UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
______________
FORM 8-K
______________
CURRENT
REPORT
Pursuant to Section 13 or
15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): January 29, 2015
______________
Quantum
Corporation
(Exact name of registrant
as specified in its charter)
______________
Delaware
(State or other
jurisdiction of incorporation)
1-13449 |
94-2665054 |
(Commission File No.) |
(IRS Employer Identification
No.) |
224 Airport
Parkway, San Jose, CA 95110
(Address of principal
executive offices and zip code)
Registrants telephone
number, including area code: (408) 944-4000
______________
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
☐ |
|
Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
☐ |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
☐ |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of
Financial Operations and Financial Condition
On January 29, 2015, Quantum
Corporation issued a press release announcing earnings for its third quarter and
first nine months of fiscal 2015, a copy of which is attached as Exhibit 99.1
hereto and incorporated by reference.
This information shall not be
deemed filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the Exchange Act), or incorporated by reference in any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except as
shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial
Statements and Exhibits
(d) Exhibits
99.1 Press Release, dated
January 29, 2015.
SIGNATURE
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly
authorized.
QUANTUM
CORPORATION |
|
|
/s/ SHAWN D. HALL |
Shawn D.
Hall |
Senior Vice
President, General Counsel and |
Secretary |
Dated:
January 29, 2015
EXHIBIT INDEX
Exhibit |
|
Description |
99.1 |
|
Press
Release, dated January 29, 2015. |
Exhibit 99.1
|
News
Release |
Contact: |
For
Release: |
Brad
Cohen |
Jan. 29, 2015 |
Public
Relations |
1:05 p.m. PST |
Quantum
Corp. |
|
(408)
944-4044 |
|
brad.cohen@quantum.com |
|
Brinlea Johnson or Allise
Furlani
Investor Relations
The Blueshirt Group
(212) 331-8424 or (212)
331-8433
brinlea@blueshirtgroup.com or allise@blueshirtgroup.com
QUANTUM CORPORATION REPORTS
FISCAL THIRD QUARTER 2015 RESULTS
Highlights: |
● |
Delivered Branded Revenue of $116 Million, Up
2% Year-over-Year |
● |
Grew
Scale-out Storage Revenue 77% Year-over-Year to $27
Million |
● |
Increased DXi Deduplication Revenue 5%
Year-over-Year to $24 Million |
● |
Generated GAAP and Non-GAAP Net Income of $7
Million and $11 |
● |
Million, Up $9 Million and $5 Million
Year-over-Year, Respectively |
Company Also Announces $50
Million Cash Repurchase of Convertible Notes Due November 2015
SAN JOSE,
Calif. Jan. 29, 2015 Quantum Corp. (NYSE: QTM) today reported
results for the fiscal third quarter 2015 ended Dec. 2014.
Fiscal Third
Quarter 2015 Results (Unless otherwise noted, all comparisons are relative to the fiscal
third quarter 2014.) |
● |
Total revenue was
$142.1 million, down slightly due primarily to a 33 percent decline in OEM
tape automation revenue. In addition, total revenue was $1.4 million lower
than it would have been had foreign exchange rates remained the same
year-over-year. |
-more-
● |
Total branded revenue
grew to $116.2 million, a 2 percent increase. |
● |
Scale-out storage and
related service revenue increased 77 percent to a record $27 million, with
significant contributions from both StorNext Pro™ Solutions and Lattus™
extended online storage systems. |
● |
DXi® backup and
deduplication appliance revenue increased 5 percent to $24 million,
driven by the strong performance of Quantums new DXi6900
platform. |
● |
GAAP operating income
was $9.6 million, up from an operating loss of $0.1
million. |
● |
GAAP net income was $6.9
million, or $0.03 per diluted share, up from a net loss of $2.5 million,
or $0.01 per diluted share. |
● |
Non-GAAP operating
income increased to $13.6 million, from $8.6 million. |
● |
Non-GAAP net income
improved to $10.9 million, or $0.04 per diluted share, up from $6.2
million, or $0.02 per diluted share. |
● |
Quantum generated $2.6
million in cash from operations and ended the quarter with nearly $110
million in total cash and cash equivalents.
|
We are very pleased with our
strong third quarter results, as we continued to build on the momentum we saw in
the first half of our fiscal year, said Jon Gacek, president and CEO of
Quantum. Branded revenue increased year-over-year for the third consecutive
quarter, driven by scale-out storage revenue growth of nearly 80 percent as well
as higher DXi revenue. Reflecting the improvements weve made in our operating
model, we also significantly increased net income year-over-year and delivered
our best operating margins in four years nearly 7 percent and 10 percent on a
GAAP and non-GAAP basis, respectively.
