Rackable Announces Q3

FREMONT, Calif. -- Rackable Systems, Inc. (NASDAQ:RACK), a leading provider of servers and storage products for large-scale data centers, today announced financial results for the third quarter of 2007.

Total revenue for the third quarter of 2007 was $87.2 million, up 6.1% from $82.2 million in the second quarter of 2007, and 8.4% compared to $80.5 million in the third quarter of 2006. Total revenue for the first nine months of 2007 was $241.5 million, compared to $253.5 million of revenue for the first nine months of 2006.

GAAP gross margin for the third quarter of 2007 was 21.6%, compared to 21.4% in the same period a year ago. Non-GAAP gross margin for the third quarter of 2007 was 19.2%, compared to 22.6% in the same period a year ago.

GAAP net income per share was breakeven for the third quarter of 2007 compared to GAAP net loss of ($0.01) per diluted share in the third quarter of 2006. Non-GAAP net income per diluted share was $0.09 compared to $0.19 in the third quarter of 2006.

"We are pleased with our Q3 results and progress over the last two quarters," said Mark J. Barrenechea, President and Chief Executive Officer of Rackable Systems. "In Q3, we grew revenues, improved gross margins, and operated profitably. We also strengthened the executive team and attracted world-class talent within Operations, Service, and Engineering. Further, we won several new key base market accounts and achieved the second largest volume of systems shipped in the companys history."Rackable Systems Inc.