Perry Hayes - SVP, Investor Relations Charles Liang - Founder, President, Chief Executive Officer and Chairman of the Board Howard Hideshima - Chief Financial Officer

Aaron Rakers - Stifel Nicolaus Mark Kelleher - Dougherty & Company Amelia Harris - Sterne Agee Glenn Hanus - Needham

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Super Micro Computer Incorporated Third Quarter Fiscal 2013 Conference Call. The company's news release issued earlier today is available on its website at www.supermicro.com. In addition, during today's call, the company will refer to a slide presentation that has been made available to participants which can be accessed in a downloadable PDF format on its website at www.supermicro.com, in the Investor Relations section under the Events and Presentations tab. During today's company's presentation, all participants will be in a listen-only-mode. Afterwards, securities analysts and institutional hopefully managers will be invited to participate in a question and answer session, but the entire call is open to all participants on a listen-only basis. As a reminder, this call is being recorded Tuesday, April 23, 2013. A replay of the call will be accessible until midnight May 7th by dialing 1-877-870-5176 and entering conference ID number 2907442. International callers should dial 1-858-384-5517. With us today are Charles Liang, Chairman and Chief Executive Officer, Howard Hideshima, Chief Financial Officer and Perry Hayes, Senior Vice President, Investor Relations. Now, I'd like to turn the conference over to Mr. Hayes. Mr. Hayes, please go ahead, sir.

Good afternoon and thank you for attending Super Micro's conference call and financial results for the third quarter fiscal year 2013, which ended March 31, 2013? By now, you should have received a copy of today's news release that was distributed after close of regular trading and is available on the company's website. As a reminder, during today’s call the company will refer to a presentation that is available to participants in the Investor Relations section on the company's website under the Events and Presentations tab. Please turn to slide two. Before we start, I remind you that our remarks include forward-looking statements. There are a number of risk factors that could cause Super Micro’s future results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2012 and our other SEC filings. All of these documents are available on the Investor Relations page of Super Micro’s website at www.supermicro.com. We assume no obligation to update any forward-looking statements. Most of today’s presentation will refer to non-GAAP financial results and outlooks. For an explanation of our non-GAAP financial measures, please refer to slide three of this presentation or to our press release published earlier today. In addition a reconciliation of GAAP to non-GAAP results is contained in today’s press release and in the supplemental information attached to today’s presentation. I'll now turn the call over to Charles Liang, Chairman and Chief Executive Officer.

