Overland Storage Reports Fiscal Fourth Quarter and Full Year Results

Overland Storage Reports Fiscal Fourth Quarter and Full Year Results 
SAN DIEGO, CA -- (Marketwired) -- 09/04/13 --  Overland Storage
(NASDAQ: OVRL), a trusted global provider of effortless data
management and data protection solutions across the data lifecycle,
today reported financial results for its fiscal 2013 fourth quarter
and full fiscal year ended June 30, 2013. 
"We made progress in fiscal 2013 with the growth of our new branded
products, including our SnapServer DX series, which grew more than
60% year-over-year," said Eric Kelly, President and CEO of Overland
Storage. "The positive market traction we are seeing with our new
branded products and services helped drive gross margin improvement
in fiscal 2013 and we expect these branded products to continue to
contribute to growth and gross margin improvement in the new fiscal
year.  
"Our recently announced partnership with Sphere 3D will enable us to
introduce a new product line this fiscal year designed to enable
enterprises and individuals to securely access applications with full
functionality from their mobile devices. The solutions will be
delivered as an appliance or as a cloud offering. We expect these new
product offerings to give mobile business users the full
functionality of software programs or applications on any device,
anywhere, anytime, eliminating the application limitations and
reducing data management and security problems created by the BYOD
(Bring Your Own Device) phenomenon.  
"We are excited about the new market opportunities created by this
new product line, and opportunities to drive additional sales of our
branded storage products through our partnership with Sphere 3D,
which includes a supplier agreement under which they will procure
their cloud infrastructure solutions from Overland, and a licensing
agreement giving us the rights to sell, distribute and license their
technology to the commercial market worldwide." 
Highlights: 


 
--  SnapServer DX series product revenue in fiscal 2013 grew 63%
    year-over-year to $6.2 million.
    
    
--  Tape revenue increased 15% in the fourth quarter compared to the
    preceding quarter.
    
    
--  Total product revenue, including both tape and disk revenue increased
    10% in the fourth quarter compared to the preceding quarter.
    
    
--  Gross margin for fiscal 2013 increased nearly 300 basis points
    year-over-year to 35.0%.
    
    
--  Announced new partnership and the development of an integrated
    solution delivering scalable storage and the full functionality of any
    software program or application onto any mobile device anywhere,
    anyplace, anytime.
    
    
--  SnapScale clustered NAS solution won the Editor's Choice Award for
    Hardware Product of the Year at The Storage Awards 2013.
    
    
--  SnapScale X2 won Favorite Storage Hardware Product at the 2013
    People's Choice Stevie(R) Awards.

  
Fiscal Fourth Quarter Financial Results 


 
--  Net revenue for the fourth quarter of fiscal 2013 was $12.1 million,
    compared to $15.3 million for the fourth quarter of fiscal 2012 and
    $11.6 million in the third quarter of fiscal 2013.
    
    
--  Product revenue for the fourth quarter of fiscal 2013 was $7.6
    million, compared to $9.4 million for the fourth quarter of fiscal
    2012 and $6.9 million in the third quarter of fiscal 2013.
    
    
--  Gross margin for the fourth quarter of fiscal 2013 improved to 36.5%,
    compared to 31.6% in the fourth quarter of fiscal 2012 and 33.1% in
    the third quarter of fiscal 2013.
    
    
--  Operating expenses for the fourth quarter of fiscal 2013 were $9.4
    million, compared to $8.5 million in the fourth quarter of fiscal 2012
    and $9.0 million for the third quarter of fiscal 2013.
    
    
--  Stock compensation expense was $1.1 million in the fourth quarter of
    fiscal 2013, compared to $1.2 million for both the fourth quarter of
    fiscal 2012 and the third quarter of fiscal 2013.
    
    
--  Depreciation and amortization was $0.3 million in the fourth quarter
    of fiscal 2013 compared to $0.5 million in the fourth fiscal quarter
    of 2012 and $0.3 million in the third quarter of fiscal 2013.
    
