SIMI VALLEY, CA -- (Marketwire - September 23, 2010) - Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of automated tape storage solutions and high efficiency power supplies, today reported financial results for the fourth quarter and full year of fiscal 2010 ended June 30, 2010.
Fiscal 2010 Fourth Quarter Financial Results
Revenues for the fourth quarter of fiscal 2010 were $4.0 million, compared to $3.8 million for the same quarter of fiscal 2009, an increase of $0.2 million or 5.9 percent. Loss from operations was $627,000 compared to $1.4 million in the fourth quarter of fiscal 2009. Net loss was $575,000 or $(0.05) per basic and diluted share, compared to a net loss of $1.2 million, or $(0.10) per basic and diluted share for the fourth quarter of fiscal 2009.
Tape library segment revenues were $2.3 million for the fourth quarter, comparable to the prior year quarter. Power supply segment revenues were $1.7 million for the quarter, compared to $1.4 million in the prior year quarter, an increase of $0.3 million, or 20.9 percent.
Gross profit increased to $1.28 million, or 32.1 percent of net revenues, for the three months ended June 30, 2010, from $941,000, or 25.0 percent of net revenues, for the three months ended June 30, 2009. The increase in gross profit is attributed to a change in product mix and a decrease in reserves.
Research and development ("R&D") expenses for the fourth quarter of fiscal 2010 were $749,000, or 18.8 percent of revenues, compared to $939,000 or 24.9 percent of revenues, for the fourth quarter of fiscal 2009. The change is due primarily to decreases in R&D material, consultants and compensation related to headcount reductions. Sales and marketing expenses were $528,000, or 13.2 percent of revenues, compared to $640,000 or 17.0 percent of revenues, in the corresponding period last year. The change in sales and marketing expense was due to decreases in advertising and promotion expenses. General and administrative expenses in the fourth quarter of fiscal 2010 were $631,000 or 15.8 percent of revenues, compared to $745,000, or 19.8 percent of revenues, for the same period last year. The change in general and administrative expense was primarily due to decreases in accounting and audit and compensation related to headcount reductions.
Commenting on the Company's business results, Bill Gervais, president and chief executive of Qualstar said, "Consolidated fourth quarter revenues of $4.0 million increased 5.9 percent compared to the fourth quarter last year driven by the continued growth in sales of our XLS enterprise class product line and our N2Power business. In fact, the XLS product line generated strong momentum throughout fiscal 2010 with sales increasing nearly 64 percent for the full year. XLS libraries appeal to a diverse array of end users as the flexibility of our solution allows customers to easily expand their data storage capacity as requirements increase over time. N2Power's full year revenues increased to a record $5.8 million and our products continue to generate strong demand due to worldwide requirements for smaller and more energy efficient power supplies."
Mr. Gervais continued, "Looking ahead, we hope that improving customer demand combined with new product development initiatives will result in a positive impact in fiscal 2011."
Fiscal 2010 Full Year Financial Results
Qualstar reported revenues of $15.3 million in fiscal 2010, compared with $17.9 million in fiscal 2009. The Company's net loss in fiscal 2010 was $3.1 million or $(0.25) per basic and diluted share, compared with a net loss in fiscal 2009 of $2.6 million, or $(0.21) per basic and diluted share.
Cash, cash equivalents and marketable securities were $24.3 million at June 30, 2010, down from $27.7 million at June 30, 2009. Inventory, net of reserves, at June 30, 2010 was $4.8 million, compared to $5.8 million at June 30, 2009.
Qualstar Corporation Conference Call
Company management will hold a conference call to discuss its fiscal 2010 fourth quarter 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 877-941-8609 or 480-629-9818. An audio replay will be available through September 30, 2010, by calling 800-406-7325 or 303-590-3030, and entering access code 4365443.
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 result s 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, 2010, 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 data)
------------------------ ------------------------
Three Months Ended Twelve Months Ended
------------------------ ------------------------
June 30, June 30,
2010 2009 2010 2009
(Unaudited) (Unaudited) (Audited) (Audited)
----------- ----------- ----------- -----------
Net revenues $ 3,991 $ 3,769 $ 15,270 $ 17,892
Cost of goods sold 2,710 2,828 10,626 12,190
----------- ----------- ----------- -----------
Gross profit 1,281 941 4,644 5,702
----------- ----------- ----------- -----------
Operating expenses:
Research and
development 749 939 3,150 3,254
Sales and marketing 528 640 2,294 2,767
General and
administrative 631 745 2,632 3,155
----------- ----------- ----------- -----------
Total operating
expenses 1,908 2,324 8,076 9,176
----------- ----------- ----------- -----------
Loss from operations (627) (1,383) (3,432) (3,474)
Investment Income 52 137 311 918
----------- ----------- ----------- -----------
Loss before income taxes (575) (1,246) (3,121) (2,556)
Provision for income
taxes - (1) - 3
----------- ----------- ----------- -----------
Net loss $ (575) $ (1,245) $ (3,121) $ (2,559)
=========== =========== =========== ===========
Loss per share:
----------- ----------- ----------- -----------
Basic and Diluted $ (0.05) $ (0.10) $ (0.25) $ (0.21)
=========== =========== =========== ===========
Shares used to compute
loss per share:
----------- ----------- ----------- -----------
Basic and Diluted 12,253 12,253 12,253 12,253
=========== =========== =========== ===========
----------- ----------- ----------- -----------
Cash dividends declared
per common share $ - $ 0.06 $ 0.12 $ 0.18
----------- ----------- ----------- -----------
QUALSTAR CORPORATION
CONDENSED BALANCE SHEETS
(in thousands)
-------------------------
June 30, June 30,
2010 2009
ASSETS (Audited) (Audited)
------------ ------------
Current assets:
Cash and cash equivalents $ 2,234 $ 3,749
Marketable securities, short-term 12,033 16,856
Receivables, net of allowance for doubtful
accounts of $113K as of June 30, 2010 and $85K
as of June 30, 2009 2,829 2,305
Inventories, net 4,823 5,822
Prepaid expenses and other current assets 299 397
------------ ------------
Total current assets 22,218 29,129
------------ ------------
Property and equipment, net 260 361
Marketable securities, long-term 9,997 7,056
Other assets 46 46
------------ ------------
Total assets $ 32,521 $ 36,592
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,225 $ 649
Accrued payroll and related liabilities 521 505
Other accrued liabilities 903 894
------------ ------------
Total current liabilities 2,649 2,048
------------ ------------
Other long-term liabilities 25 34
Commitments and contingencies
Shareholders' equity:
Common stock, no par value; 50,000 shares
authorized, 12,253 shares issued and outstanding
as of June 30, 2010 and June 30, 2009 18,830 18,798
Accumulated other comprehensive income 64 168
Retained earnings 10,953 15,544
------------ ------------
Total shareholders' equity 29,847 34,510
------------ ------------
Total liabilities and shareholders' equity $ 32,521 $ 36,592
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For more information, contact: Nicki Andalon Vice President & CFO Qualstar Corporation (805) 583-7744 nandalon@qualstar.com Lasse Glassen General Information Financial Relations Board (213) 486-6546 lglassen@mww.com