Sphere 3D Reports Third Quarter Fiscal Year 2019 Financial Results
November 14 2019 - 6:03PM
Sphere 3D Corp. (NASDAQ: ANY), a company delivering
containerization, virtualization, and data management solutions,
today reported financial results for its third quarter ended
September 30, 2019.
On November 13, 2018, the Company closed the
divestiture of its Overland subsidiary and related business. The
financial results of Overland for the third quarter and nine months
ended 2018 have been reflected in the Company’s consolidated
statements of operations as discontinued operations. Results below
exclude discontinued operations. Our results for the third quarter
and nine months ended September 30, 2019 were as follows:
Third Quarter 2019 Financial
Results:
- Revenue for the third quarter of
2019 was $1.4 million, compared to $1.3 million for the third
quarter of 2018.
- Gross margin for the third quarter
of 2019 was 35.5%, compared to 14.7% for the third quarter of
2018.
- Operating expenses for the third
quarter of 2019 were $1.8 million, compared to $2.8 million for the
third quarter of 2018.
- Share-based compensation expense
for the third quarter of 2019 was $0.2 million, compared to $0.3
million for the third quarter of 2018. Depreciation and
amortization was $0.3 million in both the third quarter of 2019 and
2018.
- Other income for the third quarter
of 2019 was $2.3 million. The majority of which related to
agreements entered into with certain executives of the Company and
the Company’s Board of Directors to extinguish certain accrued
liabilities. The Company wrote off $1.7 million of outstanding
liabilities and recorded a gain on forgiveness of liabilities.
- Net Income from continuing
operations for the third quarter of 2019 was $0.9 million, or a net
income of $0.33 per share, compared to a net loss from continuing
operations of $3.1 million, or a net loss of $1.61 per share, for
the third quarter of 2018.
- Net loss from discontinued
operations for the third quarter of 2018 was $1.8 million, or a net
loss of $0.92 per share.
Nine Months Ended September 30, 2019
Financial Results:
- Revenue for the first nine months
of 2019 was $4.5 million, compared to $6.4 million for the first
nine months of 2018.
- Gross margin for the first nine
months of 2019 was 31.9%, compared to 17.4% for the first nine
months of 2018.
- Operating expenses for the first
nine months of 2019 were $6.0 million, compared to $11.1 million
for the first nine months of 2018.
- Share-based compensation expense
for the first nine months of 2019 was $0.5 million, compared to
$1.5 million for the first nine months of 2018. Depreciation and
amortization was $0.8 million in the first nine months of 2019,
compared to $3.3 million for the first nine months of 2018.
- Other income for the first nine
months of 2019 was $2.3 million. The majority of which related to
agreements entered into with certain executives of the Company and
the Company’s Board of Directors to extinguish certain accrued
liabilities. The Company wrote off $1.7 million of outstanding
liabilities and recorded a gain on forgiveness of liabilities.
- Net loss from continuing operations
for the first nine months of 2019 was $2.6 million, or a net loss
of $1.09 per share, compared to a net loss from continuing
operations of $12.2 million, or a net loss of $8.00 per share, in
the first nine months of 2018.
- Net loss from discontinued
operations for the first nine months of 2018 was $5.4 million, or a
net loss of $3.55 per share.
Investor Conference Call:
Sphere 3D will not be hosting a third quarter fiscal year 2019
earnings conference call.
About Sphere 3D:Sphere 3D
Corp. (NASDAQ: ANY) delivers containerization, virtualization,
and data management solutions via hybrid cloud, cloud and
on-premise implementations through its global reseller network and
professional services organization. Sphere 3D has a portfolio
of brands, including HVE ConneXions, UCX ConneXions, and
SnapServer® dedicated to helping customers achieve their IT goals.
For more information, visit www.sphere3d.com. Follow us on
Twitter @Sphere3D and @HVEconneXions
Safe Harbor Statement: This
press release contains forward-looking statements that involve
risks, uncertainties, and assumptions that are difficult to
predict. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking
statements as a result of risks and uncertainties including,
without limitation, our inability to obtain additional debt or
equity financing; any increase in our cash needs; the
Company’s ability to maintain listing with the NASDAQ Capital
Market; market adoption and performance of our products; the level
of success of our collaborations and business partnerships;
possible actions by customers, partners, suppliers, competitors or
regulatory authorities; and other risks detailed from time to time
in our periodic reports contained in our Annual Information Form
and other filings with Canadian securities regulators
(www.sedar.com) and in prior periodic reports filed with
the United States Securities and Exchange Commission
(www.sec.gov). Sphere 3D undertakes no obligation to
update any forward-looking statement, whether written or oral, that
may be made from time to time, whether as a result of new
information, future developments or otherwise, except as required
by law.
