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Qualstar Reports Fiscal 2019 First Quarter Results

SIMI VALLEY, Calif.--(BUSINESS WIRE)--

Qualstar Corporation (QBAK), a leading manufacturer of data storage solutions and high-efficiency power supplies, today announced its financial results for the three months ended March 31, 2019.

(All amounts are in thousands, except per share data):

Results for the Three Months Ended March 31, 2019 vs. 2018

  • Net revenue decreased 2.7% to $2,856 from $2,935
  • Total operating expenses decreased 6.4% to $784 from $838
  • Net income of $141 or $0.07 per basic and diluted share vs. net income of $590 or $0.29 per basic and $0.28 per diluted share

Highlights for the Three Months Ended March 31, 2019

  • Strong balance sheet and no debt
  • Cash, restricted cash and cash equivalents decreased by 2.4% to $4,765 from $4,881 as of December 31, 2018
  • Data storage product revenue grew 51.7% to $783 from $516
  • Power supply revenue grew 4.2% to 1,370 from $1,315

“We are pleased with the growth in our Data Storage Product segment. We continue to expand our customer base and market share by providing a quality and competitive product offering,” according to Steven N. Bronson, President and CEO. “Our strong financial position enables us to support our channel partners by maintaining ample inventory to meet their needs in a timely fashion,” he continued.

Under the Stock Repurchase Program, 58,734 shares were repurchased during the three months ended March 31, 2019 and as of May 2, 2019 a total of 89,097 shares have been purchased since the program began. The program expires December 5, 2019.

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. 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. 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. In particular, the following factors, among others, could cause actual or future results to differ materially from those suggested by the forward-looking statements: Qualstar’s ability to successfully execute on its strategic plan and meet its long-term financial goals; Qualstar’s ability to successfully implement and recognize cost savings; Qualstar’s ability to develop and commercialize new products; industry and customer adoption and acceptance of Qualstar’s new products; Qualstar’s ability to increase sales of its products; the rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; adverse changes in market demand for Qualstar’s products; increased competition and pricing pressure on Qualstar’s products; and the risks related to actions of activist shareholders, including the amount of related costs.

For further information on these and other cautionary statements, 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 period ending December 31, 2018, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections 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).

-Financial Tables to Follow-

 

QUALSTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)

   

 

Three Months Ended
March 31,

2019 2018
Net revenues $ 2,856   $ 2,935
Cost of goods sold   1,936       1,507
Gross profit   920       1,428
Operating expenses:
Engineering 123 121
Sales and marketing 308 295
General and administrative   353       422
Total operating expenses   784       838
Income from operations 136 590
Other income   5       -
Income before income taxes 141 590
Provision for income taxes   -       -
Net Income $ 141     $ 590
Earnings per share:
Basic $ 0.07     $ 0.29
Diluted $ 0.07     $ 0.28
Shares used in per share calculation:
Basic   1,971       2,048
Diluted   1,971       2,101
 
 

QUALSTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

   

March 31,
2019

 

December 31,
2018

(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 4,665 $ 4,781
Restricted cash 100 100
Accounts receivables, net 1,745 1,809
Inventories, net 2,775 2,897
Prepaid expenses and other current assets   188       180
Total current assets   9,473       9,767
Non-current assets:
Property and equipment, net 99 112
Right-of-use 363 -
Other assets   132       119
Total non-current assets   594       231
Total assets $ 10,067     $ 9,998
 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable $ 943 $ 1,023
Accrued payroll and related liabilities 175 185
Deferred service revenue, short-term 740 736
Lease liabilities, current 229 -
Other accrued liabilities   524       559
Total current liabilities   2,611       2,503
Long-term liabilities:
Other long-term liabilities 40 40
Lease liabilities, long term 152 -
Deferred service revenue   124       127
Total long-term liabilities   316       167
Total liabilities   2,927       2,670
 
Shareholders’ equity:

Preferred stock, no par value; 5,000,000 shares authorized; no shares
issued

- -

Common stock, no par value; 50,000,000 shares authorized, shares issued
and outstanding 1,971,283 at March 31, 2019 and 2,030,017 shares at
December 31, 2018

19,097 19,426
Accumulated deficit   (11,957 )     (12,098 )
Total shareholders’ equity   7,140       7,328  
Total liabilities and shareholders’ equity $ 10,067     $ 9,998  

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