Dot Hill Systems Corp. (HILL, Financial) filed Quarterly Report for the period ended 2010-06-30.
Dot Hill Systems Corp. has a market cap of $57.4 million; its shares were traded at around $1.05 with and P/S ratio of 0.2. HILL is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Network Engines Inc., or NEI, sales increased to $1.5 million for the three months ended June 30, 2010 from $0.4 million for the three months ended June 30, 2009 and to $4.8 million for the six months ended June 30, 2010 from $1.1 million for the six months ended June 30, 2009. The increase in NEI net revenue is due to NEI becoming the contract manufacturer for Sepaton Inc. and as a result of better global economic conditions in the first half of 2010 compared to the first half of 2009.
These increases were partially offset by a decrease in net revenue from Sun, FTS, and other smaller customers. Sun sales decreased to $0.1 million for the three months ended June 30, 2010 compared to $2.5 million for the three months ended June 30, 2009 and to $0.5 million for the six months ended June 30, 2010 compared to $9.3 million for the six months ended June 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 $0.8 million for the three months ended June 30, 2010 compared to $3.6 million for the three months ended June 30, 2009 and to $1.7 million for the six months ended June 30, 2010 compared to $6.9 million for the six months ended June 30, 2009. The decrease in net revenue from FTS is due to its 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 $57.4 million; its shares were traded at around $1.05 with and P/S ratio of 0.2. HILL is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
In addition, sales to NetApp increased during the three and six months ended June 30, 2010 compared to the three and six months ended June 30, 2009 based on the success of NetApps FAS 2000 product line. Sales to NetApp totaled $17.7 million for the three months ended June 30, 2010 compared to $13.1 million for the three months ended June 30, 2009 and $35.9 million for the six months ended June 30, 2010 compared to $25.7 million for the six months ended June 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 them. The percentage of products that NetApp can elect to manufacture and sell on a royalty and royalty-free basis increases through April 1, 2011. On April 1, 2011 and thereafter, they have the right to manufacture and sell on a royalty-free basis all of the products we currently manufacture and sell to them. If NetApp were to exercise their rights to manufacture such products on a royalty or royalty-free basis and we are unable to identify an alternative source of revenue and margin to replace the reduced revenue and margin currently associated with such products, our financial results could be materially harmed.Network Engines Inc., or NEI, sales increased to $1.5 million for the three months ended June 30, 2010 from $0.4 million for the three months ended June 30, 2009 and to $4.8 million for the six months ended June 30, 2010 from $1.1 million for the six months ended June 30, 2009. The increase in NEI net revenue is due to NEI becoming the contract manufacturer for Sepaton Inc. and as a result of better global economic conditions in the first half of 2010 compared to the first half of 2009.
These increases were partially offset by a decrease in net revenue from Sun, FTS, and other smaller customers. Sun sales decreased to $0.1 million for the three months ended June 30, 2010 compared to $2.5 million for the three months ended June 30, 2009 and to $0.5 million for the six months ended June 30, 2010 compared to $9.3 million for the six months ended June 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 $0.8 million for the three months ended June 30, 2010 compared to $3.6 million for the three months ended June 30, 2009 and to $1.7 million for the six months ended June 30, 2010 compared to $6.9 million for the six months ended June 30, 2009. The decrease in net revenue from FTS is due to its 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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