Thank you, Perry, and good afternoon everyone. Please turn to slide four. First let me provide you recent highlights of our third quarter. We are pleased that our third quarter revenue was $278 million. It's 4.6% lower quarter-over-quarter and 15.8% higher year-over-year. Non-GAAP net income was $10 million or 28.1% higher quarter-over-quarter and 13.8% higher compared to last year. Super Micro’s non-GAAP earnings per share was $0.23 per diluted share, compared to $0.18 last quarter, or $0.19 last year. Slide five, please. Geographically, revenue in North America was 56.6%. Europe was 32% and Asia was 19% of total sales. As expected, Asia was softer last quarter due to the Chinese Lunar New Year. 41.2% of our overall business came from OEMs and direct sales customers of which internet data center were 10.8% of sales. Our server systems contributed 41.8% of revenue and ASPs remained stable. Slide six and seven please. Now typical March quarter seasonality was evident in the lower to revenue. However, we have said the revenue for the quarter was up 15.8% from last year. We are confident with this constant growth during a time when global economy weakness continues to impact IT spending. Our revenue growth this quarter much outpaced our competitors and we continue to grow at a multiple or industry's average. Super Micro continues to take much share by providing the industry's most innovative products that feature the best performance per watt, per dollar, and per square foot. Competition in our industry continues to intense due to big changes taking place with Tier-1 competitors. In addition, the PC market continue to decline over the past year, which force competitors to data centers, cloud and enterprise market for growth and profitability. Also other oversea competitors entered the market with limited commodity product and lower priced product that is a target on specific segments. Now, without that, we winning, we only go to those companies that have optimized solutions for customers key requirements of technology leadership in power saving and performance, total cost of ownership and solid solutions and service. Super Micro wins because of our heavy investment in industry leading technology like storage, GPU, MicroCloud and FatTwin. In addition, we are uniquely positioned in the industry to include a value added solutions, which is not only in service on a global scale and at the same time provide cost driven solutions. Combining technology leadership and services enable us to provide three optimized solutions to our customers. For example, we experienced a very strong customer demand since our FatTwin launch about two quarters ago. Our heavy investment in the FatTwin architecture enabled us to provide the best product platform in terms of computing density, storage density and energy power savings. Moreover, now FatTwin product line continues to grow and provide optimized way to serve our customers storage, HPC and cloud computing requirement. We started with the high storage density model that can feed up to eight hot-swappable 3.5-inch hard drive in 1U. Class 4 node and 8 node for I/O models, they achieved 16% less power consumption compared to other high density solutions. We recently launched the HPC FatTwin that can accommodate up to 12 GPU for Xeon Phi cards in 4U. Hadoop optimize. FatTwin is also available recently. In summary, the FatTwin product line now offer over clear optimized variations for customer applications and all of them generating strong order growth. MicroCloud product line also showed greater growth this past quarter. It was introduced about a year ago and have been one of our strongest product launch ever. Our investment in our own MicroCloud has actually have provided the industry's leading scale out solution for cloud and web hosting applications. We also launched cloud infrastructure solution last year. Recently, we had increased density to fair amount and that 24 configuration will be a bit of. Our price for high density computing does not end there. We were later introduced 6U compact solution that can house over 100 Atom-based computing nodes, which during redundant switch making it high performance cloud data center solutions in the industry. With this industry, the leading innovation in technology, we are very confident that our MicroCloud product line is a gear for market share gain. Storage also continues to show us strong growth. In addition, we are continuing to raise tender our storage product line to include a wider range of Hadoop optimized solutions. For Big Data and other applications this is the SCA -47B for you in closure with a unique of engineering product. Customers can excess all 72, 3.5-inch hard drive in an external hot-swappable fashion on SC-A47B, which later improved the access of 3G or the high density storage and that data center environment. Now, SC-A47B is becoming one of our (Inaudible). GPU continues to grow strongly and achieve higher growth year-over-year. We upgrade our technology for latest graphic processor including NVIDIA's K1 and K2 GPU for greater computing and Intel Xeon Phi core processor. As I mentioned before, our new FatTwin GPU solution fit up to 12 GPUs or Intel Xeon Phi core processors in 4U, which is one would GPU solutions in our industry. Super Micro have patients for innovation and technology leadership in GPU allow it to gain GPU large share. That is much greater than our size in our industry. The 13 GPU solution will allow us to expand our leadership due to the energy saving and performance per dollar outpace of. In addition to our hardware solutions, Super Micro's Data Center Management, SDCM saw suite, including in-band and out-band BIOS firmware and software updates and the monitoring utilities have been serving several large corporate data centers. Again, this quarter, we continue to grow our ability to generate revenue stream. In summary, our third quarter performance, again demonstrate our ability to gain much share because of our industry leading technology and innovative solutions. We continue to view on our vision as a global enterprise with global production and logistics capability. We continue to invest in our technology and further develop our software and service capabilities. We face it as usual with confidence in our strong position in the industry and our unique approach of providing differentiated application optimizing solutions to monetize the requirement. For more specifics on the third quarter, let me turn it over to Howard.

