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STEC Inc. Reports Operating Results (10-K)

February 22, 2011 | About:
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10qk

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STEC Inc. (STEC) filed Annual Report for the period ended 2010-12-31.

Stec Inc. has a market cap of $1.08 billion; its shares were traded at around $21.25 with a P/E ratio of 40.09 and P/S ratio of 3.86. Stec Inc. had an annual average earning growth of 23.1% over the past 5 years.Hedge Fund Gurus that owns STEC: Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates. Mutual Fund and Other Gurus that owns STEC: Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors.

Highlight of Business Operations:

Flash-based product revenue was $237.4 million, $308.2 million and $150.3 million in 2010, 2009 and 2008, respectively. Sales of Flash-based products represented 85%, 87% and 66% of our total revenues in 2010, 2009 and 2008, respectively. We expect to continue to make investments in Flash custom design capabilities and controller development.

We also offer both monolithic DRAM modules and DRAM modules based on our proprietary stacking technology. We derived $42.5 million, $38.8 million, and $71.0 million in revenues from the sale of DRAM products during 2010, 2009, and 2008, respectively. Sales of DRAM products represented 15%, 11%, and 31% of our total revenues in 2010, 2009, and 2008, respectively. The increase in sales of DRAM products in absolute dollars and as a percentage of our total revenues from 2009 to 2010 was due primarily to an increase in product sales to a single customer. The decrease in sales of DRAM products in absolute dollars and as a percentage of our total revenues from 2008 to 2009 was due primarily to a focus on growing SSD-based product sales which resulted in a change in the composition of our product mix in 2009, reflecting a greater percentage of SSD revenues and a decrease in DRAM revenues.

Historically, a limited number of customers have accounted for a significant percentage of our revenues. Our ten largest customers accounted for an aggregate of 88.0% of our revenues in 2010, compared to 86.9% of

We market our products to OEMs and OEM distributors, leveraging industry leadership in SSD technology to address their specific needs. In 2010, we sold to more than 210 customers, comprised of direct sales and sales through distributors and contract manufacturers. Our OEM customers make the purchasing decisions on substantially all of the products that we sell through distributors and contract manufacturers. Our ten largest customers accounted for an aggregate of 88.0% of our total revenues in 2010, 86.9% of our total revenues in 2009, and 77.2% of our total revenues in 2008. EMC Corporation (EMC) accounted for 37.8%, 45.1% and 15.2% of our total revenues in 2010, 2009 and 2008, respectively. IBM accounted for 13.2% of our total revenues in 2010 and less than 10% of our total revenues in 2009 and 2008. SMART Modular accounted for 13.0% and 34.4% of our total revenues in 2010 and 2008, respectively, and less than 10% of our total revenues in 2009. Hitachi accounted for 10.8% of our total revenues in 2010 and less than 10% of our total revenues in 2009 and 2008. There were no other customers that accounted for more than 10% of our revenues in 2010, 2009 and 2008. EMC and IBM accounted for 51.8% and 20.7%, respectively, of accounts receivable as of December 31, 2010. EMC accounted for 78.1% of accounts receivable as of December 31, 2009.

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