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Crossroads Systems Reports Fiscal Fourth Quarter and Fiscal 2009 Full Year Financial Results

^{Published on 2009-12-16 13:08:12 - Market Wire}
 

AUSTIN, TX--(Marketwire - December 16, 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 fourth quarter (Q4'09) and fiscal year ended October 31, 2009.

Fiscal Fourth Quarter 2009

Revenue totaled $6.0 million for Q4'09 compared to $3.9 million in the fiscal third quarter ended July 31, 2009 (Q3'09). Product revenue totaled $1.9 million for Q4'09 as compared to $1.3 million for Q3'09. In addition, revenue from IP licenses, royalty and other totaled $4.1 million for Q4'09 as compared to $2.6 million for Q3'09.

Gross profit was $5.2 million, or 86 percent for Q4'09, compared to $3.3 million, or 85 percent for Q3'09. Net income for Q4'09 was $775 thousand, or $0.03 cents gain per share, compared to a net loss of $1.1 million, or $0.04 cents loss per share in Q3'09.

Cash decreased from $5.6 million in Q3'09 to $5.3 million in Q4'09. This decrease was attributable to the timing of payments from intellectual property.

Fiscal Year 2009

Total revenue for fiscal year 2009 (FY'09) was $16.8 million, compared with $21.9 million for fiscal year 2008 (FY'08). Gross profit for FY'09 was $14.2 million, or 84 percent, compared with $18.3 million, or 84 percent, for FY'08. Net loss for FY'09 was $4.4 million, or $0.15 cents per share, compared to a net loss of $7.5 million, or $0.27 cents per share, for FY'08.

To learn more about Crossroads' 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. 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, October 31, 2008 2009 ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 7,086 $ 5,297 Accounts receivable, net 5,535 5,124 Inventories, net 329 111 Prepaids and other current assets 343 423 ------------ ------------ Total current assets 13,293 10,955 Property and equipment, net 1,444 830 Intangible, net 2,791 1,502 Investment in Subsidiaries 968 940 Goodwill 324 - Other assets 17 69 ------------ ------------ Total assets $ 18,837 $ 14,296 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,321 $ 1,036 Accrued expenses 2,333 1,877 Accrued warranty costs 33 18 Deferred revenue 298 199 Line of Credit 2,024 1,973 ------------ ------------ Total current liabilities 6,009 5,103 Long-term liabilities 53 59 Stockholders' equity 12,775 9,134 ------------ ------------ Total liabilities and stockholders' equity $ 18,837 $ 14,296 ============ ============ CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In Thousands, Except Share and Per Share Data) Three Months Ended Year Ended October 31, October 31, ---------------------- ---------------------- 2008 2009 2008 2009 ---------- ---------- ---------- ---------- Revenue: Product $ 1,969 $ 1,872 $ 9,305 $ 5,870 IP License, royalty and other 5,219 4,132 12,593 10,978 ---------- ---------- ---------- ---------- Total revenue 7,188 6,004 21,898 16,848 Cost of revenue: Product 250 90 1,708 585 IP License, royalty and other 649 757 1,888 2,081 ---------- ---------- ---------- ---------- Total cost of revenue 899 847 3,596 2,666 ---------- ---------- ---------- ---------- Gross profit 6,289 5,157 18,302 14,182 ---------- ---------- ---------- ---------- Operating expenses: Sales and marketing 1,744 1,192 7,147 5,373 Research and development 2,824 2,265 11,643 9,339 General and administrative 548 511 3,172 1,763 FAS 123R and stock based compensation 151 124 660 716 Business restructuring expense - - - 217 Loss on Impairment of Asset 5,694 - 5,694 - Amortization of intangibles 284 265 1,120 1,079 ---------- ---------- ---------- ---------- Total operating expenses 11,245 4,357 29,436 18,487 ---------- ---------- ---------- ---------- Income (Loss) from operations (4,956) 800 (11,134) (4,305) Interest (expense) income (9) (25) 3,607 (101) ---------- ---------- ---------- ---------- Net Income (Loss) $ (4,965) $ 775 $ (7,527) $ (4,406) ========== ========== ========== ========== Basic net gain (loss) per share (0.18) 0.03 (0.27) (0.15) Fully Diluted net gain (loss) per share (0.18) 0.03 (0.18) (0.15) Shares used in computing: Basic net gain (loss) per share 28,154,311 29,199,586 28,154,311 29,015,515 ---------- ---------- ---------- ---------- Fully Diluted net gain (loss) per share 28,154,311 29,376,774 28,154,311 29,015,515 ---------- ---------- ---------- ---------- CROSSROADS SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Year Ended October 31, ------------------ 2008 2009 -------- -------- Cash flows from operating activities: Net loss $ (7,527) $ (4,406) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation 978 839 Business restructuring expenses - 217 Loss on impairment of assets 5,694 - Amortization of intangibles 1,120 1,079 Loss on disposal of fixed assets 11 1 Stock-based compensation - 192 FAS 123R expense 661 524 Provision for doubtful accounts receivable - (70) Provision for excess and obsolete inventory 29 108 Changes in assets and liabilities: Accounts receivable (1,021) 527 Inventories 49 110 Prepaids and other current assets (264) (77) Accounts payable (333) (698) Accrued expenses and other (1,165) (163) Deferred revenue and other - (151) -------- -------- Net cash used in operating activities (1,768) (1,968) -------- -------- Cash flows from investing activities: Purchase of property and equipment (450) (216) Investment in privately-held company (1,674) - -------- -------- Net cash used in investing activities (2,124) (216) -------- -------- Cash flows from financing activities: Proceeds from issuance of common stock - 1 Proceeds from Borrowing on Line of Credit 2,024 - Paydown of Line of Credit - (51) -------- -------- Net cash provided by (used in) financing activities 2,024 (50) -------- -------- Effect of Exchange Rate on Cash (307) 445 Net increase (decrease) in cash and cash equivalents (2,175) (1,789) Cash and cash equivalents, beginning of period 9,261 7,086 -------- -------- Cash and cash equivalents, end of period $ 7,086 $ 5,297 ======== ========