With our market momentum, our
strong solutions portfolio and the significant leverage our financial model
provides, we are well-positioned to drive year-over-year growth and increased
profit in the final quarter of fiscal 2015 and in the coming year.
In addition to reporting its
third quarter results, Quantum also announced that it has entered into an
agreement to repurchase $50 million of its convertible notes due November 2015
in an all-cash transaction expected to close on Jan. 30, 2015. (For additional information, see Quantums SEC Form 8-K filed today)
-more-
Fiscal Fourth Quarter
2015 Outlook For the
fiscal fourth quarter, Quantum expects: |
● |
Revenue of approximately
$130 million to $135 million, based on typical seasonality.
|
● |
GAAP and non-GAAP gross
margin of approximately 43-45 percent. |
● |
GAAP operating expenses
of approximately $55 million to $56 million and non-GAAP operating
expenses of $52 million to $53 million. |
● |
GAAP operating income of
$2.5 million to $3.5 million and non-GAAP operating income of $6 million
to $7 million. |
● |
Interest expense of $2.1
million and taxes of $0.5 million. |
● |
GAAP net loss of $0.8
million to $1.8 million, or a loss of less than $0.01 to a loss of $0.01
per diluted share, and non-GAAP net income of $3 million to $4 million, or
$0.01 to $0.02 per diluted share. |
Fiscal Third Quarter
2015 Business Highlights |
● |
Quantum extended its
line of high-performance StorNext Pro Solutions with the introduction of
StorNext Pro Foundation, a low-cost, integrated shared storage system
designed specifically for smaller workgroups. Built on proven StorNext 5
collaboration and workflow software, StorNext Pro Foundation brings the
capabilities of Quantum's award-winning StorNext Pro Solutions to a new
audience of media professionals in post and broadcast as well as those
managing corporate and government video. |
● |
Avere Systems and
Quantum announced a joint storage solution designed to optimize workflows
for the oil and gas industry. Leveraging Quantums Lattus system, the
combination extends online storage by delivering fast access to seismic
data via a cost-effective private cloud solution with the extreme
scalability and performance needed in the oil and gas market.
|
● |
Reflecting the strength
of Quantums solutions in helping enterprise customers manage and protect
their data in some of the most demanding environments, revenue from deals
over $200,000 increased by more than 20 percent. These wins included a $4
million StorNext-Lattus deal for managing video at one of the worlds
largest consumer electronics companies ($3 million of which was recognized
in the quarter) and StorNext® deals of more than $300,000 each to two
of the top U.S. broadcast networks and an international radio broadcaster.
Other wins over $200,000 included DXi6900 sales to a large European
banking group, a multinational biopharmaceutical company and a major Asian
insurance provider as well as tape automation deals with one of the top
international shipping companies, a leading business process and document
management firm and a major American cable
network. |
-more-
● |
For the second
consecutive year, Quantum won top honors for "Vendor's Reseller Channel
Programme of the Year" at the Storage Virtualisation Cloud Awards. The
company was recognized for ongoing dedication to the channel through its
Quantum Alliance global partner program.
|
Conference Call and Audio
Webcast Notification
Quantum will hold a conference
call today, Jan. 29, 2015, at 2:00 p.m. PST to discuss its fiscal third quarter
results. Press and industry analysts are invited to attend in listen-only mode.
Dial-in number: 719-325-2448, conference ID: 5771187. Quantum will provide a
live audio webcast of the conference call beginning today, Jan. 29, 2015, at
2:00 p.m. PST. Site for the webcast and related information:
www.quantum.com/investors.
Following completion of the
call, a recorded replay of the webcast will be available at
www.quantum.com/investors. For those without access to the Internet, a replay of
the call will be available beginning at 5:00 p.m. PST on Jan. 29, 2015 through
Feb. 3, 2015 at 5:00 p.m. PST. To listen to the telephonic replay, call
719-457-0820, replay passcode: 5771187.