    
--  Net loss for the fourth quarter of fiscal 2013 was $5.4 million, or a
    loss of $0.18 per share, compared to a net loss of $2.7 million, or a
    loss of $0.10 per share, in the fourth quarter of fiscal 2012 and a
    net loss of $5.1 million, or a loss of $0.17 per share, in the third
    quarter of fiscal 2013.

  
Fiscal 2013 Financial Results 


 
--  Net revenue for fiscal 2013 was $48.0 million, compared to $59.6
    million for fiscal 2012.
    
    
--  Product revenue for fiscal 2013 was $28.8 million, compared to $35.4
    million for fiscal 2012.
    
    
--  Gross margin for fiscal 2013 increased to 35.0%, compared to 32.1% for
    fiscal 2012.
    
    
--  Operating expenses for fiscal 2013 were $35.7 million, compared to
    $36.2 million for fiscal 2012. Stock compensation expense, included in
    operating expense, for fiscal 2013 was approximately $4.6 million,
    compared to $4.9 million for fiscal 2012. Depreciation and
    amortization for fiscal 2013 was approximately $1.2 million, compared
    to $1.6 million for fiscal 2012.
    
    
--  Net loss for fiscal 2013 was $19.6 million, or a loss of $0.68 per
    share, compared to a net loss of $16.2 million, or a loss of $0.66 per
    share, for fiscal 2012.
    
    
--  Cash and cash equivalents at June 30, 2013 was $8.8 million, compared
    to $10.5 million at June 30, 2012. At June 30, 2013, the Company had
    $3.5 million outstanding under its credit facility and $13.25 million
    outstanding under its convertible notes.

