U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

September 21, 2005

 


 

XYRATEX LTD

(Registrant’s name)

 

Langstone Road

Havant

PO9 1SA

(Address of Principal Executive Offices)

 


 

Indicate by check mark whether the registrant files annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F ý    Form 40-F o

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes o    No ý

 

 



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

XYRATEX LTD

 

 

(Registrant)

 

 

 

 

 

By

/s/ RICHARD PEARCE

 

 

 

Name: Richard Pearce

 

 

 

Title: Chief Financial Officer

 

 

Date: September 21, 2005

 

2



 

NEWS RELEASE

For Immediate Release

 

Xyratex Ltd Announces Results for the Third Quarter Fiscal Year 2005

Q3 Revenues $163.9 million, up 42.7% Year over Year

 

Havant, UK – September 21, 2005 – Xyratex Ltd (Nasdaq: XRTX), a leading provider of modular enterprise class data storage subsystems and storage process technology, today announced results for the third fiscal quarter, ended August 31, 2005.  Revenues for the quarter were $163.9 million, an increase of 42.7% compared to revenues of $114.9 million for the same period last year.

 

For the third fiscal quarter, GAAP net income was $7.9 million, or $0.27 per diluted share. Non-GAAP net income was $8.5 million, or a diluted earnings per share of $0.29, compared to non-GAAP net income of $7.0 million in the same quarter a year ago. A reconciliation between net income on a GAAP basis and net income on a non-GAAP basis is provided in a table immediately following the “Unaudited Condensed Consolidated Statements of Cash Flows” below.

 

Gross profit margin in the third quarter was 20.2%, compared to 15.9% in the same period last year and 22.0% in the prior quarter. The decrease in gross margin is primarily due to business revenue and product mix.

 

“With 43% revenue growth, we continue to execute and expand our market at a significant pace. We expanded our technology and product portfolio with the acquisition of nStor Technologies, and we increased our customer base with a number of new design wins in the quarter,” said Steve Barber, CEO of Xyratex. “Our priority continues to be superb execution on meeting the demands of our customers and investing resources to develop leading technologies and products that will expand our market opportunities and improve our margins.”

 

Business Highlights

 

                  Subsequent to the quarter end, Xyratex acquired nStor Technologies, a developer of data storage solutions that are ideally suited for both large enterprises as well as small to mid-sized businesses. nStor’s flagship controller technology and StorView software form the foundation for the OneStor and NexStor family of solutions that support Microsoft Windows, Linux, UNIX and Macintosh operating environments. For Xyratex, the acquisition of nStor augments the company’s already strong portfolio of storage technology and platform solutions. The acquisition of nStor will combine Xyratex’s industry-leading expertise in high volume, high availability storage system enclosure design with nStor’s extensive experience and value-added RAID Controller and Storage Solution software to provide a highly scalable set of offerings to meet customer requirements.

 

3



 

                  As a leading provider of capital equipment to Seagate’s manufacturing sites, Xyratex was honored as Seagate’s Outstanding Supplier in the Manufacturing Capital Equipment category.

 

                  Xyratex continued to strengthen its relationship with its largest Storage and Network Systems customer, broadening its range of products in support of their expanding channel to market, and winning a number of new development and operational programs.

 

Business Outlook

 

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements include the effect of the acquisition of nStor Technologies on September 8, 2005, but do not include the potential impact of any further future acquisitions or divestitures.

 

                  Revenue in the fourth fiscal quarter of 2005 is projected to be in the range $189 to $199 million. Revenue for fiscal year 2005 is expected to increase to a range of $665 to $675 million.

                  Fully diluted earnings per share is anticipated to be between $0.41 and $0.48 on a GAAP basis in the fourth quarter. On a non-GAAP basis fully diluted earnings per share is anticipated to be between $0.45 and $0.52, which includes the dilutive impact of the acquisition of nStor Technologies.

                  Fully diluted earnings per share for fiscal year 2005 is expected to be between $1.38 and $1.45 on a GAAP basis. On a non-GAAP basis fully diluted earnings per share is expected to be between $1.53 and $1.60, including the dilution impact of the acquisition of nStor Technologies.