About
Quantum
Quantum is a leading
expert in scale-out storage, archive and data protection, providing solutions
for capturing, sharing and preserving digital assets over the entire data
lifecycle. From small businesses to major enterprises, more than 100,000
customers have trusted Quantum to address their most demanding data workflow
challenges. With Quantum, customers can Be Certain they have the end-to-end
storage foundation to maximize the value of their data by making it accessible
whenever and wherever needed, retaining it indefinitely and reducing total cost
and complexity. See how at www.quantum.com/customerstories.
###
-more-
Quantum, the Quantum logo, Be
Certain, DXi, StorNext, StorNext Pro and Lattus are either registered trademarks
or trademarks of Quantum Corporation and its affiliates in the United States
and/or other countries. All other trademarks are the property of their
respective owners.
Safe Harbor Statement under
the U.S. Private Securities Litigation Reform Act of 1995: This press release
contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Specifically, without limitation, our
statement that we are well-positioned to drive year-over-year growth and
increased profit in the final quarter of fiscal 2015 and in the coming year and
all of our statements under the section titled Fiscal Fourth Quarter 2015
Outlook are forward-looking statements within the meaning of the Safe Harbor.
All forward-looking statements in this press release are based on information
available to Quantum on the date hereof. These statements involve known and
unknown risks, uncertainties and other factors that may cause Quantums actual
results to differ materially from those implied by the forward-looking
statement. More detailed information about these risk factors, and additional
risk factors are set forth in Quantums periodic filings with the Securities and
Exchange Commission, including, but not limited to, those risks and
uncertainties listed in the section entitled Risk Factors in Quantums Annual
Report on Form 10-K filed with the Securities and Exchange Commission on June 6,
2014 and in Quantums Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission on November 7, 2014. Quantum expressly disclaims any
obligation to update or alter its forward-looking statements, whether as a
result of new information, future events or otherwise.
Use of Non-GAAP Financial
Measures
Quantum believes that the
non-GAAP financial measures disclosed above provide useful and supplemental
information to investors regarding its quarterly financial performance. Quantum
management and Board of Directors use these non-GAAP financial measures
internally to understand, manage and evaluate the companys business results and
make operating decisions. For instance, Quantum management often makes decisions
regarding staffing, future management priorities and how the company will direct
future operating expenses on the basis of non-GAAP financial measures. In
addition, compensation of our employees is based in part on the performance of
our business based on non-GAAP operating income.
The non-GAAP financial
measures used in this press release exclude the impact of the items below for
the following reasons:
Amortization of Intangible
Assets
This includes acquired
intangibles such as purchased technology and customer relationships in
connection with prior acquisitions. These expenses are not factored into
managements evaluation of potential acquisitions or Quantums performance after
completion of the acquisitions because they are not related to Quantums core
operating performance. In addition, the frequency and amount of such charges can
vary significantly based on the size and timing of acquisitions and the
maturities of the businesses being acquired. Excluding acquisition-related
charges from non-GAAP measures provides investors with a basis to compare
Quantum against the performance of other companies without the variability
caused by purchase accounting.
Share-Based Compensation
Expense
Share-based
compensation expense relates primarily to equity awards such as stock options
and restricted stock units. Share-based compensation is a non-cash expense that
varies in amount from period to period and is dependent on market forces that
are often beyond Quantums control. Management believes that non-GAAP measures
adjusted for share-based compensation provide investors with a basis to measure
Quantums core performance against the performance of other companies without
the variability created by share-based compensation as a result of the variety
of equity awards used by other companies and the varying methodologies and
assumptions used.
Restructuring
Charges
Restructuring charges
primarily relate to expenses associated with changes to Quantums operating
structure. Restructuring charges are excluded from non-GAAP financial measures
because they are not considered core operating activities. Although Quantum has
engaged in various restructuring activities in the past, each has been a
discrete event based on a unique set of business objectives. Management believes
that it is appropriate to exclude restructuring charges from Quantums non-GAAP
financial measures, as it enhances the ability of investors to compare Quantums
period-over-period operating results from continuing operations.
Outsourcing Transition
Costs
Outsourcing transition
costs are expenses attributable to transitioning our manufacturing to an
outsourced model. These costs are excluded from non-GAAP financial measures
because they are not considered core operating activities, and management
believes that it is appropriate to exclude these costs in order to provide
investors the ability to compare Quantums period-over-period operating results
from continuing operations.
