OVERLAND STORAGE REPORTS FISCAL 2010 SECOND QUARTER RESULTS

Overland Storage, Inc. (Nasdaq: OVRL) today reported second quarter results for its fiscal quarter ended December 31, 2009.

The company reported revenues of $20.4 million for the fiscal 2010 second quarter compared to revenues of $19.3 million in the prior quarter and $28.9 million for the same quarter last year. Net loss decreased by 50.0% to $2.6 million for the fiscal 2010 second quarter, or $0.47 per share, compared with a $5.2 million loss or $1.21 per share for the same quarter last year. Additionally, net loss decreased by 29.7% from $3.7 million, or $0.87 per share, as compared to the prior quarter.
Highlights of product revenue for the December quarter were as follows:

• Overland Storage branded product revenues rose approximately 20% from our fiscal 2010 first quarter
• Revenue in our EMEA and APAC regions increased 52.1% and 33.8%, respectively, from our fiscal 2010 first quarter
• NEO tape library sales increased 28.8% from our the prior quarter, including strong unit sales of our NEO 8000 (which increased 75.0%)
• Our successful launch of NEOs in October, which broadens our NEO portfolio of products, resulted in an additional 16.7% growth in NEO branded product revenue from the prior quarter

The company reported a significant decrease, of 31.7% in operating expenses for our fiscal 2010 second quarter, to $8.6 million from $12.6 million in the same quarter last year. Operating expenses remained relatively flat compared to $8.4 million for the prior quarter. Overall decreases in operating expenses compared to the same quarter last year are primarily attributable to fiscal 2009 restructuring activities within sales and marketing and research and development. In addition, the company saw gains in gross margins of its overall business fueled by significant growth in its Overland Storage branded business. This growth, along with an expected decline in OEM revenue, resulted in an increase in the percentage of revenue from the Overland Storage branded business compared to total revenue. The company's gross margin was 28.5% in the fiscal 2010 second quarter, an increase from 26.7% in the same quarter last year and up from 27.0% in the prior quarter. This resulted, in part, from the growth of our branded business worldwide, driven by significant growth in the EMEA and APAC regions compared to prior quarter.

"It has been just under a year since we started on the path to rebuilding the company and its operations worldwide. We are pleased with what we have been able to achieve in this relatively short period of time,” said Eric Kelly, President and CEO of Overland Storage. “Our strategy to significantly increase branded product sales is being well executed. In addition, we are seeing many of the strategic initiatives that we have put in place begin to show results from expanded opportunities globally."

Cash as of December 30, 2009 was $5.7 million, an increase of 42.5% from $4.0 million as of September 30, 2009. During the second quarter the company raised $3.8 million of net proceeds through its public offering in exchange for the issuance of 2.1 million shares of common stock, received $2.0 million of proceeds from the liquidation of the ARS, and made $0.8 million in payments toward the retirement of its notes held by Adaptec and Anacomp. As of December 30, 2009, current liabilities associated with the company’s non-OEM accounts receivable financing arrangements, including interest remained materially consistent, at $4.4 million compared to September 30 and June 30, 2009.

Overland Storage also highlighted the momentum in its disk systems business during the fiscal 2010 second quarter, with unit sales of its multi-disk storage systems rising 32.7% over the previous quarter. These solutions have attracted a broad range of customers around the world -- from small business to leading brand name companies, governmental agencies and educational institutions-- with representation across a wide array of industries, including health care, large retail chains, technology, and consumer products.

Several competitive advantages should position the Company to capitalize on opportunities within disk-based data protection including, on a global scale, a strong sales and service infrastructure, a large installed base of tape automation customers that we can help to transition to disk backup and an industry-leading tape library portfolio leveraging the Company’s bundled disk-tape offerings.

CEO Eric Kelly Now Also President of Overland Storage

Former president was Vernon LoForti who left the company last September.

On January 5, 2010, the Board of Directors of Overland Storage, upon the recommendation of the Nominating and Governance Committee of our Board of Directors, appointed Eric L. Kelly as President. Mr. Kelly will continue to serve as Chief Executive Officer and as a member of the Board of Directors. The board did not enter into or amend any plan, contract or arrangement between Overland and Mr. Kelly in connection with his appointment as our President.
Mr. Kelly, age 51, has served as Chief Executive Officer since January 2009 and a member of the Board of Directors since November 2007.

