Overland Storage (NASDAQ: OVRL), a trusted global provider of
effortless data management and data protection solutions across the
data lifecycle, today reported financial results for its fiscal
2013 second quarter ended December 31, 2012.
"During the second fiscal quarter, we experienced strong demand,
compared to the preceding quarter, which was reflected in our unit
sales across all product lines including a 34 percent increase in
SnapServer, a 30 percent increase in NEO Tape Libraries, and a 21
percent increase in SnapSAN," said Eric Kelly, President and CEO of
Overland Storage. "In addition, we achieved 42 percent sequential
revenue growth in Europe. With the release of our new clustered NAS
product, SnapScale X2™, last October, we have significantly
expanded our total addressable market, and we continue to see a
growing pipeline of new primary storage opportunities generated by
our SnapSAN and SnapScale X2 clustered NAS solutions. In addition,
we were pleased to announce today a $14.25 million financing
comprised of convertible notes and equity. We plan to use this
additional capital to fund further growth and capitalize on the
substantial opportunities we see ahead."
Second Quarter Fiscal 2013 Financial
Results:
- Net revenue for the second quarter of fiscal 2013 was $12.6
million, up 8% sequentially from $11.7 million for the first
quarter of fiscal 2013, and down 17% from $15.1 million in the
second quarter of fiscal 2012.
- Product revenue for the second quarter of fiscal 2013 was $7.8
million, up 18% sequentially from $6.6 million for the first
quarter of fiscal 2013, and down 14% from $9.1 million in the
second quarter of fiscal 2012.
- Gross margins of 36.5% for the second quarter of fiscal 2013
were up 280 basis points sequentially from 33.7% in the first
quarter of fiscal 2013, and up over 300 basis points from 33.2% in
the second fiscal quarter of 2012.
- Operating expenses for the second quarter of fiscal 2013 were
$8.7 million, compared to $8.6 million in the first quarter of
fiscal 2013 and $9.3 million for the second quarter of fiscal
2012.
- Depreciation and amortization was $0.3 million in the second
quarter of fiscal 2013 compared to $0.3 million in the first fiscal
quarter of 2013 and $0.4 million in the second quarter of fiscal
2012.
- Stock compensation expense was $1.3 million in the second
quarter of fiscal 2013, compared to $1.3 million for the first
quarter of fiscal 2013 and $1.4 million for the second quarter of
fiscal 2012.
- Net loss for the second fiscal quarter of 2013 was $4.3
million, or a loss of $0.15 per share, compared to a net loss of
$4.9 million, or a loss of $0.17 per share, in the first quarter of
fiscal 2013 and a net loss of $4.3 million, or a loss of $0.18 per
share, in the second quarter of fiscal 2012.
- Total cash and cash equivalents at December 31, 2012 was $3.2
million, compared to $10.5 million at June 30, 2012. At December
31, 2012, the Company had $3.5 million outstanding under its credit
facility.
Product Developments:
- Released new clustered NAS product SnapScale X2™ in October
2012, significantly expanding the company's addressable market
opportunity to include the $14 billion scale-out NAS market.
- Released 10GbE for SnapScale X2 clustered NAS solutions.
- First to market and first to ship LTO6 drives in NEO Series
tape product portfolio.
- Granted U.S patent covering clustered file system technology
for large-scale computer file storage.
Patent Litigation: Based on the United
States International Trade Commission's (ITC) evaluation of its
'581 mail slot patent, Overland filed a petition on November 8,
2012 arguing that claims 10, 12 and 16 meet the new definition of
"linear array" put forward by the Commission, and thus the ITC now
should decide for the first time whether the BDT products include
all the other elements of these claims. If the ITC remands the '581
infringement issue on this basis, the Administrative Law Judge
could find BDT's products infringe claims 10, 12 and 16, which
Overland believes would result in BDT no longer being allowed to
ship products with mail slots into the United States.