Thank you, Charles, and good afternoon, everyone. I will focus my remarks on earnings, gross margins, operating expenses and similar items on a non-GAAP basis which reflects adjustment to exclude stock compensation expenses. Reconciliation of GAAP to non-GAAP is included in the financial statements of the company in today’s earnings release and in the supplemental detail in the slide presentation accompanying this conference call. Let me begin with the review of the third quarter income statement. Please turn to slide eight. Revenue was $278 million, up 15.8% from the same quarter a year ago and down 4.6%, sequentially. The increase in revenue from last year was primarily due to strong growth in our energy efficient high density products, which are growing in importance of cloud and Big Data application continue pushing that for solutions offering the best TCOs. With the new technology releases from our partner, such as Intel, AMD and NVIDIA, et cetera, Super Micro is strongly positioned to capitalize on it with our innovative application optimized platforms. The sequential decrease in revenue from last quarter was primarily due to seasonal weakness as well as concerns about the economy and we saw strength in the U.S. as revenue was comparable to the prior quarter. Europe was weaker due to economic concerns and Asia started out as expected, but when the pause caused by the Lunar New Year, we saw business come back later in the quarter than expected. We continue to see a good ramp in Sandy Bridge products with an increase of 7%, sequentially, representing about 65% to our Intel-based revenues. Slide nine. Turning to product mix, the portion of revenues from server systems was 41.8% of total revenues, which is down from 48.5%, the same quarter a year ago and down from 43.3% last quarter. ASP for servers was $2,100 per unit, which is up from $2,000 last year and the same as last quarter. We shipped approximately 54,000 servers in the third quarter and 1,111,000 subsystems and accessories. The decrease in server units from the prior year resulted in part from a decrease in our internet data center revenues. However on a compute cost basis, we shipped more high density solutions than in past years. This is reflective of the increase in density, which our customers as well as the rest of the industry are driving for. We continue to maintain a diverse revenue base with over 600 customers and none of these customers representing more than 10% of our revenues. Internet data center revenues was 10.8%, which was a decrease from 14.2% in the prior quarter. Furthermore, 56.6% of our revenues came from the U.S. and 58.8% from our distribution and retailers. Slide 10 and 11, non-GAAP gross profit was $39.1 million, down 4.4% from $40.9 million in the same quarter last year, and down 3% from $40.3 million, sequentially. On a percentage basis, gross margin was 14.1%, down from 17% a year ago and up from 13.8%, sequentially. Price changes for Ablecom resulted in two basis point favorable change to gross profit in the quarter with total purchases representing approximately 18.8% of total cost of goods sold compared to 20.1% a year ago and 15.4%, sequentially. The year-over-year decrease in gross margin resulted from price changes in hard disk drive as well as unfavorable product mix in the current quarter when compared to the prior year. October flood in Thailand had caused of also [pricing] and supply of hard disk drives over the past year. Sequentially, gross margins were up due to increase in margins of our server boards and chassis that customers take more for application optimized and more stable pricing of hard disk drive offset in part by a higher mix of subsystem and accessories. In general, we have higher margin in server solutions than in subsystems and accessories. Slide 12, operating expenses were $30.8 million, up from $28.7 million in the same quarter a year ago and up from $29.8 million sequentially. As a percentage of revenue, operating expenses were 11.1% down from 11.9% year-over-year and up from 10.2% sequentially. Operating expenses was higher on an absolute dollar basis year over year and sequentially. We saw year-over-year increase in absolute dollars primarily in R&D as we invest in headcount to drive our innovation in our product portfolio with increased performance, intensity and power efficiency. Sequentially, operating expenses were up due to higher sales and marketing expenses related to an European tradeshow which recurred as well as other promotional marketing expected new product were low about $1,000. In addition, we book an accounts receivable reserve of about $621,000. The company headcount increased by 7, sequentially to 1,568 total employees. We continue to control our operating expenses while still making strategic investments in our product lines. Operating profit was $8.3 million, or 3% of revenues, down by $3.9 million or $12.2 million a year ago and down $2.2 million from $10.5 million, sequentially. Net income was $10 million or 3.6% of revenue, up $1.2 million from $8.8 million a year ago and up $2.2 million from $7.8 million, sequentially. Our non-GAAP fully-diluted EPS was $0.23 per share, up from $0.19 per share a year ago and up from $0.18 per share, sequentially. The number of fully diluted shares used in this second quarter was 44, 498,000. The tax rate in the third quarter on a non-GAAP basis was negative 23.1% compared to 26.6% a year ago and 24.5%, sequentially. The rate was lower due to the release of liability for taxes as a result of the resolution of a tax audit during the quarter, which contributed about $0.05 to our EPS, and the retroactive restatement of the R&D tax credit in January, which contributed another $0.05 to our EPS. We expect the effective tax rate on a non-GAAP basis to be approximately 23% for the fourth quarter, which is down from 31.6% in the same quarter last year. Turning to the balance sheet on a sequential basis, cash and cash and short and long-term investments were $96.7 million, up $5.6 million from $91.1 million in the prior quarter and up $4.5 million from $92.2 million in the same quarter last year. In the third quarter, free cash flow was a positive $6.4 million, primarily due to an increase in accounts payable to support additional inventory for the coming quarter. Accounts receivable increased by $3.4 million to $122.3 million and DSOs was 39 days, an increase of two days from 37 days in the prior quarter. Inventories increased by $13.7 million to $257.3 million with the days in inventory increasing by 1 day to 94 days. The decrease in inventory was due primarily to the increase in forecasted revenues for the seasonally strong fourth quarter. Accounts payable increased by $14.2 million to $163.6 million, with the days payable outstanding increasing by six days to 59 days, primarily due to the increase in inventories late in the quarter as mentioned above. Overall cash conversion cycle days were 74 days, a decrease of three days from 77 days in the prior quarter. Now for a few comments on outlook, as indicated previously, during the third quarter we saw a seasonally weak quarter and some economic uncertainties. In midst of this, we grew 16% year-over-year to rise in energy efficiency and compute density, which we have pioneered for many years. As we enter the fourth quarter, we continue to see this growing and important and look to continuing the ramp of our energy and density optimized solutions in this quarter, which is typically a strong quarter for the industry. Therefore, the company currently expects net sales for the quarter ended June 30, 2013, in the range of $295 million to $315 million. Assuming this revenue range, the company expects non-GAAP earnings per share per diluted share of approximately $0.17 to $0.22 for the quarter. With regard to our target model, over the next 12 to 18 months, we will target 16% to 18% gross margins and 6% to 8% operating margins. We continue to expect to see improvements in our gross margins from increasing utilization of our Taiwan facility, improvements in our product mix towards complete solutions and progress in purchasing power and to grow our business and the addition of services and software to our revenue base. It is currently expected that the outlook will not be updated until the release of the company's next quarterly earnings announcement. Notwithstanding subsequent development however, the company may update the outlook or any portion thereof at anytime. With that, let me turn it back to Charles for some closing remarks.