                  Non-GAAP earnings per share excludes non-cash equity compensation, amortization of intangible assets, certain other acquisition related charges and related taxation expense.

 

Conference Call/Webcast Information

 

Xyratex quarterly results conference call will be broadcast live via the internet at www.xyratex.com/investors on Wednesday, September 21, 2005 at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time. You can also access the conference call by dialing (800) 259-0251 in the United States and (617) 614-3671 outside of the United States, passcode 28309687. The press release will be posted to the company web site www.xyratex.com.

 

A replay will be available through September 28, 2005 following the live call by dialing (888) 286-8010 in the United States and (617) 801-6888 outside the United States, replay code 26718479.

 

4



 

Safe Harbor Statement

 

This press release contains forward–looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding future results or financial performance of Xyratex, including statements relating to projected revenue and fully diluted earnings per share data (on a GAAP and non-GAAP basis) for the fourth quarter and fiscal year 2005, the acquisition of nStor, strengthening Xyratex’s position in the storage market and enabling Xyratex to build future storage and disk cleaning products. Such statements are only predictions and involve risks and uncertainties such that actual results and performance may differ materially. Factors that might cause such a difference include successful integration of NStor’s assets and employees into Xyratex, building future disk cleaning products, Xyratex’s inability to compete successfully in the competitive and rapidly changing marketplace, failure to retain key employees, cancellation or delay of projects and continued adverse general economic conditions in the U.S. and internationally. These risks and other factors include those listed under “Risk Factors” and elsewhere in Xyratex’s Annual Report on Form 20-F as filed with the Securities and Exchange Commission (File No. 000-50799). In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

 

About Xyratex

 

Xyratex is a leading provider of enterprise class data storage subsystems and network technology. The company designs and manufactures enabling technology that provides OEM and disk drive manufacturer customers with data storage products to support high-performance storage and data communication networks. Xyratex has over 20 years of experience in research and development relating to disk drives, storage systems and high-speed communication protocols.

 

Founded in 1994 in a management buy-out from IBM, and with its headquarters in the UK, Xyratex has an established global base with R&D and operational facilities in Europe, the United States and South East Asia.  For more information, visit www.xyratex.com.

 

Contacts:

 

Xyratex Investor Relations
Brad Driver
Tel: +1 (408) 325-7260
Email: bdriver@us.xyratex.com
Website: www.xyratex.com

 

5



 

Xyratex Public Relations
Curtis Chan
CHAN & ASSOCIATES, INC.
Tel: +1 (714) 447-4993
Email: cj_chan@chanandassoc.com

 

6



 

XYRATEX LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended,

 

Nine Months Ended

 

 

 

August 31,

 

August 31,

 

August 31,

 

August 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

(US dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

163,918

 

$

114,906

 

$

476,045

 

$

342,313

 

Cost of revenues - non cash equity compensation

 

 

7,791

 

 

7,791

 

Cost of revenues - other

 

130,788

 

88,848

 

375,981

 

264,107

 

Total cost of revenues

 

130,788

 

96,639

 

375,981

 

271,898

 

Gross profit

 

33,130

 

18,267

 

100,064

 

70,415

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development - development arrangement

 

 

 

 

(6,000

)

Research and development - non cash equity compensation

 

 

23,876

 

 

23,876

 

Research and development - other

 

14,062

 

9,660

 

37,482

 

26,832

 

Total research and development

 

14,062

 

33,536

 

37,482

 

44,708

 

Selling, general and administrative - non cash equity compensation

 

240

 

135,885

 

621

 

135,885

 

Selling, general and administrative - other

 

9,164

 

7,538

 

26,483

 

20,121

 

Total selling, general and administrative

 

9,404

 

143,423

 

27,104

 

156,006

 

Amortization of intangible assets

 

834

 

378

 

1,560

 

772

 

In process research and development

 

 

 

2,230

 

 

Other costs

 

 

726

 

 

2,589

 

Total operating expenses

 

