Qualstar Corp (QBAK) SEC Filing 10-Q Quarterly report for the period ending Saturday, March 31, 2018

Exhibit 99.1

QUALSTAR REPORTS RESULTS FOR THE FOURTH QUARTER AND YEAR ENDING DECEMBER 31, 2017

Qualstar reports profit of $0.33 per share in the fourth quarter along with a strong 45.5% increase in revenue.

Simi Valley, CA, March 15, 2018 — Qualstar Corporation (NASDAQ: QBAK), a leading manufacturer of data storage solutions and high-efficiency power supplies, today announced its financial results for the three and twelve-month periods ended December 31, 2017.

Year Ended December 31, 2017 Financial Results

Qualstar reported revenues of $10.6 million for the year ended December 31, 2017, an increase of 13.0% compared with $9.4 million for the year ended December 31, 2016. Net income for the year ended December 31, 2017 was $0.6 million or $0.31 per basic and diluted share. This compares with a net loss for the year ended December 31, 2016 of $1.2 million, or $(0.59) per share. Excluding the impact of a $0.4 million stock-based compensation charge in the third quarter of 2017, non-GAAP net income for the year ended December 31, 2017 was $1.0 million or $0.52 per basic and diluted share.

Data Storage segment revenues were $4.3 million for the year ended December 31, 2017, compared with $3.8 million for the same period last year, an increase of $0.5 million or 13.8%, primarily due to new reseller relationships, whose customers have a high demand for tape libraries. Power supply segment revenues were $6.3 million for the year ended December 31, 2017, compared with $5.6 million in the year ended December 31, 2016, an increase of $0.7 million, or 12.8%, primarily due to the increase in revenues from our gaming customers.

Gross margin was 39.6% of revenues, or $4.2 million, for the year ended December 31, 2017, a significant increase from the gross margin of 27.7% of revenues, or $2.6 million, for the year ended December 31, 2016.

Cash, cash equivalents and restricted cash was $4.8 million at December 31, 2017, compared to $3.8 million of cash, cash equivalents and restricted cash at December 31, 2016.

Quarter Ended December 31, 2017 Financial Results

Revenues for the quarter ended December 31, 2017 were $3.2 million, compared with $2.2 million for the quarter ended December 31, 2016, an increase of $1.0 million or 45.5%. Income from operations for the quarter ended December 31, 2017 was $0.7 million compared with a loss of $0.4 million for the quarter ended December 31, 2016. Basic and diluted net income per share was $0.33 for the quarter ended December 31, 2017, compared to a net loss per share of $(0.20) for the quarter ended December 31, 2016.

Data Storage segment revenues were $1.5 million for the quarter ended December 31, 2017, compared with $0.8 million for the same period last year, an increase of $0.7 million or 87.5%, primarily due to new reseller relationships, whose customers have a high demand for tape libraries. Power supply segment revenues were $1.6 million for the quarter, compared with $1.4 million in the quarter ended December 31, 2016, an increase of $0.2 million, or 14.3%, due to the increase in orders from our gaming customers.

Gross margin was 43.8% of revenues or $1.4 million for the quarter ended December 31, 2017, a significant increase from the gross margin of 18.3% of revenues or $0.4 million for the quarter ended December 31, 2016.

“I am excited about the momentum that we maintained across all of our segments in the fourth quarter. Our strategy continues to gain traction, resulting in sharp revenue growth and a strong finish to the year,” said Steven N. Bronson, Chief Executive Officer and President of Qualstar. “We experienced favorable conditions in many of the markets that we serve, and our numbers confirm that we are well positioned to take advantage of opportunities.”

“Cash flow has significantly improved, as our revenues have increased and our current operating expenses have declined”, stated Mr. Bronson. “We remain committed to our strategy to create shareholder value through disciplined investments for organic growth and innovation, and strategic acquisitions.”