Qualstar Reports 20.8% Increase in Revenue
and a 500% Increase in Net Income
Qualstar Corporation (NASDAQ: 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, 2018.
Quarter Ended March 31, 2018 Financial Results
Revenues for the quarter ended March 31, 2018 were $2.9 million,
compared with $2.4 million for the quarter ended March 31, 2017, an
increase of $0.5 million or 20.8%. Income from operations for the
quarter ended March 31, 2018 was $0.6 million compared with $0.1
million for the quarter ended March 31, 2017, an increase of $0.5
million or 500%. Net income per basic share for the quarter ended
March 31, 2018 was $0.29 and $0.03 for the quarter ended March 31,
2017. Net income per diluted share for the quarter ended March 31,
2018 was $0.28 and $0.03 for the quarter ended March 31, 2017.
Data Storage segment revenues were $1.6 million for the quarter
ended March 31, 2018, compared with $0.7 million for the same
period last year, an increase of $0.9 million or 128.6%, primarily
due to the increased product development service revenue received
from our partnership with Sony Imaging Products & Solutions for
the development of an enterprise class optical disk archive
library. Power supply segment revenues were $1.3 million for the
quarter, compared with $1.7 million in the quarter ended March 31,
2017, a decrease of $0.4 million, or (23.5)%, due to delayed order
deliveries caused by a global electronic component shortage.
Gross margin was 48.3% of revenues or $1.4 million for the
quarter ended March 31, 2018, an increase from the gross margin of
37.5% of revenues or $0.9 million for the quarter ended March 31,
2017. Operating expenses for the three months ended March 31, 2018
were $0.8 million or 27.6% of revenues, and $0.8 million, or 33.3%
of revenues for the three months ended March 31, 2017.
Steven N. Bronson, Chief Executive Officer and President of
Qualstar, said, “We are delighted with our solid financial results
for the first quarter of 2018. We benefited from an increase in
revenues from data hardware sales and product development services,
which revenues were partially offset by a decline in power supply
revenues caused by component shortages. We expect our product
development services revenues and income to vary in future periods
based upon the timing of projects and our completion of project
milestones. We continue to gain traction in expanding our data
storage partners and momentum in the custom power supply space.”
Mr. Bronson added, “We continue to pursue new product opportunities
and acquisitions.”
Cash, cash equivalents and restricted cash increased $1.5
million for the quarter ended March 31, 2018 to $5.3 million
compared to $3.8 million at March 31, 2017.
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, 2017, 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).
QUALSTAR CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(In thousands, except per share
data)
Three Months Ended
March 31,
2018 2017 Net revenues $ 2,935 $ 2,439 Cost of
goods sold 1,507 1,549 Gross profit
1,428 890 Operating expenses:
Engineering 121 186 Sales and marketing 295 247 General and
administrative 422 399 Total operating
expenses 838 832 Income from operations
590 58 Other expenses - - Income before
income taxes 590 58 Provision for income taxes -
- Net Income $ 590 $ 58 Earnings per
share: Basic $ 0.29 $ 0.03 Diluted $ 0.28
$ 0.03 Shares used in per share calculation: Basic
2,048 2,042 Diluted 2,101
2,042
QUALSTAR CORPORATION AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share
amounts)
March 31,
2018
December 31,
2017
(Unaudited) Assets Current assets: Cash and cash
equivalents $ 5,231 $ 4,698 Restricted cash 100 100 Accounts
receivables, net 1,979 1,802 Inventories, net 1,611 1,564 Prepaid
expenses and other current assets 173
163 Total current assets 9,094 8,327
Non-current assets: Property and equipment, net 141 172 Other
assets 67 68 Total assets $ 9,302
$ 8,567
Liabilities and Shareholders’
Equity Current liabilities: Accounts payable $ 803 $ 1,065
Accrued payroll and related liabilities 167 173 Deferred service
revenue, short-term 1,234 834 Other accrued liabilities 439
454 Total current liabilities 2,643
2,526 Long-term liabilities: Other long-term
liabilities 52 52 Deferred service revenue 87
93 Total long-term liabilities 139
145 Total liabilities 2,782
2,671 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 2,048,118 at March 31, 2018 and 2,042,019 shares at
December 31, 2017 19,514 19,480 Accumulated deficit (12,994
) (13,584 ) Total shareholders’ equity 6,520
5,896 Total liabilities and shareholders’
equity $ 9,302 $ 8,567
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version on businesswire.com: https://www.businesswire.com/news/home/20180508006583/en/
Qualstar CorporationSteven N. BronsonChief Executive
Officer805-617-4419IR@Qualstar.com
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