From April 2007 to January 2009, he served as president of Silicon Valley Management Partners, Inc., a management consulting and M&A advisory firm, which he co-founded in April 2007. From July 2004 to August 2006,

Mr. Kelly was Vice President and General Manager of storage systems solutions at Adaptec, Inc. From August 2002 to July 2004, he served as President and CEO of Snap Appliance, Inc., which was acquired by Adaptec. From March 2000 to June 2002, Mr. Kelly served as President, Network Systems Division of Maxtor Corporation. Prior to Maxtor, he served as the Chief Operating Officer of Isyndicate, Inc. From July 1998 to January 2000 he was the Enterprise Vice President for Dell Computer Corporation. From 1980 to 1998 he served in executive or managerial roles with Netpower Incorporated, Diamond Multimedia Systems Incorporated, Conner Peripherals Incorporated, Marq Technologies Incorporated and IBM.

Grand Valley State University Graduates to First-Class Data Protection with Overland Storage’s SAN, Backup Appliance and Tape Solutions

University Leverages Overland’s Price, Capacity and Performance Benefits to Bolster Backup and Recovery while Elevating Data Protection of Rapidly Growing VMware Environment

Overland Storage, Inc. today announced that Grand Valley State University has deployed an economical multi-tiered data protection strategy utilizing Overland’s ULTAMUS™ RAID high-density SAN storage, REO SERIES® disk-based backup and recovery appliances as well as NEO SERIES® tape libraries. The integrated, scalable platform seamlessly safeguards 10 TBs of mission-critical data while enabling the university to better support a rapidly expanding VMware virtualization environment.

Grand Valley State is a public, four-year college located in Allendale, Michigan. Situated near Grand Rapids, the university supports more than 24,000 students along with a faculty and support staff of almost 2,000 people. The Princeton Review named GVSU one of the best universities in the Midwest in 2009 and its Seidman College of Business is known as one of the country’s top business schools.

An IT team of 40 ensures that students and faculty have ubiquitous network access and the latest tools to enrich the educational process, including SunGard’s Banner Unified Digital Campus administrative software. The technology staff also oversees 250 Microsoft Windows file servers, nearly 100 VMware virtual servers and 10 TBs of vital data. A constant influx of data along with a steady migration to server virtualization strained the university’s tape-based backup infrastructure, prompting Grand Valley to explore the addition of a cost-effective yet powerful disk-based appliance to bolster data protection.

In seeking reliable, scalable backup and recovery products to support its rapidly expanding environment, Grand Valley turned to trusted reseller partner, Mercury Storage, a Southfield, Michigan-based provider of best-of-breed data storage and security solutions. After evaluating products from several leading manufacturers, the university selected a suite of end-to-end data protection solutions from Overland Storage, including its high-capacity ULTAMUS RAID 1200 storage arrays, top-of-the-line REO 9100c disk-based backup appliances with hardware compression and enterprise-class NEO 8000 tape libraries. Together, this complementary blend of products has enabled Grand Valley State to accelerate backups and restores, extend long-term data retention and achieve heightened levels of disaster recovery and business continuity.

“With Overland’s SAN products, back up appliances and tape solutions, I no longer worry about backups or keeping up with spikes in data growth,” said David Reed, network engineer for Grand Valley State University. “When our continued growth requires additional solutions, we’ll look at Overland first because we’ve come to trust their products over the years since they’ve always performed well and we’re confident the next one will too.”

Grand Valley first took advantage of two NEO 8000 tape libraries for enterprise-class performance and capacity with access to as much as 1.6 petabytes of storage and space for up to 1,000 cartridges and 24 tape drives. Next, the university opted for a pair of high-end REO 9100 disk-based backup appliances to accelerate backups by more than 75 percent while enabling near-instantaneous data recoveries.

