Overland's financial losses widen

Chief excutive plays down losses, claiming the firm is still on course to become a market leader

Overland Storage has come out fighting, despite seeing its profits slide further this past year.

The tape and disk storage vendor has spent the past several years trying to fight its way back into profitability, following a run of disappointing financial results, through the launch of new products and partner initiatives.

Despite this, Overland's losses widened by $1.5m to $14.5m this year, and its revenue slumped by $7.5m to £70.2m, according to its full-year results.

In a statement, the company attributed the revenue dip to its exit from the OEM tape library market, after it severed ties with hardware giant HP during its final quarter.

Eric Kelly, chief executive of Overland, said this was part of the vendor's overall aim to sell more products under its own name.

"We have made substantial progress this year with our strategic transformation into a branded products and service company," he said.

"We now have over 1,500 channel partners worldwide and introduced three new products [that] have allowed us to enter new vertical segments, substantially expanding our potential addressable market."

The results are not all doom and gloom, as the firm's disk-based product revenues were up 32.7 per cent on 2010.

Its gross margins also exceeded 30 per cent for the first time in Overland's history, which the vendor claims is down to several operational changes it made during 2011.

These include reducing the size of its headquarters in San Diego and its decision to outsource some of its product manufacturing activities.

On top of this, the firm also claims to have stabilised its balance sheet by securing funding worth $17.8m this year from two equity houses, as well as a further $8m in credit from an unspecified Silicon Valley bank.

This funding will be used to support the roll out of the firm's new clustered NAS and private cloud products, which are pencilled in for release next year.

"With these important accomplishments achieved this year, we have continued to establish the foundation to become a leader in data management and data protection," he said.

"With the selection of our strategic manufacturing partners, and design of our new products, we plan to deliver a new level of functionality, performance and pricing to address the requirements of the distributed enterprise and SMB customers," he added.