24,300

 

178,063

 

68,376

 

204,075

 

Operating income (loss)

 

8,830

 

(159,796

)

31,688

 

(133,660

)

Interest income, net

 

351

 

77

 

1,020

 

905

 

Income (loss) from continuing operations before income taxes

 

9,181

 

(159,719

)

32,708

 

(132,755

)

Provision (benefit) for income taxes

 

1,324

 

(6,338

)

4,358

 

(2,302

)

Net income (loss) from continuing operations

 

7,857

 

(153,381

)

28,350

 

(130,453

)

Loss from discontinued operations (net of taxes of zero)

 

 

(12,924

)

 

(12,924

)

Net income (loss)

 

$

7,857

 

$

(166,305

)

$

28,350

 

$

(143,377

)

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share - basic:

 

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

0.28

 

$

(6.80

)

$

1.00

 

$

(8.74

)

Loss from discontinued operations, net of income tax

 

 

(0.57

)

 

(0.87

)

Net earnings (loss) per share

 

$

0.28

 

$

(7.37

)

$

1.00

 

$

(9.61

)

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per share - diluted:

 

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

0.27

 

$

(6.80

)

$

0.98

 

$

(8.74

)

Loss from discontinued operations, net of income tax

 

 

(0.57

)

 

(0.87

)

Net earnings (loss) per share

 

$

0.27

 

$

(7.37

)

$

0.98

 

$

(9.61

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares and class B preferred ordinary shares (in thousands), used in computing net earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

28,413

 

22,565

 

28,302

 

14,921

 

Diluted

 

29,079

 

22,565

 

29,052

 

14,921

 

Pro forma net earnings (loss) per common share from continuing operations (a)

 

 

 

 

 

 

 

 

 

Basic

 

$

0.28

 

$

(5.67

)

$

1.00

 

$

(5.26

)

Diluted

 

$

0.27

 

$

(5.67

)

$

0.98

 

$

(5.26

)

Weighted-average common shares (in thousands), used in computing the pro forma net earnings (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

28,413

 

27,060

 

28,302

 

24,797

 

Diluted

 

29,079

 

27,060

 

29,052

 

24,797

 

 


(a) Pro forma net income per share reflects the conversion of Xyratex Group Limited class A and class B preferred ordinary shares and class C ordinary shares to common shares of Xyratex Ltd on completion of its initial public offering, on June 29, 2004.

 

7



 

XYRATEX LTD

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

August 31,

 

November 30,

 

 

 

2005

 

2004

 

 

 

(US dollars and amounts in
thousands)

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

62,440

 

$

63,495

 

Accounts receivable, net

 

61,558

 

49,656

 

Inventories

 

79,731

 

43,014

 

Prepaid expenses

 

3,027

 

2,594

 

Deferred income taxes

 

9,451

 

6,774

 

Other current assets

 

6,264

 

2,855

 

Total current assets

 

222,471

 

168,388

 

Property, plant and equipment, net

 

19,646

 

14,495

 

Intangible assets, net

 

28,453

 

7,911

 

Deferred income taxes

 

9,070

 

14,448

 

Total assets

 

$

279,640

 

$

205,242

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

65,988

 

$

47,067

 

Acquisition note payable

 

3,000

 

2,000

 

Short-term borrowings

 

4,000

 

4,000

 

Employee compensation and benefits payable

 

11,054

 

10,811

 

Deferred revenue

 

24,598

 

1,887

 

Income taxes payable

 

279

 

462

 

Deferred income taxes

 

865

 

536

 

Other accrued liabilities

 

14,177

 

10,778

 

Total current liabilities

 

123,961

 

77,541

 

Long-term debt

 

8,000

 

11,000

 

Total liabilities

 

131,961

 

88,541

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Common shares of Xyratex Ltd (in thousands), par value $0.01 per share 70,000 authorized, 28,425 and 28,043 issued and outstanding

 

284

 

280

 

Additional paid-in capital

 

333,515

 

329,267

 

Accumulated other comprehensive income (loss)

 

(869

)

