Prospectus Summary
PROSPECTUS SUMMARY This summary highlights information contained elsewhere in this prospectus and does not contain all of the information that you should consider before investing in our common stock. You should read this entire prospectus carefully, including “Risk Factors,” our consolidated financial statements and the related notes and the other financial information appearing elsewhere in this prospectus before you decide to invest in our common stock. Unless otherwise indicated, references to “Supermicro,” the “Company,” “we,” “us” and “our” refer to Super Micro Computer, Inc. and its subsidiaries.We design, develop, manufacture and sell application optimized, high performance server solutions based on an innovative, modular and open-standard x86 architecture. Our solutions include a range of complete server systems, as well as components which can be used by distributors, OEMs and end customers to assemble server systems. Our application optimized servers provide our customers with the flexibility to order server solutions with more efficient levels of processing power, input/output bandwidth, or I/O, and memory capacity tailored for their specific application needs. We have developed a set of design principles and performance specifications that meet industry wide standards and also incorporate advanced functionality and capabilities. Our modular architectural approach has allowed us to offer our customers interoperable designs across all of our components, which can be configured to create complete server systems. This modular approach, in turn, enables us to offer our clients flexibility and customization by providing what we believe is the industry’s largest array of server systems and components. Our server systems and components are architected to provide high levels of reliability, quality, and scalability, thereby enabling benefits in performance, thermal optimization, power efficiency and total cost of ownership. As of June 30, 2006, we offered over 3,500 SKUs, including SKUs for server systems, serverboards, chassis and power supplies and other system accessories.
We sell our server systems and components primarily through distributors, which include value added resellers and system integrators, and to a lesser extent to OEMs as well as through our direct sales force. During fiscal year 2006, our products were purchased by over 400 customers, most of which are distributors, operating in more than 70 countries. We commenced operations in 1993 and have been profitable every year since inception. For fiscal year 2004, 2005 and 2006, our net sales were $167.1 million, $211.8 million and $302.5 million, respectively and our net income was $4.9 million, $7.1 million and $16.9 million, respectively.
As businesses of all sizes process larger quantities of data to communicate, transact and collaborate, their business processes are becoming more complex and their requirements for computing capacity are growing rapidly. Computing architectures are continuing to evolve to meet this rapidly growing demand for computing capacity. Businesses increasingly require solutions that provide flexibility and scalability in a cost effective manner, and are moving towards a modular and open system approach to create what are commonly referred to as “scale-out” computing architectures. Scale-out architectures enable businesses to add computing capacity incrementally without significantly disrupting existing systems thus reducing total cost of ownership.
Scale-out architectures provide significant benefits for many businesses. However, there are a wide range of circumstances in which businesses need more than just the incremental computing capacity that can be obtained by adding more general purpose servers as part of a scale-out deployment. In these circumstances, businesses seek application optimized solutions, which are server configurations that are built to provide optimal levels of processing, I/O and memory customized for specific application needs. For example:
solutions that are built with specific processing power and I/O capabilities that can maximize information and image capture and processing.
We believe the competitive advantages of our solutions include:
Our objective is to be the leading provider of application optimized, high performance server solutions worldwide. Key elements of our strategy include:
In pursuing our strategy, we face a number of challenges and are subject to risks and uncertainties which are discussed in more detail in the section of this prospectus entitled “Risk Factors.” The primary risks we face include:
If we are unable to adequately address these and other challenges we face, our ability to grow our business will be negatively impacted.
We were incorporated in California in September 1993. We will reincorporate in Delaware prior to the completion of this offering. Our principal executive offices are located at 980 Rock Avenue, San Jose, CA 95131 and our telephone number is (408) 503-8000. Our website address is www.supermicro.com. The information on, or that can be accessed through, our website is not part of this prospectus.