Clark Holdings, Inc. (GLA) Reports Q4 Loss of $3.27

Clark Holdings, Inc. (NYSE: GLA) reported Q4 EPS of ($3.27). Revenue for the quarter came in at $11.3 million.

Detailed Q4 2016 Analysis

The following financial results are for continuing operations, including Nexsan and the corporate holding company, for the current and prior periods unless otherwise indicated.

• Net revenue for Q4 2016 was $11.3 million, down 28.5 percent from Q4 2015. The decrease was due to the strategic decision to exit underperforming geographic regions and low-margin portions of the business.
• Gross margin for Q4 2016 was 45.1 percent, a 2.7 percent increase from Q4 2015. The improvement was primarily driven by production cost improvements, price optimization programs and product mix changes.
• Selling, general and administrative expenses in Q4 2016 were $7.3 million, down $2.2 million, or 23.2 percent, compared to $9.5 million in Q4 2015. The decrease was primarily related to Nexsan cost reductions, including the exit from underperforming geographic regions and the work force consolidations.
• Research and development (R&D) expenses in Q4 2016 were $2.4 million, compared to $3.4 million in Q4 2015, due to Nexsan cost reductions in legacy products such as E-series.
• Special charges were $0.5 million in Q4 2016 compared to $2.0 million in Q4 2015. Special charges in Q4 2016 were primarily related to severance and pension settlement costs, whereas in Q4 2015 they were primarily related to pension settlement costs and consulting fees.
• Operating loss from continuing operations was $5.1 million in Q4 2016 compared to a loss of $8.2 million in Q4 2015.
• Income tax expense was $2.4 million in Q4 2016 compared to none in Q4 2015. The Q4 tax expense was related to the reversal of all the prior quarter allocations of tax benefit from Discontinued Operations to Continuing Operations. 2016 full year tax expense is $0.1 million.
• Discontinued operations had a loss (after-tax) in Q4 2016 of $9.8 million compared with a loss of $1.4 million (after-tax) in Q4 2015. The loss was primarily due to increased legal accrual in Q4 2016. Discontinued operations include the results of the IronKey business, which was divested, and the legacy Storage Media and Accessories businesses which we exited.
• Loss per share from continuing operations was $3.27 in Q4 2016 compared with a loss per share of $2.30 in Q4 2015 based on shares outstanding of 3.6 million and 3.7 million, respectively, (adjusted to give effect to the February 2017 1:10 reverse stock split).
• Cash and short-term investments balance was $32.0 million as of December 31, 2016, down $17.6 million during Q4 2016, driven primarily by investment in Nexsan, losses on short term investments and the settlement payments related to discontinued operations.

For earnings history and earnings-related data on Clark Holdings, Inc. (GLA) click here.

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