3Ware 2007 Annual Report Download - page 5

AMCC was also recognized by our customers and the industry press
for exceptional support and leading edge products. We received
the “Supplier of the Year” award from Tellabs. Brocade awarded us for
outstanding customer and engineering support. Our 3ware SATA II
RAID controller was recognized as the Connectivity Product of the
Year by Storage Magazine. All of this recognition helps us strengthen
existing customer relationships and create new ones.
Financial
Our scal 2007 revenues were $292.9 million and grew nearly 12%
over the prior year. To understand our revenue growth one must
understand how we classify our revenues. In scal 2006 we began
to classify our revenues as “focus” revenues and “non-focus” revenues.
Non-focus revenues are generated from the sale of products we
continue to support for our customers, but for which we are no longer
making R&D investment. Fiscal 2007 non-focus revenues declined
to $38.8 million from $54.5 million in scal 2006 — a decline of 28.9%.
These non-focus revenues will continue to decline at an accelerated
rate over a relatively short period of time.
We believe that a better indication of our long-term prospects is
growth in our focus revenues. Fiscal 2007 focus revenues grew to
$254.1 million from $207.3 million in scal 2006 — a 22.5% increase.
I am particularly proud of the fact that we were able to take a large
portion of this revenue growth straight to the bottom line. This bodes
well for us once revenue growth returns.
Our scal 2007 non-GAAP net income increased to $30.3 million from
$17.9 million in scal 2006 — an increase of 69%. We accomplished this
growth despite the negative impact on our revenues from business
combinations of equipment vendors and carriers as well as from industry-
wide inventory corrections that began in the second half of our scal
year. Unfortunately, these circumstances continued to negatively impact
our business as we entered the rst quarter of scal 2008.
Looking Forward
Our strategy is to focus on large markets in transition where we have an
opportunity to leverage our core technology strengths and gain market
share. This strategy positions our Company to deliver 20% top line
growth and 20% pre-tax protability. Our entire organization is focused
on delivering to this goal. We made progress towards this goal in scal
2007 despite the dicult business conditions in the second half of the
scal year. We expect these conditions will persist during the rst half
of scal 2008 with improvement in the second half. While these
industry conditions have hampered and delayed our ability to deliver
to the 20/20 goal, our design win traction remains stronger than ever.
I expect that these design wins combined with several planned new
product introductions will lead us out of this setback as we exit scal
2008. Our overall strategy and execution plans will continue to be to
drive higher growth and protability for the Company.
Sincerely,
Kambiz Hooshmand
President & CEO
AMCC
Sto re
3ware high-performance SATA II RAID controller cards and PowerPC
processors optimized for storage applications.
• SATA II RAID Controllers
• ATA RAID Controllers
• Storage Processors
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