Nstor (AMEX:NSO)
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nStor Technologies Reports First Quarter 2005 Results
42 Percent Sequential Revenue Growth
CARLSBAD, Calif., May 10 /PRNewswire-FirstCall/ -- nStor Technologies, Inc.
(AMEX:NSO), an innovative developer of storage networking solutions, today
announced operating results for the first quarter ended March 31, 2005.
During the first quarter, the company's revenues rose by 42 percent or $933,000
as compared to the corresponding quarter of 2004 and $274,000 or 9 percent from
the fourth quarter of 2004. The company's first quarter net loss available to
common stock was $2,311,000 or $.01 per common share on revenues of $3,181,000
compared to a net loss available to common stock of $2,136,000 or $.01 per
common share on revenues of $2,248,000 during the corresponding quarter of
2004. Gross margins improved from 23 percent in the first quarter of 2004 to
29 percent in 2005. First quarter bookings exceeded $4.2 million and backlog
at the beginning of Q2 exceeded $2.2 million. This represents the highest
quarterly bookings and quarter end back log recorded in the company's recent
history. These orders are largely scheduled to ship during the second quarter
of 2005.
Todd Gresham, nStor's president and CEO stated, "nStor's first quarter revenue
growth was primarily attributable to stronger business conditions, initial ramp
up of shipments to new OEM and Solution Integrator customers, as well as
increased spending by our customers in North America. OneStor(TM), our next
generation storage system announced in April, offers unique, breakthrough
technology that empowers customers to do more with less and has resulted in
attracting new customers. Our industry leading OneStor SAS/SATA product family
shows great promise for the company." He continued to state, "In the past
year, we have worked to stabilize the business and bring new products to
market. And as evidenced by our achievements in Q1, we continue to increase
our focus on new customer acquisitions and global expansion."
Mr. Gresham further commented that the company had reduced its debt by $9.1
million in the first quarter of 2005. This was attributable to the conversion
of debt to preferred stock by the company's chairman, H. Irwin Levy. This
conversion significantly improved nStor's shareholders' equity and working
capital. The company's remaining borrowings consist of $3.65 million,
including $3.3 million from a company affiliated with Mr. Levy, maturing in
April 2006. Mr. Gresham also commented on the increased operating expenses
during 2005. "In accordance with our business plan, we have added personnel
and increased spending particularly in sales, marketing and product development
in anticipation of further revenue growth and new product development during
2005. This contributed to the higher net loss reported during the first
Quarter. The company is currently exploring alternatives to raise additional
capital to fund the further growth for the remainder of the year.
Business Highlights
* Introduction and demonstration of the OneStor family of products,
securing several new customer wins and earning industry attention
* Growth in service and software sales, contributing to continued margin
improvement
* Ramp up of initial shipments to new OEMs within key vertical and
server markets
* Significant traction of the newly introduced NexStor 4900 Fibre
Channel storage subsystem, contributing to overall revenue growth
* Penetration of Latin American market with several new customer
contracts
About nStor Technologies, Inc.
Headquartered in Carlsbad, Calif., nStor Technologies, Inc. (AMEX:NSO) is a
developer of data storage solutions that are ideally suited for both large
enterprises as well as small to mid-sized businesses. The Company's flagship
controller technology and StorView software form the foundation for the OneStor
and NexStor family of turnkey solutions that support today's most popular
operating environments. Designed for storage-intensive environments and
mission-critical applications, nStor's products are offered in various
architectures including Fibre Channel, SAS, SCSI and SATA and are focused on
addressing customers' business needs and applications. The Company markets its
storage solutions through a global network of OEM partners and solutions
integrators. For more information, visit http://www.nstor.com/.
This press release includes statements that may constitute "forward-looking"
statements, usually containing the words "believe," "estimated," "project,"
"expect," "anticipate," or similar expressions. These statements are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. Factors that would cause or contribute to such
differences include, but are not limited to, insufficient funding, the
Company's inability to increase sales to current customers and to expand its
customer base, continued acceptance of the Company's products in the
marketplace, the Company's inability to improve the gross margin on its
products, competitive factors, dependence upon third-party vendors, outcome of
litigation, and other risks detailed in the Company's periodic report filings
with the Securities and Exchange Commission. By making these forward-looking
statements, the Company undertakes no obligation to update these statements for
revisions or changes after the date of this release. nStor and StorView are
registered trademarks of nStor Technologies, Inc.
nStor Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
March 31,
2005 2004
Sales $3,181 $2,248
Cost of sales 2,262 1,740
Gross margin 919 508
Operating expenses:
Selling, general and administrative 1,992 1,273
Research and development 1,111 1,011
Depreciation 62 53
Total operating expenses 3,165 2,337
Loss from operations (2,246) (1,829)
Interest expense (65) (179)
Loss from continuing operations (2,311) (2,008)
Income (loss) from discontinued operations 97 (128)
Net loss before preferred stock dividends (2,214) (2,136)
Preferred stock dividends (97) --
Net loss available to common stock $(2,311) $(2,136)
Basic and diluted net loss per common share
Loss from continuing operations $(.01) $(.01)
Income (loss) from discontinued operations -- --
$(.01) $(.01)
Weighted average number of common shares
outstanding, basic and diluted 165,098 165,070
nStor Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $327 $1,272
Accounts receivable, net 1,468 1,805
Note receivable 200 626
Inventories 1,582 1,882
Prepaid expenses and other 324 295
Total current assets 3,901 5,880
Property and equipment, net 462 512
Goodwill, net 1,989 1,989
Note receivable 426 417
$6,778 $8,798
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Borrowings - Affiliate $-- $9,100
Accounts payable and other 2,834 2,543
Total current liabilities 2,834 11,643
Long-term debt 3,650 3,650
Total liabilities 6,484 15,293
Shareholders' equity 294 (6,495)
$6,778 $8,798
DATASOURCE: nStor Technologies, Inc.
CONTACT: Veena Raman of nStor Technologies, Inc., +1-760-683-2500,
Web site: http://www.nstor.com/