NEI (News - Alert) a provider of appliance deployment solutions and support services for software technology developers and OEMs around the world, recently revealed financial results for its second fiscal quarter, which ended March 31, 2011.
Overall, second quarter financial performance was strong. Net revenues were $65 million, an increase of 18 percent when compared to $55 million for the second fiscal quarter last year. Gross profit margin was 11.6 percent of net revenues, compared to 11.8 percent for the same quarter last year. Operating expenses were $6.1 million, compared to $6.2 million in the year-ago second quarter.
Greg Shortell, president and chief executive officer of NEI, said that NEI’s results met or exceeded expectations, and represented the company’s sixth consecutive quarter of profitability.
NEI’s increased growth may have something to do with the company’s recent opening of a new facility in Galway, Ireland that has helped to create more than 50 jobs in this still fragile economy. This facility will not only help the area in which it is located, but will also give the economy as a whole a much needed boost. “The Ireland facility is part of NEI’s growth strategy and expansion into Europe,” Shortell commented.
For the sixth month period ended March 31, 2011, net revenue was $136.7 million, compared to $99.1 million for the same period in 2010, which was an increase of 38 percent. Gross profit was $15.1 million, or 11.0 percent gross margin, compared with a gross profit of $12.6 million, or 12.7 percent gross margin for the same period last year. Total operating expenses were $12.1 million, the same as last year.
Looking forward, NEI is forecasting the following results for its fiscal third quarter which ends June 30, 2011: net revenues will likely be in the range of $61 million to $66 million, while the gross profit margin will fall in the range of 10.5-11.0 percent of net revenues.
“Forecasts from our customers continue to drive our guidance,” stated Doug Bryant, chief financial officer, in a statement. “The projected gross profit margin range is based on our current estimates for product and customer mix. However, the integration of standard, off-the-shelf appliances, which comprise a large percentage of our total revenues, continues to produce margins in the 9-12 percent range. We remain focused primarily on large, run-rate design wins, allowing us to better leverage our existing operating infrastructure and improve our profitability, as we have done in the last several quarters.”