Attached files
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| 8-K - FORM 8-K - QUALSTAR CORP | qbak20171108_8k.htm |
Exhibit 99.1
Qualstar Reports Fiscal 2017 Third Quarter Results
Strong Third Quarter Non-GAAP Earnings
SIMI VALLEY, Calif., November 8, 2017 — Qualstar Corporation (Nasdaq: QBAK), manufactures and markets data storage solutions and high-efficiency power supplies, today announced its financial results for the third fiscal quarter ended September 30, 2017.
(All amounts are in thousands, except per share data):
Results for the Three Months Ended September 30, 2017 vs. 2016
|
● |
Net revenue increased 3.3% to $2,755 from $2,666 |
|
● |
Total operating expenses increased 48.2% to $1,206 from $814 |
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● |
Net loss of $148 or ($0.07) per basic and diluted share vs. net loss of $53 or ($0.03) per basic and diluted share |
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● |
Non-GAAP net income of $265 or $0.13 per basic and diluted share vs. net loss of $53 or ($0.03) per basic and diluted share |
Results for the Nine Months Ended September 30, 2017 vs. 2016
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● |
Net revenue increased 3.8% to $7,461 from $7,186 |
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● |
Total operating expenses decreased 3.4% to $2,876 from $2,977 |
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● |
Net loss of $31 or ($0.02) per basic and diluted share vs. net loss of $803 or ($0.39) per basic and diluted share |
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● |
Non-GAAP net income of $382 or $0.19 per basic and diluted share vs. net loss of $801 or ($0.39) per basic and diluted share |
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● |
Cash provided by operations of $982 vs. cash used by operations of $285 |
Highlights for the Three and Nine Months Ended September 30, 2017
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● |
Solid balance statement, no debt and cash, restricted cash & cash equivalents increased by $972 to $4,763 from $3,791 as of December 31, 2016 |
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Increased gross profit margins for the three months ended September 30, 2017 from the same period last year by 9.9% and for the nine months ended September 30, 2017 by 7.7% from the same period last year |
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● |
Non-GAAP financial measures exclude the impact of stock-based compensation |
“We continue to make substantial progress in driving profitability and positioning our business for long term success. We expect to finish the year with revenue growth in both business units and solid bottom line results” said Steven N. Bronson, CEO and President of Qualstar.
About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. Qualstar is a leading provider of high efficiency and high density power supplies marketed under the N2Power™ brand, and of data storage systems marketed under the Qualstar™ brand. Our N2Power power supply products provide compact and efficient power conversion for a wide variety of industries and applications including, but not limited to, telecom, networking, broadcast, industrial, lighting, gaming and test equipment. Our Qualstar data storage products are used to provide highly scalable and reliable solutions to store and retrieve very large quantities of electronic data. Qualstar’s products are known throughout the world for high quality and Simply Reliable™ designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.
Cautionary Statement Concerning Forward-Looking Statements
Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements including our expectation that we will finish the year with revenue growth in both business units and solid bottom line results. These forward-looking statements are based upon the current expectations and beliefs of Qualstar's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For further information on these risks and uncertainties, please refer to the risk factors discussed in Qualstar’s filings with the U.S. Securities and Exchange Commission including, but not limited to, Qualstar’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of such Form 10-K, and any subsequently filed reports. All of Qualstar’s filings are available without charge through the SEC’s website (www.sec.gov) or from Qualstar’s website (www.qualstar.com). The information contained in this press release is as of the date of this press release. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Qualstar does not expect to, and disclaims any obligation to, publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Qualstar, however, reserves the right to update such statements or any portion thereof at any time for any reason.
Non-GAAP Financial Measures
The non-GAAP measures identified in this press release as well as in the supplementary information to this press release are not measures of performance under accounting principles generally accepted in the United States of America (“GAAP”). These measures should not be considered a substitute for, and the reader should also consider income from operations, net earnings, earnings per share and other measures of performance as defined by GAAP as indicators of our performance or profitability. Our non-GAAP measures may not be comparable to other similarly-titled captions of other companies due to differences in the method of calculation. We present results adjusted to exclude the effects of certain unusual or special items that would otherwise be included under U.S. GAAP, to aid in the comparisons with other periods. We may use Non-GAAP financial measures to determine performance-based compensation and management believes that this information may be useful to investors.
