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Rackable announces Q4, posts loss for Q and year

Rackable announced results for Q4 and fiscal 2008 on Friday, and it wasn’t good

Rackable logoGAAP net loss per share from continuing operations was ($0.61) for the fourth quarter of 2008, compared to GAAP net income per share of $0.16 in the fourth quarter of 2007. Non-GAAP net loss per share from continuing operations was ($0.17) in the fourth quarter of 2008, compared to non-GAAP net income of $0.20 in the fourth quarter of 2007. GAAP net loss per share from continuing operations was ($1.06) for fiscal year 2008, compared to GAAP net loss of ($1.39) per share in fiscal year 2007.  Non-GAAP net loss per share from continuing operations was ($0.19) for fiscal year 2008, compared to non-GAAP net income of $0.22 per diluted share in fiscal year 2007.  (Please see the financial tables accompanying this release for details on all non-GAAP metrics and their reconciliation to GAAP measures.)

Revenue was way down

Total revenue from continuing operations for the fourth quarter of 2008 was $38.8 million, compared to $111.3 million in the fourth quarter of 2007. Total revenue from continuing operations for the fiscal year 2008 was $247.4 million compared to $350.7 million in fiscal year 2007.

Timothy Prickett Morgan at The Register posted coverage on Friday as well

But the immediate issue was that Rackable’s two largest customers spent $114m less on Rackable products in 2008 than they did in 2007. Those two firms were not named by Barrenechea, but when Rackable went public in June 2005, Microsoft, Amazon, and Yahoo were its biggest customers and accounted for the bulk of its sales.

…In case you are wondering, Rackable is still “100 per cent committed” to containerized data centers, says Barrenechea, even though it did not recognize any revenue from its ICE Cube containers in 2008. “Interest remains high,” he said.

…To keep costs in line with decline revenues, Rackable let go of 60 employees in 2008 and had a headcount of 318 as the year ended. In January, when it became clear that the fourth quarter was not good and 2009 was going to be tough, Rackable cut another 15 per cent of its workforce. At the time of that announcement, I was told that headcount at the company was 350, but clearly, it wasn’t. Anyway, with another 48 people being let go January, that puts Rackable’s headcount down to 270.

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