Welcome!

Microsoft Cloud Authors: Janakiram MSV, Yeshim Deniz, David H Deans, Andreas Grabner, Stackify Blog

News Feed Item

Qualstar Reports Fiscal 2013 Second Quarter Results and Strong Second Half Outlook

SIMI VALLEY, CA -- (Marketwire) -- 02/06/13 -- Qualstar Corporation (NASDAQ: QBAK)

  • 39% sequential bookings growth to $4.9 million
  • Book to bill of 1.46:1
  • Record pro forma gross margins of 43.5%

Qualstar Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today reported financial results for its second fiscal quarter ended December 31, 2012 as its transformation continues under new leadership.

Fiscal 2013 Second Quarter Financial Results
Bookings for the second fiscal quarter were $4.9 million representing 39 percent sequential growth over the fiscal first quarter and a book to bill of 1.46:1. We closed the quarter with $2.9 million in backlog with the majority to be delivered in the third fiscal quarter. Revenues for the second quarter of fiscal 2013 were $3.4 million, compared to $3.6 million for the same quarter of fiscal 2012, a decrease of $200,000 or 5.6 percent, and sequentially flat to the fiscal first quarter. GAAP net loss including restructuring charges of $511,000 or $0.04 per share was $1.7 million or $0.14 per basic and diluted share. Excluding the adjustment in labor and overhead, pro forma non-GAAP net loss was $970,000 or $0.08 per share. This compares to GAAP net loss of $971,000, or $0.08 per basic and diluted share for the second quarter of fiscal 2012.

"Our fiscal second quarter represented a turning point for Qualstar as we implemented our most important and significant steps to transition from a manufacturing-based company to a more nimble, lower overhead company focused on engineering and sales," said Larry Firestone, President and CEO. "We booked business at a rate of just under $20 million annually in the second quarter and began the third quarter with very strong backlog. Combined with the work we have done to improve gross margins and lower inventories, we believe our strategy to focus Qualstar on our core markets of storage and power supply products will result in long-term growth, sustainable profitability and increasing returns for investors."

Strategic Plan Implementation
Since last June, under Mr. Firestone's leadership, Qualstar's management has taken swift and decisive action to transform Qualstar and create sustainable value for all shareholders, including:

  • Initiated five-year strategic plan
  • Restructuring the company for greater efficiency
    • Outsourced library manufacturing to CTS
      • Decreasing inventory and expanding gross margins
    • Exited and consolidated certain facilities
      • Exited Canoga Park
      • Shrunk Boulder
      • Exiting the Simi valley location and moving to smaller more suitable quarters
    • Reduced workforce
      • Exited legacy product lines and old drive technologies
    • Renegotiated service contract
  • Fully integrated N2Power into Qualstar
    • Reorganized into 2 engineering teams
    • Re-engaging resellers
    • Initiated discussions with first Tier 1 channel partner
  • Strengthened management team and sales and engineering staff
    • Bill Lurie - VP of Engineering
    • Steve Wagner - VP of Sales for N2Power
    • James Steger - Operations leadership
  • Delivered bookings in the annual range of $20 million for the second quarter; above our breakeven point
  • Added two experienced board members
    • Allen Alley
    • Daniel Molhoek
  • Introduced new products and technology to expand addressable market potential
    • Availability of LTO 6
    • Encryption Key Management for XLS
    • Expandable Rack Mount Tape Libraries
  • Exited legacy products and technologies
    • TLS and RLS 8000 - Selling below cost
    • Touchless Mouse and Touchless Pointing

Storage revenues grew 35.4 percent to $2.1 million for the second quarter compared to $1.6 million in the second quarter of fiscal 2012, an increase of $554,000, and 11.3 percent sequentially, up from $1.9 million in the first fiscal quarter. The increase was primarily driven by higher sales of our XLS tape libraries. N2Power revenues were $1.2 million for the quarter, compared to $2.0 million in the prior year quarter, a decrease of $755,000, or 38.1 percent as the softness in the network and telephony markets continued.

Gross profit increased to $1.3 million, or 37.8 percent, from $827,000, or 23.3 percent from the year ago quarter. Our pro forma gross profit, for the second fiscal quarter excluding the $192,000 related to changes in labor and overhead rates was $1.5 million, or a record 43.5 percent gross margin. Our focus on reducing above the line costs and outsourcing manufacturing has delivered these results.

Fiscal second quarter operating expenses which included $511,000 of restructuring charges were $3.0 million up from $1.8 million for the second quarter of 2012. Engineering expenses for the second quarter of were $742,000, or 22.1 percent of revenues, compared to $650,000 or 18.3 percent of revenues, for the second quarter of fiscal 2012 driven by recruiter expenses for our engineering department. Sales and marketing expenses were $804,000, or 24.0 percent of revenues, compared to $448,000 or 12.6 percent of revenues, in the corresponding period last year. This increase was primarily attributed to the cost of recruiting and adding to our sales force as well as the cost of advertising and promotion. General and administrative expenses were $919,000 or 27.4 percent of revenues, compared to $741,000, or 20.8 percent of revenues, for the same period last year. The increase in G&A expenses is primarily attributed to increases in professional fees and general business insurance, partially offset by a decrease in bad debt expense.

