SOURCE: Crossroads Systems

Crossroads Systems

December 16, 2009 16:00 ET

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

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
                                                        ========  ========

Contact Information

  • Investor Contact:
    Jennifer Crane
    Crossroads Systems
    Email Contact
    512.928.6897 or 800.643.7148

    Press Contact:
    Matthew Zintel
    Zintel Public Relations
    Email Contact
    310.574.8888