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April 5, 2011

Xyratex Q1 revenue up 13%

Expects Q2 revenue between $320m and $365m

By CBR Staff Writer

Xyratex, a provider of enterprise class data storage subsystems and hard disk drive capital equipment, has reported total revenues of $360.5m for the first quarter of 2011, an increase of 13% compared to $319m for the same period in 2010.

The company’s first quarter operating income was $3m compared to $27m for the same period last year.

Gross profit margin in the first quarter decreased to 13.7%, compared to 18.1% in the same period last year. This was primarily due to significantly lower revenues and gross margins in the Storage Infrastructure business, said the company.

The company posted income before income taxes of $3m for the quarter compared to $27m for the same quarter prior year.

For the quarter ended 28 February 2011, the company posted net income of $4.7m, or $0.15 per share, compared to $26.3m, or $0.85 per share, for the same period last year.

Xyratex CEO Steve Barber said the first quarter results were somewhat mixed between their two businesses — demand in their NSS business was within their expectations despite component supply challenges experienced by their largest customer.

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"In our Storage Infrastructure business we experienced soft demand and I believe this resulted from changes in the market for 2.5 inch disk drives and also the recently announced industry consolidation among two of our customers," Barber said.

The company expects the revenue in second quarter of 2011 to be in the range $320m to $365m.

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