  
Overland also announced today that Lisa Loe has joined the Company as
Vice President of Worldwide Sales, responsible for sales strategy,
channel partners and customers, and Jillian Mansolf has been named
Senior Vice President of Marketing. 
"Lisa has a proven track record within both mobility enterprise and
data storage of building long-term customer and strategic partner
relationships," said Mr. Kelly. "With her experience at Good
Technology, she is one of the few executives within the BYOD space
that has built a mobility enterprise channel. She has experience in
developing channels and alternative routes to market, and building
world-class sales teams that scale. We are excited to have her join
the leadership team at Overland as we advance our vision to be the
premier data storage provider for the mobile workforce." 
Prior to joining Overland, Ms. Loe was Vice President of Americas
Channel and Partner Sales for mobility solutions provider Good
Technology, where she was responsible for developing the overall
enterprise and market segment business strategy with partners. While
at Good Technology, she guided the team in identifying and developing
the Company's industry-leading secure integrated mobile data and
application management solutions. Before that, she was Vice President
of OEM and Global Strategic Partners at Isilon (now EMC Isilon), a
leading provider of NAS and High Performance workflow storage
solutions. She has also held senior management positions at McAfee
and Symantec. As part of her offer letter, Ms. Loe was granted an
inducement stock option at an exercise price equal to the closing
price of the Company's common stock on the grant date for the
purchase of up to 75,000 shares of its common stock, and an
inducement award of 125,000 restricted stock units, each in
accordance with NASDAQ Listing Rule 5635(c)(4).  
Investor Conference Call: 
 Overland will host an investor conference
call today, Wednesday, September 4, at 5:00 pm ET (2:00 pm PT) to
discuss the Company's fiscal 2013 fourth quarter and full year
financial results. To access the call dial 877-941-1427 (+1
480-629-9664 outside the United States) and when prompted provide the
pass code "Overland Storage" to the operator. Participants are asked
to call the assigned number approximately 10 minutes before the
conference call begins. In addition, a live and archived webcast of
the conference call will be available over the Internet at
www.overlandstorage.com in the Investor Relations section. A replay
of the conference call will also be available via telephone by
dialing (800) 406-7325 (+1 (303) 590-3030 outside the United States)
and entering access code, 4637486#, beginning 8:00 p.m. ET on
September 4, 2013 through 11:59 p.m. ET on September 11, 2013. 
About Overland Storage
 Overland Storage is a trusted global provider
of effortless data management and data protection solutions across
the data lifecycle. By providing an integrated range of technologies
and services for primary, nearline, offline, archival, and cloud data
storage, Overland makes it easy and cost effective to manage
different tiers of information over time. Whether distributed data is
across the hall or across the globe, Overland enables companies to
focus on building their business instead of worrying about data
growth. Overland SnapScale, SnapServer, SnapSAN, NEO Series and REO
Series solutions are available through a select network of value
added resellers and system integrators. For more information, visit
www.overlandstorage.com. 
Safe Harbor Statement
 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, satisfaction or disappointment with current
prospects, as well as words such as "believes," "hopes," "intends,"
"estimates," "expects," "projects," "plans," "anticipates" and
variations thereof, or the use of future tense, 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 our actual results could differ
materially from those contained in such statements. Factors that
could cause or contribute to such differences include, but are not
limited to: our ability to maintain and increase sales volumes of our
products; our ability to continue to aggressively control costs and
operating expenses; our ability to achieve the intended cost savings
and maintain quality with our manufacturing partner; our ability to
generate cash from operations; the ability of our suppliers to
provide an adequate supply of components for our products at prices
consistent with historical prices; our ability to raise outside
capital and to repay our debt as it comes due; our ability to
introduce new competitive products and the degree of market
acceptance of such new products; the timing and market acceptance of
new products introduced by our competitors; our ability to maintain
strong relationships with branded channel partners; our ability to
regain compliance with the continued listing requirements of, and
thereby maintain the listing of our common stock on the NASDAQ
Capital Market; customers', suppliers' and creditors' perceptions of
our continued viability; rescheduling or cancellation of customer
orders; loss of a major customer; our ability to enforce our
intellectual property rights and protect our intellectual property
(including the outcome of our ongoing patent litigation); general
competition and price measures in the market place; unexpected
shortages of critical components; worldwide information technology
spending levels; and general economic conditions. Reference is also
made to other factors detailed from time to time in our periodic
reports filed with the Securities and Exchange Commission. These
forward-looking statements speak only as of the date of this release
and we undertake no obligation to publicly update any forward-looking
statements to reflect new information, events or circumstances after
the date of this release. 
Connect with Overland Storage:
 Read the Overland blog:
http://overlandstorage.com/blog 
 Follow Overland on Twitter:
http://www.twitter.com/OverlandStorage 
 Visit Overland on Facebook:
http://www.facebook.com/OverlandStorage 
Overland Storage, SnapScale, SnapSAN, SnapServer, NEO Series, REO
Series and the Overland logo are trademarks of Overland Storage,
Inc., that may be registered in some jurisdictions. All other
trademarks used are owned by their respective owners. 


 
                                                                            
                                                                            
                           OVERLAND STORAGE, INC.                           
              CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS               
                   (In thousands, except per share data)                    
                                                                            
                                                                            
                                                                            
                               Three Months Ended      Twelve Months Ended  
                                    June 30,                June 30,        
                             ----------------------  ---------------------- 
                                2013        2012        2013        2012    
                             ----------  ----------  ----------  ---------- 
                                   (Unaudited)             (Unaudited)      
Net revenue                  $   12,068  $   15,300  $   48,020  $   59,632 
Cost of revenue                   7,660      10,459      31,220      40,472 
                             ----------  ----------  ----------  ---------- 
Gross profit                      4,408       4,841      16,800      19,160 
                             ----------  ----------  ----------  ---------- 
                                                                            
Operating expenses:                                                         
  Sales and marketing             4,434       3,880      17,574      16,178 
  Research and development        1,665       1,791       6,522       8,148 
  General and administrative      3,271       2,802      11,579     
 11,848 
                             ----------  ----------  ----------  ---------- 
    Total expenses                9,370       8,473      35,675      36,174 
                             ----------  ----------  ----------  ---------- 
                                                                            
