Gross Profits and Margins Improve
SAN DIEGO , Oct. 23 /PRNewswire-FirstCall/ -- Overland Storage, Inc. (Nasdaq: OVRL) today reported results for its fiscal 2009 first quarter ended September 30, 2008 .
Net revenue for the fiscal 2009 first quarter was
The company noted that increased sales through its branded sales channel nearly offset the expected sales decline to OEM customers during the fiscal 2009 first quarter in comparison to the fiscal 2008 first quarter. Specifically, in the fiscal 2009 first quarter, sales to the company's largest OEM customer were down 25.2 percent compared to the fiscal 2008 first quarter, reflecting the continuing transition by the customer to a different product. Conversely, the company's branded revenue increased 12.3 percent compared to the prior year quarter, reflecting the addition of revenue from the Snap Server(R) line of products that the company acquired on June 27, 2008 .
The company further noted that net revenue for the fiscal 2009 first quarter grew 11.6 percent on a sequential basis, compared to net revenue of
Gross profit increased 34.8 percent from
Operating expenses in the fiscal 2009 first quarter were
"It was a challenging quarter, but there are two very positive elements included in our reported results that I want to highlight," stated Vern LoForti , president and chief executive officer of Overland Storage. "First is the 16.5 percent sequential growth in branded revenue from the 2008 fourth quarter. This increase reflects an improved revenue stream from the Snap acquisition. Second is the significant improvement in our gross profit margin to 27.0 percent. Revenue growth and higher gross profit margins are key elements to our recovery.
"In our first quarter, we accomplished two significant tasks: the integration of the Snap business that we bought at the end of June and the restructuring that we triggered at the end of August. In both instances, I am extremely pleased with the timeliness and efficiency of these transitions. By the end of September, we had substantially completed the integration of both the Snap personnel and its business systems into Overland, as originally planned. At this point, we have completed training our worldwide sales force about Snap products and continue training our channel partners. We are now introducing the products to our entire channel, a critical step toward maximizing our Snap investment.
"In September, we announced a new version of the Snap software base, called GuardianOS(TM) 5.0, and a new version of the Snap replication engine, called Snap Enterprise Data Replicator(TM) 7.2. We are now shipping these new software elements with all of our Snap products. In addition, we announced an expansion to the Snap product line, the Snap Server 620, which delivers 63 percent faster performance than its predecessor. A further development is a new strategic relationship with Mobotix Vision Systems, the leader in highresolution IP network cameras. We formed this partnership to deliver a bundled solution that includes Snap Servers and Mobotix's line of digital, network-based video security solutions. We believe this combination provides a simple and compelling solution to the rapidly growing video surveillance market.
"Following the Snap acquisition, we restructured in order to adjust our operating expense structure. Though we cut approximately
"We ended the September quarter with
"The addition of the Snap NAS product line enables us to offer a portfolio of end-to-end data protection solutions not offered by the majority of our competitors. We are extremely encouraged by the high level of interest expressed by many of our channel partners in Snap and in the new video surveillance solutions," concluded LoForti. "Our expanded product set and newly energized sales team is a potent combination that we hope will be the catalyst to improved results in the future."
About Overland Storage
Overland Storage provides affordable end-to-end data protection solutions that are engineered to store smarter, protect faster and extend anywhere -- across networked storage, media types, and multi-site environments. Overland Storage products include award-winning NEO SERIES(R) and ARCvault(R) tape libraries, REO SERIES(R) disk-based backup and recovery appliances with VTL capabilities, Snap Server(R) NAS appliances, and ULTAMUS(R) RAID high-performance, high-density storage. Overland sells its products through leading OEMs, commercial distributors, storage integrators and value-added resellers. For more information, visit Overland's web site at www.overlandstorage.com
Except for the factual statements made herein, the information contained in this news release consists of forward-looking statements that involve risks, uncertainties and assumptions that are difficult to predict. Words and expressions reflecting optimism, satisfaction or disappointment with current prospects, as well as words such as "believes," "hopes," "intends," "estimates," "expects," "projects," "plans," "anticipates" and variations thereof, identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. Such forward-looking statements are not guarantees of performance and the company's actual results could differ materially from those contained in such statements. Factors that could cause or contribute to such differences include: failure to obtain sufficient funding for us to execute our business strategy; unexpected delays or costs related to the acquisition and integration of the Snap business; possible delays in new product introductions and shipments; failure to achieve desired benefits from cost-cutting measures; market acceptance of the company's new product offerings; the ability to maintain strong relationships with branded channel partners; the timing and market acceptance of new product introductions by competitors; worldwide information technology spending levels; unexpected shortages of critical components; our inability to penetrate the video surveillance market successfully; rescheduling or cancellation of customer orders; loss of a major customer; general competition and price pressures in the marketplace; the company's ability to control costs and expenses; and general economic conditions. Reference is also made to other factors detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this release and the company undertakes no obligation to publicly update any forward-looking statements to reflect new information, events or circumstances after the date of this release.
Overland, Overland Storage, REO Series, REO, NEO Series, NEO, ARCvault, ULTAMUS, Snap Server, GuardianOS and Snap Enterprise Data Replicator are trademarks of Overland Storage, Inc.
Webcast: A live audio Webcast of Overland's management conference call discussing fiscal 2009 first quarter results will be held beginning at 5:00 p.m. EDT , October 23, 2008 , and will be posted at www.overlandstorage.com. Please provide adequate time to log on. Following the broadcast, the conference call will be archived for future access on Overland's website.
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SOURCE Overland Storage, Inc.