Dot Hill Systems Corp. (HILL, Financial) filed Quarterly Report for the period ended 2010-03-31.
Dot Hill Systems Corp. has a market cap of $77.7 million; its shares were traded at around $1.43 with and P/S ratio of 0.3. HILL is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
These increases were partially offset by a decrease in net revenue from Sun, FTS, and Motorola. Sun sales decreased $6.5 million to $0.4 million, or 0.6% of total net revenue for the quarter ended March 31, 2010. The decline in Sun net revenue is due to the products we sell to Sun reaching the end of their product life cycle. FTS sales decreased $2.3 million to $0.9 million, or 1.5% of total net revenue in the quarter ended March 31, 2010. The decrease in net revenue from FTS is due to its decision to internally source the product we sell to FTS. Motorola sales decreased $0.8 million to $0.6 million, or 1.0% of total net revenue for the quarter ended March 31, 2010. The decline in Motorola net revenue is due to the timing of the transition of our next generation products we sell to Motorola.
Also contributing to the increase in cost of goods sold were higher amortization expense, inventory reserve charges and freight costs in the first quarter of 2010 compared to the corresponding quarter in 2009. The increase in amortization expense is due to the reclassification of Ciprico amortization of $0.3 million from research and development expense to costs of goods sold as a result of the RAIDCore product now generating revenue. Additionally, Cloverleaf amortization of $0.1 million is included in costs of goods sold from the acquisition date. Freight increased $0.4 million due to the increase in revenue and overall shipment volume as well as from expedite charges. Inventory reserves increased $0.2 million primarily due to a decrease in projected demand for certain end of life products.
These increases were partially offset by a decrease in project materials and non-recurring engineering costs of $0.3 million primarily as a result of terminating a contract with a supplier that was performing certain development work for us in the first quarter of 2010. In addition, during the first quarter of 2010, we determined it was probable that the amount of contingent consideration due to Ciprico would be lower based on lower actual and projected sales of products eligible for the contingent consideration through the end of the contingent consideration period. Accordingly, we reduced the contingent consideration liability and research and development expense in the statement of operations to reflect the $0.3 million reduction in estimated contingent consideration liability.
Sales and marketing expenses increased $0.8 million, or 30% in the first quarter ended March 31, 2010 compared to the same corresponding period in 2009. This was primarily due to customer-related evaluation product expenses, salaries and sales bonus costs, travel and marketing materials. Customer-related valuation product expenses increased by $0.3 million due to the introduction of our new Series 3000 products released in the first quarter of 2010 and due to the newly acquired products from Cloverleaf. Salaries and sales bonus costs increased by $0.3 million as a result of an increase of nine employees engaged in sales and marketing functions primarily associated with channel investments in our open storage partner channel program, and an increase in net revenues. Travel expenses also increased in the first quarter of 2010 by $0.1 million, primarily as a result of an increase in headcount and customer visits. We also experienced an increase in marketing and promotional materials, primarily as a result of our new product introductions in the first quarter.
Read the The complete Report
Dot Hill Systems Corp. has a market cap of $77.7 million; its shares were traded at around $1.43 with and P/S ratio of 0.3. HILL is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Revenue also benefited from the global economic recovery, as Dot Hill and many of our OEM partners were significantly affected by the global economic issues experienced in the first quarter of 2009. Network Engines Inc., or NEI, sales increased $2.5 million to $3.3 million, or 5.5% of total net revenue for the quarter ended March 31, 2010. The increase in NEI net revenue is partially due to NEI becoming the contract manufacturer for Sepaton Inc.These increases were partially offset by a decrease in net revenue from Sun, FTS, and Motorola. Sun sales decreased $6.5 million to $0.4 million, or 0.6% of total net revenue for the quarter ended March 31, 2010. The decline in Sun net revenue is due to the products we sell to Sun reaching the end of their product life cycle. FTS sales decreased $2.3 million to $0.9 million, or 1.5% of total net revenue in the quarter ended March 31, 2010. The decrease in net revenue from FTS is due to its decision to internally source the product we sell to FTS. Motorola sales decreased $0.8 million to $0.6 million, or 1.0% of total net revenue for the quarter ended March 31, 2010. The decline in Motorola net revenue is due to the timing of the transition of our next generation products we sell to Motorola.
Also contributing to the increase in cost of goods sold were higher amortization expense, inventory reserve charges and freight costs in the first quarter of 2010 compared to the corresponding quarter in 2009. The increase in amortization expense is due to the reclassification of Ciprico amortization of $0.3 million from research and development expense to costs of goods sold as a result of the RAIDCore product now generating revenue. Additionally, Cloverleaf amortization of $0.1 million is included in costs of goods sold from the acquisition date. Freight increased $0.4 million due to the increase in revenue and overall shipment volume as well as from expedite charges. Inventory reserves increased $0.2 million primarily due to a decrease in projected demand for certain end of life products.
These increases were partially offset by a decrease in project materials and non-recurring engineering costs of $0.3 million primarily as a result of terminating a contract with a supplier that was performing certain development work for us in the first quarter of 2010. In addition, during the first quarter of 2010, we determined it was probable that the amount of contingent consideration due to Ciprico would be lower based on lower actual and projected sales of products eligible for the contingent consideration through the end of the contingent consideration period. Accordingly, we reduced the contingent consideration liability and research and development expense in the statement of operations to reflect the $0.3 million reduction in estimated contingent consideration liability.
Sales and marketing expenses increased $0.8 million, or 30% in the first quarter ended March 31, 2010 compared to the same corresponding period in 2009. This was primarily due to customer-related evaluation product expenses, salaries and sales bonus costs, travel and marketing materials. Customer-related valuation product expenses increased by $0.3 million due to the introduction of our new Series 3000 products released in the first quarter of 2010 and due to the newly acquired products from Cloverleaf. Salaries and sales bonus costs increased by $0.3 million as a result of an increase of nine employees engaged in sales and marketing functions primarily associated with channel investments in our open storage partner channel program, and an increase in net revenues. Travel expenses also increased in the first quarter of 2010 by $0.1 million, primarily as a result of an increase in headcount and customer visits. We also experienced an increase in marketing and promotional materials, primarily as a result of our new product introductions in the first quarter.
Read the The complete Report
