Overland Storage Reports First Quarter Fiscal 2014 Results
November 13 2013 - 3:05PM
Marketwired
Overland Storage Reports First Quarter Fiscal 2014 Results
SAN DIEGO, CA--(Marketwired - Nov 13, 2013) - Overland
Storage (NASDAQ: OVRL), a trusted global provider of unified data
management and data protection solutions across the data lifecycle,
today reported financial results for its fiscal 2014 first quarter
ended September 30, 2013.
"We are excited about our agreement to acquire Tandberg Data,
which would create a company which had approximately $110 million
in annual revenue in our last fiscal year and would provide
substantial resources and cost synergies, enabling us to compete
more effectively in the marketplace and move toward a clearer path
to profitability following integration of the two companies," said
Eric Kelly, President and CEO of Overland Storage. "With this
acquisition, we would have a larger sales engine and expanded
market reach to realize the growth potential of the innovative and
award-winning products we have developed over the last couple
years.
"During the quarter, we continued to see solid growth in revenue
from our SnapServer DX Series, both from the immediately preceding
quarter and year-over-year, and we remain on track to begin rolling
out our mobility business solution in the first quarter of calendar
2014, which is designed to enable us to deliver the full
functionality of true native applications to any mobile device
anywhere as a workforce productivity solution. Moving forward, we
expect our products to benefit from a substantially expanded
channel of 16,000 partners as a result of our acquisition of
Tandberg Data."
Recent Highlights:
- Disk product revenue for the first quarter of fiscal 2014 was
up 4% compared to the preceding quarter and up 26% compared to the
first quarter of fiscal 2013.
- SnapServer DX Series product revenue in the first quarter of
fiscal 2014 was $1.9 million, up 19% over the preceding quarter and
up 34% compared to the first quarter of fiscal 2013.
- We released SnapScale X4, a clustered NAS product that is
designed to provide a high-density solution to more efficiently
manage growing amounts of unstructured data.
- We amended our San Diego lease reducing our square footage,
resulting in an annual savings of over $1.2 million after February
2014.
- We entered into a definitive agreement to acquire Tandberg Data
Holdings S.à.r.l., a privately held global leader of data storage
and data protection solutions. The sole consideration payable by us
in the acquisition consists of shares of our common stock. The
acquisition is currently expected to be completed by the end of
December 2013, subject to customary closing conditions, shareholder
and regulatory approvals.
- Following the filing of the preliminary proxy for the Tandberg
Data Holdings S.à.r.l. acquisition, the holders of our convertible
notes converted $10.7 million of convertible notes into shares of
our common stock at $1.30 per share.
- We received gross proceeds of $3.0 million from the sale of
convertible notes under our amended and restated note purchase
agreement entered into in November 2013 which provides for the
issuance of for up to $7.0 million of convertible notes in the
aggregate.
First Quarter Fiscal 2014 Financial Results
- Net revenue for the first quarter of fiscal 2014 was $10.6
million, compared to $11.7 million for the first quarter of fiscal
2013 and $12.1 million in the fourth quarter of fiscal 2013.
Product revenue for the first quarter of fiscal 2014 was $6.1
million, compared to $6.6 million for the first quarter of fiscal
2013 and $7.6 million in the fourth quarter of fiscal 2013.
- Gross margin for both the first quarter of fiscal 2014 and 2013
was constant at 33.7% and 36.5% in the fourth quarter of fiscal
2013.
- Operating expenses for the first quarter of fiscal 2014 were
$7.7 million, compared to $8.6 million in the first quarter of
fiscal 2013 and $9.4 million for the fourth quarter of fiscal 2013.
Stock compensation expense was $0.9 million in the first quarter of
fiscal 2014, compared to $1.3 million in the first quarter of
fiscal 2013 and $1.1 million in the fourth quarter of fiscal 2013.
Depreciation and amortization was $0.3 million in both the first
quarters of fiscal 2014 and 2013, and in the fourth quarter of
fiscal 2013.
- Net loss for the first quarter of fiscal 2014 was $4.6 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 $5.4 million, or a loss of $0.18 per
share, in the fourth quarter of fiscal 2013.
- Cash and short-term investments at September 30, 2013 were $5.8
million, compared to cash of $8.8 million at June 30, 2013. At
September 30, 2013, the Company had $3.5 million outstanding under
its credit facility and $13.25 million outstanding under its
convertible notes.
Investor Conference Call: Overland will host an investor
conference call today, Wednesday, November 13, at 5:00 pm ET (2:00
pm PT) to discuss the Company's first quarter fiscal 2014 financial
results. To access the call dial 877-941-2069 (+1 480-629-9713
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, 4650271#, beginning 8:00 p.m. ET
on November 13, 2013 through 11:59 p.m. ET on November 20,
2013.
