8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

November 10, 2011

QUALSTAR CORPORATION

(Exact name of registrant as specified in its charter)

California	000-30083	95-3927330
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3990-B Heritage Oak Court, Simi Valley, CA	93063
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code:  (805) 583-7744

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Exhibit Index on page 3

Item 2.02             Results of Operations and Financial Condition.

On November 10, 2011, Qualstar Corporation issued a press release regarding results of operations and financial condition for the 2012 fiscal first quarter ended September 30, 2011.  A copy of this press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01             Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit Number	Description
99.1	Press release of Qualstar Corporation dated November 10, 2011.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	QUALSTAR CORPORATION
November 10, 2011	By:	/s/ William J. Gervais
		William J. Gervais Chief Executive Officer and President

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release of Qualstar Corporation dated November 10, 2011.

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EX-99.1

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

For more information, contact:

Nicki Andalon

Vice President & CFO

Qualstar Corporation

(805) 583-7744

nandalon@qualstar.com                                              

QUALSTAR REPORTS FISCAL 2012 FIRST QUARTER RESULTS

SIMI VALLEY, Calif., November 10, 2011 — Qualstar® Corporation (Nasdaq: QBAK), a manufacturer of automated tape storage solutions and high efficiency power supplies, today reported financial results for the first quarter of fiscal 2012 ended September 30, 2011.

Fiscal 2012 First Quarter Financial Results

Revenues for the first quarter of fiscal 2012 were $4.6 million, compared to $5.2 million for the same quarter of fiscal 2011, a decrease of $0.6 million or 11.8 percent.  Income from operations was $13,000 compared to $120,000 in the first quarter of fiscal 2011. Net income was $57,000 or $0.00 per basic and diluted share, compared to a net income of $167,000, or $0.01 per basic and diluted share for the first quarter of fiscal 2011.

Tape library segment revenues were $2.4 million for the first quarter, compared to $3.2 million in the first quarter of fiscal 2011, a decrease of $0.8 million, or 24.9 percent. Power supply segment revenues were $2.2 million for the quarter, compared to $2.0 million in the prior year quarter, an increase of $0.2 million, or 9.3 percent.

Gross profit decreased to $1.7 million, or 37.1 percent of net revenues, for the three months ended September 30, 2011, from $2.1 million, or 40.3 percent of net revenues, for the three months ended September 30, 2010.  The decrease in gross profit is attributed to a change in product mix.

Research and development (“R&D”) expenses for the first quarter of fiscal 2012 were $648,000, or 14.0 percent of revenues, compared to $707,000 or 13.5 percent of revenues, for the first quarter of fiscal 2011.  The decrease is due primarily to lower compensation expenses related to reductions in personnel. Sales and marketing expenses were $461,000, or 10.0 percent of revenues, compared to $636,000 or 12.1 percent of revenues, in the corresponding period last year.  The decrease in sales and marketing expenses is attributed to lower compensation expenses related to reductions in personnel and lower advertising and promotion expenses.  General and administrative expenses were $592,000 or 12.8 percent of revenues in the first quarter of fiscal 2012, compared to $649,000, or 12.4 percent of revenues, for the same period last year.  The decrease in general and administrative expense is due to lower bad debt expenses.

Cash, cash equivalents and marketable securities were $21.7 million at September 30, 2011, Inventory, net of reserves, at September 30, 2011 was $6.2 million, compared to $5.7 million at June 30, 2011.

Commenting on the Company’s business results, Bill Gervais, president and chief executive of Qualstar said, “We’re off to an encouraging start in fiscal 2012.  Our first quarter results reflected an uptick in revenues and gross profit to a level sufficient to provide a small profit. We shipped 12 XLS units in the quarter with total XLS related revenue coming in at $1.0 million.  And we benefitted from a pick-up in revenues from our new 10U, or RLS 8500 library series, as well as solid performance in our power supplies product line.”

Qualstar Corporation Conference Call

Company management will hold a conference call to discuss its fiscal 2012 first quarter results on Thursday, November 10, 2011 at 2:00 p.m. Pacific standard time (5:00 p.m. Eastern).  Investors are invited to listen to the call live via the Internet using the link under the “Investors” section at www.qualstar.com.  Please go to the Website at least 15 minutes early to register, download and install any necessary audio software.  A replay of the Webcast will be available after the live conference call.  Additionally, participants can dial into the live conference call by calling 877-941-6009 or 480-629-9722.  An audio replay will be available through November 17, 2011, by calling 800-406-7325 or 303-590-3030, and entering access code 4486870.

About Qualstar Corporation

Qualstar, founded in 1984, is a diversified electronics manufacturer specializing in data storage and power supplies. The company’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.

Forward-Looking Statements

Statements concerning the future business, operating results and financial condition of the Company are “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995.  Such statements are based upon management’s current expectations and are subject to a number of uncertainties that could cause actual performance and results to differ materially from the results discussed in the forward-looking statements.  Factors that could affect the Company’s actual results include the Company’s ability to increase sales of its products; rescheduling or cancellation of customer orders; unexpected shortages of critical components; unexpected product design or quality problems; and, adverse changes in market demand for its products.  The Company undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.  Further information on these and other potential factors that could affect the Company’s financial results or condition are included in Qualstar’s filings with the Securities and Exchange Commission.  In particular, reference is made to the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011, and to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of its Form 10-K.

-Financial Tables to Follow-

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QUALSTAR CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three Months Ended Sept. 30,
	2011		2010
Net revenues	$	4,624	$	5,241
Cost of goods sold		2,910		3,129
Gross profit		1,714		2,112
Operating expenses:
Research and development		648		707
Sales and marketing		461		636
General and administrative		592		649
Total operating expenses		1,701		1,992
Income from operations		13		120
Investment Income		44		47
Income before income taxes		57		167
Benefit for income taxes		-		-
Net income	$	57	$	167
Earnings per share:
Basic and Diluted	$	0.00	$	0.01
Shares used to compute earnings per share:
Basic and Diluted		12,253		12,253

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QUALSTAR CORPORATION

CONDENSED BALANCE SHEETS

 (In thousands)

	Sept. 30,		June 30,
	2011		2011
ASSETS	(Unaudited)		(Audited)
Current assets:
Cash and cash equivalents	$	3,731	$	4,970
Marketable securities, short-term		9,192		10,713
Receivables, net of allowance for doubtful accounts of $43 as of September 30, 2011 and $180 as of June 30, 2011		4,021		3,005
Inventories, net		6,167		5,673
Prepaid expenses and other current assets		399		312
Total current assets		23,510		24,673
Property and equipment, net		205		232
Marketable securities, long-term		8,802		6,981
Other assets		51		49
Total assets	$	32,568	$	31,935
LIABILITIES AND SHAREHOLDERS'  EQUITY
Current liabilities:
Accounts payable	$	1,744	$	1,293
Accrued payroll and related liabilities		391		495
Other accrued liabilities		1,194		945
Total current liabilities		3,329		2,733
Other long-term liabilities		22		22
Commitments and contingencies
Shareholders' equity:
Common stock, no par value; 50,000 shares authorized, 12,253 shares issued and outstanding as of and September 30, 2011 and June 30, 2011		18,870		18,869
Accumulated other comprehensive income		17		38
Retained earnings		10,330		10,273
Total shareholders' equity		29,217		29,180
Total liabilities and shareholders' equity	$	32,568	$	31,935

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