FalconStor Software (NASDAQ: FALC) , a provider of disk-based data protection, announced slightly lower revenues for its first quarter—$21 million, compared with $21.8 million for the same period a year ago.  

FalconStor reported a net loss of $900,000, or 2 cents per share, compared with a net income of $1.3 million, or 3 cents per share, for the same period a year ago. Non-GAAP net income came in at $600,000, compared with $2.9 million during the same period last year.

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FalconStor said channel sales represented 64 percent of worldwide revenue, up from 58 percent during the same time last year.

The company closed the quarter with $41.8 million in cash, cash equivalents and marketable securities. Cash flow from operations for the first quarter was $3.3 million.  

“We are confident that our continued investment in development, marketing, sales and support will enable us to expand our market share and to leapfrog the competition,” said ReiJane Huai, chairman and CEO, in a prepared statement. “As a result, we have continued to hire, knowing that it may impact our earnings in the short term, but we believe it will foster the long-term growth of the company. Even with these investments, we are pleased that we had a non-GAAP profit for the quarter and that we continued to generate positive cash flows from operations.”

The company also reported on key strategic partners. Business with Sun Microsystems is up approximately 25 percent year over year, and the company believes the merger between Oracle and Sun will have a positive effect for FalconStor as FalconStor “believes the underlying demand remains strong.”

FalconStor is still targeting revenues to be in the range of $96 million to $100 million for 2009.