Overland Data Inc. reported record revenue for the fourth quarter and fiscal year ending June 30, up 79% and 33%, respectively, over last year. The company said the revenue gain is due largely to OEM demand for the company's core DLT-based LibraryXpress product line.
While the overall numbers were positive, the net income for the fourth quarter and fiscal year 2000, were significantly impacted by losses at Overland's Tecmar subsidiary, and by charges related to the company's decision to discontinue Tecmar, Inc.'s line of Ditto products for the desktop tape backup market. For the fourth quarter Overland reported revenue of $38.3 million, up from $21.4 million in the fourth quarter of the last year.
Overland claims that if not for the write down of Ditto inventory, it would have reported net income of $0.12 per share for the quarter. The net income also includes an operating loss, excluding the Ditto write down, of approximately $900,000, or $0.08 per share, that Overland says is also attributable to the losses of the Tecmar subsidiary.
Overland says that the losses at Tecmar were due to a combination of revenues falling short of expected margins and planned research and development investments in next-generation storage products. The saving grace, according to the company, has been strong sales of its DLT-based LibraryXpress family of products to OEM customers like Compaq Computer Corp.
The low profitability of the Ditto line has prompted Overland to scrap it and focus on the entry-level server market rather than the desktop backup market. Overland says it will continue to honor existing Ditto product warranties through a swap-out program, and will offer online Ditto technical support through the Tecmar Web site. Ditto media will continue to be available from a number of alternative sources.
Overland is downsizing the Colorado-based subsidiary, Tecmar, by consolidating certain functions into its San Diego, Calif. facility. A skeleton crew consisting primarily of an engineering team will remain in Colorado to develop small business products and serve as an integral part of the San Diego R&D group. The consolidation is expected to generate approximately $1.1 million in annualized cost savings.