Thank you, Howard. We were successful this past quarter in growing large share, because we [consistently] application optimized server solutions. Awarded in technology and system architecture, plus now including system management all the way up and service are critical to our future growth. We were continuously focused on our increasing market share by leveraging our world-class products, innovation and brand recognition. Our growth strategy remains intact. Our people are committed to succeed and our opportunities remain as great as ever. Operator, at this time we are ready for questions.

(Operator Instructions) And, we'll go first to Aaron Rakers with Stifel Nicolaus. Aaron Rakers - Stifel Nicolaus: Thanks for taking the questions. I was wondering if you could comment on the, looks like hard disk drive pricing has stayed relatively over the past two quarters, but I was wondering if you could comment on memory pricing. What you are seeing there? Then I have a follow-up.

Yes. I mean, our hard drive prices getting stable for many quarters already and memory pricing keeping growing since above two to three months ago and we expect these prices are going grow. Because we have a very solid and strong relationship with our suppliers and so we've strong partnership, I believe our supply in the memory should be stable in the coming quarters. Aaron Rakers - Stifel Nicolaus: Okay. Great. Thanks. Then, I wanted to talk a little bit about your Enterprise Data Center segment, and looks like you saw a kind of a slowdown in that segment this quarter. Is that from maybe an increase in competition relative to HP's new shot announcement Qantas, they are looking to double their direct server business in 2013 and then you have some comments coming from others saying that, you know, IBM and Lenovo might check a deal for their [business]?

Yes. It is. In this segment, we feel very optimistic for a couple of reasons. One is our factory. We introduced our product 45 months ago, and the product has been growing very stably and we do see a good demand on the coming quarter and other than that about 16 months ago, we introduced our MicroCloud solution, which is high density for cloud application or web hosting. That product I think grow very well in last 16 months and recently indeed we are planning to introduce another solution. As I just mentioned, it was 6U, so more than 100 Atom pace low power processor and that system I believe outperformed that competition, and so with our Asia facilities, now the utilization doing is growing, our facilities are getting mature, so we do believe we will continue to improve our cost and when that continue to happen, we will be more capable to compete in the high volume period and clarification. So, in this area, I do feel very optimistic. Aaron Rakers - Stifel Nicolaus: Okay. Great. Thank you.

We'll take our next question from Mark Kelleher from Dougherty & Company. Mark Kelleher - Dougherty & Company: Thanks for taking the questions. Just as a follow-up to that question, IBM selling its accessories to Lenovo, would you consider that a increased competitive threat or decreased competitive threat?

Both, I guess, that's why we invested in Asia two years ago to enhance our production capability and close competitive capability. So, now Asian operation is ready, so we are able to compete in Asian market and also with the facility there, we are able to compete low cost high volume server market in U.S.A. and Europe as well. So, I believe that change overall won't impact us too much. We need to have a strong pullback in kind of cost effective solution. Mark Kelleher - Dougherty & Company: Okay. And, in terms of product cycles, you mentioned where you were with Sandy Bridge. Could you kind of walk through the year and kind of indicate where you think new product cycles might give you about it. I know Sandy Bridge comes out and more after that. Could you kind of walk us through product cycles this year?

