SAN DIEGO--(BUSINESS WIRE)--April 15, 1999--Overland Data Inc. (NASDAQ/NMS:OVRL) Thursday reported that revenues for its third fiscal quarter ended March 31, 1999, grew 19% to $22.3 million, compared with $18.7 million in the same period of the prior year.
Net income for the quarter amounted to $736,000, compared with
$501,000 in the prior year, and on a per share basis amounted to
$0.07, a 40% increase from $0.05 in the prior year.
For the nine months ended March 31, 1999, revenues of $70.9
million were up 40% from $50.7 million in the same period of the prior
year. Net income for the nine months amounted to $3.4 million, or
$0.32 per share, compared with $1.5 million, or $0.13 per share, in
the prior year, a 146% increase in earnings per share.
The company's sales growth during the quarter was the result of
continued strength of its flagship DLT-based LibraryXpress family of
products, which posted a 40% gain over the prior year's quarter.
Results included initial shipments of the newest member of the product
family, the MinilibraryXpress.
The company also noted that a second successive quarter of record
sales was posted by its European operations, where revenues grew by
34% over the prior year. As expected, sales of the company's more
mature products declined in comparison to the prior year, due
principally to a 45% decline in sales of its 9-track reel-to-reel
products. For the first time the company recognized royalty revenues
related to the licensing of its VR2 tape-encoding technology.
Excluding royalties, the company's gross margin for the quarter
of 28.6% was relatively flat, compared with 29.3% in the same quarter
of the prior year. Although operating expenses rose 12.1%, compared
with the prior-year quarter, due to the company's increased sales and
marketing efforts, total expenses fell from 26.6% of sales in the
prior year to 25.2% in the current quarter.
Scott McClendon, Overland's president and chief executive
officer, commented: "We are pleased with our third-quarter results,
given that all of our OEM customers have calendar fiscal years and we
anticipated that sales this quarter would be down from last quarter on
a sequential basis.
"Sales of our LibraryXpress products reached another new
quarterly sales record, driven by strong sales to our OEM customers
both domestically and in Europe. We expect that our strong OEM
relationships will yield even more opportunities for Overland in the
future.
"Although we are seeing progress in our efforts to expand sales
of our branded product in the commercial distribution channel, the
victories are hard won. However, we are optimistic and are pleased
with the initial market acceptance of our new MinilibraryXpress, which
we announced on Feb. 1 and are now shipping in volume.
"We also are pleased," added McClendon, "that for the first time
this quarter, we recognized a small amount of revenue related to our
VR2 tape-encoding technology. We now have two licensees consisting of
Tandberg Data ASA (OSLO:TAD) and Imation Corp. (NYSE:IMN), together
with its authorized manufacturers, who will be coming out later this
year with tape-drive products incorporating VR2.
"We hope that these products will be successful and that
Overland's income from royalties and chip sales will be a nice
contributor to our bottom line. We have stepped up our research and
development efforts and are investigating new technology opportunities
to enable us to capitalize on and complement our strong competencies
in robotics and DLTtape.
"We also hope to announce shortly a new product based on the
Web-TLC(tm) software technology that we introduced on Jan. 6, which
enables platform-independent remote operation and management of our
automated tape libraries from anywhere in the world over the Internet
via a standard Web browser."
Finally, McClendon stated: "Overall, we are excited about the
many opportunities that lie before us. Based on our progress and
results for the nine months to date, we expect to report a record year
in terms of both revenue and net income.
"However, because we had such a strong fourth quarter last year,
and this year must overcome declines in our more mature products, it
may be difficult to exceed those results in the fourth quarter this
year."
Overland is a global supplier of storage automation solutions and
related technologies designed to meet and surpass the critical
requirements of high-availability network computing environments, from
entry level to the enterprise. The company is a recognized leader in
technology innovation and product reliability. Its award-winning
products meet the critical needs of end users, distributors and OEMs
in industries worldwide.
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 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 and its competitors, general competition and price pressures in the marketplace, and the company's ability to control costs and expenses. 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.
OVERLAND DATA INC.
CONSOLIDATED STATEMENTS OF OPERATION
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
1999 1998 1999 1998
Net sales:
Product sales $ 22,048 $ 18,659 $ 70,660 $ 50,728
Royalties 215 -- 215 --
Total net sales 22,263 18,659 70,875 50,728
Cost of goods sold 15,741 13,190 49,624 34,895
Gross profit 6,522 5,469 21,251 15,833
Operating expenses:
Sales and marketing 2,966 2,241 8,769 6,544
Research and development 1,305 1,060 3,892 2,963
General and administrative 1,282 1,653 3,811 4,721
Total expenses 5,553 4,954 16,472 14,228
Operating income 969 515 4,779 1,605
Interest income, net 188 247 645 710
Other income, net 56 46 168 51
Income before income taxes 1,213 808 5,592 2,366
Income taxes 477 307 2,193 899
Net income $ 736 $ 501 $ 3,399 $ 1,467
Earnings per share:
Basic $ 0.07 $ 0.05 $ 0.33 $ 0.14
Fully diluted $ 0.07 $ 0.05 $ 0.32 $ 0.13
Shares used in computing
earnings per share:
Basic 10,100 10,542 10,291 10,512
Fully diluted 10,711 10,990 10,547 10,987
OVERLAND DATA INC.
SELECTED BALANCE SHEET INFORMATION
(In thousands)
March 31, June 30,
1999 1998
(unaudited)
ASSETS
Cash and equivalents $ 16,465 $ 15,550
Accounts receivable, net 15,384 15,683
Inventories, net 14,475 16,077
Other current assets 2,762 2,431
Total current assets 49,086 49,741
Property, plant and equipment, net 4,051 4,207
Other assets 43 48
Total assets $ 53,180 $ 53,996
LIABILITIES & EQUITY
Current liabilities $ 7,896 $ 10,243
Long-term debt -- --
Other liabilities 761 385
Shareholders' equity 44,523 43,368
Total liabilities and equity $ 53,180 $ 53,996
--30--tjm/la* kwp/la
CONTACT: Overland Data Inc.
Scott McClendon/Vernon A. LoForti, 619/571-5555
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED EARNINGS
