Qualstar Corp (QBAK) SEC Filing 10-Q Quarterly report for the period ending Saturday, June 30, 2018

Exhibit 99.1

QUALSTAR REPORTS RESULTS FOR THE FIRST QUARTER OF 2018

Qualstar Reports 20.8% Increase in Revenue and a 500% Increase in Net Income

Simi Valley, CA, May 8, 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 months ended March 31, 2018.

Quarter Ended March 31, 2018 Financial Results

Revenues for the quarter ended March 31, 2018 were $2.9 million, compared with $2.4 million for the quarter ended March 31, 2017, an increase of $0.5 million or 20.8%. Income from operations for the quarter ended March 31, 2018 was $0.6 million compared with $0.1 million for the quarter ended March 31, 2017, an increase of $0.5 million or 500%. Net income per basic share for the quarter ended March 31, 2018 was $0.29 and $0.03 for the quarter ended March 31, 2017. Net income per diluted share for the quarter ended March 31, 2018 was $0.28 and $0.03 for the quarter ended March 31, 2017.

Data Storage segment revenues were $1.6 million for the quarter ended March 31, 2018, compared with $0.7 million for the same period last year, an increase of $0.9 million or 128.6%, primarily due to the increased product development service revenue received from our partnership with Sony Imaging Products & Solutions for the development of an enterprise class optical disk archive library. Power supply segment revenues were $1.3 million for the quarter, compared with $1.7 million in the quarter ended March 31, 2017, a decrease of $0.4 million, or (23.5)%, due to delayed order deliveries caused by a global electronic component shortage.

Gross margin was 48.3% of revenues or $1.4 million for the quarter ended March 31, 2018, an increase from the gross margin of 37.5% of revenues or $0.9 million for the quarter ended March 31, 2017. Operating expenses for the three months ended March 31, 2018 were $0.8 million or 27.6% of revenues, and $0.8 million, or 33.3% of revenues for the three months ended March 31, 2017.

Steven N. Bronson, Chief Executive Officer and President of Qualstar said, “We are delighted with our solid financial results for the first quarter of 2018. We benefited from an increase in revenues from data hardware sales and product development services, which revenues were partially offset by a decline in power supply revenues caused by component shortages. We expect our product development services revenues and income to vary in future periods based upon the timing of projects and our completion of project milestones. We continue to gain traction in expanding our data storage partners and momentum in the custom power supply space.” Mr. Bronson added, “we continue to pursue new product opportunities and acquisitions.”

Cash, cash equivalents and restricted cash increased $1.5 million for the quarter ended March 31, 2018 to $5.3 million compared to $3.8 million at March 31, 2017.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. Qualstar is a leading provider of high efficiency and high density power supplies marketed under the N2Power™ brand, and of data storage systems marketed under the Qualstar™ brand. Our N2Power power supply products provide compact and efficient power conversion for a wide variety of industries and applications including, but not limited to, telecom, networking, broadcast, industrial, lighting, gaming and test equipment. Our Qualstar data storage products are used to provide highly scalable and reliable solutions to store and retrieve very large quantities of electronic data. Qualstar’s products are known throughout the world for high quality and Simply Reliable™ designs that provide years of trouble-free service. More information is available at www.qualstar.com or www.n2power.com or by phone at 805-583-7744.