Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CROSSROADS SYSTEMS INC | v337964_8k.htm |
PRESS RELEASE
| Company Contacts: | Investor Contact: |
| Jennifer Crane | Mark Hood |
| Crossroads Systems | Crossroads Systems |
| jcrane@crossroads.com | mhood@crossroads.com |
| 512.928.6897 or 800.643.7148 | 512.928.7330 |
Press Contact:
Matthew Zintel
Zintel Public Relations
matthew.zintel@zintelpr.com
281.444.1590
FOR IMMEDIATE RELEASE
Crossroads Systems Reports Fiscal First Quarter 2013 Financial Results
AUSTIN, Texas – March 12, 2013 – Crossroads Systems, Inc. (NASDAQ: CRDS), a global provider of data archive solutions, reported financial results for its fiscal first quarter ended January 31, 2013.
Fiscal Q1 2013 Financial Results
Revenue for fiscal Q1 2013 increased 38% to $3.6 million from $2.6 million in the same quarter a year ago. The increase was due to the addition of StrongBox® revenue.
Gross profit for fiscal Q1 2013 was $2.6 million, or 73% of total revenue, as compared to $2.3 million or 88% of total revenue in the same quarter a year ago. The decrease in gross margin as a percentage of revenue was due to the lower margin percentage attributable to the development efforts associated with StrongBox service revenue in Q1 2013.
Operating expenses for fiscal Q1 2013 totaled $5.7 million as compared to $5.0 million in the same period a year ago. The increase in operating expenses is mainly due to increases in sales and marketing personnel from the same quarter a year ago.
Net loss for fiscal Q1 2013 totaled $3.1 million or $.27 per share, as compared to a net loss of $2.7 million or $.25 per share in the same quarter a year ago. Gross profit increases were offset by increased operating expenses in Q1 2013 as compared to the same quarter a year ago.
At January 31, 2013, cash and cash equivalents and short-term investments totaled $2.5 million, as compared to $6.9 million in the previous quarter. The decrease in cash was largely due to continued development, marketing and sales efforts of StrongBox as well as a payment on Crossroads’ debt facility of $1.5 million.
Management Commentary
“StrongBox continues to gain traction as evidenced by $1.4 million in revenue from StrongBox in our fiscal first quarter,” said Rob Sims, President and CEO at Crossroads Systems. “We are adding to the growing list of StrongBox customers as evidenced by our pipeline growing from $14 million to $17 million over the last quarter. Our recent reduction in workforce has strengthened our operational efficiency, reducing our annual expenses by more than $5 million and positioning us for profitability as we continue to see growth in StrongBox.”
Crossroads will hold a conference call later today (Tuesday, March 12, 2013) at 4:30 p.m. Eastern Time (3:30 p.m. Central Time) to discuss the financial results. Crossroads’ CEO Rob Sims and CFO Jennifer Crane will host the call starting at 4:30 p.m. Eastern Time. A question and answer session will follow management's presentation.
Date: Tuesday, March 12, 2013
Time: 4:30 p.m. Eastern Time (3:30 p.m. Central Time)
Dial-In Number: (877) 221-8809
International: (706) 679-8667
The conference call will be broadcasted and available for replay at:
http://us.meeting-stream.com/crossroadssystemsinc 031213
The conference call will also be available via the company's Web site in the Investor Relations Events & Presentations section.
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. For more information and to view recent press releases, visit www.crossroads.com.
About Crossroads Systems
Crossroads Systems, Inc. (NASDAQ: CRDS) is a global provider of data archive solutions. Through the innovative use of new technologies, Crossroads delivers customer-driven solutions that enable proactive data security, advanced data archiving, optimized performance and significant cost-savings. Founded in 1996 and headquartered in Austin, TX, Crossroads holds more than 100 patents and has been honored with numerous industry awards for data archiving, storage and protection. Visit www.crossroads.com.
Important Cautions Regarding Forward-Looking Statements
This press release includes forward-looking statements that relate to the business and future events or future performance of Crossroads
Systems, Inc. and involve known and unknown risks, uncertainties and other factors that may cause its actual results, levels of
activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. Words such as, but not limited to, "believe," "expect,"
"anticipate," "estimate," "intend," "plan," "targets," "likely," "will,"
"would," "could," and similar expressions or phrases identify forward-looking statements. Forward-looking statements
include, but are not limited to, statements about Crossroads Systems' ability to implement its business strategy, including the
transition from a hardware storage company to a software solutions and services provider, its ability to expand its distribution
channels, its ability to maintain or broaden relationships with existing distribution channels and strategic alliances and develop
new industry relationships, the performance of third parties in its distribution channels and of its strategic alliances, uncertainties
relating to product development and commercialization, the ability to obtain, maintain or protect patent and other proprietary
intellectual property rights, technological change in its industry, market acceptance of its products and services, future capital
requirements, regulatory actions or delays, competition in general and other factors that may cause actual results to be materially
different from those described herein. Forward-looking statements in this press release are based on management's beliefs and opinions
at the time the statements are made. Crossroads Systems does not intend, and undertakes no duty, to update this information to
reflect future events or circumstances.
