Overland: Fiscal 3Q13 Financial Results

Overland Storage, Inc. reported financial results for its fiscal 2013 third quarter ended March 31, 2013.

"We continue to execute on our overall strategy and expand our addressable markets with the successful introduction of new solutions in the data management and data protection marketplace," said Eric Kelly, president and CEO of Overland. "We are also encouraged by the strong growth of our disk based products last quarter and the growing pipeline from our recently announced SnapScale clustered NAS solution."

Product Highlights:

• SnapServer revenue increased 7.3% in the third quarter compared to the preceding quarter, led by a 54% increase in SnapServer DX Series 2U platform sales.
• SnapSAN revenue grew 24% sequentially in the third quarter, driven by strong S3000 and S5000 revenue.
• SnapScale pipeline has grown to an excess of $10 million since January 2013.

Third Quarter Fiscal 2013 Financial Results:

• Net revenue for the third quarter of fiscal 2013 was $11.6 million, compared to $12.6 million for the second quarter of fiscal 2013 and $15.2 million in the third quarter of fiscal 2012.
• Product revenue for the third quarter of fiscal 2013 was $6.9 million, compared to $7.8 million for the second quarter of fiscal 2013 and $9.0 million in the third quarter of fiscal 2012.
• Gross margins for the third quarter of fiscal 2013 were 33.1%, compared to 36.5% in the second quarter of fiscal 2013 and 31.1% in the third fiscal quarter of 2012.
• Operating expenses for the third quarter of fiscal 2013 were $9.0 million, compared to $8.7 million in the second quarter of fiscal 2013 and $8.4 million for the third quarter of fiscal 2012.
• Stock compensation expense was $1.2 million in the third quarter of fiscal 2013, compared to $1.3 million for the second quarter of fiscal 2013 and $1.1 million for the third quarter of fiscal 2012.
• Depreciation and amortization was $0.3 million in the third quarter of fiscal 2013 compared to $0.3 million in the second fiscal quarter of 2013 and $0.4 million in the third quarter of fiscal 2012.
• Net loss for the third fiscal quarter of 2013 was $5.1 million, or a loss of $0.17 per share, compared to a net loss of $4.3 million, or a loss of $0.15 per share, in the second quarter of fiscal 2013 and a net loss of $3.8 million, or a loss of $0.16 per share, in the third quarter of fiscal 2012.
• Cash and cash equivalents at March 31, 2013 was $14.1 million, compared to $10.5 million at June 30, 2012. At March 31, 2013, the company had $3.5 million outstanding under its credit facility and $13.25 million outstanding under its convertible notes.
• Completed private placements of convertible notes and common stock resulting in aggregate gross proceeds to the company of $14.25 million.

Recent Awards and Nominations:

• SnapServer DX Series NAS storage arrays won Hardware Product of the Year in the 2013 Network Computing Awards.
• SnapScale X2 clustered NAS has been named a finalist as Data Center Hardware Product of the Year and nominated as Network Computing’s New Product of the Year Award, Network Product Guide’s Best Storage Solution and the American Business Awards New Product of the Year Award.
• Has been awarded the 5-star partner rating in CRN’s 2013 Partner Program Guide, the listing of manufacturers and software publishers that service the IT channel.

Patent Litigation:
The International Trade Commission has agreed and has granted Overland’s petition to review the initial findings of the administrative law judge regarding its patent lawsuit. It has been and continues to be Overland’s position that the BDT FlexStor II products do infringe on Overland’s patents. If the commission reverses the administrative law judge’s initial findings, Overland expects the commission to enter an exclusion order instructing the US Customs Department to stop the libraries from being imported into the United States by BDT. The exclusion order would go into effect after a 60-day presidential review period.

To read the earnings call transcript