Upload
aholdsworth
View
218
Download
0
Tags:
Embed Size (px)
Citation preview
Forward Looking Statements
Confidential 2
Certain statements in this presentation 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 the company 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, (i) adverse change in general economic conditions; (ii) adverse change in the industries OCZ serves including without limitation computer manufacturing, retailers and etailers, information storage, internet search and content providers and computer system integrators; (iii) OCZ’s ability to manage material, including integrated circuit chip costs, and freight costs; (iv) OCZ’s ability to generate cash from operations, secure external funding for its operations and manage its liquidity needs; (v) material adverse change in customers’ access to liquidity and capital; (vi) currency exchange or interest rates changes; (vii) market acceptance of the company's products; (viii) significant changes in the competitive environment; (ix) changes in law, regulations and tax rates; and (x) other general economic, business and financing conditions and factors described in more detail in “Item 1A – Risk Factors” in Part I of OCZ’s Annual Report on Form 10-K filed with the SEC on May 20, 2010. The filing is available on our website at www.ocztechnology.com. We do not undertake to update our forward-looking statements.
OCZ Investment Highlights
3Confidential
• Transition to high performance Solid State Drives (SSDs) for use in enterprise and consumer systems from historical business of DRAM memory modules
• Seasoned high growth company--at the leading edge of a disruptive shift in storage technology as SSDs move from high-end to broad market appeal
• Major Market Opportunity: SSD sales are forecast to rise from $1 billion in 2010 to $11 billion in CY2015 (IDC)
• Several key technology advantages & strong brand with awards and recognition by independent 3rd party reviewers
• Over 300 customers including Major OEMS and enterprises
• Strong revenue momentum: $140 million SSD run rate at end of FYQ2
OCZ Today: a Global Presence
Confidential 4
• HQ in San Jose, CA; Manufacturing in Taiwan• 350 employees worldwide; 250 at Taiwan facility• Worldwide sales coverage -- over 30 countries represented in customer base
OCZ History: Rapid Growth -- 85% CAGR
Confidential 5
BUSINESS:• Founded in 2002; High speed memory modules• August 2007: entered SSD market with the first
high performance MLC Based SSD drive• August 2010:
• Reduced DRAM Product SKUs to focus on SSD market opportunity
• Record sales of SSDs of $20M in Q2, 81% year on year growth; 51% sequential
FUNDING:• ‘Bootstrapped’ funding – grew revenues from
$2m to $60m before 2006 IPO on LSE• March 2010 PIPE: raised ~$14m net• October 2010 PIPE: raised ~$20.3m net to
support additional SSD demand from OEMS.
The SSD Market – Where is OCZ
6Confidential
• 5th in SSDs globally Last year, 2nd largest independent SSD manufacturer according to Gartner
• Historically Strong in PC and Server Segments, focusing on lower cost MLC Technology
• OCZ now moving into the Enterprise Storage segment
• Raised net $34.3 million in the past 6 months to fuel growth – supporting new OEMs
• Focus on High Transactional Performance with MLC and enterprise MLC drives exceeding 125K random write IOPS – using 3x nm.
• Market strength in PCIe and SATA/SAS interface classes – introduced HSDL in October
IDC Worldwide SSD Shipments in RevenueJuly 2010 Forecast update shows higher unit shipments
7Confidential
Source: IDC and Company Estimates.
