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Wednesday, January 23, 2013
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An Update On OCZ Technology's Issues
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OCZ Technology Group on Tuesday announced that that the
Audit Committee's investigation has been completed.
OCZ has been working with Crowe Horwath LLP, the
independent auditors, regarding the restatements of the
results for the first quarter of fiscal 2013, as well as
the results for fiscal 2012. The restatements primarily
relate to the timing and classification of customer
incentive costs between revenue and operating expenses, the
timing of revenue recognition for certain transactions, and
the level of reserves for product returns.
In addition, because of the delayed filing with the SEC of
the Form 10-Q for the period ending November 30, 2012 (the
"Form 10-Q"), the company, received a letter from The
Nasdaq OMX Group indicating that the it is not in
compliance with the filing requirements for continued
listing under Nasdaq Listing Rule 5250. The Listing Qualifications Staff at Nasdaq,
based on OCZ's compliance plan, granted the company an
exception until February 28, 2013 to file its Form 10-Q for
the period ended August 31, 2012.
This recent Nasdaq letter notes that OCZ is required, by
February 1, 2013, to submit an update to this original plan
to regain compliance. Nasdaq is permitted to grant an
extension of up to 180 days from the initial delinquent
filing, or until April 8, 2013, for the Company to regain
compliance.
OCZ says that it continues to work diligently to complete
the financial audit and quarterly reviews along with any
necessary restatements. While this will hopefully be
completed in the near future, the company cannot provide an
exact dated.
On January 15, 2013 OCZ amended its credit facility
agreement with Wells Fargo Capital Finance to, among other
things, reduce the maximum loan amount to $20 million from
the prior $35 million. At December 31, 2012 the outstanding
loan balance was approximately $7 million compared to
approximately $15 million at November 30, 2012 and $20
million at August 31, 2012. This amendment specifies
certain reporting requirements and liquidity minimums, but
also provides OCZ with an operating structure to support
its business needs while it is in technical default of
certain covenants.
"The independent investigation has been completed and the
findings were highly consistent with OCZ's internally
identified issues. The company has already eliminated
certain customer incentive programs and made people and
process changes to improve overall business operations and
continue moving the Company in a positive direction,"
stated Ralph Schmitt, CEO of OCZ Technology. "We continue
to focus on making operational improvements and have
significantly reduced our channel inventory to less than
$50 million. This puts our sales channel in excellent
position to properly support our customers while also
efficiently managing our total inventory. The company has
successfully settled the two previously disclosed product
and patent litigation contingencies, removing the potential
for significant, unforeseen liabilities to the company."
"The team continues to deliver on its product development
efforts, and at this year's CES in Las Vegas, we unveiled
and demonstrated the upcoming PCIe based Vector SSD as well
as showcased a wide range of client and enterprise
solid-state storage solutions," added Schmitt. "We are also
pleased with the customer and industry reactions we are
receiving for our latest SATA III-based Vector SSD Series,
featuring the company's next-generation Indilinx Barefoot 3
controller, and look forward to continue to provide our
customers with innovative industry leading storage
solutions."
OCZ also today announced the appointment of Wayne B.
Eisenberg as Senior Vice President of Global Sales.
Eisenberg spent 16 years at SMART Modular Technologies, a
developer of memory and solid-state storage subsystems,
where he held various sales management positions including
9 years as Vice President of Worldwide Sales and Marketing
Communications.
Prior to joining OCZ, Eisenberg served as Vice President of
Sales for Leyden Energy Inc, a developer of
Lithium-ion-based energy storage solutions. Prior to his
employment with SMART Modular, Eisenberg was an Area Sales
Manager in the Computer Systems Division at Toshiba America
selling portable computing products for the enterprise. He also served as a District Manager for GRID Systems selling
industrial portable computing solutions. |
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