Net income for the quarter amounted to $1.3 million compared to $789,000 in the prior year, and on a per share basis amounted to $0.12, a 71 percent increase from $0.07 in the prior year.
This represents the third successive quarter of strong revenue and earnings growth compared with the prior year's quarter. With the exception of discontinued products, sales growth was reported in all product families.
A particularly strong performance was posted for the company's flagship DLT-based LibraryXpress family of products which grew by 55 percent over the prior year's quarter and reached record levels. The company also noted that record sales were posted by its European operations, where revenues grew by 26 percent over the prior year.
The company's gross margin for the quarter of 30.2 percent was down compared to 31.6 percent in the same quarter of the prior year because of a stronger OEM sales mix, but was stable with the immediately preceding quarter. Operating expenses, which were held flat on a sequential quarter basis, fell from 26.0 percent of sales in the prior year to 22.5 percent in the current quarter.
The company also noted that approximately 400,000 shares of its common stock were repurchased during the quarter, accounting for almost all of its cash usage.
Scott McClendon, Overland's president and chief executive officer, commented on the results: "We are extremely pleased with our second quarter results. Sales of our LibraryXpress products reached a new record, and we are optimistic about even greater opportunities for market penetration with these products in the future.
"Our OEM customers, both domestically and abroad, are pleased with the reliability and performance of these units and sales to our commercial distribution customers continue to grow."
"As we head into our seasonally soft third quarter when OEM orders typically slow," added McClendon, "we believe that Overland is positioning itself well to benefit from the paradigm shift we are seeing in the delivery of storage products.
"We are convinced that strong OEM relationships are essential, as are partnerships with the most well-recognized commercial distributors and storage specialty VARs. Our research and development efforts are focused on delivering new products to meet the increasing demands of high availability network managers and to position Overland to capitalize on the most successful tape technologies.
"We are excited about our recently announced Web-TLC(TM) software technology that 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, we are gratified with the recent market recognition of our performance to date, and anticipate record results for our full fiscal year ending June 30, 1999."
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)
Three Months Ended Six Months Ended
Dec. 31 Dec. 31
1998 1997 1998 1997
(Unaudited) (Unaudited)
Net sales $24,240 $18,071 $48,612 $32,069
Cost of goods sold 16,927 12,367 33,883 21,705
Gross profit 7,313 5,704 14,729 10,364
Operating expenses:
Sales and marketing 3,015 2,196 5,803 4,303
Research and
development 1,219 957 2,587 1,903
General and
administrative 1,208 1,537 2,529 3,068
Total expenses 5,442 4,690 10,919 9,274
Operating income 1,871 1,014 3,810 1,090
Interest income, net 221 220 457 463
Other income, net 77 38 112 5
Income before income
taxes 2,169 1,272 4,379 1,558
Income taxes 854 483 1,716 592
Net income $ 1,315 $ 789 $ 2,663 $ 966
Earnings per share:
Basic $ 0.13 $ 0.07 $ 0.26 $ 0.09
Fully-diluted $ 0.12 $ 0.07 $ 0.25 $ 0.09
Shares used in
computing earnings
per share:
Basic 10,232 10,538 10,386 10,498
Fully-diluted 10,654 11,111 10,685 11,100
OVERLAND DATA INC.
SELECTED BALANCE SHEET INFORMATION
(In thousands)
Dec. 31, June 30,
1998 1998
(unaudited)
ASSETS
Cash and equivalents $17,202 $15,550
Accounts receivable, net 14,030 15,683
Inventories, net 14,723 16,077
Other current assets 2,516 2,431
Total current assets 48,471 49,741
Property, plant and equipment, net 4,025 4,207
Other assets 76 48
Total assets $52,572 $53,996
LIABILITIES & EQUITY
Current liabilities 8,250 10,243
Long-term debt -- --
Other liabilities 663 385
Shareholders' equity 43,659 43,368
Total liabilities and equity $52,572 $53,996
CONTACT: Overland Data Scott McClendon or Vernon A. LoForti 619/571-5555
