Crossroads Systems Inc (NASDAQ:CRDS) Stock Dropped while Five Below Inc (NASDAQ:FIVE) Shares Climbed on Earnings Results.

On Wednesday, Crossroads Systems Inc (NASDAQ:CRDS), dropped -5.88% or -0.060 points, as CRDS stated financial results for its fiscal third quarter ended July 31, 2015.

According to the report, Revenue for fiscal Q3 2015 was $2.1 million, consistent with the same quarter a year ago. Gross profit for fiscal Q3 2015 was $1.6 million, or 74 percent of total revenue, contrast to $1.7 million, or 79 percent of total revenue in the same quarter a year ago. The decrease is due to a change in the mix of hardware and software products sold during the quarter.

Operating expenses for fiscal Q3 2015 raised thirty seven percent to $4.6 million, contrast to $3.4 million in the same period a year ago. The improvement is attributable to litigation expenses related to the companys ongoing patent infringement lawsuits.

Net loss available to common stockholders was $(3.3) million, or $(0.17) loss per share, contrast to a net loss available to common stockholders of $(2.4) million, or $(0.16) loss per share, in the same quarter a year ago.

On July 31, 2015, cash, cash equivalents, and restricted cash totaled $7.3 million contrast to $5.1 million in the previous quarter.

Administration Commentary

Richard K. Coleman, Jr., President, and CEO at Crossroads Systems, said, Our expectations for the success of our business strategy remain optimistic. Following our positive Markman ruling and the filing of our IPR responses, we were able to settle the litigation with Huawei, by far our smallest defendant, and remain confident in our legal position with the remaining defendants. We expect to deliver noteworthy returns to investors as we continue to pursue companies using our proprietary technology without a license. Our product business improved in the quarter and is off to a strong start in the fourth quarter. The addition of our ability to deliver StrongBox in new virtual machine configurations will strengthen our product offering and should contribute to this momentum in future quarters.

The stock closed its last trade at $0.960. The market capitalization for the company is reported at $24.14M.

Looking at other metrics of the stock, we find that latest closing price of $0.960 is at a discount to its 200-day moving average price of $1.95. Its intraday range has been $0.95 to $1.02; it is trading at discount as compared to its 52-week high of $3.10 achieved on Sep 29, 2014, and a premium to its 52-week low of $0.95faced on Sep 2, 2015. Turning to market valuation, the P/S ratio is 2.61. The stock is down -61.60% in this year through last close, and the beta ratio has a value of 2.05.

Analyst mean recommendation for the stock is 2.00. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.

Crossroads Systems, Inc. provides data protection solutions and services worldwide. The company’s products comprise StrongBox, an enterprise-level network attached storage solution based on tape for long-term data protection and preservation; and SPHiNX, a virtual tape system that provides data protection to reduce the complexity of data backup and disaster recovery.

On other hand, Five Below Inc (NASDAQ:FIVE), settled 1.44% higher to $38.01, in last trading session, after declared financial results for the thirteen and twenty-six weeks ended August 1, 2015.

Joel Anderson, CEO, stated: We delivered earnings at the high end of our guidance range in the second quarter and made noteworthy progress against our planned initiatives. We are excited to declare the opening of our new east coast distribution center and with new store growth remaining our top priority, we were very happy with our entry into three new markets, counting the highly anticipated Florida market.

For the thirteen weeks ended August 1, 2015:

  • Net sales raised by 19.5% to $182.2 million from $152.5 million in the second quarter of fiscal 2014; comparable store sales raised by 3.0%.
  • Operating income reduced to $11.6 million from $13.3 million in the second quarter of fiscal 2014 driven by the predictable deleverage associated with the new distribution center, leadership investments and a shift in marketing spend.
  • The Company opened 32 new stores and ended the quarter with 417 stores in 26 states. This represents an improvement in stores of 18.1% from the end of the second quarter of fiscal 2014.
  • S. generally accepted accounting principles, or GAAP, net income was $7.1 million contrast to $8.3 million in the second quarter of fiscal 2014.
  • GAAP diluted income per common share was $0.13 contrast to $0.15 per share in the second quarter of fiscal 2014.

Mr. Anderson continued, We believe our second quarter sales performance was curtailed by two one-time factors that occurred in the middle of the quarter. First, as part of our ongoing test and learn approach around our marketing strategy, we eliminated a summer circular. Second, we practiced temporary store receipt delays as we moved out of our existing east coast distribution center. We believe the combination of the two accounted for total sales coming in at the low end of our guidance range and the comp shortfall for the second quarter.

These one-time factors are behind us, and we believe we are well positioned from a merchandising, marketing, and distribution standpoint to deliver on our plans for the second half of the year with compelling merchandise and ample newness to further solidify Five Below as a holiday shopping destination, Mr. Anderson concluded.

Third Quarter and Fiscal 2015 Outlook:

For the third quarter of fiscal 2015, net sales are predictable to be in the range of $164 million to $167 million based on opening 16 net new stores and assuming a 3% to 4% improvement in comparable store sales. GAAP net income is predictable to be in the range of $3.3 million to $4.0 million, with a GAAP diluted income per common share range of $0.06 to $0.07 on about 54.9 million estimated diluted weighted average shares outstanding.

For fiscal 2015, the Company continues to expect net sales to be in the range of $820 million to $828 million based on opening 70 net new stores for the full year and assuming an approximate 3% improvement in comparable store sales. GAAP net income is predictable to be in the range of $56.4 million to $58.2 million, with a GAAP diluted income per common share of $1.03 to $1.06 on about 55.0 million estimated diluted weighted average shares outstanding.

Five Below, Inc. operates as a specialty value retailer in the United States. It offers accessories, counting novelty socks, sunglasses, jewelry, scarves, gloves, hair accessories, athletic tops and bottoms, and t-shirts, in addition to beauty products comprising nail polish, lip gloss, fragrance, and branded cosmetics; and items used to complete and personalize living space, counting glitter lamps, posters, frames, fleece blankets, pillows, candles, incense and related items, and storage options for the customer’s room and locker.

About Travis Garlick 1742 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.