Sphere 3D Reports Fiscal Year 2018 Financial Results
March 29 2019 - 4:45PM
Sphere 3D Corp. (NASDAQ: ANY), a company delivering
containerization, virtualization, and data management solutions,
today reported financial results for its year ended December 31,
2018.
“2018 was a year of transition with a number of challenges that
needed to be overcome in order to complete the divestiture of
Overland-Tandberg and restructuring of our credit facilities,” said
Peter Tassiopoulos, chief executive officer of Sphere3D. “The
impact of our focusing on the restructuring, coupled with our
limited financial resources, negatively impacted the Company’s
performance. With that behind us, we can now focus on seeking to
create shareholder value.”
Fiscal Year Financial Results:
On November 13, 2018, the Company closed the divestiture of its
Overland subsidiary and related business. Beginning in the fourth
quarter of 2018, the financial results of Overland for fiscal years
2018 and 2017 have been reflected in the Company’s consolidated
statements of operations as discontinued operations. All results
below exclude discontinued operations. Our results for fiscal
year 2018 were as follows:
- Net revenue for 2018 was $9.0 million, compared to $12.6
million for 2017.
- Product revenue for 2018 was $6.1 million, compared to $9.7
million for 2017. The overall decrease in revenue was partially due
to our divestiture of Overland and our limited liquidity which
delayed shipments. In addition, in 2017 there was a significant
product transaction related to a one-time opportunity resulting in
$2.2 million of product revenue that did not reoccur in 2018.
- Service revenue was $2.9 million in each of the years 2018 and
2017.
- Gross margin for 2018 was 18.6%, compared to 25.0% for
2017.
- Operating expenses for 2018 were $14.3 million, compared to
$21.2 million for 2017. In 2017 we recorded an impairment charge of
$2.3 million.
- Share-based compensation expense for 2018 was $1.6 million,
compared to $7.8 million for 2017. Depreciation and amortization
was $1.7 million for 2018, compared to $3.4 million for 2017.
- Net loss from continuing operations for 2018 was $12.7 million,
or a net loss of $7.65 per share, compared to a net loss from
continuing operations of $15.4 million, or a net loss of $24.78 per
share, for 2017.
- Net loss from discontinued operations for 2018 was $13.5
million, or a net loss of $8.15 per share, compared to a net loss
from discontinued operations of $10.8 million, or a net loss of
$17.30 per share, for 2017.
Grant of Inducement Award:
In March 2019, the Company’s Board of Directors granted
100,000 inducement restricted stock units to Stoney Hall, who has
joined the sales and marketing team of the Company. This grant
vests over an 18-month vesting period. These RSUs were granted as
an inducement material to employment in accordance with NASDAQ
Listing Rule 5635 (c)(4).
Investor Conference Call:
Sphere 3D will not be hosting a fiscal year 2018 earnings
conference call.
About Sphere 3DSphere 3D
Corp. (NASDAQ: ANY) delivers containerization, virtualization,
and data management solutions via hybrid cloud, cloud and
on-premise implementations through its global reseller network and
professional services organization. Sphere 3D has a portfolio
of brands, including HVE ConneXions, UCX ConneXions, and
SnapServer® dedicated to helping customers achieve their IT goals.
For more information, visit www.sphere3d.com. Follow us on
Twitter @Sphere3D and @HVEconneXions
Safe Harbor Statement This
press release contains forward-looking statements that involve
risks, uncertainties, and assumptions that are difficult to
predict. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking
statements as a result of risks and uncertainties including,
without limitation, our inability to obtain additional debt or
equity financing; any increase in our cash needs; the
Company’s ability to maintain listing with the NASDAQ Capital
Market; market adoption and performance of our products; the level
of success of our collaborations and business partnerships;
possible actions by customers, partners, suppliers, competitors or
regulatory authorities; and other risks detailed from time to time
in our periodic reports contained in our Annual Information Form
and other filings with Canadian securities regulators
(www.sedar.com) and in prior periodic reports filed with
the United States Securities and Exchange Commission
(www.sec.gov). Sphere 3D undertakes no obligation to
update any forward-looking statement, whether written or oral, that
may be made from time to time, whether as a result of new
information, future developments or otherwise, except as required
by law.
