OCZ Technology Issues Update for Investors

OCZ Technology Issues Update for Investors 
SAN JOSE, CA  -- (Marketwired) -- 04/17/13 --   OCZ Technology Group,
Inc. (NASDAQ: OCZ), a leading provider of high-performance
solid-state drives (SSDs) for computing devices and systems, provides
business update for the fourth quarter of 2013. 
The Company is disclosing certain preliminary information about its
fourth quarter of fiscal 2013 that ended on February 28, 2013,
subject to certain closing procedures and further review by the
Company and its auditors. As previously reported the Company
estimated that revenue in each of the unreported quarters ending
August 31, 2012 and November 30, 2012 is in the range of $65 million
to $85 million. This range takes into effect the impact of the
reclassification of certain customer costs from operating expenses to
revenue, the significant reduction in channel inventory, the timing
of revenue recognition and reserves for product returns. The
preliminary revenue range for the unreported fourth quarter of fiscal
2013 is estimated to be between $65 million and $70 million. The
Company also expects positive gross margins for the fourth quarter.
This is an indication that the operating adjustments regarding
restructuring and the restatement are behind the Company. Gross
margins will continue to improve in the coming quarters due to the
streamlining of products and focus on enterprise business. Operating
expenses are estimated to be between $23 million and $26 million for
the fourth quarter and include non-recurring restatement related
charges of approximately $4 million which includes the completion of
the internal investigation and other legal matters. The company's
inventory levels also continued to improve as inventory on hand at
the end of the fourth quarter was less than $50 million and channel
inventory was at a 2-year low of less than $20 million. 
Unshipped backlog for the fourth quarter was approximately $18
million, as NAND flash supply constrained revenue in the quarter and
suppliers are allocating certain NAND flash products. NAND supply is
expected to affect our first quarter of fiscal 2014 as well. The
Company's strategy to diversify NAND vendors has helped during this
timeframe and is planning for and expects the supply of flash to
continue to be tight throughout calendar 2013.  
Revenue generated from Enterprise solutions are expected to increase
sequentially for the first quarter of fiscal 2014, ending on May 31,
2013, which will also contribute to the improvement of our gross
margins as many previously engaged customers are now taking product.  
On April 11th, the Company received a notification letter from NASDAQ
regarding continued non-compliance with NASDAQ Listing Rules and that
the Company's securities were subject to delisting. The Company will
request a hearing before the NASDAQ Listing Qualifications Panel. In
accordance with the NASDAQ Listing Rules, in connection with the
hearing request, the Company will formally request a stay of any
delisting action pending the conclusion of the hearing process to
extend the delisting deadline. 
The restatement effort is continuing and the Company has made
substantial progress towards meeting its objective in getting current
with its filings. Although it is difficult to predict when the
Company will become current with its SEC filings, the Company and
auditors have added additional resources that should improve the
ability to bring the restatement to closure as rapidly as possible.  
"While we know our shareholders are disappointed in our inability to
becoming current on our financials by the April 8th NASDAQ deadline,"
stated Ralph Schmitt, CEO of OCZ Technology, "the OCZ team and our
auditors are working diligently in bringing this to closure as our
review procedures for the accounting of the restatement is taking
longer than we had anticipated in an effort to ensure that it is
accounted for appropriately. The restatement progress does not change
the fact that our business continues to operate effectively and we
continue to improve our operational situation." 
Schmitt continued, "In the quarter we lowered our borrowing levels
and paid off our credit facility with Wells Fargo. We then engaged in
a loan with Hercules Growth Capital that gave us more capital to
continue to improve the business. We also were able to reduce our
operating expenses even further in order to lower our breakeven
point. We have drawn $10M against our $30M credit facility, have
approximately $10M of cash on hand and are current with our key
vendors. All of which are improvements in these metrics on a quarter
to quarter basis."  
