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Violin Memory trying hard to reinvent itself amid tough times

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September 26, 2016

There's no question that Violin Memory is trying hard to reinvent itself as best as it can. Now the company says it has moved into a new phase with a product launch holding up sales leadership change and its CEO focusing on finding new funding for the company's immediate future.

So far, Violin has managed to avoid getting in trouble with falling sales, dropping revenues and investor despair.

The company has relaunched its product line with new models in the last two weeks, and now faces the possibility of a renewed NYSE delisting threath due to its stock falling under a dollar. This is the second time this has happened in the last year.

We'll let CEO Kevin DeNuccio summarize the latest quarterly results (second fiscal 2017 quarter): "Revenues for the quarter were $7.5 million versus $9.7 million in the prior quarter and $15.3 million a year ago."

He continues: "This quarter's performance is very frustrating and disappointing as we strongly believe it could be the quarter that returns revenue upward after a downward trend for more than a year."

He added: "Both of our international theaters in the EMEA and APAC had extremely difficult product sales in the quarter. The international markets alone could account for a short fall from expectations."

The company expected revenues for the quarter would be about $11 to $13 million, a sequential rise. But revenues instead fell 23 percent quarter-on-quarter and 51 percent year-on-year.

There was an inventory write-off which reduced gross margin to 3 percent from 40 percent in the previous quarter.

The issue was sales execution being "primarily caused by our inability to close significant orders in time from our key Fortune 100 customers," DeNuccio asserted.

He added: "Our target market of large Fortune 500 and Global 1000 companies makes orders naturally large and challenging in terms of very long sales cycles. And it's been a large part of our inability to consistently execute or return to growth."

He added-- "We still believe that Violin is on the verge of reversing our negative revenue trend and heading upward, nevertheless."

To be sure, some of the revenue shortfall was due to customers delaying orders because a product refresh was coming, which it did on September 14.

DeNuccio announced sales leadership changes with current sales head Said Ouissal changing to a strategy position reporting De Nuccio and COO Ebrahim Abbasi assuming "sales and marketing responsibilities for the business in addition to his current responsibilities in R&D, customer support and manufacturing operations."

Source: Violin Memory.

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