Feeds

Violin CEO gazes at red-smeared accounts: Firm posts $149m loss

Old management exodus effect hits; can new CEO fix the firm?

Build a business case: developing custom apps

Incoming CEO Kevin DeNuccio has presided over Violin Memory's first quarterly results since assuming the hot seat and painted a real poor picture. The only way is up, right?

It's traditional; an incoming CEO rescuing a troubled firm clears out all the lousy items on the first earnings call to help make subsequent ones look good. So Kevin DeNuccio appears to have done just that with the company's fourth fiscal quarter, ended January 31, and full fiscal 2014 year.

Violin Memory ships 3000 and 6000 series all-flash arrays and has just entered the PCIe flash card market with a Velocity line. DeNuccio came in to stop the firm bleeding red ink, regularise the product line, fix a missing software feature issue, ands turn the business into a profit-generating one. His first set of results are firmly in the "blame the previous management" camp and, oh boy, how he has ladled out the red ink.

The fourth quarter saw revenues of $28m; $300k less than the previous quarter but more than the $22.9m recorded a year ago. Losses were a surprising $56.5m, worse than the $34.1m last quarter and the $35.4m loss reported a year ago.

The quarterly revenue and profit/loss history looks like this:

Violin Memory's quarterly numbers

Violin Memory quarterly revenue and profit/loss numbers

The full fiscal 2014 revenues were $107.7m, which compares to $73.8m a year ago; the business is still growing. The full year loss was a horrible $149.8m; it was $109.1m last year. Charting the annual figures make the relative revenue growth failure and grossly increasing loss trend shine out in stark detail:

Violin Memory annual revenues and profit/loss history

Violin Memory annual revenues and profit/loss history

Let's glory in red ink for a minute and chart the loss history:

Violin Memory quarterly loss history

Violin Memory quarterly loss history

That's ugly, with a deep dive into the red ink in the latest quarter.

So, what did the firm say in its results release? Want to bet that DeNuccio said things went well? You're on the button there.

"Throughout our fourth quarter and full year,” said DeNuccio, “we continued to gain some of the largest IT customers in the world because our technology can fundamentally transform the way they do business. Violin continues to demonstrate that it is one of the few franchises well positioned to capitalise on the future of storage and lead the market in its transition to the all-silicon data centre.”

Let's translate that: The fourth quarter was horrible with the CEO and other top management changes helping to lower sales and deepen losses. Hopefully me and my team can rescue the company...

The 2014 year net loss included a net charge of $52m consisting primarily of:

  • Stock-based compensation expense of $36.4m
  • PCIe card inventory provision of $9.2m
  • Restructuring charges of $4.9m
  • Impairment of cost method investment of $0.7 m
  • Amortisation of acquired intangibles of $0.4m
  • Litigation settlement of $0.4m

The earnings call should tell us more and we'll report on it once we get access to its contents. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.