Highly Diverse Customer Baseno single client over 20%
8
Enterprises
OEMs and System Integrators
Upgrade, E-tail and Distribution
IT Channel and Fulfillment
Confidential
OCZ: Better, FasterComplete Spectrum of Solutions
• History of developing best-in-class high performance products – Over 200 Awards for SSD products
– Outstanding brand equity and reputation
– Significant technological advantage based on rich R&D history in memory modules
• OCZ has a significant lead in both hardware and firmware design– Experienced memory subsystem R&D Team
– Over 5 years spent on developing SSD IP with oldest SSD patents filed in 2004
– Internal critical product design, development, marketing and sales functions
• One of a few manufacturers to offer a full range of SSD products– OCZ offers more interface options than any other manufacturer
– Only SSD vendor to offer bootable PCIe and eSATA SSDs)
11Confidential
MLC shows 83% CAGR in Enterprise Adoption OCZ Enterprise SSDs are primarily MLC and eMLC based
12
Source: Gartner, August 2010
• MLC provides approx. 75% cost reduction of SLC • Shrinking process technologies further reduce flash cost (now 34nm, moving to 2xnm in Q410)• New 3 and 4 bit per cell flash technologies will go mainstream in early 2011; more cost reductions
PCIe: fastest growing at 109% CAGROCZ PCIe offerings garnered more that 20 industry awards this year
14Confidential
Z-Drive Enterprise PCIe
Revo DriveMainstream PCIe
Source: IDC
OCZ RevoDrive: Bootable PCIe at mainstream costs (less than $2.5 Per GB)
“Fusion-IO are pushing 3 years on their repeated promise of bootability. A $1k ($7k in the case of the ioDrive 160) piece of storage gear should support this standard feature common to nearly every other storage device in existence.” Source: PC Perspective
“The RevoDrive is an absolute breath of fresh air to the PCIe SSD field”
(PC Perspective, June 25, 2010)
“The RevoDrive it is less demanding on system resources when compared to ioDrive, and remains an outstanding performer for its price point. Bootable!” Source: PC Perspective
Lower is Better
MLC and EMLC: Here comes the futureMLC Matches SLC performance among top rated enterprise class SSDs
16Confidential
Mainstream PC- where the rubber meets the road OCZ MLC- 2xnm now below $1.25 per GB
17Confidential
• Price per GB is the driving trend for mainstream PC SSD growth – but no with need to reach HDD price parity to gain adoption. compare this to the adoption of flat panel TV’s versus Cathode ray tubes.
• 2x NM nodes now support pricing within the “price elasticity” range for Laptop makers
• Note Apple’s SSD only strategy on the Macbook Air
HSDL: High Speed Data Link Interface Breaks Bottlenecks
18Confidential
• SSD technology is moving at a faster rate than current interfaces can support, standard interfaces are becoming the bottleneck
• HSDL is an OCZ proprietary interface that is the fastest storage interface available in the market
• Completely scalable in number of channels
• Currently each HSDL Drive (IBIS) ships with HSDL adapter card and cable included for easy deployment
• HSDL is an open standard and OCZ is currently working with platform partners to foster adoption
HSDL Single Adapter card
IBIS HSDL 3.5” SSD
HSDL Cable
HSDL: Independent Trade Press Reviews
19Confidential
“The OCZ IBIS is very fast as you’d expect. Technically it’s the fastest SSD we’ve ever tested. Ryan and OCZ are doing what they’re good at: finding a niche and trying their best to get there quicker than the big guys.” – AnandTech, Sept 2010
“A single HSDL channel and a first-generation drive outpaces what one SAS connection can do, throughput-wise. And OCZ is talking about multiplexing lanes to generate even more performance. You can't do that with SAS.” – Tom’s Hardware, Sept 2010
“OCZ Ibis touts 2GBps High Speed Data Link, vanquishes SSD competition” - Endgadget, Sept 2010
“From a raw performance perspective, the OCZ ibis drive impressed us on many levels. Killer all around performance, best in class write performance” – Hot Hardware, Sept 2010
Memory R&D experts will lead the SSD packThe key to cost reduction and 25nm MLC and TLC support – is NAND flash processing expertise
20Confidential
OCZ is shipping 2xnm MLC SSDs this Quarter
• Companies with a background in high speed and high density memory have a head start in the SSD space
• OCZ proprietary P/E and Data retention sorting capability were key to this early launch
• Advanced testing and packaging capabilities allowed for sorting to deal with read disturb issues
• In-line Signal path processing on DDP and SDP packages to reduce noise is a memory centric issue !