Proxy Contest and Related
Costs
Proxy contest and
related costs are expenses incurred to respond to activities and inquiries of
Starboard Value LP, including their proxy solicitation. The Company has not
incurred significant expenses in connection with such matters in historical
periods and these costs are not considered core operating activities. Management
believes that it is appropriate to exclude these costs in order to provide
investors the ability to compare Quantums period-over-period operating results
from continuing operations.
-more-
Crossroads Patent
Litigation Costs
Crossroads
patent litigation costs are expenses incurred to defend ourselves and perform
other activities related to a patent infringement lawsuit filed by Crossroads
Systems, Inc. These costs are excluded from non-GAAP financial measures because
they are not considered core operating activities, and management believes that
it is appropriate to exclude these costs in order to provide investors the
ability to compare Quantums period-over-period operating results from
continuing operations.
Acquisition
Expenses
The acquisition
expenses were those expenses incurred to acquire Symform, Inc. and are not part
of Quantums future core operations.
Symform Expenses,
Net
Quantum acquired a cloud
storage services platform from Symform, Inc. (Symform) in July 2014. Symform
revenue comprises revenue generated from the Symform cloud storage services
platform. Symform expenses consist of costs related to running, maintaining and
further developing the Symform cloud storage services platform as well as the
costs of integrating Symform into Quantums business. Net Symform expenses
represent Symform expenses less Symform revenue, and non-GAAP gross margin
excludes both Symform revenue and cost of revenue. Management believes that it
is appropriate to exclude these amounts in order to provide investors with a
view of Quantums results consistent with how management views and is running
the business.
Loss on Debt
Extinguishment
The loss on
debt extinguishment relates to a specific debt repurchase action undertaken in
January 2015. The loss is excluded from non-GAAP financial measures because it
is not considered a core operating activity and management believes that it is
appropriate to exclude the loss in order to provide investors the ability to
compare Quantums period-over-period results from continuing operations.
Non-GAAP financial measures
should not be considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP. They are limited in
value because they exclude charges that have a material impact on the companys
reported financial results and, therefore, should not be relied upon as the sole
financial measures to evaluate the company. The non-GAAP financial measures are
meant to supplement, and be viewed in conjunction with, GAAP financial measures.
Investors are encouraged to review the reconciliation of the non-GAAP financial
measures to their most directly comparable GAAP financial measures as provided
in the tables accompanying this press release.
Note
1
In the fourth quarter of
fiscal year 2014, Quantum identified errors related to the accounting for rent
expense and certain allowances for estimated future price adjustments to
customers which impacted prior reporting periods. As a result, the companys
financial statements for the third quarter of fiscal 2014 have been revised.
Revenue for the third quarter of fiscal 2014 has been reduced by $0.1 million
and general and administrative expense has been reduced by less than $0.1
million. For additional information, refer to our Form 10-K filed with the
Securities and Exchange Commission on June 6, 2014.
-more-
QUANTUM
CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
|
|
December 31, 2014 |
|
March 31, 2014* |
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
106,983 |
|
|
$ |
99,125 |
|
Restricted
cash |
|
|
2,677 |
|
|
|
2,760 |
|
Accounts
receivable |
|
|
110,628 |
|
|
|
101,605 |
|
Manufacturing inventories |
|
|
38,298 |
|
|
|
34,815 |
|
Service
parts inventories |
|
|
24,361 |
|
|
|
25,629 |
|
Other
current assets |
|
|
10,174 |
|
|
|
10,161 |
|
Total current assets |
|
|
293,121 |
|
|
|
274,095 |
|
|
Long-term assets: |
|
|
|
|
|
|
|
|
Property
and equipment |
|
|
15,292 |
|
|
|
17,574 |
|
Intangible
assets |
|
|
891 |
|
|
|
3,911 |
|
Goodwill |
|
|
55,613 |
|
|
|
55,613 |
|
Other
long-term assets |
|
|
9,030 |
|
|
|
10,605 |
|
Total long-term assets |
|
|
80,826 |
|
|
|
87,703 |
|
|
|
$ |
373,947 |
|
|
$ |
361,798 |
|
|
Liabilities and Stockholders' Deficit |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
51,081 |
|
|
$ |
41,792 |
|
Accrued
warranty |
|
|
4,788 |
|
|
|
6,116 |
|
Deferred
revenue, current |
|
|
89,973 |
|
|
|
98,098 |
|
Accrued
restructuring charges, current |
|
|
3,136 |
|
|
|
4,345 |
|
Convertible subordinated debt, current |
|
|
133,735 |
|
|
|
- |
|
Accrued
compensation |
|
|
31,270 |
|
|
|
25,036 |
|
Other
accrued liabilities |
|
|
13,901 |
|
|
|
15,168 |
|
Total current liabilities |
|
|
327,884 |
|
|
|
190,555 |
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
Deferred
revenue, long-term |
|
|
39,251 |
|
|
|
40,054 |
|
Accrued
restructuring charges, long-term |
|
|
3,061 |
|
|
|
4,023 |
|
Convertible subordinated debt, long-term |
|
|
70,000 |
|
|
|
203,735 |
|
Other
long-term liabilities |
|
|
10,423 |
|
|
|
10,831 |
|
Total long-term liabilities |
|
|
122,735 |
|
|
|
258,643 |
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit |
|
|
(76,672 |
) |
|
|
(87,400 |
) |
|
|
$ |
373,947 |
|
|
$ |
361,798 |
|
* |
Derived
from the March 31, 2014 audited Consolidated Financial
Statements. |
-more-
QUANTUM
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share
amounts)
(Unaudited)
|
|
Three Months Ended |
|
Nine Months
Ended |
|
|
December 31, 2014 |
|
December 31, 2013 |
|
December 31, 2014 |
|
December 31,
2013 |
|
|
|
|
|
|
(Revised)Note 1 |
|
|
|
|
|
(Revised)Note 1 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
$ |
92,166 |
|
|
$ |
98,287 |
|
|
$ |
257,576 |
|
|
$ |
268,892 |
|
Service |
|
|
39,191 |
|
|
|
36,926 |
|
|
|
116,848 |
|
|
|
109,612 |
|
Royalty |
|
|
10,706 |
|
|
|
10,656 |
|
|
|
30,873 |
|
|
|
46,693 |
|
Total revenue |
|
|
142,063 |
|
|
|
145,869 |
|
|
|
405,297 |
|
|
|
425,197 |
|
Cost
of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product |
|
|
59,772 |
|
|
|
64,502 |
|
|
|
170,273 |
|
|
|
181,167 |
|
Service |
|
|
17,224 |
|
|
|
19,706 |
|
|
|
52,502 |
|
|
|
56,053 |
|
Restructuring charges related to cost of revenue |
|
|
- |
|
|
|
288 |
|
|
|
- |
|
|
|
377 |
|
Total cost of revenue |
|
|
76,996 |
|
|
|
84,496 |
|
|
|
222,775 |
|
|
|
237,597 |
|
Gross margin |
|
|
65,067 |
|
|
|
61,373 |
|
|
|
182,522 |
|
|
|
187,600 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
13,969 |
|
|
|
16,010 |
|
|
|
43,680 |
|
|
|
49,063 |
|
Sales and marketing |
|
|
27,494 |
|
|
|
29,424 |
|
|
|
83,417 |
|
|
|
89,577 |
|
General and administrative |
|
|
13,815 |
|
|
|
14,261 |
|
|
|
42,271 |
|
|
|
43,745 |
|
Restructuring charges |
|
|
187 |
|
|
|
1,758 |
|
|
|
1,676 |
|
|
|
4,525 |
|
Total
operating expenses |
|
|
55,465 |
|
|
|
61,453 |
|
|
|
171,044 |
|
|
|
186,910 |
|
Gain on sale of
assets |
|
|
- |
|
|
|
- |
|
|
|
462 |
|
|
|
- |
|
Income (loss) from operations |
|
|
9,602 |
|
|
|
(80 |
) |
|
|
11,940 |
|
|
|
690 |
|
|
Other income and
expense |
|
|
125 |
|
|
|
370 |
|
|
|
215 |
|
