OSS Reports Second Quarter 2018 Results

OSS (NASDAQ:OSS), a leader in high-performance computing reported revenue of US$5.9 million for the quarter ended June 30, 2018.

The company said that the revenues declined as compared to the prior year period due to lower sales to an OEM media and entertainment customer.

As quoted in the press release:

Financial & Operational Summary

Outlook for revenue growth of 68% to 82% in the second half of 2018 vs. second half 2017. Growth drivers include:

• Military flash-array program ramp-up: Received $3 million purchase order in Q2 for military flash data storage units. Shipments planned for Q3 2018.
• New design opportunities: Issued more proposals with values in excess of $1.0 million than in any time in company history.
• Recent design wins: Won significant design-ins for new customized servers and new flash array with Ion software.
• Customized server shipments increase: OEM media and entertainment customer has increased forecast for Q3 and Q4 shipments to record levels.
• New CDI acquisition

“Our Q2 results were disappointing due to our military design-in ramp-up being rescheduled to Q3 and lower than expected revenues from our media and entertainment OEM,” said Steve Cooper, OSS president and CEO. “We are now on the cusp of a major growth phase with record revenues and profitability forecast for Q3 and Q4. The upcoming addition of CDI further enhances our short- and long-term outlook.”

2018 Guidance Update

Inclusive of CDI, revenue outlook is $10.0 million to $10.8 million in the third quarter and $13 million to $14.2 million in the fourth quarter. This represents revenue growth of 68% to 82% in the second half of 2018 versus the second half 2017. For the full year of 2018, revenue is anticipated to be between $36 million and $38 million.

The ramp-up of military flash array sales and the planned inclusion of CDI are anticipated to increase gross margins in the third and fourth quarter. These two periods are also expected to be highly profitable, with the full year 2018 coming in neutral to slightly profitable.

Quarterly revenue may fluctuate plus or minus 15% from the company’s plan in any given quarter due to variations in delivery.

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