Qualstar Corp (QBAK) SEC Filing 8-K Material Event for the period ending Thursday, November 7, 2019

Qualstar Corp

CIK: 758938 Ticker: QBAK

Exhibit 99.1



Qualstar Reports Fiscal 2019 Third Quarter Results


Camarillo, CA. November 7, 2019Qualstar Corporation (NASDAQ: QBAK), a leading manufacturer of data storage solutions and high-efficiency power supplies, today announced its financial results for the three and nine months ended September 30, 2019.


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


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


Net revenue increased 17.4% to $3,703 from $3,154


Total operating expenses increased 8.1% to $917 from $848


Net Income of $49 or $0.03 per basic and diluted share vs. net income of $405 or $0.20 per basic and diluted share


Results for the Nine Months Ended September 30, 2019 vs. 2018


Net revenue increased 7.3% to $9,998 from $9,320


Total operating expenses decreased 3.8% to $2,533 from $2,634


Net income of $179 compared to $1,469 for the prior year period, a decrease of 87.8%, or $0.09 per basic and diluted share vs. $0.72 per basic and $0.70 per diluted share


Cash provided by operations of $211 vs. $112


Highlights for the Three and Nine Months Ended September 30, 2019


Strong balance sheet and no debt


Cash, restricted cash and cash equivalents decreased by 10.4% to $4,371 from $4,881 as of December 31, 2018


Revenue growth in the data storage products segment has increased for the three months ended September 30, 2019 from the same period last year by 45.5% to $1,148 from $789 and for the nine months ended September 30, 2019 by 55.1% to $3,060 from $1,973 for the same period last year


Gross profit decreased for the three months ended September 30, 2019 from the same period last year by 23.9% to $954 from $1,253 and for the nine months ended September 30, 2019 by 34.7% to $2,679 from $4,103 for the same period last year. The decrease in gross profit for the nine months ended September 30, 2019 from the same period last year is 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 of 84.7% to $148 from $970 in the current phase of our Optical Drive Assembly (“ODA”) product development with Sony.


Under the Stock Repurchase Program, during the three and nine months ended September 30, 2019 a total of 22,458 and 115,164 shares were repurchased, repectively, and as of September 30, 2019 a total of 133,266 shares have been repurchased since the program began. The program expires December 5, 2019.


"Our data storage systems business continues to experience tremendous organic growth," said Steven N. Bronson, CEO, and President of Qualstar. "Mr. Bronson also stated, "We are excited about the progress of the Optical Drive development project."


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 or or by phone at 805-583-7744.





Cautionary Statement Concerning Forward-Looking Statements


Statements used in this press release that relate to future plans, events, financial results, prospects or performance are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. Forward looking statements include the statement by Mr. Bronson that the Company’s data storage systems business continues to experience tremendous organic growth. These forward-looking statements are based upon the current expectations and beliefs of Qualstar's management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Qualstar does not expect to, and disclaims any obligation to, publicly update any forward-looking statements whether as a result of new information, future events or otherwise. Qualstar, however, reserves the right to update such statements or any portion thereof at any time for any reason. In particular, the following factors, among others, could cause actual or future results to differ materially from those suggested by the forward-looking statements: Qualstar’s ability to successfully execute on its strategic plan and meet its long-term financial goals; Qualstar’s ability to successfully implement and recognize cost savings; Qualstar’s ability to develop and commercialize new products; industry and customer adoption and acceptance of Qualstar’s new products; Qualstar’s ability to increase sales of its products; the rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; adverse changes in market demand for Qualstar’s products; increased competition and pricing pressure on Qualstar’s products; and the risks related to actions of activist shareholders, including the amount of related costs.


For further information on these and other cautionary statements, please refer to the risk factors discussed in Qualstar’s filings with the U.S. Securities and Exchange Commission including, but not limited to, Qualstar’s Annual Report on Form 10-K for the period ending December 31, 2018, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of such Form 10-K, and any subsequently filed reports. All of Qualstar’s filings are available without charge through the SEC’s website ( or from Qualstar’s website (


Contact Information:

Steven N. Bronson

Chief Executive Officer

Qualstar Corporation




-Financial Tables to Follow-








  (In thousands, except per share data)




Three Months Ended

September 30,


Nine Months Ended

September 30,










Net revenues

  $ 3,703     $ 3,154     $ 9,998     $ 9,320  

Cost of goods sold

    2,749       1,901       7,319       5,217  

Gross profit

    954       1,253       2,679       4,103  

Operating expenses:



    122       123       473       372  

Sales and marketing

    368       351       982       1,000  

General and administrative

    427       374       1,078       1,262  

Total operating expenses

    917       848       2,533       2,634  

Income from operations

    37       405       146       1,469  

Other income

    12       -       33       -  

Income before income taxes

    49       405       179       1,469  

Provision for income taxes

    -       -       -       -  

Net income

  $ 49     $ 405     $ 179     $ 1,469  

Earnings per share:



  $ 0.03     $ 0.20     $ 0.09     $ 0.72  


  $ 0.03     $ 0.20     $ 0.09     $ 0.70  

Shares used in per share calculation:



    1,922       2,048       1,967       2,048  


    1,922       2,065       1,967       2,088  







(In thousands, except share amounts)



September 30,



December 31,







Current assets:


Cash and cash equivalents

  $ 4,271     $ 4,781  

Restricted cash

    100       100  

Accounts receivables, net

    2,177       1,809  

Inventories, net

    2,728       2,897  

Prepaid expenses and other current assets

    250       180  

Total current assets

    9,526       9,767  

Non-current assets:


Property and equipment, net

    132       112  


    734       -  

Other assets

    133       119  

Total non-current assets

    999       231  

Total assets

  $ 10,525     $ 9,998  

Liabilities and Shareholders’ Equity


Current liabilities:


Accounts payable

  $ 1,325     $ 1,023  

Accrued payroll and related liabilities

    177       185  

Deferred service revenue, short-term

    671       736  

Lease liabilities, current

    272       -  

Other accrued liabilities

    405       559  

Total current liabilities

    2,850       2,503  

Long-term liabilities:


Other long-term liabilities

    53       40  

Lease liabilities, long term

    494       -  

Deferred service revenue

    257       127  

Total long-term liabilities

    804       167  

Total liabilities

    3,654       2,670  

Shareholders’ equity:


Preferred stock, no par value; 5,000,000 shares authorized; no shares issued

    -       -  

Common stock, no par value; 50,000,000 shares authorized, shares issued and outstanding 1,914,852 at September 30, 2019 and 2,030,017 shares at December 31, 2018

    18,790       19,426  

Accumulated deficit





Total shareholders’ equity

    6,871       7,328  

Total liabilities and shareholders’ equity

  $ 10,525     $ 9,998  



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Qualstar Corp provided additional information to their SEC Filing as exhibits

Ticker: QBAK
CIK: 758938
Form Type: 8-K Corporate News
Accession Number: 0001437749-19-021937
Submitted to the SEC: Thu Nov 07 2019 3:41:15 PM EST
Accepted by the SEC: Thu Nov 07 2019
Period: Thursday, November 7, 2019
Industry: Magnetic And Optical Recording Media
  1. Earnings Release
  2. Financial Exhibit

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