Qualstar Corp (QBAK) 10-Q Quarterly Report November 2019

Camarillo, CA, August 13, 2019 — 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 six months ended June 30, 2019.

(All amounts are in thousands, except per share data):

Results for the Three Months Ended June 30, 2019 vs. 2018

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Net revenue increased 6.4% to $3,439 from $3,231

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Total operating expenses decreased 12.2% to $832 from $948

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Net loss of $11 or $0.01 per basic and diluted share vs. net income of $474 or $0.23 per basic and diluted share

Results for the Six Months Ended June 30, 2019 vs. 2018

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Net revenue increased 2.1% to $6,295 from $6,166

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Total operating expenses decreased 9.5% to $1,616 from $1,786

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Net income of $130 compared to $1,064, for the prior year period, a decrease of 87.8%, or $0.07 per basic and diluted share vs. $0.52 per basic and $0.51 per diluted share

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Cash provided by operations of $158 vs. $820

Highlights for the Three and Six Months Ended June 30, 2019

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Strong balance sheet and no debt

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Cash, restricted cash and cash equivalents decreased by 8.3% to $4,476 from $4,881 as of December 31, 2018

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Revenue growth in the data storage products segment has increased for the three months ended June 30, 2019 from the same period last year by 69% to $1,129 from $668 and for the six months ended June 30, 2019 by 61.5% to $1,912 from $1,184 for the same period last year

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Gross profit decreased for the three months ended June 30, 2019 from the same period last year by 43.4% to $805 from $1,422 and for the six months ended June 30, 2019 by 39.5% to $1,725 from $2,850 for the same period last year, with the decrease being primarily attributable to a one-time charge for the write-down of raw materials inventory purchased from a discontinued power supply contract manufacturer and a reduction of gross margin in the current phase of our Optical Drive Assembly (“ODA”) product development with Sony.

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Under the Stock Repurchase Program, during the three and six months ended June 30, 2019 a total of 33,972 and 92,706 shares were repurchased, repectively, and as of August 9, 2019 a total of 126,366 shares have been repurchased since the program began. The program expires December 5, 2019.

“We are pleased with our growth in the data storage business; unfortunately, we are experiencing several headwinds in our power supply segment, including China tariffs, and increased competition,” said Steven N. Bronson, CEO, and President of Qualstar.“ Mr. Bronson also stated, “we are actively taking steps to address the challenges in the power supply business, including product expansion, and pursuing new strategic partnerships.”

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.

The following information was filed by Qualstar Corp (QBAK) on Thursday, August 15, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Qualstar Corp's 10-Q Quarterly Report:

Financial - Earnings Highlight
Power supply gross profit declined due to a decrease in sales in our power supply segment and a $190,000 one-time charge for the write down of raw material inventory repurchased from a terminated contract manufacturer.

Financial - Expense Highlight
General and administrative costs decreased primarily due to a decrease in bonus expense, travel expenses, and professional services and legal fees offset by expenses incurred in connection with our move to our new facility in Camarillo, California.
Financial - Income Highlight
Other income increased as a result of interest earned during the three months ended September 30, 2019.
Revenue - Product Highlight
Power Supplies - The decrease in power supply sales in the three months ended September 30, 2019 compared to the prior year period is primarily attributable to the decreased orders from existing customers.
Revenue - Product Highlight
Power Supplies - The decrease in power supply sales in the nine months ended September 30, 2019 compared to the prior year period is primarily attributable to the decreased orders from existing customers.
Revenue - Geography
Cash used for investing activities...Read more
Financial - Earnings
Gross profit in our data...Read more
Financial - Expense
General and administrative costs decreased...Read more
Revenue - Product
The Company is focused on...Read more
Revenue - Product
Service revenue also increased as...Read more
Revenue - Product
Our service revenue decreased compared...Read more
Financial - Expense
Engineering expenses increased in the...Read more
Financial - Income
The cash provided by operating...Read more
Revenue - Product
Sales and marketing expenses increased...Read more
Revenue - Product
The increase in product revenues...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Qualstar Corp provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: QBAK
CIK: 758938
Form Type: 10-Q Quarterly Report
Accession Number: 0001437749-19-021855
Submitted to the SEC: Thu Nov 07 2019 3:47:07 AM EST
Accepted by the SEC: Thu Nov 07 2019
Period: Monday, September 30, 2019
Industry: Magnetic And Optical Recording Media