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Related-party and Other Transactions
9 Months Ended
Mar. 31, 2017
Related Party Transactions [Abstract]  
Related-party and Other Transactions
Related-party and Other Transactions

Ablecom Technology Inc.—Ablecom, a Taiwan corporation, together with one of its subsidiaries, Compuware (collectively “Ablecom”), is one of the Company’s major contract manufacturers. Ablecom’s ownership of Compuware is below 50% but Compuware remains a related party as Ablecom still has significant influence over its operations. Ablecom’s chief executive officer, Steve Liang, is the brother of Charles Liang, the Company’s President, Chief Executive Officer and Chairman of the Board of Directors. Ablecom owns approximately 0.4% of the Company’s common stock. Charles Liang and his wife, also an officer of the Company, collectively own approximately 10.5% of Ablecom, while Steve Liang and other family members own approximately 36.0% of Ablecom at March 31, 2017.

The Company has product design and manufacturing services agreements (“product design and manufacturing agreements”) and a distribution agreement (“distribution agreement”) with Ablecom.

Under the product design and manufacturing agreements, the Company outsources a portion of its design activities and a significant part of its manufacturing of components such as server chassis to Ablecom. Ablecom agrees to design products according to the Company’s specifications. Additionally, Ablecom agrees to build the tools needed to manufacture the products. The Company has agreed to pay for Ablecom's cost of chassis and related product tooling and engineering services and will pay for those items when the work has been completed.

Under the distribution agreement, Ablecom purchases server products from the Company for distribution in Taiwan. The Company believes that the pricing and terms under the distribution agreement are similar to the pricing and terms of distribution arrangements the Company has with similar, third party distributors.

Ablecom’s net sales to the Company and its net sales of the Company’s products to others comprise a substantial majority of Ablecom’s net sales. The Company purchased products from Ablecom totaling $62,378,000 and $177,513,000, and sold products to Ablecom totaling $4,069,000 and $14,414,000 for the three and nine months ended March 31, 2017, respectively. The Company purchased products from Ablecom totaling $55,133,000 and $185,845,000, and sold products to Ablecom totaling $4,413,000 and $12,125,000 for the three and nine months ended March 31, 2016, respectively.

Amounts owed to the Company by Ablecom as of March 31, 2017 and June 30, 2016 were $7,614,000 and $4,678,000, respectively. Amounts owed to Ablecom by the Company as of March 31, 2017 and June 30, 2016 were $50,407,000 and $39,152,000, respectively. For the three and nine months ended March 31, 2017, the Company paid Ablecom the majority of invoiced dollars between 45 and 86 days of invoice date. For the three and nine months ended March 31, 2017, the Company paid $1,776,000 and $4,712,000, respectively, for tooling assets and miscellaneous costs to Ablecom. For the three and nine months ended March 31, 2016, the Company paid $3,003,000 and $5,901,000, respectively, for tooling assets and miscellaneous costs to Ablecom.

The Company’s exposure to loss as a result of its involvement with Ablecom is limited to (a) potential losses on its purchase orders in the event of an unforeseen decline in the market price and/or demand of the Company’s products such that the Company incurs a loss on the sale or cannot sell the products and (b) potential losses on outstanding accounts receivable from Ablecom in the event of an unforeseen deterioration in the financial condition of Ablecom such that Ablecom defaults on its payable to the Company. Outstanding purchase orders with Ablecom were $102,502,000 and $62,782,000 at March 31, 2017 and June 30, 2016, respectively, representing the maximum exposure to loss relating to (a) above. The Company does not have any direct or indirect guarantees of losses of Ablecom.

In May 2012, the Company and Ablecom jointly established Super Micro Asia Science and Technology Park, Inc. ("Management Company") in Taiwan to manage the common areas shared by the Company and Ablecom for their separately constructed manufacturing facilities. Each company contributed $168,000 and owns 50% of the Management Company. Although the operations of the Management Company are independent of the Company, through governance rights, the Company has the ability to direct the Management Company's business strategies. Therefore, the Company has concluded that the Management Company is a variable interest entity of the Company as the Company is the primary beneficiary of the Management Company. The accounts of the Management Company are consolidated with the accounts of the Company, and a noncontrolling interest has been recorded for the Ablecom's interests in the net assets and operations of the Management Company. In the three and nine months ended March 31, 2017, $5,000 and $(19,000) of net income (loss) attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations, respectively. In the three and nine months ended March 31, 2016, $13,000 and $9,000 of net income attributable to Ablecom's interest was included in the Company's general and administrative expenses in the condensed consolidated statements of operations, respectively.

Investment in a Corporate Venture— In October 2016, the Company entered into agreements pursuant to which the Company agreed to contribute certain technology rights in connection with an investment in a privately-held company ("Corporate Venture") located in China to expand the Company's presence in China. The Corporate Venture is 30% owned by the Company and 70% owned by another investor in China. The transaction was closed in the three months ended March 31, 2017 and the investment has been accounted for under the equity method of accounting. The equity in earnings (losses) of the Corporate Venture were immaterial for the three months ended March 31, 2017 and were included in the Interest and Other Income (Expense), Net in the Company's condensed consolidated statements of operations. The Company recorded a deferred gain related to the contribution of certain technology rights of $6,650,000 in the transaction as of March 31, 2017. The deferred gain will be recognized as license revenue over time on the Company's statement of operations. 

Additionally, the Company sold products to the Corporate Venture in the three months ended March 31, 2017 and all the related intra-entity sales and profits on the products which remained unsold by the Corporate Venture as of March 31, 2017 have been eliminated and reduced the Company's investment in the Corporate Venture. As of March 31, 2017, the Company's equity investment in the Corporate Venture was $6,714,000 and was recorded under Other Assets on the Company's condensed consolidated balance sheets.