Loss from operations             (4,962)     (3,632)    (18,875)    (17,014)
Interest income                       -         377           3         377 
Interest expense                   (327)        (22)       (594)       (100)
Other income (expense), net         (92)        589         (16)        655 
                             ----------  ----------  ----------  ---------- 
Loss before income taxes         (5,381)     (2,688)    (19,482)    (16,082)
Provision for income taxes           44           6         165          79 
                             ----------  ----------  ----------  ---------- 
Net loss                     $   (5,425) $   (2,694) $  (19,647) $  (16,161)
                             ==========  ==========  ==========  ========== 
                                                                            
Net loss per share:                                                         
  Basic and diluted          $    (0.18) $    (0.10) $    (0.68) $    (0.66)
                             ==========  ==========  ==========  ========== 
                                                                            
Shares used in computing net                                                
 loss per share:                                                            
  Basic and diluted              29,996      27,644      28,841      24,487 
                                                                            
                                                                            

 
                                                                            
                                                                            
                           OVERLAND STORAGE, INC.                           
              CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS               
                   (In thousands, except per share data)                    
                                                                            
                                                                            
                                                                            
                                                Three Months   Three Months 
                                                   Ended          Ended     
                                                  June 30,      March 31,   
                                               -------------  ------------- 
                                                    2013           2013     
                                               -------------  ------------- 
                                                (Unaudited)    (Unaudited)  
Net revenue                                    $      12,068  $      11,642 
Cost of revenue                                        7,660          7,790 
                                               -------------  ------------- 
Gross profit                                           4,408          3,852 
                                               -------------  ------------- 
                                                                            
Operating expenses:                                                         
  Sales and marketing                                  4,434          4,662 
  Research and development                             1,665          1,669 
  General and administrative                           3,271          2,659 
                                               -------------  ------------- 
    Total expenses                                     9,370          8,990 
                                               -------------  ------------- 
                                                                            
Loss from operations                                  (4,962)        (5,138)
Interest income                                            -              - 
Interest expense                                        (327)          (179)
Other income (expense), net                              (92)           235 
                                               -------------  ------------- 
Loss before income taxes                              (5,381)        (5,082)
Provision for income taxes                                44              4 
                                               -------------  ------------- 
Net loss                                       $      (5,425) $      (5,086)
                                               =============  ============= 
                                                                            
Net loss per share:                                                         
  Basic and diluted                            $       (0.18) $       (0.17)
                                               =============  ============= 
                                                                            
Shares used in computing net loss per share:                                
  Basic and diluted                                   29,996         29,390 
                                                                            
                                                                            

 
                                                                            
                                                                            
                           OVERLAND STORAGE, INC.                           
                     SELECTED BALANCE SHEET INFORMATION                     
                               (In thousands)                               
                                                                            
                                                                            
                                                                            
                                                  June 30,       June 30,   
                                                    2013           2012     
                                               -------------  --------------
                                                (Unaudited)     (Unaudited) 
ASSETS                                                                      
Cash and cash equivalents                      $       8,831  $       10,522
Accounts receivable, net                               6,640           9,193
Inventories                                           10,354          10,658
Other current assets                                   1,923           3,779
                                               -------------  --------------
  Total current assets                                27,748          34,152
Property and equipment, net                            2,014           1,446
Other assets                                           1,641           2,662
                                               -------------  --------------
  Total assets                                 $      31,403  $       38,260
                                               =============  ==============
                                                                            
                                                                            
LIABILITIES & EQUITY (DEFICIT)                                              
Current liabilities                            $      21,064  $       26,759
Long-term debt                                        16,750           3,500
Other long-term liabilities                            3,885           4,960
Shareholders' equity (deficit)                       (10,296)          3,041
                                               -------------  --------------
  Total liabilities and equity (deficit)       $      31,403  $       38,260
                                               =============  ==============

  
Investor Relations Contact:
Todd Kehrli or Jim Byers
MKR Group Inc.
323-468-2300
ovrl@mkr-group.com 
 
 
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