N@N

Crossroads Systems: Crossroads Systems Reports Fiscal Third Quarter Financial Results

^{Published on 2009-08-26 13:21:18, Last Modified on 2009-08-26 13:21:19 - Market Wire}
 

AUSTIN, TX--(Marketwire - August 26, 2009) - Crossroads Systems, Inc. (PINKSHEETS: [ CRDS ]), a global leading provider of solutions to connect, protect, secure and restore data, today announced results for its fiscal third quarter ended July 31, 2009 (Q3'09).

Revenue totaled $3.9 million for Q3'09 compared to $3.7 million in the fiscal second quarter ended April 30, 2009 (Q2'09). Product revenue totaled $1.3 million for Q3'09 compared to $1.2 million for Q2'09. Product revenue remained low due to our largest OEM continued to have sales below their traditional run-rate as well as a slow recovery in the economy. In addition, revenue from IP license, royalty and other totaled $2.6 million for Q3'09 compared to $2.5 million for Q2'09. Gross profit was $3.3 million, or 85 percent for Q3'09, compared to $3.2 million, or 85 percent for Q2'09. Net loss for Q3'09 was $1.1 million, or $0.04 cents loss per share, compared to a net loss of $1.5 million, or $0.05 cents loss per share in Q2'09.

For additional financial information, visit [ www.crossroads.com/InvestorRelations/ ].

About Crossroads Systems, Inc.

Headquartered in Austin, Texas, Crossroads Systems is a global leading provider of solutions to connect, protect, secure and restore data-at-rest. Crossroads (PINKSHEETS: [ CRDS ]) trades over-the-counter on Pink Sheets and posts its financial disclosure reports, press releases and other related documentation on the OTCIQ Web service of the Pink Sheets Web site. Visit [ www.crossroads.com ].

Forward-Looking Statements

This release may include forward-looking statements. The words "believe," "expect," "intend," "plan," "project," "will" and similar phrases as they relate to Crossroads are intended to identify such forward-looking statements. These statements reflect the current views and assumptions of Crossroads and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations.

©2009 Crossroads Systems, Inc. Crossroads and Crossroads Systems are registered trademarks of Crossroads Systems, Inc. All specifications are subject to change without notice.

 CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In Thousands) October 31, July 31, 2008 2009 ----------- -------- ASSETS Current assets: Cash and cash equivalents $ 7,086 $ 5,623 Accounts receivable, net 5,535 3,480 Inventories, net 329 147 Prepaids and other current assets 343 262 ----------- -------- Total current assets 13,293 9,512 Property and equipment, net 1,444 986 Intangible, net 2,791 1,767 Investment in Subsidiaries 968 940 Goodwill 324 - Other assets 17 69 ----------- -------- Total assets $ 18,837 $ 13,274 =========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,321 $ 1,030 Accrued expenses 2,333 1,629 Accrued warranty costs 33 22 Deferred revenue 298 333 Line of Credit 2,024 1,973 ----------- -------- Total current liabilities 6,009 4,987 Long-term liabilities 53 81 Stockholders' equity 12,775 8,206 ----------- -------- Total liabilities and stockholders' equity $ 18,837 $ 13,274 =========== ======== CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In Thousands, Except Share and Per Share Data) Three Months Ended Nine Months Ended July 31, July 31, ---------- ---------- ---------- ---------- 2008 2009 2008 2009 ---------- ---------- ---------- ---------- Revenue: Product $ 2,230 $ 1,277 $ 7,336 $ 3,998 IP License, royalty and other 1,881 2,584 7,374 6,846 ---------- ---------- ---------- ---------- Total revenue 4,111 3,861 14,710 10,844 Cost of revenue: Product 356 87 1,458 495 IP License, royalty and other 376 507 1,239 1,324 ---------- ---------- ---------- ---------- Total cost of revenue 732 594 2,697 1,819 ---------- ---------- ---------- ---------- Gross profit 3,379 3,267 12,013 9,025 ---------- ---------- ---------- ---------- Operating expenses: Sales and marketing 1,737 1,164 5,403 4,181 Research and development 2,784 2,320 8,819 7,074 General and administrative 792 460 2,624 1,252 FAS 123R and stock based compensation 174 191 509 592 Business restructuring expense - - - 217 Amortization of intangibles 284 265 836 814 ---------- ---------- ---------- ---------- Total operating expenses 5,771 4,400 18,191 14,130 ---------- ---------- ---------- ---------- Income (Loss) from operations (2,392) (1,133) (6,178) (5,105) Interest (expense) income 3,572 (7) 3,616 (77) ---------- ---------- ---------- ---------- Net Income (Loss) $ 1,180 $ (1,140) $ (2,562) $ (5,182) ========== ========== ========== ========== Basic net gain (loss) per share 0.04 (0.04) 0.04 (0.18) Shares used in computing: Basic net gain (loss) per share 28,154,311 29,103,391 28,154,311 28,953,483 ---------- ---------- ---------- ---------- Fully Diluted net gain (loss) per share 28,154,311 29,103,391 28,154,311 28,953,483 ---------- ---------- ---------- ---------- CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Nine Months Ended July 31, ------------------ 2008 2009 -------- -------- Cash flows from operating activities: Net loss $ (2,562) $ (5,182) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 736 658 Business restructuring expenses - 217 Amortization of intangibles 836 814 Loss on disposal of fixed assets (11) 1 Stock-based compensation - 130 FAS 123R expense 510 462 Provision for doubtful accounts receivable 3 2 Provision for excess and obsolete inventory 20 107 Changes in assets and liabilities: Accounts receivable 886 2,248 Inventories 98 75 Prepaids and other current assets (253) 94 Accounts payable (1,218) (705) Accrued expenses and other 780 (360) Deferred revenue and other - (18) -------- -------- Net cash used in operating activities (175) (1,457) -------- -------- Cash flows from investing activities: Purchase of property and equipment (307) (203) Investment in privately-held company (2,378) - -------- -------- Net cash used in investing activities (2,685) (203) -------- -------- Cash flows from financing activities: Proceeds from issuance of common stock - 1 Proceeds from Borrowing on Line of Credit 2,024 (51) Net cash provided by (used in) financing activities 2,024 (50) -------- -------- Effect of Exchange Rate on Cash 33 247 Net increase (decrease) in cash and cash equivalents (803) (1,463) Cash and cash equivalents, beginning of period 9,261 7,086 -------- -------- Cash and cash equivalents, end of period $ 8,458 $ 5,623 ======== ========