The team then added compression cards to their high-end REOs to nearly double the useable virtual tape capacity in order to keep pace with constant data growth. Two ULTAMUS SAN storage solutions complete the data protection picture by offering massive amounts of storage at the best possible price point to accommodate the university’s VMware backups. “

According to Jillian Mansolf, vice president of worldwide sales and marketing for Overland Storage, the company’s family of backup appliances, highly available SAN and NAS solutions and tape products scale easily to support demanding requirements. “Our future-proof data protection solutions are flexible and well suited for rapid-growth environments,” she explains. “Grand Valley State University is an excellent example of how Overland’s product portfolio delivers complementary capabilities for achieving faster backups and restores, more reliable long-term data retention and increased support for server virtualization migrations.”

Iomega StorCenter NAS is great for backups

You can never be rich enough or thin enough, and you can never have enough storage.

I’ve been playing with Iomega’s brand new StorCenter ix2-200, a 4TB network-attached storage/home server that totally kicks NAS!

Not only is it a nice big target for Time Machine backups, it’s also an iTunes server. It plays nice with the Mac, and is dead easy to set up and use.

Aimed at small business and home users, Iomega’s StorCenter ix2-200 offers cheap network storage AND a media server. It’s a killer combo: you get a big roomy drive for Time Machine and a no-setup server for storing gobs of music and movies. Your media is accessible by any Mac or PC on your home network — as well as the Apple TV and the kids’ Xbox. Your files are also accessible over the internet.

Best yet, it’s a torrent machine, able to download and store torrents in the background. You just double-click on the torrent jobs you want downloading, and the ix2-200 does the rest. It’s fast and doesn’t clog your internet connection like a lot of Mac clients. Plus you don’t have to leave your machine on while you wait for the torrents to finish downloading. There’s also a built-in video player so you can watch downloaded torrents through the ix2’s browser interface. It plays video encoded in popular formats like .avi and divx, so no need to download VLC or Perian.

The ix2-200 is available in 1TB to 4TB capacities. Starting at $270 for the 1TB model, it costs $370 for the 2TB version and $700 for the 4TB version (two 2TB drives are still pretty expensive). That might sound pricey, but a comparable Hewlett Packard MediaSmart Home Server also costs $700 but offers only 1.5TB of storage. Yeah, the HP offers more performance, but it’s probably overkill in a typical home setting. According to Iomega, the ix2-200 can serve five simultaneous HD video streams at the same time, and support about 20 users at the same time.

It serves up media not just to Macs, Windows and Linux PCs, but UPnP devices like networked TVs and game consoles, including the Xbox 360 and PlayStation 3. It’s preconfigured to share through iTunes and automatically shows up in iTunes as a shared device.

Setup was a breeze. I plugged it into the wall and home/office router, then ran the setup utility on my Mac. A few clicks later, and there it was in the Finder as a shared drive. Open Time Machine, and it’s available for backups. Dead easy. Another NAS appliance I’m reviewing wasn’t nearly as easy to set up..

The ix2-200 is configured through a browser interface, which is very intuitive (also unlike the other NAS appliance). Easy to add users, shared folders, set storage quotas and setup an FTP server.

The only problem I’ve had is with the browser interface, which is a little glitchy. Sometimes it jumps to a “configure network settings” screen, which disappears if you hit the Home link. It’s annoying, but not a deal breaker.

It’s got a gigabit connection and two drive bays. Drives are user replaceable, and it’s easy to add extra storage — just plug external drives into the three USB ports (one in front; two in the back).

Iomega says the ix2-200 is pretty green. It uses new green drives and automatically spins them down when not in use.

It also supports Bluetooth for backup and storage for smartphones, but alas not the iPhone until Apple adds for support for Bluetooth file sharing. It will work with jailbroken iPhones though. Requires a separate Bluetooth adapter (price TBD).

There’s a front panel “quick transfer” button for automatically copying files to and from USB thumb drives, flash memory cards and external USB drives. It can also initiate pre-set network copy jobs, which is useful for things like offsite backups.

There’s a bunch of other features for business users I’ll likely never use — like iSCSI for fast data transfers and support for up to five networked security cams.

But that’s all good. The iX2-200 is a great, full-featured package that’s not just a dumb hard drive but a capable addition to any home or office network. Recommended.

