Crossroads Systems: Fiscal 1Q09 Financial Results

Crossroads Systems, Inc. announced results for its fiscal first quarter ended January 31, 2009 (Q1’09).

Revenue totaled $3.2 million for Q1’09 compared to $7.2 million in the fiscal fourth quarter ended October 31, 2008 (Q4’08). Product revenue totaled $1.6 million for Q1’09 compared to $2.0 million for Q4’08. In addition, revenue from IP license, royalty and other totaled $1.7 million for Q1’09 compared to $5.2 million for Q4’08. Gross profit was $2.6 million, or 80 percent for Q1’09, compared to $6.3 million, or 87 percent for Q4’08. Net loss for Q1’09 was $2.5 million, or $0.09 cents loss per share, compared to a net loss of $5.0 million, or $0.18 cents loss per share in Q4’08.

The decrease in revenue and gross margin was largely due to a decrease in revenue received from our largest OEM as well as a decrease in license revenue and deferred revenue of one million dollars recognized last quarter. Our OEM constitutes a large percentage of our business so when their business fluctuates, it greatly impacts our business. As a result, Q1’09 included one-time restructuring expenses of $217,000.