SIMI VALLEY, CA--(Marketwire -11/10/11)- Qualstar® Corporation (NASDAQ: QBAK - News), a manufacturer of automated tape storage solutions and high efficiency power supplies, today reported financial results for the first quarter of fiscal 2012 ended September 30, 2011.
Fiscal 2012 First Quarter Financial Results
Revenues for the first quarter of fiscal 2012 were $4.6 million, compared to $5.2 million for the same quarter of fiscal 2011, a decrease of $0.6 million or 11.8 percent. Income from operations was $13,000 compared to $120,000 in the first quarter of fiscal 2011. Net income was $57,000 or $0.00 per basic and diluted share, compared to a net income of $167,000, or $0.01 per basic and diluted share for the first quarter of fiscal 2011.
Tape library segment revenues were $2.4 million for the first quarter, compared to $3.2 million in the first quarter of fiscal 2011, a decrease of $0.8 million, or 24.9 percent. Power supply segment revenues were $2.2 million for the quarter, compared to $2.0 million in the prior year quarter, an increase of $0.2 million, or 9.3 percent.
Gross profit decreased to $1.7 million, or 37.1 percent of net revenues, for the three months ended September 30, 2011, from $2.1 million, or 40.3 percent of net revenues, for the three months ended September 30, 2010. The decrease in gross profit is attributed to a change in product mix.
Research and development ("R&D") expenses for the first quarter of fiscal 2012 were $648,000, or 14.0 percent of revenues, compared to $707,000 or 13.5 percent of revenues, for the first quarter of fiscal 2011. The decrease is due primarily to lower compensation expenses related to reductions in personnel. Sales and marketing expenses were $461,000, or 10.0 percent of revenues, compared to $636,000 or 12.1 percent of revenues, in the corresponding period last year. The decrease in sales and marketing expenses is attributed to lower compensation expenses related to reductions in personnel and lower advertising and promotion expenses. General and administrative expenses were $592,000 or 12.8 percent of revenues in the first quarter of fiscal 2012, compared to $649,000, or 12.4 percent of revenues, for the same period last year. The decrease in general and administrative expense is due to lower bad debt expenses.
Cash, cash equivalents and marketable securities were $21.7 million at September 30, 2011, Inventory, net of reserves, at September 30, 2011 was $6.2 million, compared to $5.7 million at June 30, 2011.
Commenting on the Company's business results, Bill Gervais, president and chief executive of Qualstar, said, "We're off to an encouraging start in fiscal 2012. Our first quarter results reflected an uptick in revenues and gross profit to a level sufficient to provide a small profit. We shipped 12 XLS units in the quarter with total XLS related revenue coming in at $1.0 million. And we benefitted from a pick-up in revenues from our new 10U, or RLS 8500 library series, as well as solid performance in our power supplies product line."
Qualstar Corporation Conference Call
Company management will hold a conference call to discuss its fiscal 2012 first quarter results on Thursday, November 10, 2011 at 2:00 p.m. Pacific standard time (5:00 p.m. Eastern). Investors are invited to listen to the call live via the Internet using the link under the "Investors" section at www.qualstar.com. Please go to the Website at least 15 minutes early to register, download and install any necessary audio software. A replay of the Webcast will be available after the live conference call. Additionally, participants can dial into the live conference call by calling 877-941-6009 or 480-629-9722. An audio replay will be available through November 17, 2011, by calling 800-406-7325 or 303-590-3030, and entering access code 4486870.
About Qualstar Corporation
Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company'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.
Forward-Looking Statements
Statements concerning the future business, operating results and financial condition of the Company are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations and are subject to a number of uncertainties that could cause actual performance and results to differ materially from the results discussed in the forward-looking statements. Factors that could affect the Company's actual results include the Company's ability to increase sales of its products; rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; and, adverse changes in market demand for its products. The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Further information on these and other potential factors that could affect the Company's financial results or condition are included in Qualstar's filings with the Securities and Exchange Commission. In particular, reference is made to the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2011, and to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of its Form 10-K.
-Financial Tables to Follow-
QUALSTAR CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Sept. 30,
2011 2010
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Net revenues $ 4,624 $ 5,241
Cost of goods sold 2,910 3,129
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Gross profit 1,714 2,112
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Operating expenses:
Research and development 648 707
Sales and marketing 461 636
General and administrative 592 649
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Total operating expenses 1,701 1,992
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Income from operations 13 120
Investment Income 44 47
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Income before income taxes 57 167
Benefit for income taxes - -
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Net income $ 57 $ 167
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Earnings per share:
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Basic and Diluted $ 0.00 $ 0.01
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Shares used to compute earnings per share:
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Basic and Diluted 12,253 12,253
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QUALSTAR CORPORATION
CONDENSED BALANCE SHEETS
(in thousands)
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Sept. 30, June 30,
2011 2011
ASSETS (Unaudited) (Audited)
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Current assets:
Cash and cash equivalents $ 3,731 $ 4,970
Marketable securities, short-term 9,192 10,713
Receivables, net of allowance for doubtful
accounts of $43 as of September 30, 2011 and $180
as of June 30, 2011 4,021 3,005
Inventories, net 6,167 5,673
Prepaid expenses and other current assets 399 312
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Total current assets 23,510 24,673
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Property and equipment, net 205 232
Marketable securities, long-term 8,802 6,981
Other assets 51 49
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Total assets $ 32,568 $ 31,935
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,744 $ 1,293
Accrued payroll and related liabilities 391 495
Other accrued liabilities 1,194 945
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Total current liabilities 3,329 2,733
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Other long-term liabilities 22 22
Commitments and contingencies
Shareholders' equity:
Common stock, no par value; 50,000 shares
authorized, 12,253 shares issued and outstanding
as of September 30, 2011 and June 30, 2011 18,870 18,869
Accumulated other comprehensive income 17 38
Retained earnings 10,330 10,273
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Total shareholders' equity 29,217 29,180
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Total liabilities and shareholders' equity $ 32,568 $ 31,935
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Nicki Andalon
Vice President & CFO
Qualstar Corporation
(805) 583-7744
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