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, 2017
QUALSTAR CORPORATION
(Exact Name of Registrant as Specified in its Charter)
|
California (State or other Jurisdiction of Incorporation or Organization) |
000-30083 (Commission File Number) |
95-3927330 (I.R.S. Employer Identification No.) |
130 West Cochran Street, Unit C
Simi Valley, CA 93065
(Address of principal executive offices) (Zip Code)
(805) 583-7744
(Registrant’s telephone number, including area code)
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 (see General Instruction A.2. below):
☐ Written communication pursuant to Rule 425 under 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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On May 10, 2017, Qualstar Corporation (the “Company”) issued a press release announcing the Company’s financial results for the first quarter ended March 31, 2017. A copy of this press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
|
Exhibit No. |
|
Description |
|
99.1 |
|
Press release of Qualstar Corporation dated May 10, 2017.* |
* This exhibit is furnished, not filed.
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 |
| |
|
|
|
|
|
|
|
|
|
|
|
Dated: May 10, 2017 |
By: |
/s/ Steven N. Bronson |
|
|
|
|
Name: Steven N. Bronson |
|
|
|
|
Title: President and Chief Executive Officer |
|
Exhibit Index
|
Exhibit No. |
|
Description |
|
99.1 |
|
Press release of Qualstar Corporation dated May 10, 2017. |
Exhibit 99.1
QUALSTAR REPORTS RESULTS FOR THE FIRST QUARTER 2017
Qualstar reports its first quarter of profitability since September 30, 2011 and third consecutive quarter of positive cash flow
Simi Valley, Calif., May 10, 2017 — Qualstar® Corporation (NASDAQ: QBAK), a manufacturer of data storage solutions and high-efficiency power supplies, today reported financial results for the first quarter ended March 31, 2017.
Quarter Ended March 31, 2017 Financial Results
Revenues for the quarter ended March 31, 2017 were $2.4 million, compared with $2.2 million for the quarter ended March 31, 2016, an increase of $0.2 million or 9.1%. Income from operations for the quarter ended March 31, 2017 was $0.1 million compared with a loss of $(0.4) million for the quarter ended March 31, 2016. Net income per basic and diluted share for the quarter ended March 31, 2017 was $0.03 and $(0.20) for the quarter ended March 31, 2016.
Data Storage segment revenues were $0.7 million for the quarter ended March 31, 2017, compared with $0.8 million for the same period last year, a decrease of $0.1 million or (12.5)%, primarily due to pricing competition in the industry. Power supply segment revenues were $1.7 million for the quarter, compared with $1.4 million in the quarter ended March 31, 2016, an increase of $0.3 million, or 21.4%, due to new customer projects and the timing of orders shipped to manufacturers.
Gross margin was 37.5% of revenues or $0.9 million for the quarter ended March 31, 2017, an increase from the gross margin of 31.8% of revenues or $0.7 million for the quarter ended March 31, 2016. Operating expenses for the three months ended March 31, 2017 were $0.8 million or 33.3% of revenues, compared with $1.1 million, or 50.0% of revenues for the three months ended March 31, 2016.
Steven N. Bronson, Chief Executive Officer and President of Qualstar said, “Our combined efforts on improving sales, product offerings and ongoing cost cutting measures has demonstrated our success in executing the turnaround of our company. We are optimistic that we can compete effectively with our lean cost structure and customer centric approach”. Mr. Bronson added, “we are not only pleased with reporting our first quarterly profit in almost seven years but that we achieved our third consecutive quarter of positive cash flow.”.
Cash, cash equivalents and restricted cash increased $0.1 million for the quarter ended March 31, 2017 to $3.8 million compared to $3.7 million at March 31, 2016.
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.
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. 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, 2016, 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 (www.sec.gov) or from Qualstar’s website (www.qualstar.com).
Contact Information:
Steven N. Bronson
Chief Executive Officer
Qualstar Corporation
805.583.7744 ext. 154
-Financial Tables to Follow-
QUALSTAR CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
|
Three Months Ended March 31, |
||||||||
|
2017 |
2016 |
|||||||
|
Net revenues |
$ | 2,439 | $ | 2,150 | ||||
|
Cost of goods sold |
1,549 | 1,501 | ||||||
|
Gross profit |
890 | 649 | ||||||
|
Operating expenses: |
||||||||
|
Engineering |
186 | 395 | ||||||
|
Sales and marketing |
247 | 300 | ||||||
|
General and administrative |
399 | 369 | ||||||
|
Total operating expenses |
832 | 1,064 | ||||||
|
Income (loss) from operations |
58 | (415 |
) | |||||
|
Other income |
— | 1 | ||||||
|
Income (loss) before income taxes |
58 | (414 |
) | |||||
|
Provision for income taxes |
— | — | ||||||
|
Net income (loss) |
$ | 58 | $ | (414 |
) | |||
|
Income (loss) per common share: |
||||||||
|
Basic and diluted |
$ | 0.03 | $ | (0.20 |
) | |||
|
Weighted average common shares outstanding: |
||||||||
|
Basic and diluted |
2,042 | 2,042 | ||||||
QUALSTAR CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands)
|
March 31, 2017 |
December 31, 2016 |
|||||||
|
(Unaudited) |
||||||||
|
Assets |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ | 3,740 | $ | 3,691 | ||||
|
Restricted cash |
100 | 100 | ||||||
|
Accounts receivables, net |
1,946 | 1,583 | ||||||
|
Inventories, net |
1,127 | 1,360 | ||||||
|
Prepaid expenses and other current assets |
189 | 166 | ||||||
|
Total current assets |
7,102 | 6,900 | ||||||
|
Non-current assets: |
||||||||
|
Property and equipment, net |
244 | 286 | ||||||
|
Other assets |
50 | 77 | ||||||
|
Total assets |
$ | 7,396 | $ | 7,263 | ||||
|
Liabilities and Shareholders’ Equity |
||||||||
|
Current liabilities: |
||||||||
|
Accounts payable |
$ | 953 | $ | 888 | ||||
|
Accrued payroll and related liabilities |
167 | 222 | ||||||
|
Deferred service revenue, short term |
906 | 787 | ||||||
|
Other accrued liabilities |
324 | 359 | ||||||
|
Total current liabilities |
2,350 | 2,256 | ||||||
|
Long term liabilities: |
||||||||
|
Other long term liabilities |
64 | 63 | ||||||
|
Deferred service revenue |
85 | 105 | ||||||
|
Total long term liabilities |
149 | 168 | ||||||
|
Total liabilities |
2,499 | 2,424 | ||||||
|
Shareholders’ equity: |
||||||||
|
Preferred stock, no par value; 5,000 shares authorized; no shares issued |
- | - | ||||||
|
Common stock, no par value; 50,000 shares authorized, 2,042 shares issued and outstanding as of March 31, 2017 and December 31, 2016 |
19,063 | 19,063 | ||||||
|
Accumulated deficit |
(14,166 |
) |
(14,224 |
) | ||||
|
Total shareholders’ equity |
4,897 | 4,839 | ||||||
|
Total liabilities and shareholders’ equity |
$ | 7,396 | $ | 7,263 | ||||
4