Investor Relations:
Steven N. Bronson
Chief Executive Officer
805-617-4419
IR@Qualstar.com
-Financial Tables to Follow-
QUALSTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
|
Three Months Ended |
Nine Months Ended |
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September 30, |
September 30, |
|||||||||||||||
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2017 |
2016 |
2017 |
2016 |
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Net revenues |
$ | 2,755 | $ | 2,666 | $ | 7,461 | $ | 7,186 | ||||||||
|
Cost of goods sold |
1,697 | 1,905 | 4,616 | 5,002 | ||||||||||||
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Gross profit |
1,058 | 761 | 2,845 | 2,184 | ||||||||||||
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Operating expenses: |
||||||||||||||||
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Engineering |
131 | 232 | 427 | 850 | ||||||||||||
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Sales and marketing |
360 | 276 | 886 | 933 | ||||||||||||
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General and administrative |
715 | 306 | 1,563 | 1,194 | ||||||||||||
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Total operating expenses |
1,206 | 814 | 2,876 | 2,977 | ||||||||||||
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Loss from operations |
(148 |
) |
(53 |
) |
(31 |
) |
(793 |
) |
||||||||
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Other expenses |
- | - | - | (10 |
) |
|||||||||||
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Loss before income taxes |
(148 |
) |
(53 |
) |
(31 |
) |
(803 |
) |
||||||||
|
Provision for income taxes |
- | - | - | - | ||||||||||||
|
Net Loss |
$ | (148 |
) |
$ | (53 |
) |
$ | (31 |
) |
$ | (803 |
) |
||||
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Loss per common share: |
||||||||||||||||
|
Basic and diluted |
$ | (0.07 |
) |
$ | (0.03 |
) |
$ | (0.02 |
) |
$ | (0.39 |
) |
||||
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Weighted average common shares outstanding: |
||||||||||||||||
|
Basic and diluted |
2,042 | 2,042 | 2,042 | 2,042 | ||||||||||||
QUALSTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
September 30, 2017 |
December 31, 2016 |
|||||||
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(Unaudited) |
||||||||
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Assets |
||||||||
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Current assets: |
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Cash and cash equivalents |
$ | 4,663 | $ | 3,691 | ||||
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Restricted cash |
100 | 100 | ||||||
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Accounts receivables, net |
1,453 | 1,583 | ||||||
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Inventories, net |
1,082 | 1,360 | ||||||
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Prepaid expenses and other current assets |
171 | 166 | ||||||
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Total current assets |
7,469 | 6,900 | ||||||
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Non-current assets: |
||||||||
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Property and equipment, net |
172 | 286 | ||||||
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Other assets |
70 | 77 | ||||||
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Total assets |
$ | 7,711 | $ | 7,263 | ||||
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Liabilities and Shareholders’ Equity |
||||||||
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Current liabilities: |
||||||||
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Accounts payable |
$ | 902 | $ | 888 | ||||
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Accrued payroll and related liabilities |
206 | 222 | ||||||
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Deferred service revenue, short term |
850 | 787 | ||||||
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Other accrued liabilities |
378 | 359 | ||||||
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Total current liabilities |
2,336 | 2,256 | ||||||
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Long term liabilities: |
||||||||
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Other long term liabilities |
52 | 63 | ||||||
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Deferred service revenue |
102 | 105 | ||||||
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Total long term liabilities |
154 | 168 | ||||||
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Total liabilities |
2,490 | 2,424 | ||||||
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Shareholders’ equity: |
||||||||
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Preferred stock, no par value; 5,000 shares authorized; no shares issued |
- | - | ||||||
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Common stock, no par value; 50,000 shares authorized, 2,042 shares issued and outstanding as of September 30, 2017 and December 31, 2016 |
19,476 | 19,063 | ||||||
|
Accumulated deficit |
(14,255 |
) |
(14,224 |
) |
||||
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Total shareholders’ equity |
5,221 | 4,839 | ||||||
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Total liabilities and shareholders’ equity |
$ | 7,711 | $ | 7,263 | ||||
QUALSTAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION
RECONCILIATION OF U.S. GAAP NET INCOME TO NON-U.S. GAAP NET INCOME
(in thousands, unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
|
Net loss, as reported |
$ | (148 |
) |
$ | (53 |
) |
$ | (31 |
) |
$ | (803 |
) |
||||
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Unusual or special items: |
||||||||||||||||
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Share-based compensation |
413 | - | 413 | 2 | ||||||||||||
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Adjusted non-GAAP net income |
$ | 265 | $ | (53 |
) |
$ | 382 | $ | (801 |
) |
||||||
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Adjusted non-GAAP income (loss) per common share: |
||||||||||||||||
|
Basic and diluted |
$ | 0.13 | $ | (0.03 |
) |
$ | 0.19 | $ | (0.39 |
) |
||||||
|
Weighted average common shares outstanding: |
||||||||||||||||
|
Basic and diluted |
2,042 | 2,042 | 2,042 | 2,042 | ||||||||||||