Strong Third Quarter Non-GAAP
Earnings
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
- 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
- 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
- Net revenue increased 3.8% to $7,461
from $7,186
- Total operating expenses decreased 3.4%
to $2,876 from $2,977
- 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
- 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
- Cash provided by operations of $982 vs.
cash used by operations of $285
Highlights for the Three and Nine Months Ended September 30,
2017
- 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
- 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
- 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.
QUALSTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30, 2017 2016
2017 2016 Net revenues $ 2,755 $ 2,666
$ 7,461 $ 7,186 Cost of goods sold 1,697
1,905 4,616
5,002 Gross profit 1,058 761
2,845 2,184 Operating expenses:
Engineering 131 232 427 850 Sales and marketing 360 276 886 933
General and administrative 715 306
1,563 1,194 Total
operating expenses 1,206 814
2,876 2,977 Loss from operations
(148 ) (53 ) (31 ) (793 ) Other expenses -
- - (10 ) Loss
before income taxes (148 ) (53 ) (31 ) (803 ) Provision for income
taxes - - -
- Net Loss $ (148 ) $ (53 ) $
(31 ) $ (803 ) Loss per common share: Basic and diluted $
(0.07 ) $ (0.03 ) $ (0.02 ) $ (0.39 ) 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, December
31, 2017 2016 (Unaudited)
Assets Current assets: Cash and cash equivalents $ 4,663 $
3,691 Restricted cash 100 100 Accounts receivables, net 1,453 1,583
Inventories, net 1,082 1,360 Prepaid expenses and other current
assets 171 166 Total current assets
7,469 6,900 Non-current assets:
Property and equipment, net 172 286 Other assets 70
77 Total assets $ 7,711 $ 7,263
Liabilities and Shareholders’ Equity Current liabilities:
Accounts payable $ 902 $ 888 Accrued payroll and related
liabilities 206 222 Deferred service revenue, short term 850 787
Other accrued liabilities 378 359 Total
current liabilities 2,336 2,256 Long
term liabilities: Other long term liabilities 52 63 Deferred
service revenue 102 105 Total long term
liabilities 154 168 Total liabilities
2,490 2,424 Shareholders’
equity: Preferred stock, no par value; 5,000 shares authorized; no
shares issued - - 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 ) Total shareholders’ equity
5,221 4,839 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
September 30,
Nine Months Ended
September 30,
2017 2016 2017 2016 Net loss, as
reported $ (148 ) $ (53 ) $ (31 ) $ (803 )
Unusual or special items: Share-based compensation 413
- 413
2 Adjusted non-GAAP net income $ 265 $
(53 ) $ 382 $ (801 ) 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
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version on businesswire.com: http://www.businesswire.com/news/home/20171108006549/en/
Investor Relations:Qualstar CorporationSteven N.
BronsonChief Executive Officer805-617-4419IR@Qualstar.com
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