About Overland Storage Overland Storage is a trusted global
provider of unified data management and data protection solutions
across the data lifecycle. By providing an integrated range of
technologies and services for primary, nearline, offline, and
archival data storage, Overland makes it easy and cost effective to
manage different tiers of information over time whether distributed
data is across the hall or across the globe. Overland SnapScale,
SnapServer, SnapSAN, NEO Series and REO Series solutions are
available through a select network of value-added resellers and
system integrators. For more information, visit
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: the occurrence of any event, change or other
circumstances that could give rise to the termination of the
definitive acquisition agreement, the failure to obtain shareholder
approval or the failure to satisfy the closing conditions, the
failure to obtain the necessary regulatory approvals on conditions
permissible under the acquisition agreement, risks related to
disruption of management's attention from our ongoing business
operations due to the transaction, the effect of the announcement
of the acquisition on the ability of Overland and Tandberg to
retain customers and retain and hire key personnel and maintain
relationships with its suppliers, operating results and business
generally; 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 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 regain compliance with the continued
listing requirements of, and thereby 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 (including the outcome of our ongoing patent
litigation); 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, SnapScale, 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.
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|
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OVERLAND STORAGE, INC. |
|
CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS |
|
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, |
|
|
|
2013 |
|
|
2012 |
|
|
|
(Unaudited) |
|
Net revenue |
|
$ |
10,606 |
|
|
$ |
11,711 |
|
Cost of revenue |
|
|
7,037 |
|
|
|
7,768 |
|
Gross profit |
|
|
3,569 |
|
|
|
3,943 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
3,745 |
|
|
|
4,125 |
|
|
Research and development |
|
|
1,309 |
|
|
|
1,597 |
|
|
General and administrative |
|
|
2,611 |
|
|
|
2,884 |
|
|
|
Total expenses |
|
|
7,665 |
|
|
|
8,606 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(4,096 |
) |
|
|
(4,663 |
) |
Interest income |
|
|
- |
|
|
|
3 |
|
Interest expense |
|
|
(314 |
) |
|
|
(42 |
) |
Other income (expense), net |
|
|
(161 |
) |
|
|
(112 |
) |
Loss before income taxes |
|
|
(4,571 |
) |
|
|
(4,814 |
) |
Provision for income taxes |
|
|
19 |
|
|
|
49 |
|
Net loss |
|
$ |
(4,590 |
) |
|
$ |
(4,863 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.15 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
Shares used in computing net loss per share: |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
30,725 |
|
|
|
27,876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OVERLAND STORAGE, INC. |
|
CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS |
|
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
|
September 30, |
|
|
June 30, |
|
|
|
2013 |
|
|
2013 |
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
Net revenue |
|
$ |
10,606 |
|
|
$ |
12,068 |
|
Cost of revenue |
|
|
7,037 |
|
|
|
7,660 |
|
Gross profit |
|
|
3,569 |
|
|
|
4,408 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
3,745 |
|
|
|
4,434 |
|
|
Research and development |
|
|
1,309 |
|
|
|
1,665 |
|
|
General and administrative |
|
|
2,611 |
|
|
|
3,271 |
|
|
|
Total expenses |
|
|
7,665 |
|
|
|
9,370 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(4,096 |
) |
|
|
(4,962 |
) |
Interest expense |
|
|
(314 |
) |
|
|
(327 |
) |
Other income (expense), net |
|
|
(161 |
) |
|
|
(92 |
) |
Loss before income taxes |
|
|
(4,571 |
) |
|
|
(5,381 |
) |
Provision for income taxes |
|
|
19 |
|
|
|
44 |
|
Net loss |
|
$ |
(4,590 |
) |
|
$ |
(5,425 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.15 |
) |
|
$ |
(0.18 |
) |
|
|
|
|
|
|
|
|
|
Shares used in computing net loss per share: |
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
30,725 |
|
|
|
29,996 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OVERLAND STORAGE, INC. |
|
SELECTED BALANCE SHEETS INFORMATION |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
June 30, |
|
|
|
2013 |
|
|
2013 |
|
|
|
(Unaudited) |
|
|
(Unaudited) |
|
ASSETS |
|
|
|
|
|
|
|
|
Cash |
|
$ |
3,934 |
|
|
$ |
8,831 |
|
Short-term investment - related party |
|
|
1,865 |
|
|
|
- |
|
Accounts receivable, net |
|
|
6,366 |
|
|
|
6,640 |
|
Inventories |
|
|
10,029 |
|
|
|
10,354 |
|
Other current assets |
|
|
1,846 |
|
|
|
1,923 |
|
|
Total
current assets |
|
|
24,040 |
|
|
|
27,748 |
|
Property and equipment, net |
|
|
2,039 |
|
|
|
2,014 |
|
Other assets |
|
|
1,799 |
|
|
|
1,641 |
|
|
Total
assets |
|
$ |
27,878 |
|
|
$ |
31,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
Current liabilities |
|
$ |
19,442 |
|
|
$ |
21,064 |
|
Long-term debt |
|
|
16,750 |
|
|
|
16,750 |
|
Other long-term liabilities |
|
|
3,984 |
|
|
|
3,885 |
|
Shareholders' equity (deficit) |
|
|
(12,298 |
) |
|
|
(10,296 |
) |
|
Total
liabilities and equity (deficit) |
|
$ |
27,878 |
|
|
$ |
31,403 |
|
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact: Todd Kehrli or Jim Byers MKR Group
Inc. 323-468-2300 ovrl@mkr-group.com
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