Cash, cash equivalents and marketable securities were $17.8 million at December 31, 2012, a decrease of $3 million from June 30, 2012. Inventory, net of reserves, at December 31, 2012 was $3.6 million, compared to $4.5 million at June 30, 2012.

Qualstar Corporation Conference Call
Company management will hold a conference call to discuss its second quarter fiscal year 2013 results today at 2:00 p.m. Pacific (5:00 p.m. Eastern). Investors are invited to listen to the call live via the Internet using the link under the "Investors" section at www.qualstar.com. Please go to the Website at least 15 minutes early to register, download and install any necessary audio software. A replay of the Webcast will be available after the live conference call. Additionally, participants can dial into the live conference call by calling 888-549-7750 or 480-629-9722. An audio replay will be available through February 20, 2013, by calling 800-406-7325 or 303-590-3030 and entering access code 4593164.

About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company's products are known throughout the world for high quality and Simply Reliable designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.

Forward-Looking Statements
Statements concerning the future business, operating results and financial condition of the Company are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations and are subject to a number of uncertainties that could cause actual performance and results to differ materially from the results discussed in the forward-looking statements. Factors that could affect the Company's actual results include the Company's ability to increase sales of its products; rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; and, adverse changes in market demand for its products. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Further information on these and other potential factors that could affect the Company's financial results or condition are included in Qualstar's filings with the Securities and Exchange Commission. In particular, reference is made to the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2012, and to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of its Form 10-K.

QUALSTAR CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(UNAUDITED)

                                 ------------------------------------------
                                  Three Months Ended     Six Months Ended
                                 --------------------  --------------------
                                     December 31,          December 31,
                                    2012       2011       2012       2011
                                 ---------  ---------  ---------  ---------

Net revenues                     $   3,355  $   3,555  $   6,808  $   8,179

Cost of goods sold                   2,086      2,728  $   4,595      5,638
                                 ---------  ---------  ---------  ---------

Gross profit                         1,269        827      2,213      2,541
                                 ---------  ---------  ---------  ---------

Operating expenses:
  Engineering                          742        650      1,408      1,298
  Sales and marketing                  804        448      1,335        909
  General and administrative           919        741      1,659      1,333
  Restructuring expense                511          -      1,393          -
                                 ---------  ---------  ---------  ---------
    Total operating expenses         2,976      1,839      5,795      3,540
                                 ---------  ---------  ---------  ---------

Loss from operations                (1,707)    (1,012)    (3,582)      (999)

Other income (expense)                  34         41        (37)        85
                                 ---------  ---------  ---------  ---------

Loss before income taxes            (1,673)      (971)    (3,619)      (914)

Provision for income taxes               -          -          -          -
                                 ---------  ---------  ---------  ---------

Net loss                         $  (1,673) $    (971) $  (3,619) $    (914)
                                 =========  =========  =========  =========

Loss per share:
                                 ---------  ---------  ---------  ---------
  Basic and Diluted              $   (0.14) $   (0.08) $   (0.30) $   (0.07)
                                 =========  =========  =========  =========

Shares used to compute earnings
 per share:
                                 ---------  ---------  ---------  ---------
  Basic and Diluted                 12,253     12,253     12,253     12,253
                                 =========  =========  =========  =========



             QUALSTAR CORPORATION
           CONDENSED BALANCE SHEETS
                (in thousands)

                                                 ---------------------------
                                                  December 31,    June 30,
                                                      2012          2012
                     ASSETS                       (Unaudited)    (Audited)
                                                 ------------- -------------

Current assets:
  Cash and cash equivalents                      $       6,482 $       7,381
  Marketable securities, short-term                      7,437         7,135
  Receivables, net of allowance for doubtful
   accounts of $48 as of December 31, 2012 and
   $38 as of June 30, 2012                               3,056         2,995
  Inventories, net                                       3,991         4,475
  Prepaid expenses and other current assets                213           151
                                                 ------------- -------------

    Total current assets                                21,179        22,137
                                                 ------------- -------------

Property and equipment, net                                365           268
Marketable securities, long-term                         3,924         6,369
Other assets                                                46            50
                                                 ------------- -------------

    Total assets                                 $      25,514 $      28,824
                                                 ============= =============

      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable                               $       1,242 $       2,039
  Accrued payroll and related liabilities                  538           332
  Other accrued liabilities                              2,242         1,374
                                                 ------------- -------------

    Total current liabilities                            4,022         3,745
                                                 ------------- -------------

