Qualstar Corporation Reports Fourth Quarter 2024 Results
PR Newswire
IRVINE, Calif., March 6, 2025
Data Storage Segment Reports 8(th) Consecutive Year of Income
IRVINE, Calif., March 6, 2025 /PRNewswire/ -- Qualstar Corporation (OTC Markets: QBAK), a leading manufacturer of data storage solutions and high-efficiency power supplies, today announced its financial results for the three months and year ended December 31, 2024.
Consolidated Financial Results (Unaudited)
(Amounts in thousands except per share data and percentages)
Three Months Ended December 31, Year Ended December 31,
------------------------------------------------
2024 2023 $ % 2024 2023 $ %
----------- ---------- ------- ------ ---------- ---------- ------- ------ ----
Revenues $ 2,033 $3,404 $(1,371) (40.3)% $ 8,044 $10,616 $(2,572) (24.2)%
Gross profit $ 683 $1,213 $ (530) (43.7)% $ 2,458 $ 3,280 $ (822) (25.1)%
Gross margin 33.6% 35.6% 30.6% 30.9%
Income
(loss) from
operations $ 62 $ 323 $ (468) $ 140
Net income
(loss) $ (10) $ 320 $ (471) $ 191
Earnings
(loss) per
share $(0.01) $ 0.21 $(0.33) $ 0.12
Adjusted
EBITDA $ 88 $ (73) $ (70) $ (96)
Key Highlights:
-- Revenue decreased 40% for the three months ended December 31, 2024,
compared to the three months ended December 31, 2023, and decreased 24%
for the year ended December 31, 2024, compared to the prior year. The
declines in revenues were primarily due to lower shipments of our power
supplies products in 2024 compared to 2023, and also in part to lower
shipments of our data storage products this year compared to last year.
In our power supplies business, as previously reported, we experienced
the loss of a large customer in 2024, and this is expected to
significantly reduce revenues for the foreseeable future.
-- Gross margin percentage declined slightly to 34% for the three months
ended December 31, 2024, compared to 36% for the three months ended
December 31, 2023, and was approximately flat at 31% for the years ended
December 31, 2024 and 2023. The gross margin percentage changes were due
to changes in the mix of our products, services, and customers.
-- The Company's data storage business segment reported pre-tax income of
$49,000 for the three months ended December 31, 2024, and pre-tax income
of $127,000 for the year ended December 31, 2024, marking the 8th
consecutive year of reporting pre-tax income. The Company's power
supplies business segment reported pre-tax loss of $56,000 for the three
months ended December 31, 2024, and pre-tax loss of $595,000 for the year
ended December 31, 2024.
-- Net loss for the three months and year ended December 31, 2024 were
impacted by revenue levels and also by certain non-routine expenses and
non-cash charges. As discussed below, we use an Adjusted EBITDA financial
measure to evaluate our core operating performance. Adjusted EBITDA for
the three months ended December 31, 2024 was $88,000, compared to
negative $73,000 for the three months ended December 31, 2023. Adjusted
EBITDA for the year ended December 31, 2024 was negative $70,000,
compared to negative $96,000 for the year ended December 31, 2023.
-- The Company has repurchased 471,161 shares of its common stock during the
years 2021 to 2024 under a stock repurchase program. In March 2025, the
Company's Board of Directors approved an extension of the Company's stock
repurchase program through December 31, 2026 for up to an additional
100,000 shares of common stock.
-- We continue to pursue acquisitions and partnerships with companies in the
data management software and hardware systems spaces.
-- We ended the year with $2.4 million in cash and cash equivalents.
Qualstar makes available its annual financial statements, quarterly financial statements, and other significant reports and amendments to such reports, free of charge, on its website as soon as reasonably practicable after such reports are prepared. Please visit www.qualstar.com to view the Company's financial results in more detail.
About Qualstar Corporation
Qualstar Corporation, founded in 1984, manufactures and markets data storage system products and compact, high efficiency power solutions.
Our data storage systems are marketed under the Qualstar$(TM)$ brand and include highly scalable automated magnetic tape libraries used to store, retrieve and manage electronic data primarily in the network computing environment. Our products, sold through resellers, system integrators and OEMs, range from entry-level to enterprise and are a cost-effective solution for organizations requiring backup, recovery and archival storage of critical electronic information.
The Company's power solutions, marketed under the N2Power(TM) brand, include standard, semi-custom and custom versions and provide OEM designers with increased functionality while reducing thermal loads and cooling requirements and lowering operating costs. These products are sold to OEMs in a wide range of markets, including telecom/networking equipment, audio/visual, industrial, gaming and medical.
More information is available at www.qualstar.com and www.n2power.com or by phone at 805-583-7744.
Non-GAAP Financial Measure
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with United States generally accepted accounting principles ("GAAP"), we use the following non-GAAP financial measure: Adjusted EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We define Adjusted EBITDA for a particular period as net income (loss) before interest, taxes, depreciation and amortization, and as further adjusted for non-routine expenses that may not be indicative of our core business operating results such as severance compensation, provisions (recoveries) for inventory net realizable value, gains/losses on marketable securities, gains/losses on foreign currency transactions, and non-cash expenses such as stock-based compensation expense.
We use this non-GAAP financial measure for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our core business operating results. We believe that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting, and analyzing future periods. This non-GAAP financial measure also facilitates management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe this non-GAAP financial measure is useful to investors both because (1) is allows for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) it is used by our investors to help them analyze the health of our business.
There are a number of limitations related to the use of non-GAAP financial measures. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant financial measures in accordance with GAAP.
The following table reconciles Net Income (Loss) to Adjusted EBITDA for the three months and years ended December 31, 2024 and 2023:
Three Months Ended Year Ended
December 31, December 31,
---------------------- -----------------
2024 2023 2024 2023
----------- --------- --------- ------
(in thousands)
Net income (loss) $ (10) $ 320 $ (471) $ 191
Adjustments to arrive
at earnings before
interest, taxes,
depreciation, and
amortization
(EBITDA):
Interest income (21) (21) (80) (45)
Depreciation and
amortization expense 2 9 26 37
------- -------- ----- -----
EBITDA (29) 308 (525) 183
Adjustments to arrive
at Adjusted EBITDA:
Severance compensation -- -- 57 9
Provisions
(recoveries) for
inventory net
realizable value (19) (389) 145 (279)
(Gains) losses on
marketable
securities, net 56 35 49 (5)
(Gains) losses on
foreign currency
transactions, net 34 (27) 29 (4)
Stock-based
compensation expense 46 -- 175 --
------- -------- ----- -----
Adjusted EBITDA $ 88 $ (73) $ (70) $ (96)
======= ======== ===== =====
Contact Information:
Steven N. Bronson
Chief Executive Officer
Qualstar Corporation
805-617-4419
IR@Qualstar.com
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SOURCE Qualstar Corporation
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