As we reflect on our 25 years as a corporation, I look back on our past accomplishments with great pride, and I look forward to our future strategy with a heightened level of excitement that is shared by each and every employee. Our efforts over the last several years at Overland have paved the way for the company to reach new levels of growth. We are committed to diversifying our business through the development of a broad array of storage appliances. We have been deliberate in making acquisitions for specific pieces of critical software that will allow Overland to strengthen its market position as a premier provider of protected storage solutions.

Our strategy is to deliver the promise of Simply Protected Storage. As corporations of all sizes design their storage environments, they must ensure that their data is automatically safe, easily available for restoration, and always accessible for compliance and warehousing requirements. Overland Storage can now address these needs through our award-winning NEO SERIES® automation products, our market-leading REO SERIES™ disk-based backup and recovery appliances, and through the delivery of ULTAMUS SERIES™, our new protected primary storage appliances.

Through its worldwide network of resellers, distributors, and direct marketers, Overland will offer a set of solutions for primary, secondary, and tertiary storage that has been designed to automatically save and protect the data that resides upon each appliance. Our products will work together across all three tiers to ensure data is automatically safe, readily available for restoration and always there in the form of long-term archives. All of this intelligence stems from the development of our Protection OS™ software.

As we grow our branded business, we will deliver our solutions through one of the most mature distribution channels in the storage world. It is not the delivery of any one tier of storage that will allow us to succeed. The heart of our strategy is to provide all three tiers from a single vendor, and each tier is designed specifically to protect data. This will be a dramatic departure from the option currently available to customers, who have only been able to purchase loosely coupled, generic storage devices.

Our primary competition will no longer be the library vendors of the world. Overland is becoming a world-class brand that end-users increasingly turn to for ‘saving’ data — a company delivering a balanced suite of software-driven appliances that plug together with the simplicity of Legos™ to protect corporate data at all levels.

We currently have four new projects under development. Each of these products is scheduled to be launched during fiscal 2006.

By the end of fiscal 2006, we expect to offer a comprehensive set of new products, covering the complete spectrum of mid-range customer needs for protecting data, sold through a world-class distribution sales channel of nearly 1,000 resellers strong. We will focus on continuing to drive branded revenue growth in excess of 20 percent.

Our investments for fiscal 2006 are designed to set the stage for Overland’s long-term growth. We will develop a balanced business around our comprehensive line of storage appliances, with no single technology or customer dependency. As we embark on this strategy, we are committed to building a company with a clear and predictable course that will lead us to new levels of achievement and profitability.

CHRISTOPHER P. CALISI
President and Chief Executive Officer
Overland Storage, Inc