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Overland Storage Reports Fiscal 2010 Second Quarter Results

SAN DIEGO, Feb. 3 /PRNewswire-FirstCall/ -- Overland Storage, Inc. (Nasdaq: OVRL) today reported second quarter results for its fiscal quarter ended December 31, 2009.

The company reported revenues of $20.4 million for the fiscal 2010 second quarter compared to revenues of $19.3 million in the prior quarter and $28.9 million for the same quarter last year. Net loss decreased by 50.0% to $2.6 million for the fiscal 2010 second quarter, or $0.47 per share, compared with a $5.2 million loss or $1.21 per share for the same quarter last year. Additionally, net loss decreased by 29.7% from $3.7 million, or $0.87 per share, as compared to the prior quarter.

Highlights of product revenue for the December quarter were as follows:

  • Overland Storage branded product revenues rose approximately 20% from our fiscal 2010 first quarter
  • Revenue in our EMEA and APAC regions increased 52.1% and 33.8%, respectively,  from our fiscal 2010 first quarter
  • NEO tape library sales increased 28.8% from our the prior quarter, including strong unit sales of our NEO 8000 (which increased 75.0%)
  • Our successful launch of NEOs in October, which broadens our NEO portfolio of products, resulted in an additional 16.7% growth in NEO branded product revenue from the prior quarter

The company reported a significant decrease, of 31.7% in operating expenses for our fiscal 2010 second quarter, to $8.6 million from $12.6 million in the same quarter last year. Operating expenses remained relatively flat compared to $8.4 million for the prior quarter. Overall decreases in operating expenses compared to the same quarter last year are primarily attributable to fiscal 2009 restructuring activities within sales and marketing and research and development. In addition, the company saw gains in gross margins of its overall business fueled by significant growth in its Overland Storage branded business.  This growth, along with an expected decline in OEM revenue, resulted in an increase in the percentage of revenue from the Overland Storage branded business compared to total revenue. The company's gross margin was 28.5% in the fiscal 2010 second quarter, an increase from 26.7% in the same quarter last year and up from 27.0% in the prior quarter. This resulted, in part, from the growth of our branded business worldwide, driven by significant growth in the EMEA and APAC regions compared to prior quarter.

"It has been just under a year since we started on the path to rebuilding the company and its operations worldwide. We are pleased with what we have been able to achieve in this relatively short period of time,” said Eric Kelly, President and CEO of Overland Storage. “Our strategy to significantly increase branded product sales is being well executed. In addition, we are seeing many of the strategic initiatives that we have put in place begin to show results from expanded opportunities globally."

Cash as of December 30, 2009 was $5.7 million, an increase of 42.5% from $4.0 million as of September 30, 2009. During the second quarter the company raised $3.8 million of net proceeds through its public offering in exchange for the issuance of 2.1 million shares of common stock, received $2.0 million of proceeds from the liquidation of the ARS, and made $0.8 million in payments toward the retirement of its notes held by Adaptec and Anacomp. As of December 30, 2009, current liabilities associated with the company’s non-OEM accounts receivable financing arrangements, including interest remained materially consistent, at $4.4 million compared to September 30 and June 30, 2009.

Overland Storage also highlighted the momentum in its disk systems business during the fiscal 2010 second quarter, with unit sales of its multi-disk storage systems rising 32.7% over the previous quarter. These solutions have attracted a broad range of customers around the world -- from small business to leading brand name companies, governmental agencies and educational institutions-- with representation across a wide array of industries, including health care, large retail chains, technology, and consumer products.

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