Qualstar Corporation (ticker: QBAK, exchange: NASDAQ Global Market (.O))
News Release -
2-Nov-2005
Qualstar Reports Fiscal 2006 First Quarter Results SIMI VALLEY, Calif.--(BUSINESS WIRE)--Nov. 2, 2005--Qualstar(R)
Corporation (Nasdaq:QBAK), a manufacturer of automated tape storage
solutions, today reported financial results for the first quarter of
fiscal 2006 ended September 30, 2005.
Revenues for the first quarter of fiscal 2006 were $6.1 million,
compared to $6.3 million for the same quarter of the prior year. The
decrease in revenues was due primarily to lower sales of tape
libraries and drives incorporating AIT, SAIT and SDLT tape technology,
partially offset by higher sales of tape libraries and drives
incorporating LTO tape technology, tape media and power supplies.
Gross margin in the fiscal 2006 first quarter was 31.2 percent,
compared to 37.0 percent in the year-ago quarter. The decline in gross
margin was primarily related to increased labor and material costs
partially due to a change in product mix and increased competitive
pricing pressures.
Research and development expenses for the first quarter of fiscal
2006 were $719,000, or 11.8 percent of revenues, compared to $954,000,
or 15.1 percent of revenues, for the year-ago quarter. The decrease in
research and development expenses was due primarily to lower
compensation expenses. Sales and marketing expenses in the 2006 fiscal
first quarter were $757,000, or 12.4 percent of revenues, compared to
$847,000, or 13.4 percent of revenues, in the same quarter last year.
The decrease in sales and marketing expenses was attributed primarily
to lower promotion expenses. General and administrative expenses in
the first quarter of fiscal 2006 were $910,000, or 14.9 percent of
revenues, compared to $932,000, or 14.8 percent of revenues, for the
first quarter of fiscal 2005. The decrease in general and
administrative expenses in absolute dollars in the first quarter of
fiscal 2006 was due primarily to lower compensation expenses.
Qualstar reported a loss from operations of $482,000 in the first
quarter of fiscal 2006, compared to a loss from operations of $400,000
for last year's fiscal first quarter. The Company reported a net loss
of $211,000, or $(0.02) per basic and diluted share, for the first
quarter of fiscal 2006, compared with a net loss of $236,000, or
$(0.02) per basic and diluted share, for last year's first quarter.
Cash, cash equivalents and marketable securities were $33.9
million at September 30, 2005, compared with $34.1 million at June 30,
2005. Days sales outstanding (DSOs) were approximately 50 days at
September 30, 2005, compared to approximately 48 days at June 30,
2005. Inventory turns were 2.3 times on an annualized basis for the
period ended September 30, 2005, compared to 2.5 times on an
annualized basis for the period ended June 30, 2005.
"Our first quarter operating performance was at the high end of
our forecast, and our cash position held strong, as our business
remained on track," said Bill Gervais, president and chief executive
officer of Qualstar. "Once again, LTO-based libraries and our power
supply business showed particular strength compared to last year's
first quarter.
"Work is continuing on our next generation of tape libraries,
including verification and interface testing, and we plan to provide
further updates as we complete important project milestones. In the
meantime, we are committed to providing our customers with a wide
range of versatile, efficient and reliable tape automation products,"
said Mr. Gervais.
Qualstar Corporation Conference Call
Company management will hold a conference call to discuss its
fiscal 2006 first 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 for 30 days. Additionally,
participants can dial into the live conference call by calling
866-249-5225 or 303-262-2004. An audio replay will be available
through November 9, 2005, by calling 800-405-2236 or 303-590-3000, and
entering passcode 11041887.
About Qualstar Corporation
Qualstar is a manufacturer of automated tape libraries used for
backup, archival storage, data protection and disaster recovery. Its
products are known throughout the world for their rugged, Simply
Reliable design, yielding years of trouble-free operation. Qualstar
tape libraries are sold, installed and supported worldwide by selected
Value Added Resellers, Systems Integrators, Original Equipment
Manufacturers and Distributors. Qualstar also designs, manufactures
and sells ultra small, high efficiency open-frame switching power
supplies under the "N2Power" brand name to OEMs. Qualstar Corporation
is publicly traded on the Nasdaq National Market under the symbol
QBAK. More information is available at www.qualstar.com or by phone at
805-583-7744.
Forward-Looking Statements
Statements in this press release 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 tape libraries
which incorporate LTO and SAIT tape drives; whether the Company's
initiatives to maintain and increase sales of its tape libraries based
on AIT tape technology will be successful; whether development of the
Company's new enterprise-class tape libraries will be completed on
time and achieve customer acceptance; rescheduling or cancellation of
customer orders; unexpected shortages of critical components;
unexpected product design or quality problems; and, adverse changes in
market demand for tape libraries or other Qualstar 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, 2005, and to the "Management's Discussion
and Analysis of Financial Condition and Results of Operations"
sections of its Form 10-K and its most recent Quarterly Report on Form
10-Q.
QUALSTAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(UNAUDITED)
Three Months Ended
September 30,
2005 2004
-------- ---------
Net revenues $6,102 $6,305
Cost of goods sold 4,198 3,972
-------- ---------
Gross profit 1,904 2,333
-------- ---------
Operating expenses:
Research and development 719 954
Sales and marketing 757 847
General and administrative 910 932
-------- ---------
Total operating expenses 2,386 2,733
-------- ---------
Loss from operations (482) (400)
Investment Income 271 164
-------- ---------
Loss before income taxes (211) (236)
Provision for income taxes - -
-------- ---------
Net Loss $(211) $(236)
======== =========
Loss per share:
Basic $(0.02) $(0.02)
======== =========
Diluted $(0.02) $(0.02)
======== =========
Shares used to compute loss per share:
Basic 12,253 12,604
======== =========
Diluted 12,253 12,604
======== =========
QUALSTAR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Sep 30, June 30,
2005 2005
ASSETS (Unaudited) (Audited)
----------- ---------
Current assets:
Cash and cash equivalents $11,598 $12,210
Marketable securities 22,307 21,854
Receivables, net of allowances of $227
as of September 30, 2005 and $248 as of
June 30, 2005 3,321 3,532
Inventories 7,150 7,157
Prepaid expenses and other current assets 766 452
Prepaid income taxes 642 640
Deferred income taxes - -
----------- ---------
Total current assets 45,784 45,845
----------- ---------
Property and equipment, net 1,164 1,188
Other assets 323 190
----------- ---------
Total assets $47,271 $47,223
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,164 $763
Accrued payroll and related liabilities 348 496
Other accrued liabilities 1,386 1,311
----------- ---------
Total current liabilities 2,898 2,570
----------- ---------
Shareholders' equity:
Common stock, no par value; 50,000 shares
authorized, 12,253 and 12,253 shares
issued and outstanding as of September
30, 2005 and June 30, 2005, respectively 18,370 18,370
Accumulated other comprehensive loss (263) (159)
Paid in capital 35 -
Retained earnings 26,231 26,442
----------- ---------
Total shareholders' equity 44,373 44,653
----------- ---------
Total liabilities and shareholders'
equity $47,271 $47,223
=========== =========
CONTACT:
Qualstar Corporation
Frederic T. Boyer, 805-583-7744
fboyer@qualstar.com
or
Financial Relations Board
Laurie Berman, 310-854-8315 (General Information)
lberman@financialrelationsboard.com
SOURCE:
Qualstar Corporation
|
Qualstar Corporation
