Qualstar: Fiscal 3Q12 Financial Results

Qualstar Corporation reported financial results for the third quarter of fiscal 2012 ended March 31, 2012.

Fiscal 2012 Third Quarter Financial Results
Revenues for the third quarter of fiscal 2012 were $4.6 million, compared to $4.2 million for the same quarter of fiscal 2011, an increase of $0.4 million or 8.5 percent. Loss from operations was $601,000 compared to $561,000 in the third quarter of fiscal 2011. Net loss was $553,000 or $0.05 per basic and diluted share, compared to a net loss of $514,000, or $0.04 per basic and diluted share for the third quarter of fiscal 2011.

Tape library segment revenues were $1.9 million for the third quarter, compared to $2.0 million in the third quarter of fiscal 2011, a decrease of $0.1 million, or 4.3 percent. This decrease in revenues was due to lower sales of TLS and RLS tape libraries and service, partially offset by increased sales of XLS tape libraries and media. Power supply segment revenues were $2.7 million for the quarter, compared to $2.2 million in the prior year quarter, an increase of $0.5 million, or 20.0 percent. The increase in revenues is related to an increase in overall demand.

Gross profit decreased to $1.2 million, or 25.8 percent of net revenues, for the three months ended March 31, 2012, from $1.4 million, or 32.3 percent of net revenues, for the three months ended March 31, 2011. The decrease in gross profit is attributed to a change in product mix.

R&D expenses for the third quarter of fiscal 2012 were $696,000, or 15.1 percent of revenues, compared to $656,000 or 15.4 percent of revenues, for the third quarter of fiscal 2011. The increase is due primarily to higher consulting expenses. Sales and marketing expenses were $451,000, or 9.8 percent of revenues, compared to $604,000 or 14.2 percent of revenues, in the corresponding period last year. The decrease in sales and marketing expenses is attributed to lower compensation expenses and decreased advertising and promotion expenses. General and administrative expenses were $644,000 or 14.0 percent of revenues, compared to $672,000, or 15.8 percent of revenues, for the same period last year.

Commenting on the company’s business results, Bill Gervais, president and CEO of Qualstar, said: "We are finding traction with the new RLS 10U and 6U product line. We are also seeing more activity overall in the market, compared to last quarter. In the power supply segment, we shipped approximately 43,600 units, yielding the highest quarterly revenue for power supplies to date."

Fiscal 2012 Nine-Month Financial Results
Qualstar reported revenues of $12.8 million for the first nine months of fiscal 2012, compared with $13.6 million for the first nine months of fiscal 2011. The company’s net loss for the first nine months of fiscal 2012 was $1.5 million, or $(0.12) per basic and diluted share, compared with a net loss of $0.6 million, or $(0.05) per basic and diluted share, in the first nine months of fiscal 2011.

Cash, cash equivalents and marketable securities were $21.6 million at March 31, 2012. Inventory, net of reserves, at March 31, 2012 was $6.1 million, compared to $5.7 million at June 30, 2011.