SAN DIEGO--(BUSINESS WIRE)--Aug. 5, 1999--Overland Data Inc. (NASDAQ/NMS:OVRL) Thursday reported that revenues for fiscal year 1999 increased to $92.2 million, up 23% from revenues of $75.2 million in fiscal year 1998.
Net income for the fiscal year ended June 30, 1999, increased to
$4.0 million, compared with $2.8 million in fiscal year 1998, and on a
per share basis grew to $0.37 per share, up 48% from $0.25 per share
in the prior fiscal year.
Overland attributed the revenue growth in fiscal year 1999
primarily to strong sales of its DLT-based LibraryXpress(tm) family of
products, which accounted for 57% of total revenues and grew 41% over
the prior year.
Sales of the company's 36-track products, up 24% over fiscal year
1998, also contributed to the growth in revenue. These gains were
partially offset by declines in sales of the company's more mature
18-track and 9-track product lines, which accounted for only 4% of
revenues for the year.
Gross margin of 30% for fiscal year 1999 was down slightly from
31% in fiscal year 1998 due to a higher level of sales to OEM
customers. Total operating expenses, however, were reduced from 26% of
sales last year to 24% of sales in fiscal year 1999, due primarily to
a reduction in general and administrative expenses.
For the fourth quarter of fiscal year 1999, Overland reported net
income of $583,000, or $0.05 per share, on revenues of $21.4 million,
compared with net income of $1.3 million, or $0.12 per share, on
revenues of $24.4 million in the fourth quarter of 1998.
The decline in fourth-quarter sales was due primarily to lower
OEM sales and sales of its 36-track product to non-OEM customers, and
to lower sales of 18-track and 9-track products which have been phased
out.
Gross margin for the fourth quarter was up slightly year-to-year
due to the decline in OEM sales but was offset by higher operating
expenses resulting from investments in sales and marketing and
research and development.
Overland believes the falloff in fourth-quarter OEM sales was due
primarily to a new inventory management system implemented as part of
Overland's recently signed OEM agreement with Compaq (NYSE:CPQ).
More specifically, under the new contract, the inventory
management system changed from a traditional OEM model, wherein
Overland recorded revenues when product was shipped to DEC, to a
just-in-time system of regional hubs wherein Overland does not
recognize revenues until products are released to Compaq's customers.
Sales of LibraryXpress products to customers other than Compaq
during the fourth quarter 1999 were up 42% over the same quarter last
year.
"We are pleased with our record performance in fiscal year 1999,"
stated Scott McClendon, president and chief executive officer of
Overland, "and with the market's continued strong acceptance of our
award-winning DLT-based LibraryXpress products.
"We are also excited about the most significant event of the year
-- our signing of our OEM agreement with Compaq -- which we expect to
contribute to another record year in fiscal year 2000.
"At the same time," added McClendon, "it is unfortunate that the
change in the inventory management system negatively impacted our
level of OEM sales in the fourth quarter. The impact of this change
was greater than expected due to the fact that the start of our new
OEM supply relationship with Compaq, which was originally planned to
begin in April, did not commence until mid-June.
"We currently expect Compaq sales to begin to ramp up during the
first quarter of the current fiscal year as Compaq's focus shifts to
the Overland-supplied product line. Based on current order indications
and market forecasts, our outlook for OEM sales to Compaq for
full-year fiscal 2000 is higher than we originally expected.
"We are extremely encouraged by Compaq's strong market support of
our LibraryXpress-based products, and by its leadership position in
the storage market.
"In addition to anticipated higher sales to Compaq," stated
McClendon, "our goal is to generate additional revenue in fiscal year
2000 and beyond by continuing to strengthen our automation product
line by introducing new products and technologies, by establishing
additional distribution partnerships, and by pursuing potential
strategic initiatives targeting emerging storage market
opportunities.
"Over the past year, we successfully introduced several new
products, including our MinilibraryXpress(tm) for the midrange-server
market, and a new software technology called Web TLC(tm) that enables
remote operation and management of our tape libraries and autochangers
from anywhere in the world over the Internet.
"We entered the enterprise storage market through the
introduction of our EnterpriseXpress(tm), and through our fibre-
channel-connectivity and storage-area-network initiatives.
"On the technology-development front, our Variable Rate
Randomizer (VR2(tm)) development program with Tandberg, although late,
continued to advance with the expectation that this collaboration will
generate royalty revenue by the end of calendar year 1999, and we
entered a joint development agreement with Imation Corp. (NYSE:IMN) to
bring VR2 technology into the next-generation Travan NS platform.
"In addition, we have introduced a SLR loader product, and have
the technical capability to deliver robotics for other tape formats
such as AIT, LTO and SDLT. We believe this capability, coupled with
our recent acquisition of optical storage robotics technology,
positions us well to respond to emerging opportunities in the
marketplace.
"And," commented McClendon, "we have strengthened our commercial
distribution channel in support of our current and future product
offerings through the addition of Ingram Micro (NYSE:IM) as a major
new distributor of Overland Data products."
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 OPERATIONS
(In thousands, except per share data)
Three Months Twelve Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
(Unaudited)
Net sales:
Product sales $ 21,117 $ 24,436 $ 91,777 $ 75,164
Royalty 235 - 450 -
Total net sales 21,352 24,436 92,227 75,164
Cost of goods sold 14,712 17,070 64,336 51,965
Gross profit 6,640 7,366 27,891 23,199
Operating expenses:
Sales and marketing 3,056 2,701 11,825 9,245
Research and development 1,481 1,130 5,373 4,093
General and administrative 1,268 1,500 5,079 6,221
Total expenses 5,805 5,331 22,277 19,559
Operating income 835 2,035 5,614 3,640
Interest income, net 165 230 810 940
Other income, net (11) (88) 157 (37)
Income before income taxes 989 2,177 6,581 4,543
Income taxes 406 852 2,599 1,751
Net income $ 583 $ 1,325 $ 3,982 $ 2,792
Earnings per share:
Basic $ 0.06 $ 0.13 $ 0.39 $ 0.27
Diluted $ 0.05 $ 0.12 $ 0.37 $ 0.25
Shares used in computing
earnings per share:
Basic 10,120 10,564 10,222 10,525
Diluted 10,648 11,052 10,652 11,069
OVERLAND DATA INC.
SELECTED BALANCE SHEET INFORMATION
(In thousands)
June 30, June 30,
1999 1998
Audited Audited
ASSETS
Cash and equivalents $ 16,199 $ 15,550
Accounts receivable, net 13,885 15,683
Inventories 17,704 16,077
Other current assets 3,511 2,431
Total current assets 51,299 49,741
Property, plant and equipment, net 4,657 4,207
Other assets 274 48
Total assets $ 56,230 $ 53,996
LIABILITIES & EQUITY
Current liabilities 10,318 10,243
Long-term debt - -
Long-term liabilities 1,105 385
Shareholders' equity 44,807 43,368
Total liabilities and shareholders' equity $ 56,230 $ 53,996
--30--tjm/la* mt/la
CONTACT: Overland Data Inc., San Diego
Scott McClendon/Vern LoForti, 619/571-5555
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED EARNINGS