Other long-term liabilities                                 26            26
Commitments and contingencies
Shareholders' equity:
  Common stock, no par value; 50,000 shares
   authorized, 12,253 shares issued and
   outstanding as of December 31, 2012 and June
   30, 2012                                             18,905        18,878
  Accumulated other comprehensive income                    14             9
  Retained earnings                                      2,547         6,166
                                                 ------------- -------------
    Total shareholders' equity                          21,466        25,053
                                                 ------------- -------------

    Total liabilities and shareholders' equity   $      25,514 $      28,824
                                                 ============= =============

For more information, contact:

Nicki Andalon
Vice-President & CFO
Qualstar Corporation
(805) 583-7744
Email Contact

Vanessa Lehr/Annie Leschin
Investor Relations
StreetSmart Investor Relations
(415) 775-1788

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
Infoblox delivers Actionable Network Intelligence to enterprise, government, and service provider customers around the world. They are the industry leader in DNS, DHCP, and IP address management, the category known as DDI. We empower thousands of organizations to control and secure their networks from the core-enabling them to increase efficiency and visibility, improve customer service, and meet compliance requirements.
Join IBM November 1 at 21st Cloud Expo at the Santa Clara Convention Center in Santa Clara, CA, and learn how IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Cognitive analysis impacts today’s systems with unparalleled ability that were previously available only to manned, back-end operations. Thanks to cloud processing, IBM Watson can bring cognitive services and AI to intelligent, unmanned systems. Imagine a robot vacuum that becomes your personal assistant tha...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, will lead you through the exciting evolution of the cloud. He'll look at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering ...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, will discuss how from store operations...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, will discuss how they b...
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.
Digital transformation is changing the face of business. The IDC predicts that enterprises will commit to a massive new scale of digital transformation, to stake out leadership positions in the "digital transformation economy." Accordingly, attendees at the upcoming Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA, Oct 31-Nov 2, will find fresh new content in a new track called Enterprise Cloud & Digital Transformation.
SYS-CON Events announced today that NetApp has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. NetApp is the data authority for hybrid cloud. NetApp provides a full range of hybrid cloud data services that simplify management of applications and data across cloud and on-premises environments to accelerate digital transformation. Together with their partners, NetApp emp...
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Avere delivers a more modern architectural approach to storage that doesn't require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbui...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, will discuss how given the magnitude of today's applicati...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
In a recent survey, Sumo Logic surveyed 1,500 customers who employ cloud services such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). According to the survey, a quarter of the respondents have already deployed Docker containers and nearly as many (23 percent) are employing the AWS Lambda serverless computing framework. It’s clear: serverless is here to stay. The adoption does come with some needed changes, within both application development and operations. Tha...
SYS-CON Events announced today that Taica will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TAZMO technology and development capabilities in the semiconductor and LCD-related manufacturing fields are among the best worldwide. For more information, visit https://www.tazmo.co.jp/en/.
SYS-CON Events announced today that TidalScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. TidalScale is the leading provider of Software-Defined Servers that bring flexibility to modern data centers by right-sizing servers on the fly to fit any data set or workload. TidalScale’s award-winning inverse hypervisor technology combines multiple commodity servers (including their ass...
SYS-CON Events announced today that Avere Systems, a leading provider of hybrid cloud enablement solutions, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Avere Systems was created by file systems experts determined to reinvent storage by changing the way enterprises thought about and bought storage resources. With decades of experience behind the company’s founders, Avere got its ...
As hybrid cloud becomes the de-facto standard mode of operation for most enterprises, new challenges arise on how to efficiently and economically share data across environments. In his session at 21st Cloud Expo, Dr. Allon Cohen, VP of Product at Elastifile, will explore new techniques and best practices that help enterprise IT benefit from the advantages of hybrid cloud environments by enabling data availability for both legacy enterprise and cloud-native mission critical applications. By rev...
SYS-CON Events announced today that Ryobi Systems will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ryobi Systems Co., Ltd., as an information service company, specialized in business support for local governments and medical industry. We are challenging to achive the precision farming with AI. For more information, visit http:...
Amazon is pursuing new markets and disrupting industries at an incredible pace. Almost every industry seems to be in its crosshairs. Companies and industries that once thought they were safe are now worried about being “Amazoned.”. The new watch word should be “Be afraid. Be very afraid.” In his session 21st Cloud Expo, Chris Kocher, a co-founder of Grey Heron, will address questions such as: What new areas is Amazon disrupting? How are they doing this? Where are they likely to go? What are th...
High-velocity engineering teams are applying not only continuous delivery processes, but also lessons in experimentation from established leaders like Amazon, Netflix, and Facebook. These companies have made experimentation a foundation for their release processes, allowing them to try out major feature releases and redesigns within smaller groups before making them broadly available. In his session at 21st Cloud Expo, Brian Lucas, Senior Staff Engineer at Optimizely, will discuss how by using...