755

 

Accumulated deficit

 

(185,251

)

(213,601

)

Total shareholders’ equity

 

147,679

 

116,701

 

Total liabilities and shareholders’ equity

 

$

279,640

 

$

205,242

 

 

8



 

XYRATEX LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Nine Months Ended

 

 

 

August 31,

 

August 31,

 

 

 

2005

 

2004

 

 

 

(US dollars in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

28,350

 

$

(130,453

)

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation

 

4,952

 

3,890

 

Amortization of intangible assets

 

1,560

 

773

 

Non-cash equity compensation

 

621

 

167,552

 

Bonus paid by trust

 

144

 

 

Gain on sale of assets

 

 

(36

)

Supplier note receivable

 

 

(6,000

)

Changes in assets and liabilities, net of impact of acquisitions and divestitures

 

 

 

 

 

Accounts receivable

 

(11,376

)

(7,314

)

Inventories

 

(26,689

)

(5,009

)

Prepaid expenses and other current assets

 

(2,648

)

(2,686

)

Accounts payable

 

14,113

 

7,775

 

Customer advance

 

 

(1,073

)

Employee compensation and benefits payable

 

189

 

(3,587

)

Deferred revenue

 

5,604

 

(9,806

)

Income taxes payable

 

(183

)

225

 

Deferred income taxes

 

5,172

 

(3,510

)

Amount payable to related party

 

 

339

 

Other accrued liabilities

 

734

 

940

 

Net cash provided by operating activities

 

20,543

 

12,020

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Investments in property, plant and equipment

 

(9,666

)

(6,403

)

Dispositions of property, plant and equipment

 

 

36

 

Loan to acquire company

 

(2,500

)

 

Acquisition of business, net of cash received

 

(6,473

)

(6,015

)

Repayment of supplier note receivable

 

 

6,000

 

Net cash used in investing activities

 

(18,639

)

(6,382

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Net payments of short-term borrowings

 

 

(133

)

Payment of acquisition note payable

 

(2,000

)

 

Payments of long-term borrowings

 

(3,000

)

(3,000

)

Proceeds from issuance of shares

 

2,041

 

52,984

 

Net cash provided by (used in) financing activities

 

(2,959

)

49,851

 

Change in cash and cash equivalents

 

(1,055

)

55,489

 

Cash and cash equivalents at beginning of period

 

63,495

 

2,008

 

Cash and cash equivalents at end of period

 

$

62,440

 

$

57,497

 

 

9



 

XYRATEX LTD

UNAUDITED RECONCILIATION OF GAAP NET INCOME FROM CONTINUING OPERATIONS TO NON-GAAP NET INCOME

 

 

 

Three Months Ended

 

 

 

GAAP

 

Non-GAAP

 

Non-GAAP

 

 

 

August 31,

 

Adjustment

 

August 31,

 

 

 

2005

 

(a)

 

2005

 

 

 

(US dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Revenues

 

$

163,918

 

 

 

$

163,918

 

Cost of revenues

 

130,788

 

 

 

130,788

 

Gross profit

 

33,130

 

 

 

33,130

 

Operating expenses:

 

 

 

 

 

 

 

Research and development - other

 

14,062

 

 

 

14,062

 

Total research and development

 

14,062

 

 

 

14,062

 

 

 

 

 

 

 

 

 

Selling, general and administrative - non cash equity compensation

 

240

 

(240

)

 

Selling, general and administrative - other

 

9,164

 

 

 

9,164

 

Total selling, general and administrative

 

9,404

 

 

 

9,164

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

834

 

(834

)

 

In process research and development

 

 

 

 

 

Total operating expenses

 

24,300

 

 

 

23,226

 

Operating income

 

8,830

 

 

 

9,904

 

Interest income, net

 

351

 

 

 

351

 

Income before income taxes

 

9,181

 

 

 

10,255

 

Provision for income taxes

 

1,324

 

459

 

1,783

 

Net income

 

$

7,857

 

 

 

$

8,472

 

 

 

 

 

 

 

 

 

