Qualstar: Fiscal 1Q16 Financial Results

Qualstar Corporation reported financial results for its first fiscal quarter ended September 30, 2015.

Results for the Three Months Ended September 30, 2015 Vs. 2014

• Revenue decreased 30.3% or $1.0 million to $2.3 million from $3.3 million
• Storage revenue decreased 42.1% or $0.8 million to $1.1 million from $1.9 million
• Power supply revenue decreased 14.3% or $0.2 million to $1.2 million from $1.4 million
• Gross profit decreased 100% or $1.2 million to ($35,000) from $1.2 million, due to a $0.7 million noncash, inventory reserve
• Total operating expenses decreased 6.7% or $0.1 million to $1.4 million, which includes $0.1 million of nonrecurring professional fees, from $1.5 million
• Net loss was $1.5 million or ($0.12) per basic and diluted share versus a net loss of $0.3 million or ($0.03) per basic and diluted share, a $1.2 million increase in net loss
• Cash, cash equivalents and marketable securities for quarter ended September 30, 2015 was $4.7 million versus $6.7 million at September 30, 2014
• Revenue declined in the three months ended September 30, 2015, as the comparable quarter last year benefited from significant one-time orders.

The company expensed $0.1 million in professional fees during the three months ended September 30, 2015, related to a recent acquisition opportunity. After further due diligence, management decided it was in the best interest of the company not to pursue the acquisition.

“We continue to focus on our business plan, which includes introducing new products and establishing new partnerships. We introduced the Q48 tape library in September, 2015. This value-oriented product is available to our customers with short-order lead times, enabling us to more efficiently manage inventory while improving our speed to market. The Q48 duplicates certain low-end models of the current RLS tape library series. As a result, we took a large reserve against excess inventory of approximately $0.7 million.”

“We were disappointed with the quarterly revenue results,” said Steven N. Bronson, CEO. “However, we continue to add new partners and new products to our product portfolio for both the power supply and storage business units.” he continued, “While it takes time to see the financial results of these efforts, we are confident that Qualstar will be in a stronger position to compete in the market.”