Crossroads Systems Reports Fiscal Third Quarter 2014 Financial Results

AUSTIN, Texas, Sept. 9, 2014 /PRNewswire/ -- Crossroads Systems, Inc. (NASDAQ: CRDS), a global provider of data archive solutions, reported financial results for its fiscal third quarter ended July 31, 2014.

Revenue for fiscal Q3 2014 was $2.1 million, a decrease of 25 percent from $2.8 million in the same quarter a year ago. The decrease is primarily attributable to a decrease in the company's OEM SPHiNX business.  StrongBox revenue also decreased compared to Q3 2013, which included one-time payments from both FujiFilm and Iron Mountain for custom development agreements. Gross profit for fiscal Q3 2014 was $1.7 million, or 79 percent of total revenue, as compared to $2.1 million, or 75 percent of total revenue, in the same quarter a year ago.

Operating expenses for fiscal Q3 2014 totaled $3.4 million as compared to $5.7 million in the same period a year ago, a decrease of 41 percent, due to employee and operating expense reductions. The Company has continued to closely monitor expenses resulting in an additional $0.3 million decrease from Q2 2014 to Q3 2014.

Net loss available to common stockholders for fiscal Q3 2014 totaled $2.4 million or $0.16 loss per share, compared to a net loss available to common stockholders of $4.1 million or $0.34 loss per share in the same quarter a year ago.

At July 31, 2014, cash and cash equivalents decreased $3.6 million to $7.1 million from $10.7 million in the previous quarter. Payments to Fortress this quarter totaled $3.0 million, including an optional principal payment of $2.0 million.

Management Commentary

Richard K. Coleman, Jr., President and CEO at Crossroads Systems, said, "Crossroads completed pivotal product enhancements this quarter and StrongBox is now well positioned as a unique enterprise storage solution for virtually any storage environment. Despite declines in our legacy OEM product sales, we are confident that the future revenues from StrongBox, combined with our considerable IP licensing opportunity and protection from taxation by our $128 million NOL, will provide strong returns for our investors."

Conference Call Information

Crossroads will hold a conference call on Tuesday, September 9, 2014 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., CFO Jennifer Crane, and Mark Hood, executive vice president of corporate development, will host the call. A question and answer session will follow management's presentation.

Date: Tuesday, September 9, 2014
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: 80133243

To access the live or recorded webcast, visit:
https://engage.vevent.com/rt/crossroadssystems_ao~090914

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. For those unable to listen to the live call, a webcast replay of the call will be available from the day after the call in the Investor Relations Events & Presentations section of the Crossroads website.

About Crossroads Systems

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 www.crossroads.com.

Important Cautions Regarding Forward-Looking Statements

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, the potential market for our data storage products, changes in the fair value of its derivative instruments and its 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, maintain or protect patent and other proprietary intellectual property rights, developments in litigation to which we may be a party, 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 http://investors.crossroads.com. 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.

©2014 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.                                                          

SOURCE Crossroads Systems