Overland Storage (NASDAQ:OVRL)
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Overland Storage Lowers Guidance for Fiscal 2004 Fourth Quarter
Cites OEM Sales Levels
SAN DIEGO, June 30 /PRNewswire-FirstCall/ -- Overland Storage, Inc.
(NASDAQ:OVRL) today said it expects fiscal fourth quarter revenue for the year
ended June 30, 2004 to be approximately $54 million, or 10 percent below its
previous guidance of $60 million issued in April 2004. The company attributed
the shortfall primarily to lower than expected OEM revenue. Revenue for fiscal
year 2004 is now expected to reach a record $237 million, representing a 21
percent increase over fiscal 2003.
"While we are extremely pleased with our strong year-over-year growth during
fiscal 2004, we are disappointed with our performance for the fourth quarter.
Nevertheless, we remain optimistic about our prospects for fiscal 2005. The
mid-range of the backup and recovery market, our focus, continues to provide
exciting growth opportunities for us, and early results indicate that our new
disk-based backup appliance is being well received in the marketplace. We
expect these opportunities will lead to continued growth in fiscal 2005," said
Christopher Calisi, president and chief executive officer of Overland Storage.
Calisi highlighted the success of Overland's new REO 4000 disk-based appliance.
He said that unit sales of REO in the fourth quarter exceeded management's
expectations and were over three and a half times the unit sales recorded in
the preceding third quarter. "We believe the use of disk and tape appliances
will be complementary components of backup systems for the foreseeable future
-- our REO product sales clearly support this change," Calisi added.
"The core of our business strategy in fiscal 2005 is diversification of channel
distribution and product mix. We recognize that dependence upon any single
customer can lead to quarterly fluctuations, as we just experienced, and we
continue to aim for greater predictability and consistency of results. I
believe we are making great strides in each of these two directions of
diversification.
"First, we are having serious discussions with a number of potential new OEM
customers for both our market-leading tape automation solutions and our
disk-based products. The addition of any of these new relationships would
lower the revenue concentration from our major OEM. Though completion and
timing are difficult to predict, we are optimistic on this front.
"Second, we are determined to diversify our product base beyond tape and are
expanding our disk backup business with the goal of becoming the dominant
choice in this sector. We believe REO 4000 is the most feature-rich and
capable product on the market today, and we are pursuing an aggressive roadmap
to enhance its software capabilities. This summer, Overland will announce two
new major products in the REO disk appliance family, with further product
advancements currently under development. REO 4000 ramped dramatically in the
fiscal fourth quarter, and we are projecting major financial contributions from
the entire REO product line in fiscal 2005," Calisi added.
The company will report full results for its fourth quarter and fiscal year
ended June 30, 2004 on Aug. 13, 2004. At that time, the company will provide
guidance for fiscal 2005.
About Overland Storage
For more than 20 years, Overland Storage has delivered world-class data
protection solutions designed to ensure business continuity. Focused on backup
and recovery, Overland's data protection solutions are designed for
midrange-computer environments. These include NEO SERIES, the award-winning
automated storage libraries that set the standard for intelligent, automated
and scalable storage, and REO, the family of high-performance disk-based backup
appliances. Overland sells its products worldwide through leading OEMs,
commercial distributors, storage integrators and value-added resellers. For
more information, visit Overland's website at http://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 and satisfaction with current prospects, as
well as words such as "believe," "intends," "expects," "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 difficulty of predicting
sales to the company's major OEM customer, technology spending levels,
unexpected shortages of critical components, rescheduling or cancellation of
customer orders, loss of a major customer, the timing and market acceptance of
new product introductions by the company, including the launch of the company's
new REO products, its competitors or its licensees, the timing and amount of
licensing royalties, general competition and price pressures in the
marketplace, the company's ability to control costs and expenses and economic
conditions. Reference is also made to other factors set forth in the company's
filings with the Securities and Exchange Commission, including the "Risk
Factors," "Management's Discussion and Analysis" and other sections of the
company's Form 10-K for the most recently completed fiscal year. 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.
DATASOURCE: Overland Storage, Inc.
CONTACT: Vernon A. LoForti, CFO, , or
Cynthia A. Bond, Director of Corporate Communications,
, both of Overland Storage, Inc.
Web site: http://www.overlandstorage.com/