Qualstar: Fiscal 1Q12 Financial Results

Qualstar Corporation reported financial results for the first quarter of fiscal 2012 ended September 30, 2011.

Fiscal 2012 First Quarter Financial Results
Revenues for the first quarter of fiscal 2012 were $4.6 million, compared to $5.2 million for the same quarter of fiscal 2011, a decrease of $0.6 million or 11.8 percent. Income from operations was $13,000 compared to $120,000 in the first quarter of fiscal 2011. Net income was $57,000 or $0.00 per basic and diluted share, compared to a net income of $167,000, or $0.01 per basic and diluted share for the first quarter of fiscal 2011.

Tape library segment revenues were $2.4 million for the first quarter, compared to $3.2 million in the first quarter of fiscal 2011, a decrease of $0.8 million, or 24.9 percent. Power supply segment revenues were $2.2 million for the quarter, compared to $2.0 million in the prior year quarter, an increase of $0.2 million, or 9.3 percent.

Gross profit decreased to $1.7 million, or 37.1 percent of net revenues, for the three months ended September 30, 2011, from $2.1 million, or 40.3 percent of net revenues, for the three months ended September 30, 2010. The decrease in gross profit is attributed to a change in product mix.

Research and development expenses for the first quarter of fiscal 2012 were $648,000, or 14.0 percent of revenues, compared to $707,000 or 13.5 percent of revenues, for the first quarter of fiscal 2011. The decrease is due primarily to lower compensation expenses related to reductions in personnel. Sales and marketing expenses were $461,000, or 10.0 percent of revenues, compared to $636,000 or 12.1 percent of revenues, in the corresponding period last year. The decrease in sales and marketing expenses is attributed to lower compensation expenses related to reductions in personnel and lower advertising and promotion expenses. General and administrative expenses were $592,000 or 12.8 percent of revenues in the first quarter of fiscal 2012, compared to $649,000, or 12.4 percent of revenues, for the same period last year. The decrease in general and administrative expense is due to lower bad debt expenses.

Cash, cash equivalents and marketable securities were $21.7 million at September 30, 2011, Inventory, net of reserves, at September 30, 2011 was $6.2 million, compared to $5.7 million at June 30, 2011.

Commenting on the Company’s business results, Bill Gervais, president and chief executive of Qualstar, said: "We’re off to an encouraging start in fiscal 2012. Our first quarter results reflected an uptick in revenues and gross profit to a level sufficient to provide a small profit. We shipped 12 XLS units in the quarter with total XLS related revenue coming in at $1.0 million. And we benefitted from a pick-up in revenues from our new 10U, or RLS 8500 library series, as well as solid performance in our power supplies product line."