Earnings Release • Mar 5, 2019
Earnings Release
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ASETEK - Q4 2018 and CMU: Record FULL-YEAR revenue and EBITDA - Building a gaming and enthusiast brand
* Record full-year revenue of $67.3 million in 2018, representing 16% growth
from 2017
* 2018 Gaming and Enthusiast (former Desktop) revenue of $63.0 million, up 18%
from 2017
* 2018 full-year adjusted EBITDA increased 38% to $9.4 million
* Q4 revenue was $16.5 million (Q417: $17.9 million) and adjusted EBITDA of $2.6
million ($2 million)
* Gaming and Enthusiast, the renamed Desktop segment, reflects a wider corporate
rebranding in Q1 2019
* Group revenue is expected to grow in the range of 0% to 10% in 2019 when
compared to 2018
"Our performance in 2018 reflected increased demand for our market leading
liquid cooling solutions from gamers and enthusiasts. Our expectations for 2019
reflect macro-economic uncertainties that temper the Gaming and Enthusiast
growth outlook compared to recent prior years and a protracted adoption of
liquid cooling in the data center market," said André Sloth Eriksen, CEO and
founder of Asetek.
Today, Asetek introduced a new brand strategy to strengthen its Gaming and
Enthusiast market positioning and increase awareness of Asetek and its story of
innovation and of delivering the best in performance, quality and reliability.
The former Desktop reporting segment was renamed Gaming and Enthusiast.
"We are doubling down our effort on gamers and enthusiasts, engaging the
community and implementing marketing initiatives to strengthen our position with
OEM customers and develop brand strategies that support our high-end products
value proposition to both OEM's and end-users," said André Sloth Eriksen.
Financial review
Asetek reported record revenue of $67.3 million for the full year 2018, 16%
higher compared with 2017 ($58.2 million), reflecting increased Gaming and
Enthusiast shipments. In the fourth quarter of 2018, revenues amounted to $16.5
million, compared with $17.9 million which was a record level in 2017.
Gross margin for the full year of 2018 grew to 38.9% compared with 36.0% in the
full year 2017, reflecting higher average selling prices (ASPs) associated with
a richer mix of Gaming and Enthusiast product shipments. Gross margin rose to
42.1% in the fourth quarter of 2018, from 33.8% in 2017, due to both a richer
mix of product shipments and a stronger U.S. dollar.
Adjusted EBITDA for the full year 2018 was $9.4 million, compared to $6.8 in
2017, reflecting higher revenue and gross margin. Adjusted EBITDA was $2.6
million in the fourth quarter of 2018, compared with $2.0 million in the fourth
quarter of 2017.
Gaming and Enthusiast revenue was $63.0 million in full year for the full year
2018, an increase of 18% from 2017. Fourth quarter revenue was $15.4 million,
compared with $16.4 million in the same period of 2017. Operating profit from
the Gaming and Enthusiast segment was $20.7 million for the year and $5.4
million for the fourth quarter, both reflecting improvement over the respective
periods of 2017, due to improved gross margins in 2018.
Data center revenue was $4.3 million for the full year 2018, compared with $5.0
million in 2017. Revenue in the fourth quarter 2018 totaled $1.1 million,
compared with $1.5 million in the same period of 2017. Operating loss from the
data center segment was $7.3 million for the year and $1.6 million for the
fourth quarter of 2018. This compares with losses of $7.3 million and $2.3
million in 2017, respectively. Continued variability of data center operating
results is expected while the Company secures new OEM partners and growth of end
-user adoption through existing OEM partners.
Asetek's latest generation of direct-to-chip (D2C) liquid cooling, incorporated
in new Intel® Compute Modules, were installed by Ace Computers in a new HPC
cluster for a U.S. Defense contractor. The initial deployment utilizes Asetek
InRackCDU to capture and remove heat from the system nodes.
The November 2018 edition of the TOP500 list of fastest computers in the world
includes thirteen installations that are cooled by Asetek D2C liquid cooling
technology. Three of the thirteen on the list are in the world's TOP20 fastest
computers.
Asetek expects Group revenue growth of 0% to 10% for 2019 compared to 2018. The
group revenue expectation reflects macro-economic uncertainties that temper the
Gaming and Enthusiast growth outlook compared to recent prior years and a
protracted data center market adoption of liquid cooling solutions. The Company
has decided to discontinue segment revenue guidance until the data center
business more clearly develops into a meaningful business.
Material
The interim report and presentation material is available on www.asetek.com and
www.newsweb.no.
Capital Markets Update Tuesday 5 March 2018 from 12:00 - 15:30.
The day will provide an update on Asetek's market, strategy, operations,
financial development and outlook. Asetek's fourth quarter 2018 results will be
discussed at the event. The presentations will be given in English.
Program
11:45 Registration
12:00 Lunch
12:30 Presentations by management and Q&A session
14:30 Wrap up
14:45 Informal get-together with Asetek management
15:30 End of program
Location
Asetek A/S
Assensvej 2, 9220 Aalborg East
Denmark
(approximately 25 minutes drive from Aalborg Airport)
A live webcast from the presentation can be accessed at
https://getvisualtv.net/stream/?asetek-q4-2018-and-capital-markets-update
Presentations will be available for download before the event begins.
For further information, please contact:
CEO and Founder André S. Eriksen, +45 2125 7076, email: [email protected]
CFO Peter Dam Madsen, +45 2080 7200, email: [email protected]
About Asetek
Asetek is the global leader in liquid cooling solutions for data centers,
servers and PCs. Founded in 2000, Asetek is headquartered in Denmark and has
operations in California, Texas, China and Taiwan. Asetek is listed on the Oslo
Stock Exchange (ASETEK.OL).
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