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FalconStor Software Announces Second Quarter 2013 Results

Stocks in this article: FALC

MELVILLE, N.Y., Aug. 8, 2013 (GLOBE NEWSWIRE) -- FalconStor Software, Inc. (Nasdaq:FALC), a market leader in disk-based data protection, today announced financial results for its second quarter ended June 30, 2013.

"The FalconStor customer base continues to receive value in the form of optimized storage, business continuity and lower total cost of ownership," said Gary Quinn, president and CEO of FalconStor. "We are strengthening our balance sheet, and reviewing our current product portfolio for additional investments. We are excited about our joint-efforts into the "flash memory" market segment, we are rebalancing our routes-to-market -- both by customer segment and geography -- and we look to rationalize our costs to maximize stockholder value."

Financial and Business Highlights and Overview:

  • Appointed Gary Quinn President and Chief Executive Officer in July 2013.
  • Reached an agreement in principle with Hale Capital Partners on August 5, 2013 for an equity investment of up to $15 million in the form of redeemable convertible preferred stock, subject to certain closing conditions.
  • Signed an agreement to sell the Company's investment in Tianjin Zhongke Blue Whale Technologies Co., Ltd., a Chinese joint venture, for $3.0 million on August 7, 2013, subject to certain closing conditions.
  • As a result of these strategic initiatives, the Company notified the investment banking firm Wells Fargo Securities, LLC that the Company was ending Wells Fargo's retention as the Company's exclusive financial advisor.
  • A Joint Motion for Preliminary Approval of the Class Action lawsuit was filed with the courts on June 14, 2013. In January 2013, the parties to the Class Action reached an agreement in principle to settle the Class Action for $5.0 million.

Financials

Total revenues for the second quarter of 2013 were $14.0 million, a decrease of 15 percent compared with $16.5 million in the same period a year ago. GAAP loss from operations for the second quarter of 2013 was $4.6 million, compared with an operating loss of $6.3 million for the second quarter of 2012. GAAP net loss for the quarter was $5.2 million, or $0.11 per share, compared with a net loss of $6.6 million, or $0.14 per share, for the same period a year ago. Included in the operating results for the second quarter of 2013 and 2012 were expenses of $0.1 million and $0.9 million, respectively, of investigation, litigation and settlement related costs.

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