- With fears about the company's long-term survival running high, Violin Memory (VMEM -25.9%) has fallen towards $0.50 after missing FQ4 sales estimates (while slightly beating on EPS due to cost cuts), stating it has ended its strategic review (without selling the company), and disclosing it has laid off another 25% of its workforce. The company's market cap is now at $50M.
- Violin once more declined to provide formal revenue guidance on its earnings call (transcript). However, it did forecast a sales pickup. CEO Kevin DeNuccio: "[W]e believe that our revenues have now bottomed from our difficult product transition, and believe we can increasingly grow quarterly revenues to a view at yearend that can produce 25% to 35% annual growth in FY 2017."
- DeNuccio admitted several factors created "challenges" for Violin's strategic review. Among them: "Industry disruptions" such as cloud storage, de-duplication, and storage virtualization adoption, the face Violin's Flash Storage Platform (FSP) is still "new and maturing in many new accounts around the world," and the fact Violin's "financial cost structure and losses were significantly out of balance with our current revenues."
- FQ1 cash burn is expected to total $16M-$18M. Violin, which had $76M in cash at the end of FQ4, is counting on its job cuts to help lower cash burn to less than $10M in subsequent quarters. Non-GAAP operating expenses are expected to drop to $18.5M-$19.5M in FQ1 from FQ4's $22.8M, and $16M-$17M in FQ2.
- Violin's FQ4 results, details