AUSTIN, TX — (Marketwired) — 12/12/13 — Crossroads Systems, Inc. (NASDAQ: CRDS), a global provider of data archive solutions, reported financial results for its fiscal fourth quarter and full year ended October 31, 2013.
Total revenue for fiscal Q4 2013 decreased 20% to $3.6 million from $4.4 million in the same quarter a year ago. The decrease was mainly due to decreases in our legacy OEM business.
Total revenue for the fiscal full year 2013 decreased 10% to $12.6 million from $14.0 million in the prior year. The decrease was due to a decrease in sales to one large customer of our Read Verify Appliance and decreases in our legacy OEM business. The decreases were partially offset by an increase in revenue from our StrongBox product.
Gross profit for fiscal Q4 2013 was $2.8 million or 80% of total revenue, compared to $3.1 million, or 70% of total revenue in the same quarter a year ago. Gross profit for fiscal year 2013 was $9.5 million or 75% of total revenue, compared to $11.1 million or 79% of total revenue in fiscal 2012. The period-to-period decreases in gross profit were mainly due to a decrease in total revenue. The year-over-year decrease in gross profit as a percentage of revenue was primarily due to lower margin service revenue from Iron Mountain.
Operating expenses for fiscal Q4 2013 totaled $4.9 million, compared to $5.7 million in the same period a year ago. Operating expenses for fiscal year 2013 totaled $22.1 million, compared to $21.5 million in the prior year. The year-over-year increase was primarily due to StrongBox product launch expenses and increases in professional fees associated with our preferred stock and Fortress financing activities and other securities law compliance matters. On October 24, 2013 we reduced our workforce by approximately 40%. Corresponding expense reductions will be reflected in future reporting periods.
Net loss available to common stockholders for fiscal Q4 2013 totaled $2.3 million or $(0.19) loss per share, compared to a net loss of $2.6 million or $(0.23) loss per share in the same quarter a year ago. Net loss available to common stockholders for fiscal year 2013 totaled $14.3 million or $(1.20) loss per share, compared to a net loss of $10.7 million or $(0.95) loss per share in fiscal 2012. Approximately $1.5 million of other income is attributable to the change in value of the derivative instrument issued in connection with our March 2013 preferred stock private placement. These derivative instruments will be marked to market each quarter and a change in the value of the derivative instruments may cause fluctuations in our loss per share from quarter to quarter.
At October 31, 2013, cash and cash equivalents totaled $7.8 million compared to $9.9 million in the previous quarter.
Richard K. Coleman, Jr., President and CEO at Crossroads Systems, said, “During the fourth quarter, we saw continued growth and market acceptance for our StrongBox product. StrongBox revenue from unit sales and licenses was up 33 percent over the prior quarter, and total revenue was up 27 percent over the prior quarter. The positive momentum in product sales, along with our recent expense reductions, positions us to be cash flow positive from operations in fiscal year 2014.”
Crossroads will hold a conference call on Thursday, December 12, 2013 at 4:30 p.m. Eastern Time (3:30 p.m. Central Time) to discuss the financial results. President and CEO Richard K. Coleman, Jr. and CFO Jennifer Crane will host the call. A question and answer session will follow management-s presentation.
Date: Thursday, December 12, 2013
Time: 4:30 p.m. Eastern Time (3:30 p.m. Central Time)
Dial-In Number: (877) 221-8809
International: (706) 679-8667
Conference ID # 14496553
To access the live or recorded webcast, visit:
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. The conference call will also be available via the company-s website in the Investor Relations Events & Presentations section. For more information and to view recent press releases, visit .
Crossroads Systems, Inc. (NASDAQ: CRDS) is a global provider of data archive solutions. Through the innovative use of new technologies, Crossroads delivers customer-driven solutions that enable proactive data security, advanced data archiving, optimized performance and significant cost-savings. Founded in 1996 and headquartered in Austin, TX, Crossroads has been awarded more than 100 patents and has been honored with numerous industry awards for data archiving, storage and protection. Visit .
This press release includes forward-looking statements that relate to the business and expected future events or future performance of Crossroads Systems, Inc. and involve known and unknown risks, uncertainties and other factors that may cause its actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. Forward-looking statements include, but are not limited to, statements about Crossroads Systems- ability to implement its business strategy, including the transition from a hardware storage company to a software solutions and services provider, its ability to expand its distribution channels, its ability to maintain or broaden relationships with existing distribution channels and strategic alliances and develop new industry relationships, the performance of third parties in its distribution channels and of its strategic alliances, expected cost savings from the recent reduction of its workforce, our ability to retain our Nasdaq listing, and Crossroads- ability to achieve or maintain profitability. The future performance of Crossroads Systems may be adversely affected by the following risks and uncertainties: uncertainties relating to product development and commercialization, uncertain market acceptance of Crossroads Systems products, including StrongBox, intense competition in the data protection and storage markets, variations in quarterly results and a consequence of unpredictable sales cycles and other factors, the ability to obtain, our ability to maintain, protect and/or monetize our patents and other proprietary intellectual property rights, technological change in the industry, future capital requirements, regulatory actions or delays and other factors that may cause actual results to be materially different from those described or anticipated by these forward-looking statements. For a more detailed discussion of these factors and risks, investors should review Crossroads Systems- reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission, which can be accessed through the SEC-s website or by clicking “SEC Filings” on the company-s Investor Relations website at . Forward-looking statements in this press release are based on management-s beliefs and opinions at the time the statements are made. Crossroads Systems undertakes no duty to update this information to reflect future events, information or circumstances.
©2013 Crossroads Systems, Inc., Crossroads and Crossroads Systems are registered trademarks of Crossroads Systems, Inc. All trademarks are the property of their respective owners. All specifications are subject to change without notice.
Jennifer Crane
Crossroads Systems
512.928.6897 or 800.643.7148
Mark Hood
Crossroads Systems
512.928.7330
Matthew Zintel
Zintel Public Relations
281.444.1590
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