Qualstar Corp (QBAK)

[Enterprising Investor]

Qualstar Reports Fiscal 2015 Fourth Quarter and Full Year Results (9/09/15)

Qualstar Reports an 18% Revenue Increase for Fiscal Year Ending 2015 Versus 2014

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today reported financial results for the fourth quarter and the fiscal year ended June 30, 2015.

2015 Fourth Quarter Financial Results

Revenues for the quarter ended June 30, 2015 were $3.2 million, compared with $2.7 million for the quarter ended June 30, 2014, an increase of $0.5 million or 18.5%. Loss from operations was $0.3 million for the quarter ended June 30, 2015 compared with a loss of $0.7 million for the quarter ended June 30, 2014. Loss per share was $(0.02) for the quarter ended June 30, 2015 compared with loss per share of $(0.06) per basic and diluted share for the quarter ended June 30, 2014.

“We are pleased with the overall improvement in our results. We were able to increase revenue, lower operating expenses and continue with our product expansion for both business units. This demonstrates that we are executing our turnaround plan. We continue to explore other avenues to achieve further growth and continued momentum,” said Steven N. Bronson, Qualstar’s Chief Executive Officer.

“Qualstar has now successfully entered into additional vertical markets with our broadened product offerings in both the Data Storage Solutions and Power Solutions business units. As part of our global expansion, we have developed new channel partners in various countries including emerging markets,” stated Daniel K. Jan, Qualstar’s President.

Data Storage segment revenues were $1.4 million for the quarter ended June 30, 2015, compared with $1.2 million for the same period last year, an increase of $0.2 million or 16.7%. Power supply segment revenues were $1.8 million for the quarter, compared with $1.5 million in the quarter ended June 30, 2014, an increase of $0.3 million, or 20%.

Gross margin was 34.4% of revenues or $1.1 million for the quarter ended June 30, 2015, an improvement over the gross margin of 29.6% of revenues or $0.8 million for the quarter ended June 30, 2014. The increase in gross profit was primarily attributed to lower charges to the inventory reserves during the quarter and sales of higher margin products. Engineering expenses for the fourth quarter of the fiscal year 2015 were $0.4 million or 12.5% of revenues, compared with $0.5 million, or 18.5% of revenues for the fourth quarter of the fiscal year 2014. Sales and marketing expenses were $0.5 million or 15.6% of revenues for the fourth quarter of fiscal 2015, compared with $0.4 million, or 14.8% of revenues in the corresponding period last year. General and administrative expenses for the fourth quarter of fiscal 2015 were $0.5 million, or 15.6% of revenues, compared to $0.8 million, or 29.6% of revenues, for the same period last year. There were no restructuring expenses for the fourth quarter of fiscal 2015, compared to a recovery of $0.2 million, or 7.4% of revenues, for the same period last year.

Fiscal 2015 Full Year Financial Results

Qualstar reported revenues of $12.9 million in the fiscal year 2015, an increase of 18.3% compared with $10.9 million in the fiscal year 2014. Net loss in fiscal 2015 was $1.3 million or $(0.11) per basic and diluted share. This compares with a net loss in the fiscal year 2014 of $5.6 million, or $(0.46) per basic and diluted share.

Cash equivalents and marketable securities were $4.7 million at June 30, 2015, compared with $7.2 million at June 30, 2014, down $2.5 million. Inventory, net of reserves, at June 30, 2015, was $2.9 million, compared with $3.2 million at June 30, 2014.

“We continue to aggressively manage our cash. In fiscal 2015 the Company used $2.4 million in operating the business, compared to $6.3 million used in 2014 and $6.5 million used in 2013,” stated Mr. Bronson. “We are focused on improving our cash flow. In February 2015, we relocated our offices and warehouse to a smaller footprint and are saving approximately $34,000 per month. We continue to reduce spending where possible and to work toward a positive cash flow.”

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.

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