Pro forma net earnings per common share

 

 

 

 

 

 

 

Basic

 

$

0.28

 

 

 

$

0.30

 

Diluted

 

$

0.27

 

 

 

$

0.29

 

 

 

 

 

 

 

 

 

Weighted-average common shares (in thousands), used in computing the pro forma net earnings per share:

 

 

 

 

 

 

 

Basic

 

28,413

 

 

 

28,413

 

Diluted

 

29,079

 

 

 

29,079

 

 

10



 

 

 

Nine Months Ended

 

 

 

GAAP

 

Non-GAAP

 

Non-GAAP

 

 

 

August 31,

 

Adjustment

 

August 31,

 

 

 

2005

 

(a)

 

2005

 

 

 

(US dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Revenues

 

$

476,045

 

 

 

$

476,045

 

Cost of revenues

 

375,981

 

 

 

375,981

 

Gross profit

 

100,064

 

 

 

100,064

 

Operating expenses:

 

 

 

 

 

 

 

Research and development - other

 

37,482

 

 

 

37,482

 

Total research and development

 

37,482

 

 

 

37,482

 

 

 

 

 

 

 

 

 

Selling, general and administrative - non cash equity compensation

 

621

 

(621

)

 

Selling, general and administrative - other

 

26,483

 

 

 

26,483

 

Total selling, general and administrative

 

27,104

 

 

 

26,483

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

1,560

 

(1,560

)

 

In process research and development

 

2,230

 

(2,230

)

 

Total operating expenses

 

68,376

 

 

 

63,965

 

Operating income

 

31,688

 

 

 

36,099

 

Interest income, net

 

1,020

 

 

 

1,020

 

Income before income taxes

 

32,708

 

 

 

37,119

 

Provision for income taxes

 

4,358

 

1,346

 

5,704

 

Net income

 

$

28,350

 

 

 

$

31,415

 

 

 

 

 

 

 

 

 

Pro forma net earnings per common share

 

 

 

 

 

 

 

Basic

 

$

1.00

 

 

 

$

1.11

 

Diluted

 

$

0.98

 

 

 

$

1.08

 

 

 

 

 

 

 

 

 

Weighted-average common shares (in thousands), used in computing the pro forma net earnings per share:

 

 

 

 

 

 

 

Basic

 

28,302

 

 

 

28,302

 

Diluted

 

29,052

 

 

 

29,052

 

 

11



 

 

 

Three Months Ended

 

 

 

GAAP

 

Non-GAAP

 

Non-GAAP

 

 

 

August 31,

 

Adjustment

 

August 31,

 

 

 

2004

 

(a)

 

2004

 

 

 

(US dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Revenues

 

$

114,906

 

 

 

$

114,906

 

Cost of revenues - non cash equity compensation

 

7,791

 

(7,791

)

 

Cost of revenues - other

 

88,848

 

 

 

88,848

 

Total cost of revenues

 

96,639

 

 

 

88,848

 

Gross profit

 

18,267

 

 

 

26,058

 

Operating expenses:

 

 

 

 

 

 

 

Research and development - non cash equity compensation

 

23,876

 

(23,876

)

 

Research and development - other

 

9,660

 

 

 

9,660

 

Total research and development

 

33,536

 

 

 

9,660

 

 

 

 

 

 

 

 

 

Selling, general and administrative - non cash equity compensation

 

135,885

 

(135,885

)

 

Selling, general and administrative - other

 

7,538

 

 

 

7,538

 

Total selling, general and administrative

 

143,423

 

 

 

7,538

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

378

 

(378

)

 

Other costs

 

726

 

(726

)

 

Total operating expenses

 

178,063

 

 

 

17,198

 

Operating income (loss)

 

(159,796

)

 

 

8,860

 

Interest income, net

 

77

 

 

 

77

 

Income (loss) from continuing operations before income taxes

 

(159,719

)

 

 

8,937

 

Provision (benefit) for income taxes

 

(6,338

)

8,287

 

1,949

 

Net income (loss) from continuing operations

 

$

(153,381

)

 

 

