Dot Hill Systems Corp. (HILL, Financial) filed Quarterly Report for the period ended 2010-09-30.
Dot Hill Systems Corp. has a market cap of $113.7 million; its shares were traded at around $2.08 with and P/S ratio of 0.4. HILL is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
The increase in net revenue for the nine months ended September 30, 2010 was mostly due to an increase in sales to HP. Sales to HP totaled $104.4 million for the nine months ended September 30, 2010 compared to $87.8 million for the nine months ended September 30, 2009. The increase in HP net revenue is due to the growth in the HP MSA product line, which includes our Series 2000 products and Series 3000 products. Although our Series 2000 products are in the decline phase of the product life cycle, demand for these products continues to be significant. We released our next generation Series 3000 products in the first quarter of 2010 and sales of these products have increased significantly during each quarter of 2010.
In addition, sales to NetApp increased during the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 based on the success of NetApps FAS 2000 product line. Sales to NetApp totaled $52.5 million for the nine months ended September 30, 2010 compared to $38.1 million for the nine months ended September 30, 2009.
These increases were partially offset by a decrease in net revenue from Sun, FTS, and other smaller customers. Sun sales decreased to $0.5 million for the nine months ended September 30, 2010 compared to $9.8 million for the nine months ended September 30, 2009. 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 to $2.1 million for the nine months ended September 30, 2010 compared to $10.1 million for the nine months ended September 30, 2009. The decrease in net revenue from FTS is due to FTSs decision to internally source the product we sell to FTS. We also experienced declines in sales to other smaller customers primarily as a result of product transition.
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Dot Hill Systems Corp. has a market cap of $113.7 million; its shares were traded at around $2.08 with and P/S ratio of 0.4. HILL is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Partially offsetting these decreases in net revenue for the three months ended September 30, 2010, was an increase in NetApp net revenue to NetApp based on the success of NetApps FAS 2000 product line. Sales to NetApp totaled $16.6 million for the three months ended September 30, 2010 compared to $12.4 million for the three months ended September 30, 2009. However, under our agreement with NetApp, NetApp has the right to manufacture and sell, on a royalty and royalty-free basis, up to certain specified percentages of the products we currently manufacture and sell to NetApp. In the fourth quarter of 2010, we amended our agreement with NetApp to allow NetApp to manufacture and sell on a royalty-free basis all of the products we currently manufacture and sell to NetApp beginning on December 1, 2010. As a result, we currently do not anticipate generating any additional revenue from NetApp subsequent to November 30, 2010. We expect to generate additional revenue from our channel sales, software offerings and new OEM customers to replace the revenue, and more importantly, the gross profit lost as a result of amending our agreement with NetApp. However, if we are unable to generate sufficient revenue and gross profit from these sources to replace the reduced revenue and gross profit currently associated with NetApp, our financial results would be materially harmed.The increase in net revenue for the nine months ended September 30, 2010 was mostly due to an increase in sales to HP. Sales to HP totaled $104.4 million for the nine months ended September 30, 2010 compared to $87.8 million for the nine months ended September 30, 2009. The increase in HP net revenue is due to the growth in the HP MSA product line, which includes our Series 2000 products and Series 3000 products. Although our Series 2000 products are in the decline phase of the product life cycle, demand for these products continues to be significant. We released our next generation Series 3000 products in the first quarter of 2010 and sales of these products have increased significantly during each quarter of 2010.
In addition, sales to NetApp increased during the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 based on the success of NetApps FAS 2000 product line. Sales to NetApp totaled $52.5 million for the nine months ended September 30, 2010 compared to $38.1 million for the nine months ended September 30, 2009.
These increases were partially offset by a decrease in net revenue from Sun, FTS, and other smaller customers. Sun sales decreased to $0.5 million for the nine months ended September 30, 2010 compared to $9.8 million for the nine months ended September 30, 2009. 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 to $2.1 million for the nine months ended September 30, 2010 compared to $10.1 million for the nine months ended September 30, 2009. The decrease in net revenue from FTS is due to FTSs decision to internally source the product we sell to FTS. We also experienced declines in sales to other smaller customers primarily as a result of product transition.
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