Overland Storage Launches NEO 200s and NEO 400s Autoloaders

Small and midsize enterprises (SMEs) face some tough choices right now. Disk-based backup is definitely on the rise and has many appealing features, but it can come with a price tag that these organizations simply cannot afford and may not meet all levels of data protection needs. Many SMEs are using tape as a primary backup target or leveraging tape as an archive in a disk-to-disk-to-tape (D2D2T) scenario. It is these requirements that the new NEO® 200s and NEO® 400s entry-level tape libraries announced this week from Overland Storage are designed to address.

There is no doubt that the price of disk-based backup has dropped dramatically over the last few years, even as its acceptance as a backup target has risen. But in small IT shops, tape still has appeal. It is portable, available in a small form factors and its upfront and ongoing costs are minimal, especially if needed to back up only a few hundred gigabytes (GBs) or up to one terabyte (TB) nightly. It is for reasons like these IT offices with budget, space and resource constraints are still purchasing entry-level tape libraries.

But as they look for new entry-level options, their appetite for more capacity and more features is increasing. Growing data centers and few or no IT personnel to manage backups means that hardware and software features once only found in midrange and enterprise tape libraries need to find their way into entry-level tape libraries.

To satisfy this growing hunger, Overland elected to leverage its proven NEO tape library family with the addition of an entry-level offering. The NEO 200s and NEO 400s entry-level tape libraries are the first products in this new line. While they do not possess all the features one will find in the NEOe product line, end users find the following features appealing for backup and archive applications:

* Web-based remote management and diagnostics
* Integrated bar code readers
* Choice of SCSI, SAS or native FC interfaces
* Easy rack installation
* Removable magazines with user-configurable mail slots

Of these features, Overland's decision to continue to support SCSI is notable because many of its competitors are moving to entry level tape libraries that only offer SAS or FC. While SAS interfaces certainly appear to the be wave of the future and are supported on these new Overland systems, continuing to offer a SCSI interface option still makes sense for SMEs since for now SCSI is still more prevalent and standardized than SAS and can provide sufficient throughput for smaller environments.

The NEO 200s and NEO 400s also diverge in a number of ways. The NEO 400s is a larger capacity, more full featured tape library while the NEO 200s more cleanly fits the definition of an autoloader/small library. Some other ways in which the NEO 200S and NEO 400s differ include:

* The NEO 200s supports both LTO-3 and LTO-4 tape drives while the NEO 400s only supports LTO-4 tape drives. Smaller organizations are less likely to have a need for the higher capacities and faster throughput that LTO-4 tape offers plus LTO-3 tapes are, on a per cartridge basis, lower cost than LTO-4 tapes.
* Redundant power supply option on the NEO400s. Overland has learned over the years that SMEs and data-intensive environments have a heightened need for data availability. The ability to add redundant power ensures a "backup" power source and ongoing access to data in the event of a primary power supply failure.
* Planned future options for the NEO 400s. For organizations faced with rapidly changing environments requiring an extra degree of flexibility, Overland is planning to provide a scalability solution that allows them to start with a NEO 400s with 48 slots and add capacity at a later date as needed. An encryption option also is planned to accommodate additional data security and compliance requirements.

Overland Storage Appoints Christopher Gopal Vice President of Worldwide Operations

Industry Thought Leader Joins Executive Team to Align Strategic Supply Chain Model with Operational Best Practices for Optimal Customer Satisfaction & Shareholder Value

Overland Storage, Inc. today announced the appointment of Christopher Gopal as vice president of worldwide operations. In this capacity, Gopal will oversee Overland’s global supply chain and operations strategies encompassing product sourcing, manufacturing, inventory, logistics, fulfillment and demand/supply management.

“We are extremely pleased to welcome Chris to our executive team as the head of operations,” says Eric Kelly, chief executive officer of Overland Storage. “Chris is a well-known industry expert with a stellar track record in executing successful supply chain models with world-class results and increased shareholder value. We are confident he’ll play a pivotal part in helping Overland achieve greater operating efficiencies while enabling us to facilitate rapid product development at lower costs to meet market demands and drive business success for our global channel partners.”

