Super Micro Plans IPO, To Ship 'Superblade'

While the company does not yet specify how much it hopes to raise through the stock offering, it has applied to have shares traded on NASDAQ under the symbol "SMCI."

The company also said in the report that it plans to ship a high-performance blade server in the first half of 2007 that will support both Advanced Micro Devices' Opteron processors and Intel's Xeon chips. The new product, called "Superblade," is an effort to grab a piece of an expected brisk market for ultra-dense servers next year.

The San Jose, Calif.-based company turned in sales that grew from $211.8 million for its 2005 fiscal year to $302.5 million for its most recent fiscal year, with its income more than doubling during that time from $7 million to $16.9 million. The significant rise in revenue and profit corresponds with the company's decision to abandon its strategy of providing motherboards that were targeted exclusively at the Intel processing platform, while shipping boards into the market for processors made by Advanced Micro Devices.

In Super Micro's most recent quarter, the company reported its net sales jumped to $90.2 million from $64.5 million for the same quarter a year earlier.

"Growth in unit volumes was primarily due to the increasing sales of our AMD series of server systems, our PD, H8 and X7 series of serverboards and other server components, primarily accessories, including memory and hard drives," Super Micro reported in its S-1/A registration statement, filed last week with the SEC.

As far as its server business, Super Micro said its forthcoming Superblade will include numerous configurations "that will be optimized to support several different applications. By creating a range of unique blade server offerings, we will provide our customers with solutions that can be customized to fit their needs."

In listing risk factors, Super Micro said a patent infringement lawsuit filed against it by Rackable Systems -- related to "front mounted I/O connectors and back-to-back placement of rack mounted computers" -- remains open in U.S. District Court for the Northern District of New York, and that it has faced legal issues regarding some controversial exports.

The company revealed that in September, it reached a plea agreement with federal prosecutors after a two-year investigation into motherboards it shipped to the Middle East that made their way into Iran in violation of U.S. law. "In September 2006, we entered into an agreement with the U.S. Department of Justice pursuant to which we agreed to plead guilty to one count of violating federal export regulations by shipping 300 motherboards to Dubai, UAE, with knowledge that they would be transshipped to Iran," the company reported. "We agreed to pay a $150,000 fine. The plea agreement has been approved by the U.S. District Court."

The still-unpriced offering will involve 100 million shares, according to the filing. As of its last quarter, 53 stock holders owned 11.1 million shares, Super Micro said.