales from server solutions comprised 38.6% of net sales, up from 35.2% in the first quarter of fiscal year 2007. No customer accounted for more than 10% of net sales during the quarter. On a sequential basis, net sales increased by 6.3% from $110.9 million in the fourth quarter of fiscal year 2007. The net sales growth was primarily due to continued revenue traction of 1U Twin and Universal IO solutions. In addition, the start of volume shipments of SuperBlade servers contributed to the net sales growth.

Net income for the first quarter of fiscal year 2008 was $5.8 million or $0.15 per diluted share compared to net income of $4.8 million, or $0.15 per diluted share in the same period a year ago. Included in net income for the quarter was $0.9 million of stock-based compensation expense (pre-tax). Excluding stock-based compensation expense and the related tax effect, non-GAAP net income for the first quarter was $6.6 million, or $0.17 per diluted share, compared to non-GAAP net income of $5.1 million, or $0.16 per diluted share, in the same period a year ago. On a sequential basis, non-GAAP net income increased by $0.5 million or $0.01 per diluted share.

Gross margin for the first quarter was 19.5%, compared to 19.9% in the same period a year ago. Non-GAAP gross margin for the first quarter was 19.6% compared to 20.0% in the same period a year ago. First quarter of fiscal year 2008 gross margin was lower than the same period a year ago due to higher inventory write-downs in the first quarter of fiscal 2008. In addition, gross margins in first quarter of fiscal year 2007 were higher as a result of sales of new products based on new processor introductions. On a sequential basis, non-GAAP gross margin increased by 1.5% from 18.1% in the fourth quarter of fiscal 2007. The increase was primarily due to cost reductions on existing products, higher gross margins on new products such as 1U Twin and UIO and lower inventory write-downs.

The Company ended the first quarter of fiscal year 2008 with $69.4 million in cash and cash equivalents and short term investments compared to $65.9 million at the end of fourth quarter of fiscal year 2007.

On July 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). Implementation of FIN 48 resulted in the recording of an additional $989,000 in overall income tax liabilities for net unrecognized tax benefits and the reclassifications from various tax accounts to “Long-term liabilities” totaling $3.7 million.

Business Outlook & Management Commentary

The Company has historically seen seasonal net sales growth in our fiscal second and fourth quarters. The Company has also seen a historical pattern of increased sales traction following the introduction of new products. We believe that this should continue during the second quarter of fiscal year 2008. The Company expects net sales to be in the range of $128 million to $135 million for the second quarter of fiscal year 2008 ending December 31, 2007. It is currently expected that the outlook will not be updated until the release of the Company’s next quarterly earnings announcement, notwithstanding subsequent developments; however, the Company may update the outlook or any portion thereof at any time.

“This quarter marked our 14^th anniversary since our founding in 1993. It was highlighted by record net sales, the start of volume shipments of our Supermicro SuperBlade^™ servers, continued revenue traction from our 1U Twin and UIO solutions and the launch of innovative products such as our AMD Barcelona server solutions and our line of Intel quad-core MP Xeon servers. These results highlight the strength of our application optimized solution model and the value of the building block approach we utilized to drive this model,” said Charles Liang, President and Chief Executive Officer of Super Micro Computer. “We will continue to drive ourselves to further optimize our business for expansion and profitability, while still maintaining our financial discipline.”

Conference Call Information

Super Micro Computer will discuss these financial results and its outlook for the second quarter of fiscal 2008 in a conference call at 2:00 p.m. PT, today. Those wishing to participate in the conference call should call 888-713-3589 (international callers dial 913-312-9305) 10 minutes prior to registering. A replay of the call will be available until 11:59 pm ET on November 7, 2007 by dialing 888-203-1112 (international callers dial 719-457-0820) and entering replay PIN 1618804. The live web cast and replay of the call will be available on the Investor Relations section at www.supermicro.com, with the replay beginning approximately two hours after the conclusion of the call and will remain available until the Company’s next earnings call.