The Company has recently appointed a new CFO, Rafael Torres, and an
enterprise solid state storage experienced VP of Sales, Wayne
Eisenberg, and continues to hire key enterprise talent, primarily in
engineering and sales. The Company has also made progress in the
recent quarter by introducing a new application-specific strategy in
the enterprise by going to beta on its ZD-XL PCIe solid-state
solution designed specifically for SQL acceleration. This product
represents the culmination of hardware and software coming together
as one tightly integrated and optimized solution. Included in this
total solution are implementation wizards that make installation
quick and simple for data center customers.  
The Company also launched its first drives using leading-edge 20
nanometer (nm) flash and expects the majority of product lines to
transition to this technology node by the end of its second fiscal
quarter. The Company will also move the majority of its consumer
drives to in-house controller technology in this same timeframe.
Utilizing the Company's proprietary Barefoot 3 controller, the Vector
Series of SATA solid state drives continue to ramp in volume in the
high-end client market and is recognized by leading independent trade
publications as a performance leader in both sequential transfers and
sustained performance, most recently winning Editor's Choice Awards
from PC Gamer and Maximum PC magazines. Moving forward the Company
will continue to leverage next generation versions of the Barefoot 3
controller with the latest generation flash devices to offer
customers the best balance of performance, reliability and value.  
About OCZ Technology Group, Inc.
Founded in 2002, San Jose, CA-based OCZ Technology Group, Inc. (OCZ)
is a global leader in the design, manufacturing, and distribution of
high-performance solid-state storage solutions and premium computer
components. Offering a complete spectrum of solid-state drives
(SSDs), OCZ provides SSDs in a variety of form factors and interfaces
(i.e. PCIe, SAS and SATA) to address a wide range of client and
enterprise applications. Having developed firmware and controller
platforms, to virtualization and endurance extending technologies,
the company delivers vertically integrated solutions enabling
transformational approaches to how digital data is captured, stored,
accessed, analyzed and leveraged by customers. For more information,
please visit: www.ocz.com. 
Forward Looking Statements
Certain statements in this release relate to future events and
expectations and as such constitute forward-looking statements
involving known and unknown factors that may cause actual results of
OCZ Technology Group, Inc. to be different from those expressed or
implied in the forward-looking statements. In this context, words
such as "will," "would," "expect," "anticipate," "should" or other
similar words and phrases often identify forward-looking statements
made on behalf of OCZ. It is important to note that actual results of
OCZ may differ materially from those described or implied in such
forward-looking statements based on a number of factors and
uncertainties, including, but not limited to, the risk that the
process of preparing and auditing the financial statements or other
subsequent events would require OCZ to make additional adjustments;
the time and effort required to complete the restatement of the
financial reports; the ramifications of OCZ's potential inability to
timely file required reports; including potential delisting of OCZ's
common stock on NASDAQ; the risk of litigation or governmental
investigations or proceedings relating to such matters; market
acceptance of OCZ's products and OCZ's ability to continually develop
enhanced products; adverse changes both in the general macro-economic
environment as well as in the industries OCZ serves, including
computer manufacturing, traditional and online retailers, information
storage, internet search and content providers and computer system
integrators; OCZ's ability to efficiently manage material and
inventory, including integrated circuit chip costs and freight costs;
OCZ's ability to obtain sufficient NAND flash; and OCZ's ability to
generate cash from operations, secure external funding for its
operations and manage its liquidity needs. Other general economic,
business and financing conditions and factors are described in more
detail in "Item 1A -- Risk Factors" in Part I in OCZ's Annual Report
on Form 10-K filed with the SEC on May 14, 2012, and statements made
in other subsequent filings. The filing is available both at
www.sec.gov as well as via OCZ's website at www.ocz.com. OCZ does not
undertake to update its forward-looking statements.  
Investor Contact:
Bonnie Mott
Senior Manager of Investor Relations
408-440-3428
bmott@ocztechnology.com 
Press Contact:
Scott Harlin
Director of Marketing Communications - Enterprise
(408) 733-8400
sharlin@ocztechnology.com
 
 
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