30 Percent Sequential Revenue Growth CARLSBAD, Calif., Aug. 12
/PRNewswire-FirstCall/ -- nStor Technologies, Inc. (AMEX:NSO), an
innovative developer of storage networking solutions, today
announced operating results for the second quarter and six months
ended June 30, 2005. During the second quarter, the company's
revenues rose by $2,116,000 or 105% as compared to the
corresponding quarter of 2004 and $944,000 or 30 percent from the
first quarter of 2005. The company's second quarter net loss
available to common stock was $2,139,000 or $.01 per common share
on revenues of $4,125,000 compared to a net loss of $1,802,000 or
$.01 per common share on revenues of $2,009,000 during the
corresponding quarter of 2004. Second quarter bookings and quarter
end backlog approximated $5 million and $2.9 million, respectively,
again, representing the highest quarterly bookings and quarter end
backlog recorded in the company's recent history. These orders are
largely scheduled to ship during the third quarter of 2005. For the
six months, revenues increased by $3,049,000 or 72% as compared to
the corresponding period of 2004. The company's six month net loss
available to common stock was $4,451,000 or $.03 per common share
on revenues of $7,306,000 compared to a net loss of $3,938,000 or
$.02 per common share on revenues of $4,257,000 during the
corresponding six month period of 2004. "Our second quarter results
demonstrate our continued progress in executing against our
strategic plan, as we continue to grow our product portfolio and
build on a solid customer base. During 2005, we have experienced a
higher volume of orders from existing major customers and have
begun significant volume shipments to several new customers," noted
Todd Gresham, nStor's president and CEO. He further commented that
the pending merger agreement with Xyratex is complementary to
nStor's business initiatives and brings additional value to its
customers, providing resources, volume procurement capabilities and
customer acquisition possibilities. Mr. Gresham added, "This
transaction allows us to better serve our customers, giving us the
means to significantly expand our market reach and our product
development capabilities by providing the financial stability that
will afford us the opportunities in this dynamic market segment."
Mr. Gresham explained, "Xyratex's tender offer commenced on August
5, 2004 and expires on September 2, 2005 and the company expects
the merger to become final shortly thereafter." Business Highlights
* Recently introduced, OneStor(TM) family of industry leading next
generation Fibre/SAS/SATA products * Earns industry attention and
contribution to strong revenue growth * Market leading SAS product
shipments * Initiation of product cost reduction programs * Strong
sales of new and traditional offerings to existing and new
customers * Announcement of pending acquisition agreement by
Xyratex Ltd. (NASDAQ:XRTX) allowing for access to funding,
technology and scale 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) (unaudited) Three Months Ended Six Months Ended June
30, June 30, 2005 2004 2005 2004 Sales $4,125 $2,009 $7,306 $4,257
Cost of sales 3,040 1,443 5,302 3,184 Gross margin 1,085 566 2,004
1,073 Operating expenses: Selling, general and administrative 2,002
1,467 4,009 2,744 Research and development 976 685 2,088 1,696
Depreciation 61 51 123 103 Total operating expenses 3,039 2,203
6,220 4,543 Loss from operations (1,954) (1,637) (4,216) (3,470)
Interest expense, net (113) (238) (162) (412) Loss from continuing
operations (2,067) (1,875) (4,378) (3,882) Income (loss) from
discontinued operations 41 73 138 (56) Net loss before preferred
stock dividends (2,026) (1,802) (4,240) (3,938) Preferred stock
dividends (113) -- (211) -- Net loss available to common stock
$(2,139) $(1,802) $(4,451) $(3,938) Basic and diluted net loss per
common share: Loss from continuing operations $(.01) $(.01) $(.03)
$(.02) Income (loss) from discontinued operations .00 .00 .00 (.00)
$(.01) $(.01) $(.03) $(.02) Weighted average number of common
shares considered outstanding, basic and diluted 165,098 165,070
165,098 165,078 nStor Technologies, Inc. and Subsidiaries Condensed
Consolidated Balance Sheets (in thousands) June 30, December 31,
2005 2004 (unaudited) ASSETS Current assets: Cash and cash
equivalents $58 $1,272 Accounts receivable, net 1,403 1,805 Note
receivable -- 626 Inventories 1,548 1,882 Prepaid expenses and
other 297 295 Total current assets 3,306 5,880 Property and
equipment, net 453 512 Goodwill, net 1,989 1,989 Note receivable --
417 $5,748 $8,798 LIABILITIES AND SHAREHOLDERS' DEFICIT Current
liabilities: Borrowings: Affiliate $3,725 $9,100 Other 325 --
Accounts payable and other 3,544 2,543 Total current liabilities
7,594 11,643 Long-term debt -- 3,650 Total liabilities 7,594 15,293
Shareholders' deficit (1,846) (6,495) $5,748 $8,798 DATASOURCE:
nStor Technologies, Inc. CONTACT: Veena Raman of nStor
Technologies, Inc., +1-760-683-2500, Web site:
http://www.nstor.com/
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