Investor Contact:Kurt
Kalbfleisch+1-858-495-4211Investor.relations@sphere3d.com
|
SPHERE 3D CORP. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
Revenue |
|
$ |
1,368 |
|
|
$ |
1,306 |
|
|
$ |
4,461 |
|
|
$ |
6,377 |
|
Cost of revenue |
|
|
883 |
|
|
|
1,114 |
|
|
|
3,036 |
|
|
|
5,269 |
|
Gross profit |
|
|
485 |
|
|
|
192 |
|
|
|
1,425 |
|
|
|
1,108 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
550 |
|
|
|
885 |
|
|
|
1,494 |
|
|
|
2,406 |
|
Research and development |
|
|
460 |
|
|
|
486 |
|
|
|
1,673 |
|
|
|
2,496 |
|
General and administrative |
|
|
801 |
|
|
|
1,465 |
|
|
|
2,814 |
|
|
|
6,156 |
|
|
|
|
1,811 |
|
|
|
2,836 |
|
|
|
5,981 |
|
|
|
11,058 |
|
Loss from operations |
|
|
(1,326 |
) |
|
|
(2,644 |
) |
|
|
(4,556 |
) |
|
|
(9,950 |
) |
Interest expense - related party |
|
|
(41 |
) |
|
|
(494 |
) |
|
|
(327 |
) |
|
|
(2,264 |
) |
Interest expense |
|
|
(9 |
) |
|
|
- |
|
|
|
(24 |
) |
|
|
- |
|
Other income (expense), net |
|
|
2,261 |
|
|
|
53 |
|
|
|
2,283 |
|
|
|
(32 |
) |
Net income (loss) from continuing operations |
|
|
885 |
|
|
|
(3,085 |
) |
|
|
(2,624 |
) |
|
|
(12,246 |
) |
Net loss from discontinued operations |
|
|
- |
|
|
|
(1,767 |
) |
|
|
- |
|
|
|
(5,431 |
) |
Net income (loss) |
|
$ |
885 |
|
|
$ |
(4,852 |
) |
|
$ |
(2,624 |
) |
|
$ |
(17,677 |
) |
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.33 |
|
|
$ |
(1.61 |
) |
|
$ |
(1.09 |
) |
|
$ |
(8.00 |
) |
Discontinued operations |
|
|
- |
|
|
|
(0.92 |
) |
|
|
- |
|
|
|
(3.55 |
) |
Net income (loss) per share basic |
|
$ |
0.33 |
|
|
$ |
(2.53 |
) |
|
$ |
(1.09 |
) |
|
$ |
(11.55 |
) |
Net income (loss) per share basic diluted |
|
$ |
0.10 |
|
|
$ |
(2.53 |
) |
|
$ |
(1.09 |
) |
|
$ |
(11.55 |
) |
Shares used in computing net income (loss) per share: |
|
|
|
|
|
|
|
|
Basic |
|
|
2,668,311 |
|
|
|
1,916,523 |
|
|
|
2,403,373 |
|
|
|
1,531,067 |
|
Diluted |
|
|
8,909,761 |
|
|
|
1,916,523 |
|
|
|
2,403,373 |
|
|
|
1,531,067 |
|
|
|
|
|
|
|
|
|
|
|
SPHERE 3D CORP. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands) |
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
(Unaudited) |
|
(Unaudited) |
ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
129 |
|
|
$ |
341 |
|
Accounts receivable, net |
|
|
777 |
|
|
|
1,142 |
|
Inventories |
|
|
825 |
|
|
|
1,230 |
|
Other current assets |
|
|
389 |
|
|
|
784 |
|
Total current assets |
|
|
2,120 |
|
|
|
3,497 |
|
Investment in affiliate |
|
|
2,100 |
|
|
|
2,100 |
|
Property and equipment, net |
|
|
3 |
|
|
|
6 |
|
Intangible assets, net |
|
|
2,613 |
|
|
|
3,348 |
|
Goodwill |
|
|
1,385 |
|
|
|
1,385 |
|
Other assets |
|
|
936 |
|
|
|
950 |
|
Total assets |
|
$ |
9,157 |
|
|
$ |
11,286 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|
|
|
|
Current liabilities |
|
$ |
8,185 |
|
|
$ |
9,639 |
|
Redeemable preferred shares |
|
|
1,019 |
|
|
|
6,571 |
|
Other long-term liabilities |
|
|
713 |
|
|
|
683 |
|
Total shareholders' deficit |
|
|
(760 |
) |
|
|
(5,607 |
) |
Total liabilities and shareholders' deficit |
|
$ |
9,157 |
|
|
$ |
11,286 |
|
|
|
|
|
|
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