Qualstar, Profitable Q3 and Significant Share Buyback Program

Qualstar Corporation (NASDAQ: QBAK) designs, develops, manufactures, and sells power supplies under the N2Power brand name; and data storage systems under the Qualstar brand in North America, Europe, the Asia Pacific, and internationally.


On November 8th the company announced its financial results for the three and nine months ended September 30, 2018. Net revenue increased 14.5% to $3.1 million and total operating expenses decreased 29.7% to $848,000. Net income was $405,000 or $0.20 per basic and diluted share.


December 6, 2018. Qualstar announced a stock repurchase program for up to $2.4 million of the company’s outstanding common stock. The stock buyback program, which is effective immediately, permits the company to repurchase shares from time to time through open market purchases. The actual timing, number and value of shares repurchased under the program will be determined in the Company’s discretion and will depend on a number of factors, including the market price of Qualstar’s stock, general market and economic conditions and applicable legal requirements. The program will expire on December 5, 2019, unless extended.

At the stock’s current price, the announced buyback could represent 25% of the outstanding shares.


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From easy installation to easy maintenance, the Q24 compact LTO tape library is designed to be Simply Reliable™. Feature-rich and compact in a rackmountable 2U enclosure, the Q24 offers capacities up to 288 terabytes (native) and 720 terabytes (compressed).

Key Highlights

24 cartridge slots in two 12-slot magazines

1 available single-slot I/O port

1 half-height LTO-6, LTO-7 or LTO-8 tape drive; second drive optional

Up to 720TB with LTO-8 compression (2.5:1)

2U height x 19″ rack mount

Barcode reader standard, for fast inventory management

Remote management capability simplifies IT administration

The Qualstar Q40 Mid-range and Enterprise tape library is designed to be Simply Reliable™, providing superior performance, reliability and scalability for short-term backup/disaster recovery and long-term archiving requirements.

Easy installation and easy maintenance are two important features of the Q48 mid-range LTO tape library, which is designed to be Simply Reliable™. Housed in a rackmountable 4U enclosure, the Q48 offers capacities up to 576 terabytes (native) and 1.44 petabytes (compressed).

The Q80 system offers capacity scaling from eighty to five hundred and sixty cartridge slots, and throughput scaling from one to forty-two tape drives. The Q80 utilizes LTO-6, LTO-7 or LTO-8 tape drives, with each 6U high Q80 library module delivering up to 960 terabytes (LTO-8, native) of storage capacity or up to 2.4 petabytes (LTO-8, compressed).


By providing some of the highest efficiency and power density supplies in the industry, Qualstar’s N2Power-branded power solutions for IT equipment have helped our customers achieve their power requirements for both standard and customized solutions in the communications industry – including the server, storage, networking, broadcasting and telecommunications sectors. Our supplies enable designers to more easily address the growing energy usage and power demand concerns of data centers, networking devices and telecom products.





Qualstar Corporation designs, develops, manufactures, and sells power supplies under the N2Power brand name; and data storage systems under the Qualstar brand in North America, Europe, the Asia Pacific, and internationally. The company offers switching power supplies that are used to convert AC line voltage to DC voltages, or DC voltages to other DC voltages for use in electronic equipment, such as telecommunications equipment, machine tools, routers, switches, wireless systems, and gaming devices. It also provides data storage devices used to store, retrieve, and manage electronic data primarily in network computing environments, as well as provide data storage solutions for organizations requiring backup, recovery, and archival storage of critical data. The company’s tape libraries include cartridge tape drives, tape cartridges, and robotics that move the cartridges from their storage locations to the tape drives under software control. It serves original equipment manufacturers, information technology departments, and lower and middle market companies through distributor and reseller network, distributors, and independent outside sales representatives. Qualstar Corporation was founded in 1984 and is headquartered in Simi Valley, California.



Financial review

(All amounts are in thousands, except per share data):

Results for the Three Months Ended September 30, 2018 vs. 2017

Net revenue increased 14.5% to $3,154 from $2,755

Total operating expenses decreased 29.7% to $848 from $1,206

Net income of $405 or $0.20 per basic and diluted share vs. net loss of $148 or $(0.07) per basic and diluted share.


Results for the Nine Months Ended September 30, 2018 vs. 2017

Net revenue increased 24.9% to $9,320 from $7,461

Total operating expenses decreased 8.4% to $2,634 from $2,876

Net income of $1,469 from a loss of $31, or $0.72 per basic and $0.70 per diluted share vs. ($0.02) per basic and diluted share.



Stock influences and risk factors

Changes in trade policy in the United States and other countries, including changes in trade agreements and the imposition of tariffs and the resulting consequences, may have adverse impacts on the business, results of operations and financial condition.

Principal competitors devote greater financial resources to developing, marketing and selling their products. Consequently, they may be unable to maintain or increase market share.

A loss of or deterioration in their relationship with one or more of resellers or distributors, or the inability to establish new indirect sales channels to drive growth of their products could negatively affect operating results.

Much of their business is subject to risks associated with operations in foreign countries.



Stock chart

On Monday, December 10, 2018, QBAK shares were trading at $5.50 on traded volume of 7.4K shares. The current RSI (14) is 49.87

At $5.50, QBAK shares are trading below their 50 DMA and 200 DMA of $6.13 and $8.36 respectively.




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