Cautionary Statement Regarding Forward Looking Statements

Statements contained in this press release that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate, among other things, to our expected financial and operating results, our ability to build and grow Super Micro Computer, the benefits of our products and our ability to achieve our goals, plans and objectives. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from those anticipated. These include, but are not limited to: our dependence on continued growth in the market for X86 and blade servers, increased competition, difficulties of predicting timing, introduction and customer acceptance of new products, poor product sales, difficulties in establishing and maintaining successful relationships with our distribution partners, shortages or price fluctuations in our supply chain, our ability to protect our intellectual property rights, our ability to control the rate of expansion domestically and internationally, difficulty managing rapid growth and general political, economic and market conditions and events. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in our filings with the Securities and Exchange Commission, including those factors discussed under the caption “Risk Factors” in such filings.

Use of Non-GAAP Financial Measures

Non-GAAP gross margin discussed in this press release excludes stock-based compensation expense. Non-GAAP net income (loss) and net income (loss) per share discussed in this press release exclude stock-based compensation expense and the related tax effect of the applicable items. Management presents non-GAAP financial measures because it considers them to be important supplemental measures of performance. Management uses the non-GAAP financial measures for planning purposes, including analysis of the Company’s performance against prior periods, the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company’s financial and operational performance. However, these non-GAAP financial measures have limitations as an analytical tool, and are not intended to be an alternative to financial measures prepared in accordance with GAAP. Pursuant to the requirements of SEC Regulation G, detailed reconciliations between the Company’s GAAP and non-GAAP financial results is provided at the end of this press release. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company’s SEC filings.

About Super Micro Computer, Inc.

Established in 1993, Supermicro emphasizes superior product design and uncompromising quality control to produce industry-leading serverboards, chassis and server systems. These mission-critical Server Building Block solutions provide benefits across many environments, including data center deployment, high-performance computing, high-end workstations, storage networks and standalone server installations. For more information on Supermicro’s complete line of advanced motherboards, SuperServers, and optimized chassis, visit www.supermicro.com, email Marketing@Supermicro.com or call the San Jose, CA headquarters at +1 408-503-8000.

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	September 30, 2007			June 30, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	50,315		$	50,864
Short-term investments		19,055			15,055
Accounts receivable, net		40,655			33,426
Inventories, net		73,427			66,772
Deferred income taxes – current		6,438			5,630
Prepaid expenses and other current assets		1,893			1,759
Total current assets		191,783			173,506
Property, plant and equipment, net		32,758			31,089
Deferred income taxes - noncurrent		891			624
Other assets		566			364
Total assets	$	225,998		$	205,583
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	70,144		$	61,453
Accrued liabilities		14,548			14,074
Income tax payable		3,140			1,489
Advances from receivable financing arrangements		905			982
Current portion of capital lease obligations		92			118
Current portion of long-term debt		317			304
Total current liabilities		89,146			78,420
Long-term capital lease obligations-net of current portion		25			40
Long-term debt-net of current portion		11,162			11,251
Other long-term liabilities		3,730			—
Total liabilities		104,063			89,711
Stockholders’ equity:
Common stock and additional paid-in capital		59,251			58,239
Deferred stock-based compensation		(1,267	)		(1,500	)
Retained earnings		63,951			59,133
Total stockholders’ equity		121,935			115,872
Total liabilities and stockholders’ equity	$	225,998		$	205,583

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended September 30,
	2007			2006
Net sales	$	117,949		$	90,187
Cost of sales		94,904			72,202
Gross profit		23,045			17,985
Operating expenses:
Research and development		6,706			4,937
Sales and marketing		3,729			2,357
General and administrative		3,424			2,603
Reversal of litigation loss		—			(120	)
Total operating expenses		13,859			9,777
Income from operations		9,186			8,208
Interest income		538			54
Interest expense		(252	)		(327	)
Income before income tax provision		9,472			7,935
Income tax provision		3,665			3,126
Net income	$	5,807		$	4,809
Net income per share:
Basic	$	0.19		$	0.22
Diluted	$	0.15		$	0.15
Shares used in per share calculation:
Basic		30,291,743			22,190,603
Diluted		38,619,263			32,214,766

Stock-based compensation is included in the following cost and expense categories by period (in thousands):

	Three Months Ended September 30,
	2007		2006
Cost of sales	$	112	$	15
Research and development		349		120
Sales and marketing		144		53
General and administrative		265		68

SUPER MICRO COMPUTER, INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(In thousands)

(Unaudited)

