Company's Growing Solid State Drive Business Provides Opportunity to Shift Focus to Higher Performance DRAM Module Products
SAN JOSE, Calif., Aug. 24, 2010 (GLOBE NEWSWIRE) -- OCZ Technology Group, Inc. (Nasdaq:OCZ), a leading provider of high-performance solid-state drives (SSDs) and memory modules for computing devices and systems, announces that it has made a strategic decision to discontinue certain commodity level DRAM module products as part of an optimization plan for its memory business to focus on specialty and high-performance memory offerings.
The decision to optimize the DRAM module business comes after careful consideration from OCZ's Board of Directors, and is being implemented now as the Company has reached sufficient scale in its Solid State Drive segment. The plan is consistent with OCZ's publicly stated strategy to focus resources on the continued growth in its SSD business, while scaling back on non-core, low-margin product lines.
OCZ is committed to continuing to deliver its core high-performance DRAM module products to its customers on an ongoing basis. The Company anticipates that the increased focus on high-performance memory products will also provide margin efficiencies in SSD production, due to the synergies in manufacturing, purchasing, and product development.
OCZ's commodity DRAM module products represent roughly 70% of the Company's overall DRAM module revenue (approximately $70 million TTM), which over the past 6 quarters has operated at less than 3% average gross margins.
These products will be taken out of production during the 2nd and 3rd fiscal Quarters, which end August and November 2010 respectively. The Company anticipates the transition will have a positive effect on operating margins, and plans to issue pro-forma financial statements beginning with the upcoming second quarter results, through the completion of the transition.
"OCZ continues to focus on Solid State Drive products and away from the rapidly commoditized standard speed DRAM module market; I am excited that we have been able to gain sufficient SSD manufacturing scale allowing us to focus on our strengths," commented Ryan Petersen, CEO of the OCZ Technology Group, Inc.
Mr. Petersen added, "Our R&D driven SSD business is performing well and is anticipated to be the majority of our revenue going forward, thus the next logical step is refocusing our DRAM business in the high-performance segment--a limited but more profitable market in which we have traditionally excelled."
"For fiscal 2011, OCZ's prior revenue guidance was in the range of $200 million to $215 million. We are adjusting DRAM module revenue guidance down by $35.0 million, but all other product lines are anticipated, based on current booking rates, to be in line with expectations. Adjusted revenue guidance is now a range of $165 million to $180 million."
About OCZ Technology Group, Inc.
Founded in 2002, San Jose, CA-based OCZ Technology Group, Inc. ("OCZ"), is a leader in the design, manufacturing, and distribution of high performance and reliable Solid State Drives (SSDs) and premium computer components. OCZ has built on its expertise in high-speed memory to become a leader in the SSD market, a technology that competes with traditional rotating magnetic hard disk drives (HDDs). SSDs are faster, more reliable, generate less heat and use significantly less power than the HDDs used in the majority of computers today. In addition to SSD technology, OCZ also offers high performance components for computing devices and systems, including enterprise-class power management products as well leading-edge computer gaming solutions. For more information, please visit: www.ocztechnology.com.
Last updated: Apr 7, 2020 at 12:02 pm CDT
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