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)

May 10, 2012

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

1

Item 2.02                      Results of Operations and Financial Condition.

On May 10, 2012, Qualstar Corporation issued a press release regarding results of operations and financial condition for the 2012 fiscal third quarter ended March 31, 2012.  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 May 10, 2012.

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
May 10, 2012	By:	/s/ William J. Gervais
		William J. Gervais
		Chief Executive Officer and President

2

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release of Qualstar Corporation dated May 10, 2012

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

For more information, contact:

Nidhi Andalon

Vice-President and CFO

Qualstar Corporation

(805) 583-7744

gervais@qualstar.com

QUALSTAR REPORTS FISCAL 2012 THIRD QUARTER RESULTS

SIMI VALLEY, Calif., May 10, 2012 — Qualstar® Corporation (Nasdaq: QBAK), a manufacturer of automated tape storage solutions and high efficiency power supplies, today reported financial results for the third quarter of fiscal 2012 ended March 31, 2012.

Fiscal 2012 Third Quarter Financial Results

Revenues for the third quarter of fiscal 2012 were $4.6 million, compared to $4.2 million for the same quarter of fiscal 2011, an increase of $0.4 million or 8.5 percent.  Loss from operations was $601,000 compared to $561,000 in the third quarter of fiscal 2011. Net loss was $553,000 or $0.05 per basic and diluted share, compared to a net loss of $514,000, or $0.04 per basic and diluted share for the third quarter of fiscal 2011.

Tape library segment revenues were $1.9 million for the third quarter, compared to $2.0 million in the third quarter of fiscal 2011, a decrease of $0.1 million, or 4.3 percent. This decrease in revenues was due to lower sales of TLS and RLS tape libraries and service, partially offset by increased sales of XLS tape libraries and media. Power supply segment revenues were $2.7 million for the quarter, compared to $2.2 million in the prior year quarter, an increase of $0.5 million, or 20.0 percent. The increase in revenues is related to an increase in overall demand.

Gross profit decreased to $1.2 million, or 25.8 percent of net revenues, for the three months ended March 31, 2012, from $1.4 million, or 32.3 percent of net revenues, for the three months ended March 31, 2011.  The decrease in gross profit is attributed to a change in product mix.

Research and development (“R&D”) expenses for the third quarter of fiscal 2012 were $696,000, or 15.1 percent of revenues, compared to $656,000 or 15.4 percent of revenues, for the third quarter of fiscal 2011.  The increase is due primarily to higher consulting expenses. Sales and marketing expenses were $451,000, or 9.8 percent of revenues, compared to $604,000 or 14.2 percent of revenues, in the corresponding period last year.  The decrease in sales and marketing expenses is attributed to lower compensation expenses and decreased advertising and promotion expenses.  General and administrative expenses were $644,000 or 14.0 percent of revenues, compared to $672,000, or 15.8 percent of revenues, for the same period last year.

Commenting on the Company’s business results, Bill Gervais, president and chief executive of Qualstar said, “We are finding traction with the new RLS 10U and 6U product line.  We are also seeing more activity overall in the market, compared to last quarter.  In the power supply segment, we shipped approximately 43,600 units, yielding the highest quarterly revenue for power supplies to date”.

Fiscal 2012 Nine-Month Financial Results

Qualstar reported revenues of $12.8 million for the first nine months of fiscal 2012, compared with $13.6 million for the first nine months of fiscal 2011.  The Company’s net loss for the first nine months of fiscal 2012 was $1.5 million, or $(0.12) per basic and diluted share, compared with a net loss of $0.6 million, or $(0.05) per basic and diluted share, in the first nine months of fiscal 2011.

Cash, cash equivalents and marketable securities were $21.6 million at March 31, 2012. Inventory, net of reserves, at March 31, 2012 was $6.1 million, compared to $5.7 million at June 30, 2011.

Qualstar Corporation Conference Call

The Company will hold a conference call to discuss its fiscal 2012 third quarter results on Thursday, May 10th, 2012 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 1-877-941-0843 or 1-480-629-9770.  An audio replay will be available through May 24th, 2012, by calling 1-800-406-7325 or 1-303-590-3030, and entering access code 4536084.

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-

QUALSTAR CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2012			2011			2012			2011
Net revenues	$	4,608		$	4,247		$	12,787		$	13,595
Cost of goods sold		3,418			2,876		$	9,056			8,495
Gross profit		1,190			1,371			3,731			5,100
Operating expenses:
Research and development		696			656			1,994			2,088
Sales and marketing		451			604			1,360			1,821
General and administrative		644			672			1,977			1,971
Total operating expenses		1,791			1,932			5,331			5,880
Loss from operations		(601	)		(561	)		(1,600	)		(780	)
Investment Income		48			47			133			137
Loss before income taxes		(553	)		(514	)		(1,467	)		(643	)
Benefit for income taxes		-			-			-			-
Net loss	$	(553	)	$	(514	)	$	(1,467	)	$	(643	)
Loss per share:
Basic and Diluted	$	(0.05	)	$	(0.04	)	$	(0.12	)	$	(0.05	)
Shares used to compute earnings per share:
Basic and Diluted		12,253			12,253			12,253			12,253

QUALSTAR CORPORATION

CONDENSED BALANCE SHEETS

(in thousands)

	March 31,		June 30,
	2012		2011
ASSETS	(Unaudited)		(Audited)
Current assets:
Cash and cash equivalents	$	3,777	$	4,970
Marketable securities, short-term		7,999		10,713
Receivables, net of allowance for doubtful accounts of $154 as of March 31, 2012 and $180 as of June 30, 2011		2,695		3,005
Inventories, net		6,082		5,673
Prepaid expenses and other current assets		224		312
Total current assets		20,777		24,673
Property and equipment, net		176		232
Marketable securities, long-term		9,778		6,981
Other assets		51		49
Total assets	$	30,782	$	31,935
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,518	$	1,293
Accrued payroll and related liabilities		419		495
Other accrued liabilities		1,123		945
Total current liabilities		3,060		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 March 31, 2012 and June 30, 2011		18,875		18,869
Accumulated other comprehensive income		19		38
Retained earnings		8,806		10,273
Total shareholders' equity		27,700		29,180
Total liabilities and shareholders' equity	$	30,782	$	31,935