Gopal brings nearly 35 years of experience in leading, managing and transforming all aspects of supply chain, operations and product development in an impressive career that spans both prominent global organizations and entrepreneurial start-ups in the technology and telecommunications industries. Previously, he was COO for Applied Solar, Inc., a next-generation solar energy company based in San Diego. He also served as vice president of worldwide operations at Dell, where he helped develop and implement the company’s supply-chain model and operations strategy.

Additionally, Gopal served as senior partner and director of Ernst & Young’s Global Supply Chain & Operations Consulting Services and has held executive positions at SAIC and Unisys. A well-respected authority on supply chain management and global operations, he speaks frequently at industry events and has co-authored three books, including “Supercharging Supply Chains: New Ways to Increase Value through Global Operational Excellence.”

“I look forward to working with Overland’s customers and suppliers to achieve operational excellence and global supply chain success,” said Gopal. “My background, previous experiences and hands-on approach will prove invaluable as we elevate Overland’s operations and build value while reducing costs through integrated demand/supply management.”

Gopal holds a Ph.D. in Business from the University of Southern California and an MBA from the Cranfield School of Management, UK.

Jillian Mansolf at Overland Storage recognized as one of the top 100 women in the channel

SAN DIEGO - August 26, 2009 - Overland Storage, Inc. (Nasdaq: OVRL) today announced that Jillian Mansolf, vice president of worldwide sales and marketing, has been recognized by Everything Channel’s CRN Magazine as one of the Top 100 Women in the Channel. The Top 100 Women in the Channel were chosen by the editors of the magazine based on the women’s achievements as executives and the amount of influence they wield over the technology channel. The Top 100 Women in the Channel represent a changing trend in what traditionally has been an all-male industry.

“We are very pleased to see women executives reaching the highest levels in a wide range of dynamic companies. It is with great pleasure that we honor the women who have made a profound impact in the technology marketplace,” said Robert C. DeMarzo, senior vice president and editorial director, Everything Channel. “We offer our congratulations to Jillian Mansolf for her significant contributions to our industry."

For the past 13 years, Mansolf has leveraged her significant channel sales and marketing expertise to execute highly successful global channel programs for a variety of high-technology organizations. Most recently, she joined Overland to lead the company’s sales organization and expand its strategic marketing efforts worldwide. Overland continually reinforces its channel commitment through the ongoing development of customer-centric resource and lead-generation programs designed to help its channel partners accelerate sales cycles while driving increased revenue and profitability.

“It’s an honor to join this group of inspirational leaders who are being recognized for making an indelible mark on the channel,” said Mansolf. “At Overland, our unwavering’ dedication to building and sustaining long-term channel relationships is reinforced by a constant focus on providing innovative products, sales tools, training and the educational resources our partners need to address their customers’ ever-increasing business requirements.”

Overland Storage appoints new VP of Worldwide Sales and Marketing

Overland Storage, Inc. today announced the appointment of Jillian Mansolf as vice president of worldwide sales and marketing. In this position, Mansolf will leverage her extensive sales and channel marketing experience to lead the company's global sales and marketing teams.

“We are extremely pleased to welcome Jillian to our executive team as the head of worldwide sales and marketing,” said Eric Kelly, chief executive officer of Overland Storage. “Jillian is a storage industry veteran with a strong track record of success, including her tenure as an officer and executive at Snap Appliance. Her unique industry perspective as well as significant sales and marketing expertise will prove instrumental in leading the Overland sales organization while broadening our strategic marketing efforts worldwide.”

Previously, Mansolf served as senior vice president of sales and marketing at Data Robotics, where she spearheaded the company's global sales and marketing initiatives. Prior to that, she held various executive positions at Motion Computing, Maxtor and Dell. At Snap Appliance, Mansolf played a pivotal role in doubling sales and establishing the company as the worldwide NAS volume market leader.

Ravi Pendekanti will take on a new role as vice president of business development and solutions. This executive position, which reports to Kelly, reflects the importance of integrated solutions as a major growth driver in Overland's business. “Our strengthened executive team is well positioned to accelerate growth across all major lines of business and geographic areas,” added Kelly. “This will ensure Overland continually delivers compelling end-to-end solutions that effectively meet our customeers' requirements.”