FalconStor Software reports lower sales

Melville-based FalconStor's revenue slipped 11 percent, to $22.5

Melville-based FalconStor's revenue slipped 11 percent, to $22.5 million, during November, December and January, compared to the same period a year earlier. (Nov. 8, 2011) Photo Credit: Steve Pfost

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FalconStor Software, a data storage company based in Melville, reported lower fourth-quarter sales Monday but reduced overall losses by trimming legal expenses.

The company's revenue slipped 11 percent, to $22.5 million, during November, December and January compared to the same period a year earlier.

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FalconStor has been operating at a loss for each of the past four years. Despite the drop in fourth-quarter sales, the company reduced its net losses to $2.3 million, down from $6.1 million last year.

That decrease is largely due to FalconStor's shedding $4.5 million in costs from investigations, litigation and settlements following the company's resolution last year of a Securities and Exchange Commission investigation.

The company paid $5.8 million to the SEC in June to settle charges that the former chief executive, ReiJane Huai, and two former salesmen had paid more than $300,000 in bribes to JPMorgan Chase & Co. to win contracts. Huai committed suicide in September 2011, one day before he was scheduled to plead guilty in court.

The company employs about 430 people and has offices overseas, where a significant number of its customers are based. FalconStor's sales have slumped amid the economic slowdowns in Europe and Asia.

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