©2013 Crossroads Systems, Inc., Crossroads and Crossroads Systems are registered trademarks of Crossroads Systems, Inc. All trademarks are the property of their respective owners. All specifications are subject to change without notice.
| CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (In thousands, except share data) |
| October 31, | January 31, | |||||||
| ASSETS | 2012 | 2013 | ||||||
| (Unaudited) | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 6,895 | $ | 2,456 | ||||
| Accounts receivable, net of allowance for doubtful | ||||||||
| accounts of $102 and $97, respectively | 2,847 | 2,282 | ||||||
| Inventory | 376 | 405 | ||||||
| Prepaid expenses and other current assets | 309 | 324 | ||||||
| Total current assets | 10,427 | 5,467 | ||||||
| Property and equipment, net | 1,521 | 1,439 | ||||||
| Other assets | 76 | 98 | ||||||
| Total assets | $ | 12,024 | $ | 7,004 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,260 | $ | 1,158 | ||||
| Accrued expenses | 2,879 | 1,869 | ||||||
| Deferred revenue | 1,306 | 1,506 | ||||||
| Current portion of long term debt | 2,948 | 1,481 | ||||||
| Total current liabilities | 8,393 | 6,014 | ||||||
| Long term liabilities | 1,634 | 1,445 | ||||||
| Commitments and contingencies (See Note 7) | - | - | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.001 par value, 75,000,000 shares authorized, | ||||||||
| 11,679,860 and 11,827,458 shares issued and outstanding, respectively | 12 | 12 | ||||||
| Additional paid-in capital | 204,582 | 205,280 | ||||||
| Accumulated other comprehensive loss | (39 | ) | (44 | ) | ||||
| Accumulated deficit | (202,558 | ) | (205,703 | ) | ||||
| Total stockholders' equity (deficit) | 1,997 | (455 | ) | |||||
| Total liabilities and stockholders' equity | $ | 12,024 | $ | 7,004 | ||||
| CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| (In Thousands, Except Share and Per Share Data) |
| Three Months Ended | ||||||||
| January 31, | ||||||||
| 2012 | 2013 | |||||||
| Revenue: | ||||||||
| Product | $ | 1,112 | $ | 1,918 | ||||
| IP license, royalty and other | 1,467 | 1,633 | ||||||
| Total revenue | 2,579 | 3,551 | ||||||
| Cost of revenue: | ||||||||
| Product | 81 | 194 | ||||||
| IP license, royalty and other | 236 | 754 | ||||||
| Total cost of revenue | 317 | 948 | ||||||
| Gross profit | 2,262 | 2,603 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing | 1,409 | 1,960 | ||||||
| Research and development | 2,757 | 2,857 | ||||||
| General and administrative | 762 | 876 | ||||||
| Amortization of intangible assets | 47 | - | ||||||
| Total operating expenses | 4,975 | 5,693 | ||||||
| Loss from operations | (2,713 | ) | (3,090 | ) | ||||
| Interest expense | (50 | ) | (54 | ) | ||||
| Other expense | 14 | (1 | ) | |||||
| Net loss | $ | (2,749 | ) | $ | (3,145 | ) | ||
| Basic and diluted net loss per share | $ | (0.25 | ) | $ | (0.27 | ) | ||
| Basic and diluted average common shares outstanding | 10,974,049 | 11,819,003 | ||||||
| CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (Unaudited) |
| (In thousands) |
| Three Months Ended | ||||||||
| January 31, | ||||||||
| 2012 | 2013 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,749 | ) | $ | (3,145 | ) | ||
| Adjustments to reconcile net loss to net cash used in | ||||||||
| operating activities: | ||||||||
| Depreciation | 161 | 201 | ||||||
| Amortization of intangible assets | 47 | - | ||||||
| Gain on disposal of property and equipment | (15 | ) | - | |||||
| Stock-based compensation | 763 | 383 | ||||||
| Provision for doubtful accounts receivable | 33 | (5 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (304 | ) | 570 | |||||
| Inventory | (162 | ) | (29 | ) | ||||
| Prepaid expenses and other assets | 26 | (37 | ) | |||||
| Accounts payable | (1,237 | ) | (102 | ) | ||||
| Accrued expenses | (468 | ) | (706 | ) | ||||
| Deferred revenue | 665 | 264 | ||||||
| Net cash used in operating activities | (3,240 | ) | (2,606 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (119 | ) | (119 | ) | ||||
| Purchase of held-to-maturity investments | (185 | ) | - | |||||
| Maturity of held-to-maturity investments | 1,578 | - | ||||||
| Net cash provided by (used in) investing activities | 1,274 | (119 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock, net of expenses | 34 | 2 | ||||||
| Proceeds from borrowing on debt | 2,000 | - | ||||||
| Repayment of debt | - | (1,720 | ) | |||||
| Net cash provided by (used in) financing activities | 2,034 | (1,718 | ) | |||||
| Effect of foreign exchange rate on cash and cash equivalents | (177 | ) | 4 | |||||
| Net decrease in cash and cash equivalents | (109 | ) | (4,439 | ) | ||||
| Cash and cash equivalents, beginning of period | 7,336 | 6,895 | ||||||
| Cash and cash equivalents, end of period | $ | 7,227 | $ | 2,456 | ||||