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Qualstar: Fiscal 2Q16 Financial Results

Storage down 35% Y/Y at $1.3 million

(in $ million) 2Q15 2Q16 6 mo. 15 6 mo. 16 Year ended
in 12/2014
Year ended
in 12/2015
Revenue 3.5 2.6 6.8 4.9 10.9 12.9
Growth   -26%   -10% NA 18%
Net income (loss) (0.03) (0.04) (0.6) (1.9) (5.6) (1.3)

 Qualstar Corporation reported financial results for the six months ended December 31, 2015.

The transition period was necessary to accommodate the change in the company’s fiscal year end from June 30 to December 31. Transition period comparisons are made against the unaudited six months ended December 31, 2014.

Quarter Ended December 31, 2015 Financial Results
Revenues for the quarter ended December 31, 2015 were $2.6 million, compared with $3.5 million for the quarter ended December 31, 2014, a decrease of $0.9 million or 25.7%. Loss from operations was $0.4 million for the quarter ended December 31, 2015 compared with a loss of $0.3 million for the quarter ended December 31, 2014. Loss per basic and diluted share was $(0.04) for the quarter ended December 31, 2015 compared with loss per basic and diluted share of $(0.03) per for the quarter ended December 31, 2014.

Storage segment revenues were $1.3 million for the quarter ended December 31, 2015, compared with $2.0 million for the same period last year, a decrease of $0.7 million or 35.0%, primarily due to significant one-time international orders in the prior year. Power supply segment revenues were $1.3 million for the quarter, compared with $1.5 million in the quarter ended December 31, 2014, a decrease of $0.2 million, or 13.3%, resulting from a slow down by manufacturers at the end of the year 2015.

Gross margin was 42.3% of revenues or $1.1 million for the quarter ended December 31, 2015, an improvement over the gross margin of 31.4% of revenues or $1.1 million for the quarter ended December 31, 2014. The gross profit remained constant during the quarter on lower sales, as steps were taken to reduce costs and achieve higher margins on our products. Operating expenses, excluding restructuring income, for the three months ended December 31, 2015 were $1.5 million or 57.7% of revenues, compared with $1.6 million, or 45.7% of revenues for the three months ended December 31, 2014. There was no restructuring income for the three months ended December 31, 2015, compared to income of $0.2 million, or 5.7% of revenues, for the same period last year.

Transition Year Ended December 31, 2015 Six Months Financial Results
Qualstar reported revenues of $4.9 million for the six months ended December 31, 2015, a decrease of 27.9% compared with $6.8 million in the six months ended December 31, 2014. Net loss from operations in the six months ended December 31, 2015 was $1.9 million or $(0.15) per basic and diluted share. This compares with a net loss in the six months ended December 31, 2014 of $0.6 million, or $(0.05) per basic and diluted share.

Steven N. Bronson, CEO and president, said: “We are exploring strategic alternatives that we believe will benefit the Qualstar shareholders, including mergers, acquisitions and divestures.” He continued: “As we look for these opportunities, we continue to reduce operating expenses and manage to our reduced breakeven revenue, including personnel adjustments.”

Cash and cash equivalents were $4.0 million at December 31, 2015, a decrease of $0.7 million from June 30, 2015. The decrease in cash is attributed to operating activities.

Cash is being monitored closely and we are taking prudent steps to reduce the cash out flow,” stated Bronson. “Effective May 1, 2016, we are consolidating offices for our administrative and storage sales team into our existing Simi Valley facility and subleasing the Westlake Village office. This move will reduce rent expense by $10,000 per month with the income from the sublease.”

Read also:
Bid Price of Qualstar’s Common Stock Under $1 Last 30 Days
Company received NASDAQ notice of deficiency for eventual delisting
2016.01.06 | Press Release
President Dan Jan Left Qualstar
Company’s fiscal year-end changed from December 31 from June 30
2016.01.06 | Press Release

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