Feeds

Lawsuit loot helps Overland cut loss

$3m keeps wolf from door

5 things you didn’t know about cloud backup

Overland Storage has reported a reduced quarterly loss, helped by a $3m gain from a lawsuit.

Overland, which supplies NEO physical and REO virtual tape libraries and Snap iSCSI SAN, filer and unified storage products, has reported its second quarter fiscal 2011 results, ending 31 December 2010; both revenue and net loss numbers are down.

Revenues were $17.93m, 12.2 per cent down on the $20.432m reported a year ago, and the net loss was $0.91m ($2.58m a year ago.) That looks impressive. The revenue was two per cent higher than in the previous quarter and the net loss was significantly lower than the $6.5m in the preceding quarter.

However, Overland earned $3m by selling a minority interest in its patent infringement no-win, no-fee lawsuit against tape automation manufacturer BDT. Removing this from the numbers would make the net loss $3.91m, still down on the prior quarter but an increase on the year-ago quarter. It was a good rabbit to pull out of the hat but doesn't relate to underlying product and service sales, being a one-off… but maybe not.

If the lawsuit prospects are good enough for some third party to pay Overland $3m for a minority interest in the outcome, then Overland could reasonably look forward to an award of perhaps $10m or more if it wins the case, giving it a further gain of, say, $5m. Perhaps, with this sale happening, BDT will try to negotiate a settlement.

As its OEM revenues decline Overland is selling more branded product; sales grew 21.7 per cent from the previous quarter and now constitute 92.3 per cent of all sales. The downwards effect of declining OEM revenue on Overland's result will probably end next quarter.

Interestingly sales of NEO tape products in the quarter were 10.7 per cent higher than in the first quarter. There is a view in Overland that the tape market is growing, a counter-intuitive view to many. The company also thinks the tape market is ripe for innovation.

SnapServer and SnapSAN product sales were up 53 per cent quarter-on-quarter and 95 per cent year-on-year.

Meanwhile, an interesting note: Shmuel Shottan has joined Overland's board. This would be a so-what announcement were it not for the fact that he is the chief technology officer (CTO) of hardware-accelerated filer supplier BlueArc, a company that was founded by Overland's CTO and engineering VP Geoff Barrall. Shottan also worked at Snap Appliance, Overland CEO Eric Kelly's old company and one which he was instrumental in having Overland buy in 2008.

Could we be looking at some sort of link between low-end Snap products and the high-end BlueArcs, some sort of technology supply maybe? Or is it just a case of getting more relevant expertise on the board?

Getting back to the results; if Overland continues to make progress it could return to profit. That would be a red-letter day. ®

Build a business case: developing custom apps

More from The Register

next story
Microsoft: Azure isn't ready for biz-critical apps … yet
Microsoft will move its own IT to the cloud to avoid $200m server bill
Shoot-em-up: Sony Online Entertainment hit by 'large scale DDoS attack'
Games disrupted as firm struggles to control network
Silicon Valley jolted by magnitude 6.1 quake – its biggest in 25 years
Did the earth move for you at VMworld – oh, OK. It just did. A lot
VMware's high-wire balancing act: EVO might drag us ALL down
Get it right, EMC, or there'll be STORAGE CIVIL WAR. Mark my words
Forrester says it's time to give up on physical storage arrays
The physical/virtual storage tipping point may just have arrived
VMware vaporises vCHS hybrid cloud service
AnD yEt mOre cRazy cAps to dEal wIth
Better be Nimble, tech giants, or mutant upstarts will make off with your sales
Usual suspects struggling to create competing products
prev story

Whitepapers

A new approach to endpoint data protection
What is the best way to ensure comprehensive visibility, management, and control of information on both company-owned and employee-owned devices?
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.