	Three Months Ended September 30,
	2007			2006
OPERATING ACTIVITIES:
Net income	$	5,807		$	4,809
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization		537			346
Stock-based compensation expense		870			258
Allowance for doubtful accounts		42			16
Allowance for sales returns		1,273			954
Loss on disposal of property, plant and equipment		—			2
Deferred income taxes		(1,075	)		—
Gain on short-term investments		(198	)		—
Changes in operating assets and liabilities:
Accounts receivable, net		(8,544	)		(5,295	)
Inventories, net		(6,655	)		(20,374	)
Prepaid expenses and other current assets		(101	)		(2,049	)
Accounts payable		7,072			16,930
Income tax payable		1,736			2,988
Accrued litigation loss		—			(396	)
Accrued liabilities		494			4,391
Other long-term liabilities		2,741			—
Net cash provided by operating activities		3,999			2,580
INVESTING ACTIVITIES:
Proceeds from short-term investments		890			—
Purchases of short-term investments		(4,725	)		—
Purchases of property, plant and equipment		(580	)		(1,155	)
Other assets		(205	)		6
Net cash used in investing activities		(4,620	)		(1,149	)
FINANCING ACTIVITIES:
Repayment of long-term debt		(76	)		(156	)
Proceeds from exercise of stock options		290			43
Payment of obligations under capital leases		(45	)		(40	)
Advances under receivable financing arrangements		(77	)		(16	)
Payment of offering costs		(20	)		(721	)
Net cash provided by (used in) financing activities		72			(890	)
Net increase (decrease) in cash and cash equivalents		(549	)		541
Cash and cash equivalents at beginning of year		50,864			16,509
Cash and cash equivalents at end of year	$	50,315		$	17,050
Supplemental disclosure of cash flow information:
Cash paid for interest	$	252		$	327
Cash paid for taxes	$	5		$	137
Non-cash investing and financing activities:
Equipment purchased under capital leases	$	4		$	—
Reversals of deferred stock-based compensation for cancellation of stock options	$	19		$	90
Accrued costs for property, plant and equipment purchases	$	1,697		$	288
Accrued offering costs	$	297		$	1,805

SUPER MICRO COMPUTER, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except share and per share amounts)

(Unaudited)

	Three Months Ended September 30,
	2007			2006
GAAP GROSS PROFIT	$	23,045		$	17,985
Add back stock-based compensation (a)		112			15
Non-GAAP GROSS PROFIT	$	23,157		$	18,000
GAAP GROSS MARGIN		19.5	%		19.9	%
Add back stock-based compensation (a)		0.1	%		0.1	%
Non-GAAP GROSS MARGIN		19.6	%		20.0	%
GAAP INCOME FROM OPERATIONS	$	9,186		$	8,208
Add back stock-based compensation (a)		870			256
Non-GAAP INCOME FROM OPERATIONS	$	10,056		$	8,464
GAAP NET INCOME	$	5,807		$	4,809
Add back stock-based compensation (a)		870			256
Add back adjustments to tax provision (b)		(119	)		41
Non-GAAP NET INCOME	$	6,558		$	5,106
GAAP NET INCOME PER SHARE - BASIC	$	0.19		$	0.22
Add back stock-based compensation and adjustments to tax provision (a) (b)	$	0.03		$	0.01
Non-GAAP NET INCOME PER SHARE - BASIC	$	0.22		$	0.23
GAAP NET INCOME PER SHARE - DILUTED	$	0.15		$	0.15
Add back stock-based compensation and adjustments to tax provision (a) (b)	$	0.02		$	0.01
Non-GAAP NET INCOME PER SHARE - DILUTED	$	0.17		$	0.16
SHARES USED IN COMPUTING NET INCOME PER SHARE
BASIC - GAAP		30,291,743			22,190,603
BASIC - Non-GAAP		30,291,743			22,190,603
DILUTED - GAAP		38,619,263			32,214,766
DILUTED - Non-GAAP		38,851,182			32,409,816

(a) Amortization of SFAS No. 123R, APB 25 and SFAS No. 123 stock-based compensation for the three months ended September 30, 2007 and 2006.

(b) The provision for income taxes used in arriving at the non-GAAP net income was computed using an effective income tax rate of 36.6% and 37.7% for the three months ended September 30, 2007 and 2006, respectively. For the three months ended September 30, 2006, the stock-based compensation was proportionally lower than that for the full year resulting in a favorable tax adjustment for non-GAAP income taxes when applied to the first quarter.