Yes. We like technology change. New technology always mean better performance for per watt, better performance per dollars. With Ivy Bridge becoming nascent in next few months, we do have a very good forecast and customer commitment from there and also order top three order coming very soon for much faster performance for high end application and also UP, uni-process Intel hardware product line we have around here within next few weeks and we did have really strong product available today. So, from those point of view, I could feel a new product line in [satellites]. Mark Kelleher - Dougherty & Company: Okay. Thanks.

We'll take our next question from Alex Kurtz with Sterne Agee. Amelia Harris - Sterne Agee: Hi. This is Amelia on for Alex today. Thanks for taking the question. How far along would you say are you with Seagate on a contract for HDD pricing, and if so what does that timeframe look like?

Hi. This is Howard. Yes. We've been in discussions obviously with our vendors all the way along and so we are hopeful that we will have things. They are looking to us and we are negotiating with them.

Basically, we already have a certain reasonable and [aver] to say a very positive agreement and the relationship continue to improve basically. Amelia Harris - Sterne Agee: Thanks. This is a follow-up. Are you seeing ODMs at Qantas more active or less active in the market right now? How would you say they are on a competitive front?

Those who see formation have a better cost and lower price from certain standard to for certain Big Data standard customer we do want to really expand our Asia facility kind of strongly in last two years, so our facility formation now it is pretty ready and however what customer really need? I mean most of the customer really need is a TCO, basically a TCO, so that mean not just a lower cost from that, but better quality, better optimization, including performance optimization and power saving optimization also including management all the way total solution. So, indeed the most of the market I mean the customers feel, now their TCO in total. Amelia Harris - Sterne Agee: Okay. Thank you.

We'll take our next question from Glenn Hanus from Needham. Glenn Hanus - Needham: Hi, guys. Could we dive a little bit more into; so you have a new target for gross margin, you had talked about a 300-basis point improvement from abatement of the HDD and memory issue. Can you sort of bridge out from the 19 and now you are kind of talking of 17. If I take the middle of the range, what are the factors that are going into the reduced gross margin guidance and sort of the rank the factors that are contributing to that? Thank you.

Yes. I guess the competition is getting stronger if I compare with three years ago, four years ago, so we already understand that. However, our product mix is getting stronger like the MicroCloud, and especially storage, GPU. Also, our purchasing, bargain power is getting stronger too together with our service value and operation with lower cost from Asia. And that's why in next 18 months, we believe 17% can be a reasonable number. Glenn Hanus - Needham: And, the 300-basis point improvement. How should we think about that relative to what you've said in the past there?

Glenn, this is Howard. Like I said, some of it come back and we are still working with our customers, our providers to get that back and so basically we pull that from the model, per se, in the form of basically just a negotiating with our vendors and put that as improving our purchasing power and our Taiwan facility. Glenn Hanus - Needham: Okay. Can you give us any color here sort of sequentially in gross margins? You showed a little improvement this quarter. Would we see sort of a similar improvement next quarter or might we see a greater improvement and what are the factors that are kind of really driving your sequential gross margin improvement or like thereof right now?

Yes. With regard to the June quarter, you'll find seasonally a strong quarter, so coming out of this March quarter, which is seasonally weak, you see a lot of competition happening for a smaller pie, so that maybe put some pressure on margins, or we did pretty well with that. Also, again, our product mix hurt us a bit this past quarter in March, and so as we go into the June quarter, hopefully we'll see that come back a little bit more towards our full service solution, so those positive. Yes? Glenn Hanus - Needham: Okay. And then typically you have a pretty healthy uptick in OpEx in the June quarter. You have to in order to in order to get to your guidance there, so can you go through that?

Generally, actually, we're being very prudent with our operating expenses going forward as far as we are making the strategic investments that we need to as Charles alluded to on new products and canalization, but we are going to be keeping a tight handle on it. We've invest a lot of over last year or two. Glenn Hanus - Needham: Okay. Thank you.

(Operator Instructions). It appears at this time, we have no further questions. I'd like to turn the call back over to Mr. Liang for any additional or closing comments.

Thank you for joining us today and we look forward to talking to you again at the end of this quarter. Thank you, everyone. Have a great day. Thank you.

This concludes today's conference. We thank you for your participation. Thank you, ladies and gentlemen. That does conclude Super Micro third quarter fiscal 2013 conference call. We do appreciate your participation. You may disconnect at this time. Thank you.