HAMILTON, BERMUDA — (Marketwired) — 10/10/13 — Stratus Technologies Bermuda Holdings Ltd. (together with its consolidated subsidiaries, “Stratus” or the “Company”), the leading provider of high availability solutions, today announced financial results for the second quarter of fiscal year 2014 ended August 25, 2013.
$51.2 million
: $5.4 million
$15.0 million
Commenting on the quarter, Dave Laurello, Stratus CEO and president, said, “Despite continued currency headwinds, the second quarter of fiscal year 2014 was strong from an earnings perspective. This was due to a strong legacy quarter and our effective management of costs. From a market perspective, we continue to see sluggish x86 server sales worldwide which continues to negatively impact our business.”
Looking toward the future, Laurello added, “We continued the forward progress on our transition to a provider of software and services which prevent downtime before it occurs. The mobile world we live in is further driving demand for always-on applications, and our strategy is to enable both enterprises and cloud providers to deliver the right level of availability for these applications.”
Total revenue for the quarter-to-date period ended August 25, 2013 was $51.2 million as compared to $52.5 million in the quarter-to-date period ended August 26, 2012. This is a 3% decrease as reported, and a 4% increase at constant currency. Profit from operations was $10.5 million compared to $10.9 million for the same period last year. This is a 4% decrease as reported, and an 18% increase at constant currency. Profit from operations for the quarter-to-date period ended August 25, 2013 included restructuring charges of $1.2 million to further align spending with current business initiatives. Net loss was $5.4 million, compared to a net loss of $4.2 million in the second quarter of fiscal year 2013. This is a 29% increase as reported, and a 25% decrease at constant currency. Net loss for the quarter-to-date periods ended August 25, 2013 and August 26, 2012 include a net loss on change in fair value of embedded derivatives of $0.9 million and $0.5 million respectively. Net loss for the quarter-to-date periods ended August 25, 2013 and August 26, 2012 includes a net loss on extinguishment of debt of $0.8 million and $0.9 million, respectively.
The Company reported Adjusted EBITDA, a non-GAAP financial measure, of $15.0 million, or 29% of revenue, compared to $13.1 million, or 25% of revenue, for the same period last year. This represents a gross increase of 14% compared to the prior year, or 31% at constant currency. Please refer to the reconciliation of Adjusted EBITDA to Generally Accepted Accounting Principles (“GAAP”) financial measures in the attached, unaudited “Consolidated Statements of Operations.”
Total revenue for the year-to-date period ended August 25, 2013 was $98.7 million as compared to $105.0 million in the year-to-date period ended August 26, 2012. This is a 6% decrease as reported, and is in line at constant currency. Profit from operations was $17.4 million compared to $21.7 million for the same period last year. This is a 20% decrease as reported, and a 1% increase at constant currency. Profit from operations for the year-to-date period ended August 25, 2013 included restructuring charges of $1.3 million to further align spending with current business initiatives. Net loss was $11.9 million, compared to a net loss of $7.1 million in the same period last year. This is a 66% increase as reported, and a 5% increase at constant currency. Net loss for the year-to-date periods ended August 25, 2013 and August 26, 2012 include a net loss on change in fair value of embedded derivatives of $1.0 million and $0.8 million respectively. Net loss for the year-to-date periods ended August 25, 2013 and August 26, 2012 includes a net loss on extinguishment of debt of $0.8 million and $0.9 million, respectively.
The Company reported Adjusted EBITDA, a non-GAAP financial measure, of $24.9 million, or 25% of revenue, compared to $26.4 million, or 25% of revenue, for the same period last year. This represents a gross decrease of 5% compared to the prior year, or an increase of 11% at constant currency. Please refer to the reconciliation of Adjusted EBITDA to Generally Accepted Accounting Principles (“GAAP”) financial measures in the attached, unaudited “Consolidated Statements of Operations.”
A conference call to review second quarter financial results will be held today, October 10, 2013, at 1:30 p.m. Eastern Time, and may be accessed by calling 1-877-941-9205 (U.S. only) or 1-480-629-9771 with a conference ID of 4643335. A recording of this conference call will be available later today at 1-800-406-7325 (U.S. only) or 1-303-590-3030 with a conference ID of 4643335 for 30 days.
Stratus Technologies is the leading provider of infrastructure based solutions that keep applications running continuously in today-s always-on world. Stratus enables rapid deployment of always-on infrastructures, from enterprise servers to clouds, without any changes to applications. Stratus- flexible solutions – software, platform and services – prevent downtime before it occurs and ensure uninterrupted performance of essential business operations. .
Forward-Looking Statements: This press release may contain forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). You are cautioned that such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Such risks and uncertainties include, but are not limited to: the continued acceptance of the Company-s products by the market; the Company-s ability to enter into new service agreements and to retain customers under existing service contracts; the Company-s ability to source quality components and key technologies without interruption and at acceptable prices; the Company-s ability to comply with certain covenants in the governing documents for the Company-s credit facilities and other debt instruments; the Company-s ability to refinance indebtedness when required; the Company-s reliance on sole source manufacturers and suppliers; the presence of existing competitors and the emergence of new competitors; the Company-s financial condition and liquidity and the Company-s leverage and debt service obligations; economic conditions globally and in the Company-s most important markets; developments in the fault-tolerant and high-availability server markets; claims by third parties that the Company infringes upon their intellectual property rights; the Company-s success in adequately protecting its intellectual property rights; the Company-s success in maintaining efficient manufacturing and logistics operations; the Company-s ability to recruit, retain and develop appropriately skilled employees; exposure for systems and service failures; fluctuations in foreign currency exchange rates; fluctuations in interest rates; current risks of terrorist activity and acts of war; the impact of changing tax laws; the impact of changes in policies, laws, regulations or practices of foreign governments on the Company-s international operations; and the impact of natural or man-made disasters. Any forward-looking statements in this press release are made as of the date hereof, and the Company undertakes no duty to further update such forward-looking statements.
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