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): August 13, 2019
QUALSTAR CORPORATION
(Exact Name of Registrant as Specified in its Charter)
|
California (State or other Jurisdiction of Incorporation or Organization) |
001-35810 (Commission File Number) |
95-3927330 (I.R.S. Employer Identification No.) |
1267 Flynn Road
Camarillo, CA 93012
(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))
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
|
Common Stock |
QBAK |
Nasdaq Capital Market |
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 August 13, 2019, Qualstar Corporation (the “Company”) issued a press release announcing the Company’s financial results for the three and six months ending June 30, 2019. 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 August 13, 2019.* |
* 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: August 14, 2019 |
By: |
/s/ Steven N. Bronson |
|
|
|
|
Name: Steven N. Bronson |
|
|
|
|
Title: President and Chief Executive Officer |
|
Exhibit 99.1
Qualstar Reports Fiscal 2019 Second Quarter Results
Camarillo, CA, August 13, 2019 — Qualstar Corporation (NASDAQ: QBAK), a leading manufacturer of data storage solutions and high-efficiency power supplies, today announced its financial results for the three and six months ended June 30, 2019.
(All amounts are in thousands, except per share data):
Results for the Three Months Ended June 30, 2019 vs. 2018
|
● |
Net revenue increased 6.4% to $3,439 from $3,231 |
|
● |
Total operating expenses decreased 12.2% to $832 from $948 |
|
● |
Net loss of $11 or $0.01 per basic and diluted share vs. net income of $474 or $0.23 per basic and diluted share |
Results for the Six Months Ended June 30, 2019 vs. 2018
|
● |
Net revenue increased 2.1% to $6,295 from $6,166 |
|
● |
Total operating expenses decreased 9.5% to $1,616 from $1,786 |
|
● |
Net income of $130 compared to $1,064, for the prior year period, a decrease of 87.8%, or $0.07 per basic and diluted share vs. $0.52 per basic and $0.51 per diluted share |
|
● |
Cash provided by operations of $158 vs. $820 |
Highlights for the Three and Six Months Ended June 30, 2019
|
● |
Strong balance sheet and no debt |
|
● |
Cash, restricted cash and cash equivalents decreased by 8.3% to $4,476 from $4,881 as of December 31, 2018 |
|
● |
Revenue growth in the data storage products segment has increased for the three months ended June 30, 2019 from the same period last year by 69% to $1,129 from $668 and for the six months ended June 30, 2019 by 61.5% to $1,912 from $1,184 for the same period last year |
|
● |
Gross profit decreased for the three months ended June 30, 2019 from the same period last year by 43.4% to $805 from $1,422 and for the six months ended June 30, 2019 by 39.5% to $1,725 from $2,850 for the same period last year, with the decrease being 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 in the current phase of our Optical Drive Assembly (“ODA”) product development with Sony. |
|
● |
Under the Stock Repurchase Program, during the three and six months ended June 30, 2019 a total of 33,972 and 92,706 shares were repurchased, repectively, and as of August 9, 2019 a total of 126,366 shares have been repurchased since the program began. The program expires December 5, 2019. |
“We are pleased with our growth in the data storage business; unfortunately, we are experiencing several headwinds in our power supply segment, including China tariffs, and increased competition,” said Steven N. Bronson, CEO, and President of Qualstar.“ Mr. Bronson also stated, “we are actively taking steps to address the challenges in the power supply business, including product expansion, and pursuing new strategic partnerships.”
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. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. 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 (www.sec.gov) or from Qualstar’s website (www.qualstar.com).
Contact Information:
Steven N. Bronson
Chief Executive Officer
Qualstar Corporation
805-617-4419
IR@Qualstar.com
-Financial Tables to Follow-
QUALSTAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
|
2019 |
2018 |
2019 |
2018 |
|||||||||||||
|
Net revenues |
$ | 3,439 | $ | 3,231 | $ | 6,295 | $ | 6,166 | ||||||||
|
Cost of goods sold |
2,634 | 1,809 | 4,570 | 3,316 | ||||||||||||
|
Gross profit |
805 | 1,422 | 1,725 | 2,850 | ||||||||||||
|
Operating expenses: |
||||||||||||||||
|
Engineering |
228 | 128 | 351 | 249 | ||||||||||||
|
Sales and marketing |
306 | 354 | 614 | 649 | ||||||||||||
|
General and administrative |
298 | 466 | 651 | 888 | ||||||||||||
|
Total operating expenses |
832 | 948 | 1,616 | 1,786 | ||||||||||||
|
Income (loss) from operations |
(27 |
) |
474 | 109 | 1,064 | |||||||||||
|
Other income |
16 | - | 21 | - | ||||||||||||
|
Income (loss) before income taxes |
(11 |
) |
474 | 130 | 1,064 | |||||||||||
|
Provision for income taxes |
- | - | - | - | ||||||||||||
|
Net income (loss) |
$ | (11 |
) |
$ | 474 | $ | 130 | $ | 1,064 | |||||||
|
Earnings per share: |
||||||||||||||||
|
Basic |
$ | (0.01 |
) |
$ | 0.23 | $ | 0.07 | $ | 0.52 | |||||||
|
Diluted |
$ | (0.01 |
) |
$ | 0.23 | $ | 0.07 | $ | 0.51 | |||||||
|
Shares used in per share calculation: |
||||||||||||||||
|
Basic |
1,952 | 2,048 | 1,972 | 2,048 | ||||||||||||
|
Diluted |
1,952 | 2,094 | 1,972 | 2,098 | ||||||||||||
QUALSTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
|
June 30, 2019 |
December 31, 2018 |
|||||||
|
(Unaudited) |
||||||||
|
Assets |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ | 4,376 | $ | 4,781 | ||||
|
Restricted cash |
100 | 100 | ||||||
|
Accounts receivables, net |
2,238 | 1,809 | ||||||
|
Inventories, net |
2,744 | 2,897 | ||||||
|
Prepaid expenses and other current assets |
131 | 180 | ||||||
|
Total current assets |
9,589 | 9,767 | ||||||
|
Non-current assets: |
||||||||
|
Property and equipment, net |
106 | 112 | ||||||
|
Right-of-use |
822 | - | ||||||
|
Other assets |
129 | 119 | ||||||
|
Total non-current assets |
1,057 | 231 | ||||||
|
Total assets |
$ | 10,646 | $ | 9,998 | ||||
|
Liabilities and Shareholders’ Equity |
||||||||
|
Current liabilities: |
||||||||
|
Accounts payable |
$ | 1,365 | $ | 1,023 | ||||
|
Accrued payroll and related liabilities |
203 | 185 | ||||||
|
Deferred service revenue, short-term |
618 | 736 | ||||||
|
Lease liabilities, current |
303 | - | ||||||
|
Other accrued liabilities |
453 | 559 | ||||||
|
Total current liabilities |
2,942 | 2,503 | ||||||
|
Long-term liabilities: |
||||||||
|
Other long-term liabilities |
52 | 40 | ||||||
|
Lease liabilities, long term |
545 | - | ||||||
|
Deferred service revenue |
168 | 127 | ||||||
|
Total long-term liabilities |
765 | 167 | ||||||
|
Total liabilities |
3,707 | 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 1,937,310 at June 30, 2019 and 2,030,017 shares at December 31, 2018 |
18,907 | 19,426 | ||||||
|
Accumulated deficit |
(11,968 |
) |
(12,098 |
) |
||||
|
Total shareholders’ equity |
6,939 | 7,328 | ||||||
|
Total liabilities and shareholders’ equity |
$ | 10,646 | $ | 9,998 | ||||
4