Overland reported on October 26, 2012 that the ITC released a
Notice of Commission Decision in the infringement action filed by
Overland Storage against IBM, Dell and BDT. Overland has previously
reported that its ITC and District Court actions against IBM and
Dell have been resolved by settlement. The Notice of Commission
Decision makes several key findings regarding Overland Storage's
U.S. Patent No. 6,328,766, which relates to partitioning media
elements in automated media devices, and its U.S. Patent No.
6,353,581, which relates to the "mail slot" feature in automated
media devices. Overland views this decision by the full Commission
as beneficial to pursuing patent suits in civil court and another
step in the process of proving that BDT and others in the data
storage industry have been using Overland's intellectual property
without permission. The company's infringement case against BDT and
its affiliates continues and Overland plans to pursue monetary
damages against BDT in District Court.
Investor Conference Call: Overland will
host an investor conference call today, Wednesday, February 13, at
5:00 pm ET (2:00 pm PT) to discuss the Company's second quarter
fiscal 2013 financial results. To access the call dial (888)
846-5003 (+1 (480) 629-9856 outside the United States) and when
prompted provide the pass code "Overland Storage" to the operator.
Participants are asked to call the assigned number approximately 10
minutes before the conference call begins. In addition, a live and
archived webcast of the conference call will be available over the
Internet at www.overlandstorage.com in the Investor Relations
section. A replay of the conference call will also be available via
telephone by dialing (800) 406-7325 (+1 (303) 590-3030 outside the
United States) and entering access code, 4595341#, beginning 8:00
p.m. ET on February 13, 2013 through 11:59 p.m. ET on February 20,
2013.
About Overland Storage Overland Storage is
a trusted global provider of effortless data management and data
protection solutions across the data lifecycle. By providing an
integrated range of technologies and services for primary,
nearline, offline, archival and cloud data storage, Overland makes
it easy and cost effective to manage different tiers of information
over time. Overland SnapServer®, SnapSAN™, NEO® and REO® solutions
are available through a select network of value added resellers and
system integrators. For more information, visit
http://www.overlandstorage.com/.
Safe Harbor Statement Except for the
factual statements made herein, the information contained in this
news release consists of forward-looking statements that involve
risks, uncertainties and assumptions that are difficult to predict.
Words and expressions reflecting optimism, satisfaction or
disappointment with current prospects, as well as words such as
"believes," "hopes," "intends," "estimates," "expects," "projects,"
"plans," "anticipates" and variations thereof, or the use of future
tense, identify forward-looking statements, but their absence does
not mean that a statement is not forward-looking. Such
forward-looking statements are not guarantees of performance and
our actual results could differ materially from those contained in
such statements. Factors that could cause or contribute to such
differences include, but are not limited to: our ability to
maintain and increase sales volumes of our products; our ability to
continue to aggressively control costs and operating expenses; our
ability to achieve the intended cost savings and maintain quality
with our new manufacturing partner; our ability to generate cash
from operations; the ability of our suppliers to provide an
adequate supply of components for our products at prices consistent
with historical prices; our ability to raise outside capital and to
repay our debt as it comes due; our ability to introduce new
competitive products and the degree of market acceptance of such
new products; the timing and market acceptance of new products
introduced by our competitors; our ability to maintain strong
relationships with branded channel partners; our ability to
maintain the listing of our common stock on the NASDAQ Capital
Market; customers', suppliers' and creditors' perceptions of our
continued viability; rescheduling or cancellation of customer
orders; loss of a major customer; our ability to enforce our
intellectual property rights and protect our intellectual property;
general competition and price measures in the market place;
unexpected shortages of critical components; worldwide information
technology spending levels; and general economic conditions.
Reference is also made to other factors detailed from time to time
in our periodic reports filed with the Securities and Exchange
Commission. These forward-looking statements speak only as of the
date of this release and we undertake no obligation to publicly
update any forward-looking statements to reflect new information,
events or circumstances after the date of this release.