Investor Contact:Kurt
Kalbfleisch+1-858-495-4211Investor.relations@sphere3d-overland.com
|
SPHERE 3D
CORP. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended |
|
|
|
December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
(Unaudited) |
|
|
Net
revenue |
|
$ |
9,030 |
|
|
$ |
12,599 |
|
Cost
of revenue |
|
|
7,351 |
|
|
|
9,454 |
|
Gross
profit |
|
|
1,679 |
|
|
|
3,145 |
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Sales and
marketing |
|
|
3,375 |
|
|
|
3,402 |
|
|
Research and
development |
|
|
3,425 |
|
|
|
5,867 |
|
|
General and
administrative |
|
|
7,499 |
|
|
|
9,653 |
|
|
Impairment of
acquired intangible assets |
|
|
- |
|
|
|
2,294 |
|
|
|
|
|
14,299 |
|
|
|
21,216 |
|
Loss
from operations |
|
|
(12,620 |
) |
|
|
(18,071 |
) |
|
Interest expense
- related party |
|
|
(76 |
) |
|
|
- |
|
|
Other income,
net |
|
|
10 |
|
|
|
1,799 |
|
Loss
before income taxes |
|
|
(12,686 |
) |
|
|
(16,272 |
) |
Benefit from income taxes |
|
|
- |
|
|
|
(852 |
) |
Net
loss from continuing operations |
|
|
(12,686 |
) |
|
|
(15,420 |
) |
Net
loss from discontinued operations |
|
|
(13,522 |
) |
|
|
(10,764 |
) |
Net
loss |
|
$ |
(26,208 |
) |
|
$ |
(26,184 |
) |
|
|
|
|
|
|
Net
loss per share: |
|
|
|
|
|
Continuing
operations |
|
$ |
(7.65 |
) |
|
$ |
(24.78 |
) |
|
Discontinued
operations |
|
|
(8.15 |
) |
|
|
(17.30 |
) |
|
Net loss per
share basic and diluted |
|
$ |
(15.80 |
) |
|
$ |
(42.08 |
) |
|
|
|
|
|
|
Shares used in computing net loss per share: |
|
|
|
|
|
Basic and
diluted |
|
|
1,658,862 |
|
|
|
622,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SPHERE 3D
CORP. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
(Unaudited) |
|
(Unaudited) |
ASSETS |
|
|
|
|
Cash
and cash equivalents |
|
$ |
341 |
|
|
$ |
600 |
Accounts receivable, net |
|
|
1,142 |
|
|
|
1,911 |
Inventories |
|
|
1,230 |
|
|
|
1,449 |
Other
current assets |
|
|
784 |
|
|
|
418 |
Assets of discontinued operations |
|
|
- |
|
|
|
72,009 |
|
Total current
assets |
|
|
3,497 |
|
|
|
76,387 |
Intangible assets, net |
|
|
3,348 |
|
|
|
5,198 |
Goodwill |
|
|
1,385 |
|
|
|
1,385 |
Other
assets |
|
|
3,056 |
|
|
|
310 |
|
Total assets |
|
$ |
11,286 |
|
|
$ |
83,280 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND (DEFICIT)
EQUITY |
|
|
|
|
Current liabilities |
|
$ |
9,639 |
|
|
$ |
6,800 |
Liabilities of discontinued operations |
|
|
- |
|
|
|
63,780 |
Series A redeemable preferred shares |
|
|
6,571 |
|
|
|
- |
Other
long-term liabilities |
|
|
683 |
|
|
|
2,237 |
Total
shareholders' (deficit) equity |
|
|
(5,607 |
) |
|
|
10,463 |
|
Total liabilities
and shareholders' (deficit) equity |
|
$ |
11,286 |
|
|
$ |
83,280 |
|
|
|
|
|
|
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