$

6,988

 

 

 

 

 

 

 

 

 

Pro forma net earnings per common share

 

 

 

 

 

 

 

Basic

 

$

(5.67

)

 

 

$

0.26

 

Diluted

 

$

(5.67

)

 

 

$

0.25

 

 

 

 

 

 

 

 

 

Weighted-average common shares (in thousands), used in computing pro forma net earnings per share:

 

 

 

 

 

 

 

Basic

 

27,060

 

 

 

27,060

 

Diluted

 

27,060

 

 

 

27,625

 

 

12



 

 

 

Nine Months Ended

 

 

 

GAAP

 

Non-GAAP

 

Non-GAAP

 

 

 

August 31,

 

Adjustment

 

August 31,

 

 

 

2004

 

(a)

 

2004

 

 

 

(US dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

Revenues

 

$

342,313

 

 

 

$

342,313

 

Cost of revenues - non cash equity compensation

 

7,791

 

(7,791

)

 

Cost of revenues - other

 

264,107

 

 

 

264,107

 

Total cost of revenues

 

271,898

 

 

 

264,107

 

Gross profit

 

70,415

 

 

 

78,206

 

Operating expenses:

 

 

 

 

 

 

 

Research and development - development arrangement

 

(6,000

)

6,000

 

 

Research and development - non cash equity compensation

 

23,876

 

(23,876

)

 

Research and development - other

 

26,832

 

 

 

26,832

 

Total research and development

 

44,708

 

 

 

26,832

 

 

 

 

 

 

 

 

 

Selling, general and administrative - non cash equity compensation

 

135,885

 

(135,885

)

 

Selling, general and administrative - other

 

20,121

 

 

 

20,121

 

Total selling, general and administrative

 

156,006

 

 

 

20,121

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

772

 

(772

)

 

Other costs

 

2,589

 

(2,589

)

 

Total operating expenses

 

204,075

 

 

 

46,953

 

Operating income (loss)

 

(133,660

)

 

 

31,253

 

Interest income (expense), net

 

905

 

(933

)

(28

)

Income (loss) from continuing operations before income taxes

 

(132,755

)

 

 

31,225

 

Provision (benefit) for income taxes

 

(2,302

)

8,125

 

5,823

 

Net income (loss) from continuing operations

 

$

(130,453

)

 

 

$

25,402

 

 

 

 

 

 

 

 

 

Pro forma net earnings per common share

 

 

 

 

 

 

 

Basic

 

$

(5.26

)

 

 

$

1.02

 

Diluted

 

$

(5.26

)

 

 

$

1.00

 

 

 

 

 

 

 

 

 

Weighted-average common shares (in thousands), used in computing pro forma net earnings per share:

 

 

 

 

 

 

 

Basic

 

24,797

 

 

 

24,797

 

Diluted

 

24,797

 

 

 

25,458

 

 


(a)

 

Non-GAAP Adjustment for the three and nine month periods ended August 31, 2005 includes non-cash equity compensation expense and non-cash amortization of intangible assets and the related tax effect. Non-GAAP adjustment for the nine months ended August 31, 2005 also includes in process research and development expense and the related tax effect. Non-GAAP Adjustment for the three and nine month periods ended August 31, 2004 includes non cash equity compensation expense and the related tax effect, expenses recorded in connection with our preparation for our initial public offering and non-cash amortization of intangible assets and the related tax effect. Non-GAAP Adjustment for the nine months ended August 31, 2004 also includes elimination of the bad debt allowance on a supplier loan of $6,000,000 and accrued interest of $933,000 together with the related tax on the accrued interest.

 

 

 

 

 

We believe these Non-GAAP measures are useful to investors because they provide an alternative method of measuring the operating performance of our business by excluding certain expenses, gains and losses which we believe are not indicative of our core operating results.

 

 

 

(b)

 

Pro forma earnings per share reflects the conversion of Xyratex Group Limited class A and class B preferred ordinary shares and class C ordinary shares to common shares of Xyratex Ltd on completion of its initial public offering, on June 29, 2004.

 

13