Connect with Overland Storage: Read the
Overland blog: http://overlandstorage.com/blog Follow Overland on
Twitter: http://www.twitter.com/OverlandStorage Visit Overland on
Facebook: http://www.facebook.com/OverlandStorage
Overland Storage, SnapSAN, SnapServer, NEO Series, REO Series
and the Overland logo are trademarks of Overland Storage, Inc.,
that may be registered in some jurisdictions. All other trademarks
used are owned by their respective owners.
OVERLAND STORAGE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
(Unaudited) (Unaudited)
Net revenue $ 12,599 $ 15,105 $ 24,310 $ 29,180
Cost of revenue 8,002 10,083 15,770 19,571
--------- --------- --------- ---------
Gross profit 4,597 5,022 8,540 9,609
--------- --------- --------- ---------
Operating expenses:
Sales and marketing 4,353 4,073 8,478 8,538
Research and development 1,591 2,151 3,188 4,634
General and administrative 2,765 3,048 5,649 6,129
--------- --------- --------- ---------
Total expenses 8,709 9,272 17,315 19,301
--------- --------- --------- ---------
Operating loss (4,112) (4,250) (8,775) (9,692)
Interest income - - 3 -
Interest expense (46) (26) (88) (35)
Other income (expense), net (47) (8) (159) 207
--------- --------- --------- ---------
Loss before income taxes (4,205) (4,284) (9,019) (9,520)
Provision for income taxes 68 8 117 127
--------- --------- --------- ---------
Net loss $ (4,273) $ (4,292) $ (9,136) $ (9,647)
========= ========= ========= =========
Net loss per share:
Basic and diluted $ (0.15) $ (0.18) $ (0.33) $ (0.42)
========= ========= ========= =========
Shares used in computing net
loss per share:
Basic and diluted 28,339 23,382 28,108 23,219
OVERLAND STORAGE, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Three Months
Ended Ended
December 31, September 30,
------------- -------------
2012 2012
------------- -------------
(Unaudited) (Unaudited)
Net revenue $ 12,599 $ 11,711
Cost of revenue 8,002 7,768
------------- -------------
Gross profit 4,597 3,943
------------- -------------
Operating expenses:
Sales and marketing 4,353 4,125
Research and development 1,591 1,597
General and administrative 2,765 2,884
------------- -------------
Total expenses 8,709 8,606
------------- -------------
Operating loss (4,112) (4,663)
Interest income - 3
Interest expense (46) (42)
Other income (expense), net (47) (112)
------------- -------------
Loss before income taxes (4,205) (4,814)
Provision for income taxes 68 49
------------- -------------
Net loss $ (4,273) $ (4,863)
============= =============
Net loss per share:
Basic and diluted $ (0.15) $ (0.17)
============= =============
Shares used in computing net loss per share:
Basic and diluted 28,339 27,876
OVERLAND STORAGE, INC.
SELECTED BALANCE SHEETS INFORMATION
(In thousands)
December 31, June 30,
2012 2012
------------- -------------
(Unaudited) (Unaudited)
ASSETS
Cash and cash equivalents $ 3,163 $ 10,522
Accounts receivable, net 7,669 9,193
Inventories 10,375 10,658
Other current assets 2,886 3,779
------------- -------------
Total current assets 24,093 34,152
Property and equipment, net 1,875 1,446
Other assets 2,342 2,662
------------- -------------
Total assets $ 28,310 $ 38,260
============= =============
LIABILITIES & EQUITY (DEFICIT)
Current liabilities $ 26,828 $ 26,759
Long-term debt - 3,500
Other long-term liabilities 4,408 4,960
Shareholders' equity (deficit) (2,926) 3,041
------------- -------------
Total liabilities and equity (deficit) $ 28,310 $ 38,260
============= =============
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Investor Relations Contact: Charles Messman or Todd
Kehrli MKR Group Inc. 323-468-2300 ovrl@mkr-group.com
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