Xyratex Announces Q4 Results

HAVANT, U.K. -- Xyratex Ltd. (Nasdaq: XRTX), a leading provider of enterprise class data storage subsystems and storage process technology, today announced results for the fourth quarter and fiscal year ended November 30, 2007. Revenues for the fourth quarter were $248.0 million, an increase of 2.9% compared to revenues of $241.1 million for the same period last year.

For the fourth quarter, GAAP net income was $11.7 million, or $0.39 per diluted share compared to GAAP net income of $9.4 million in the same period last year. Non-GAAP net income increased 20.5% to $13.1 million, or a diluted earnings per share of $0.44, compared to non-GAAP net income of $10.9 million, or $0.37 per diluted share, in the same quarter a year ago(1).

Gross profit margin in the fourth quarter was 18.5%, compared to 17.4% in the same period last year and 17.9% in the prior quarter. Revenues from sales of our Networked Storage Solutions (NSS) products were $187.2 million in the fourth quarter as compared to $167.6 million in the same quarter a year ago, an increase of 11.7%. Gross profit margin in the Networked Storage Solutions business was 15.0% as compared to 13.0% a year ago. Revenues from sales of our Storage Infrastructure (SI) products were $60.8 million as compared to $73.5 million in the same quarter a year ago, a decrease of 17.3%. Gross profit margin in the Storage Infrastructure business was 29.7% as compared to 27.9% a year ago.

Revenues for fiscal year 2007 were $931.6 million, a decrease of 5.3%, compared to revenues of $983.6 million for fiscal year 2006. Revenues from sales of our NSS products were $694.0 million for the year as compared to $598.8 in 2006, an increase of 15.9%. Revenues from sales of our SI products were $237.6 million as compared to $384.9 million in 2006, a decrease of 38.3%.

GAAP net income for fiscal year 2007 was $28.1 million or $0.94 per diluted share compared to a GAAP net income of $58.2 million for fiscal year 2006. Non-GAAP net income for fiscal year 2007 decreased 42.3% to $37.5 million, or a diluted earnings per share of $1.26, compared to non-GAAP net income of $64.9 million, or $2.19 per diluted share, for fiscal year 2006.I am pleased with our performance for the 2007 Fiscal Year given the challenges we anticipated at the beginning of the year and duly experienced. And while we weren’t immune from constrained capital expenditure in the Hard Drive Industry, our competitive differentiation and business fundamentals in both of our businesses remain strong,” said Steve Barber, CEO of Xyratex. “The results for the year support our strong position in the industries we serve and our ongoing effort and focus in expanding our partnerships with our existing customers and in developing partnerships with new customers. We are confident that the fundamentals within the markets we serve are positive and that our technology and strong execution will benefit us over the longer term.”

Xyratex Ltd.