Overland Storage Announces Plan to Outsource its Manufacturing
September 21 2004 - 7:30AM
PR Newswire (US)
Overland Storage Announces Plan to Outsource its Manufacturing SAN
DIEGO, Sept. 21 /PRNewswire-FirstCall/ -- Overland Storage, Inc.
(NASDAQ:OVRL) today announced that in order to enhance its
strategic competitiveness and increase its flexibility it will
outsource its manufacturing operations. Over the next nine months,
Overland will outsource all of its manufacturing and certain
related activities to Sanmina-SCI Corporation (NASDAQ:SANM).
Approximately 140 Overland employees at its San Diego facility,
representing about one-third of its total workforce, will be
affected and will receive severance packages. Overland and
Sanmina-SCI expect to finalize the definitive outsourcing agreement
in the next 30 days. "I want to thank our operations team for all
their hard work, and sincerely regret their displacement," said
Christopher Calisi, president and CEO. "As a result of their
efforts, we have gained a reputation for quality products and our
operations are certified by some of the best OEMs in the world.
Over the past few years, this team has succeeded in significantly
reducing the total cost of our NEO tape automation solutions. And,
they have achieved these reductions in spite of the burden of the
expensive economic environment in San Diego." Overland expects to
incur between $2.5 million and $3.0 million of pretax charges
during the remainder of fiscal year 2005 related to the outsourcing
decision. In fiscal year 2006, the company expects to realize
important cost savings from outsourcing. About Overland Storage For
almost 25 years, Overland Storage has delivered world-class data
protection solutions designed to ensure business continuity.
Focused on backup and recovery, Overland's data protection
solutions include the REO(TM) family of disk-based backup and
recovery appliances and the award-winning NEO SERIES(R) of tape
libraries. Overland sells its products worldwide through leading
OEMs, commercial distributors, storage integrators and value-added
resellers. For more information, visit Overland's website at
http://www.overlandstorage.com/. 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 and satisfaction with current
prospects, as well as words such as "believe," "intends,"
"expects," "plans," "anticipates" and variations thereof, 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 the company's actual results
could differ materially from those contained in such statements.
Factors that could cause or contribute to such differences include
production problems, delays, unbudgeted expenses and inefficiencies
that may result from the transition of manufacturing to
Sanmina-SCI, difficulty of predicting sales to the company's major
OEM customer, technology spending levels, unexpected shortages of
critical components, rescheduling or cancellation of customer
orders, loss of a major customer, the timing and market acceptance
of new product introductions by the company, including the
company's new REO products, its competitors or its licensees, the
timing and amount of licensing royalties, general competition and
price pressures in the marketplace, the company's ability to
control costs and expenses and economic conditions. Reference is
also made to other factors set forth in the company's filings with
the Securities and Exchange Commission, including the "Risk
Factors," "Management's Discussion and Analysis" and other sections
of the company's Form 10-K for the most recently completed fiscal
year. These forward-looking statements speak only as of the date of
this release and the company undertakes no obligation to publicly
update any forward-looking statements to reflect new information,
events or circumstances after the date of this release. All
trademarks, trade names, service marks, and logos referenced herein
belong to their respective companies. DATASOURCE: Overland Storage,
Inc. CONTACT: Vernon A. LoForti, CFO, , or Cynthia A. Bond,
Director of Corporate Communications, , both of Overland Storage,
Inc., +1-858-571-5555 Web site: http://www.overlandstorage.com/
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