• FLASH Device Reliability enhancement is KEY
Future Density increases require packaging Expertise
• Small BGA body size support with advanced technology and increased Density is a requirement for future cost/size reductions
• Enables increased number of controller channels / Flash sites
• Packaging innovation required to support greater than 8 dice per Flash package for increased capacity with similar reliability
• Ongoing reliability enhancements required to satisfy Enterprise-level MLC requirements over time
OCZ – Upcoming key product technologies
• NVMHCI PCIe SSD controller
• Enhanced Error Correction Engine for 3 and 4 bit per cell MLC
• Quasi-Modular multi-core NAND controller
• Multi-Interface SSD SOC
• Ultra-High Density Mass storage class SSDs – up to 16TB per Drive
21Confidential
Confidential23
Segmented Net RevenueTaking account of discontinued DRAM lines
Source: Company(Fiscal Year)
(Fiscal Year)
Target Operating Model and Revenue Mix
Revenue MixQ1 11 Q2 11 Target Model
SSD 59% 69% 90%
Ongoing memory 15% 14% 2-4%PSU and Other 26% 18% 6-8%
Operating Model (non-GAAP)Gross Margin % 15% 18% 26%-30%
EBITDA (6%) (6%) 16%-20%
Confidential 24
(Ended 5/31/10) (Ended 8/31/10)
Financial Overview: Q2 FY11
25
(a) Net revenue from discontinued commodity level DRAM module products (b) Direct COGS related to discontinued products ($9,259) + reserves on related inventory levels ($2,806) + other non-recurring costs ($163)(c) Direct costs related to discontinued products ($1,430) + vendor product quality dispute ($1,250) + stock based compensation ($200) (d) Allocation of financing costs to discontinued products(e) Non-cash gain for revaluation of warrants issued in connection with equity financing(f) Non-cash addition to valuation reserve for deferred tax assets(h) Stock based compensation
2010 2009GAAP Adj non-GAAP GAAP Adj non-GAAP
Net revenues $ 38,045 $ (8,522) (a) $ 29,523 $ 37,795 $ 37,795 Cost of revenues 36,425 (12,228) (b) 24,197 31,534 31,534
Gross profit 1,620 5,326 6,261 6,261
Gross margin % 4.3% 18.0% 16.6% 16.6%
Operating expenses 10,188 (2,880) (c) 7,308 7,562 (135) (h) 7,427
Operating income (loss) (8,568) (1,982) (1,301) (1,166)
Financing costs/other (634) 147 (d) (487) (438) (438)Warrant fair value adjustment 2,450 (2,450) (e) -
Pre-Tax (6,752) (2,469) (1,739) (1,604)
Deferred Tax Asset Reserve 836 (836) (f) - - -
Net income (loss) $ (7,588) $ (2,469) $ (1,739) $ (1,604)
Net income (loss) per share: $ (0.29) $ (0.09) $ (0.08) $ (0.08)
Weighted Shares Outstanding 26,600 26,600 21,300 21,300
Three Months Ended August 31,
Balance Sheet Summary
26
($ in thousands) Aug. 31, 2010
Feb. 28, 2010
Cash and Cash Equivalents $ 2,604 $ 1,224
Inventory 15,395 9,846
Accounts Receivables 28,107 20,380
Other Current Assets 2,889 3,022
Property and Equipment, net 2,443 2,629
Goodwill and Other Assets 10,727 10,748
Total Assets $62,165 $47,849
Accounts Payable $37,543 $26,318
Bank Debt/ Notes Payable 13,324 10,854
Other Current Liabilities 4,572 4,389
Common Stock Warrant Liability 529 -
Total Liabilities $55,968 $41,561
Total Stockholders’ Equity $6,197 $6,288
Experienced Management
28
• Ryan Petersen, Founder and Chief Executive Officer– Bootstrapped OCZ from $0 to $60 million revenues without significant outside equity– Over 10 patents developed including numerous SSD specific patents
• Arthur Knapp, CPA/CMA, Interim Chief Financial Officer– Joined 2005– Duquesne Systems, LEGENT Corporation, Boole & Babbage, and Calico Commerce
• Alex Mei, Chief Marketing Officer– Joined 2004– First International Computer, Global Marketing Manager
• Dr. Michael Schuette, Vice President Technology Development– Joined 2005– Ramtron Int. (RMTR), Data-Secure, LLC.
• Richard Singh, Sr. Vice President of Sales– Joined 2010– Seagate, Toshiba, Samsung, Corsair
OCZ SSDs: Other Third Party Reviews
29
“It’s been a long time since we could unequivocally give a award to a solid state drive - but the Vertex 2 takes the crown.” Source: Maximum PC, Aug 2010 Issue
“The fastest MLC Drive we have ever tested.” Source: Anandtech
“Performance wise the OCZ Vertex 2 does an excellent job of satisfying our need for speed. The OCZ Vertex 2 proves to be a significant force in the SSD world. Overall we would say it's the fastest drive we've tested.” Source: Bjorn3D
“The OCZ Vertex 120GB drive is the first drive to consistently beat out the Intel X25-M.” Source: PC Perspective
“The OCZ RevoDrive SSD lets you experience what is the meaning of BRUTAL speed performance!” Source: PC DIY