Crossroads Systems Reports Fiscal Second Quarter 2015 Financial Results

AUSTIN, Texas, June 4, 2015 /PRNewswire/ -- Crossroads Systems, Inc. (NASDAQ: CRDS), a global provider of data storage solutions, reported financial results for its fiscal second quarter ended April 30, 2015.

Revenue for fiscal Q2 2015 was $1.7 million, compared to $2.3 million in the same quarter a year ago. The decrease is primarily attributable to a decrease in custom development revenue as well as an expected decrease from our OEM SPHiNX product. Gross profit for fiscal Q2 2015 was $1.3 million, or 75 percent of total revenue, compared to $1.8 million, or 80 percent of total revenue in the same quarter a year ago. The decrease is due to a change in the mix of hardware and software products sold during the quarter.

Operating expenses for fiscal Q2 2015 increased twenty five percent to $4.5 million, compared to $3.6 million in the same period a year ago. The increase is attributable to litigation expenses related to the company's ongoing patent infringement lawsuits against NetApp, Oracle, Cisco, Quantum, Huawei and Dot Hill.

Net loss available to common stockholders was $(3.6) million or $(0.19) loss per share, compared to a net loss available to common stockholders of $(1.8) million, or $(0.14) loss per share, in the same quarter a year ago.

At April 30, 2015, cash, cash equivalents, and restricted cash totaled $5.1 million compared to $8.4 million in the previous quarter.

Management Commentary Richard K. Coleman, Jr., President and CEO at Crossroads Systems, said, "Although several major sales opportunities were delayed past the end of the quarter, our newest strategic partners, TIM AG in Germany and ARJ Distribution AB in Sweden, have well known and successful enterprise storage distribution channels and are working to expand our StrongBox opportunities in Europe.  Litigation expenses were higher than anticipated, but reflect our recent successful efforts to consolidate scheduling and accelerate certain inter partes review proceedings. Our Intellectual Property monetization strategy is unfolding as expected as we pursue companies that have been illegally using Crossroads' proprietary technology. We have previously advised investors that the potential compensatory damages could be in excess of $200 million and have no reason to revise that estimate.  We remain confident that we will deliver significant returns to our investors."

Conference Call Information Crossroads will hold a conference call on Thursday, June 4, 2015 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 EVP Mark Hood will host the call. A question and answer session will follow management's presentation.

Date: Thursday, June 4, 2015 Time: 4:30 p.m. Eastern Time (3:30 p.m. Central Time) Dial-In Number: (888) 438-5535 International:  (719) 325-2448 Conference ID: 3732527

To access the live or recorded webcast, visit: http://edge.media-server.com/m/p/8nzwuz5u 

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 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 storage 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,  Form 10-Q,Form 8-K and other reports 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. All forward-looking statements are qualified in their entirety by this cautionary statement, and Crossroads Systems undertakes no duty to update this information to reflect future events, information or circumstances.

©2015 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.        

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SOURCE Crossroads Systems