Tandberg: Fiscal 2013 Financial Results

We have already published the financial results of Tandberg Data’s fiscal year ended December 31, 2011 and 2012, but not for 2013. We got these most recent figures as Overland Storage reveal them in a recent SEC filing following its acquisition of Tandberg consummated on January 21, 2014.

Revenue continued to decline, 9% from 2012 to 2013, and net loss to increase. As of and for the year ending December 31, 2013, the company had a deficit working capital of $53 million, deficit equity of $32 million and incurred a net loss of $18 million.

Revenue from tape automation, tape drives and tape media decreased $7.8 million during 2013 as compared to 2012. The tape drives revenue decreased $3.4 million and the tape automation revenues $2.7 million. These declines were primarily the result of a reduction in the overall tape market, as well as an increase in competition between existing tape product vendors during 2013, which resulted in price erosion within the tape product market. Tape media revenue decreased $1.7, due primarily to decreased LTO and SLR media sales resulting from general market declines. Revenue from RDX products increased $1.7 million, or 12.3% in 2013 compared to 2012.

At the end the old tape drive manufacturer was essentially getting revenue from removable disk RDX representing 47.6% of total sales and 49.7% with royalties, the only growing sector for the European company. Tape drive and automation continues to decline, together being at 29.4% in 2013 from 35.7% in 2012.

Tandberg Data Holdings S.à r.l. was incorporated on August 14, 2009 under the laws of the Republic of Luxembourg with wholly-owned subsidiaries in Germany, USA, Norway, Japan, China with a manufacturing and repair plant, Singapore, Hong Kong and France. In 2009, it assumed the operating activities of Tandberg Data ASA and Tandberg Storage ASA (in liquidation), which went into bankruptcy in the same year. For this purpose, Cyrus Capital Partners, LP established Tandberg Data in its current structure, which is owned by FBC Holdings S.à.r.l. and Tandberg Data Management S.à r.l. Cyrus ultimately acted as the recipient of all transferred assets and shares from the bankruptcy estate. Prior to the establishment of the company, Cyrus was the largest creditor and pledge to the predecessor companies and remains the largest shareholder and its primary creditor.

Following the acquisition of Overland by Sphere 3D, Seeking Alpha wrote: “Sphere 3D has achieved phenomenal gains with the relentless support of a conflicted portfolio manager suspected of stock manipulation in the past. Even with that former regulatory target blowing millions on stocks that his firm owns, Sphere 3D ranks as a rare winner in that ugly portfolio. With Sphere 3D set to close an overhyped merger deal, much of its stock will soon land in the hands of a less supportive firm with clear incentive to sell.“

Financial data of Tandberg in $ million
(year ended December 31)

in $ million	2012	2013	Y/Y growth
Product revenue	61.6	56.0	-9%
Service revenue	4.3	4.4	2%
Royalty fee	1.7	1.1	-36%
Total Revenue	67.6	61.5	-9%
Net loss	*(11.5)*	(18.5)

Sales by product for fiscal year ended December 31

	2011	2012	2013
Tape drives	21.9%	20.2%	16.7%
Tape automation	14.7%	15.5%	12.7%
RDX	37.3%	40.7%	47.6%
Disk solution	1.1%	0.5%	1.4%
Media	16.0%	13.7%	12.2%
Others	0.8%	0.5%	0.5%
Services	6.7%	6.3%	7.2%
RDX royalty	1.5%	2.6%	1.7%
Total	100.0%	100.0%	100.0%