Overland Data Reports Fourth Quarter Results
Overland Data, Inc. today reported revenue for its fourth fiscal quarter ended June 30, 2001 of $37,365,000. According to the company, revenue for the same quarter of the prior year was $38,311,000. Pro forma net income for the fourth fiscal quarter, which also was ahead of the First Call consensus estimate, totaled $655,000, or $.06 per diluted share, compared to $1,297,000, or $.12 per share, in the fourth quarter of fiscal year 2000.
For the full 2001 fiscal year, revenue of $155,696,000 rose 27% over fiscal 2000 revenue of $122,979,000. Pro forma earnings for fiscal 2001 rose 34% to $4,165,000, or $.38 per share, compared to $3,106,000, or $.29 per share, in fiscal 2000.
Pro forma earnings in the fiscal 2001 fourth quarter exclude several one-time items. On an after-tax basis, they are: (1) a $1.5 million charge ($.14 per share) for inventory reserves and related expenses incident to the Company's exit of the entry-level tape drive business as announced on June 18, 2001; (2) a $420,000 ($.04 per share) charge for severance expenses related to employment reductions effected during the quarter; and (3) a $241,000 ($.02 per share) charge for the write-off of an optical product design and lawsuit settlements. Pro forma earnings for the full 2001 fiscal year exclude these fourth quarter items as well as a one-time gain in the third fiscal quarter of $492,000 ($.04 per share) related to the sale by the Company of its SLR Loader design to Tandberg Data.
Christopher Calisi, who joined Overland in March 2001 as the Company's President & CEO, stated, "We are pleased with our performance for the quarter in light of the difficult economic conditions. We held sales level with those of the March quarter, and we are seeing encouraging signs that our newly introduced Neo(TM) tape library system is being well received in the marketplace. It contains features not enjoyed by any other competitive products and its density, scalability and low initial price point make it a natural choice in these times when our customers' IT purchases are being closely scrutinized. We intend to capitalize on this opportunity and are redirecting our spending to grow our branded product sales force over the next few quarters. "We are also pleased that we succeeded during the fourth quarter in lowering our cost structure and operating expenses. The sale of our entry-level tape drive designs and the exit of an under-performing line of business were key factors in this effort. We also wish to thank our employees who have remained committed and dedicated in the face of difficult times to making Overland a more efficient operation and to improving the predictability of our earnings. We expect to see the full effect of these actions in the first quarter of fiscal year 2002. Our actions will help us fund the expansion of our sales force in our efforts to take market share from our competitors in the mid-range tape automation market. "Although our business is stable, the lack of public confidence in the economy and other uncertainties force us to be conservative in our forward guidance and to limit it to a single quarter," added Calisi. "Although the September quarter is normally seasonally slow, we expect first quarter fiscal 2002 revenues to be flat sequentially with the fourth quarter of 2001. We expect pressure on our gross margin down to the 23-24% range due to lower initial margins on ramping sales and production volumes of our new products. Reduced margins should be offset by expense reductions and net income for the quarter should be flat with the pro forma earnings of the fourth quarter.