Crossroads: Fiscal 1Q15 Financial Results

(in $ million)	1Q14	1Q15	Growth
Revenue	4.1	2.2	*-46%*
Net income (loss)	(3.3	(2.3)

Crossroads Systems, Inc. reported financial results for its fiscal first quarter ended January 31, 2015.

Revenue for fiscal Q1 2015 was $2.2 million, compared to $4.1 million in the same quarter a year ago.

The decrease is primarily attributable to a $0.6 million decrease in custom development revenue as well as an expected decrease from our OEM SPHiNX product.

Gross profit for fiscal Q1 2015 was $1.6 million, or 73% of total revenue, compared to $3.5 million or 85% of total revenue in the same quarter a year ago. The decrease is due to a change in the mix of products sold during the quarter.

Operating expenses for fiscal Q1 2015 decreased nine% to $3.6 million, compared to $3.9 million in the same period a year ago.

Net loss available to common stockholders was $(2.4) million or $(0.15) loss per share, compared to a net loss available to common stockholders of $(3.5) million or $(0.28) loss per share in the same quarter a year ago.

At January 31, 2015, cash, cash equivalents, and restricted cash totaled $8.4 million compared to $4.9 million in the previous quarter.

Richard K. Coleman, Jr., president and CEO, said: “Crossroads continues to take the actions necessary to maximize the value of our product and intellectual property assets. We made significant progress this quarter by delivering a rich set of product enhancements and strengthening our balance sheet. While we can’t predict the timing of the ultimate payoff from our intellectual property monetization efforts, we’re well down the path and confident of our strategy as well as the strength of our legal position.”

Comments

Rick Coleman, president and CEO:
"Our current monetization efforts focus on the 31 patents and pending patents in our successful 972 access controls portfolio. Over the last 14 years, these important industry innovations have been licensed to 51 companies for over $61 million. But there have been some companies who have simply refused to take a license.
"In late 2013 and early 2014, after more than a decade of a attempts to license these patents to some of the industry’s largest suppliers returned to litigation as our only alternative. Not surprisingly with potentially hundreds of millions of dollars of risk, Oracle, NetApp, Cisco, Quantum, Dot Hill, and Huawei are taking every possible action to protect themselves."

Jennifer Crane, CFO:
"This quarter, StrongBox revenue was $649,000, a decrease of 11% from the same quarter last year, mainly due to decreases in Europe."