|
|
791 |
|
Interest expense |
|
|
(2,460 |
) |
|
|
(2,440 |
) |
|
|
(7,360 |
) |
|
|
(7,319 |
) |
Income (loss) before income taxes |
|
|
7,267 |
|
|
|
(2,150 |
) |
|
|
4,795 |
|
|
|
(5,838 |
) |
Income
tax provision |
|
|
336 |
|
|
|
308 |
|
|
|
940 |
|
|
|
1,232 |
|
Net income (loss) |
|
$ |
6,931 |
|
|
$ |
(2,458 |
) |
|
$ |
3,855 |
|
|
$ |
(7,070 |
) |
|
Income
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.03 |
|
|
$ |
(0.01 |
) |
|
$ |
0.02 |
|
|
$ |
(0.03 |
) |
Diluted |
|
$ |
0.03 |
|
|
$ |
(0.01 |
) |
|
$ |
0.01 |
|
|
$ |
(0.03 |
) |
|
Weighted average
shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
255,860 |
|
|
|
248,135 |
|
|
|
253,773 |
|
|
|
246,183 |
|
Diluted |
|
|
302,855 |
|
|
|
248,135 |
|
|
|
257,807 |
|
|
|
246,183 |
|
|
|
Included in the above
Statements of Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
$ |
160 |
|
|
$ |
368 |
|
|
$ |
753 |
|
|
$ |
1,104 |
|
Sales and marketing |
|
|
- |
|
|
|
1,856 |
|
|
|
2,784 |
|
|
|
5,569 |
|
|
|
|
160 |
|
|
|
2,224 |
|
|
|
3,537 |
|
|
|
6,673 |
|
Share-based
compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
362 |
|
|
|
509 |
|
|
|
1,109 |
|
|
|
1,560 |
|
Research and development |
|
|
600 |
|
|
|
862 |
|
|
|
1,983 |
|
|
|
2,638 |
|
Sales and marketing |
|
|
830 |
|
|
|
994 |
|
|
|
2,627 |
|
|
|
3,148 |
|
General and administrative |
|
|
1,126 |
|
|
|
1,056 |
|
|
|
2,936 |
|
|
|
2,922 |
|
|
|
|
2,918 |
|
|
|
3,421 |
|
|
|
8,655 |
|
|
|
10,268 |
|
Outsourcing transition
costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
- |
|
|
|
952 |
|
|
|
126 |
|
|
|
952 |
|
|
|
|
- |
|
|
|
952 |
|
|
|
126 |
|
|
|
952 |
|
Proxy contest and related
costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
125 |
|
|
|
- |
|
|
|
972 |
|
|
|
- |
|
|
|
|
125 |
|
|
|
- |
|
|
|
972 |
|
|
|
- |
|
Crossroads patent litigation
costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
325 |
|
|
|
- |
|
|
|
744 |
|
|
|
- |
|
|
|
|
325 |
|
|
|
- |
|
|
|
744 |
|
|
|
- |
|
Acquisition
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
- |
|
|
|
- |
|
|
|
4 |
|
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
4 |
|
|
|
- |
|
Symform expenses,
net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
30 |
|
|
|
- |
|
|
|
50 |
|
|
|
- |
|
Research and development |
|
|
131 |
|
|
|
- |
|
|
|
241 |
|
|
|
- |
|
Sales and marketing |
|
|
104 |
|
|
|
- |
|
|
|
195 |
|
|
|
- |
|
|
|
|
265 |
|
|
|
- |
|
|
|
486 |
|
|
|
- |
|
Note 1 is presented above,
before the Condensed Consolidated Balance Sheets.
-more-
QUANTUM
CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
Nine Months
Ended |
|
|
December 31, 2014 |
|
December 31,
2013 |
|
|
|
|
|
|
(Revised) Note 1 |
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
3,855 |
|
|
$ |
(7,070 |
) |
Adjustments to reconcile net income (loss) to net cash provided
by |
|
|
|
|
|
|
|
|
operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
6,364 |
|
|
|
8,217 |
|
Amortization of intangible assets |
|
|
3,537 |
|
|
|
6,673 |
|
Amortization of debt issuance costs |
|
|
1,246 |
|
|
|
1,225 |
|
Service parts lower of cost or market adjustment |
|
|
2,690 |
|
|
|
8,715 |
|
Gain on sale of assets |
|
|
(462 |
) |
|
|
- |
|
Deferred income taxes |
|
|
(11 |
) |
|
|
86 |
|
Share-based compensation |
|
|
8,655 |
|
|
|
10,268 |
|
Other non-cash |
|
|
(302 |
) |
|
|
- |
|
Changes in assets and liabilities, net of effect of acquisition: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(9,023 |
) |
|
|
(7,443 |
) |
Manufacturing inventories |
|
|
(6,145 |
) |
|
|
5,372 |
|
Service parts inventories |
|
|
(686 |
) |
|
|
2,993 |
|
Accounts payable |
|
|
9,325 |
|
|
|
(8,672 |
) |
Accrued warranty |
|
|
(1,328 |
) |
|
|
(1,393 |
) |
Deferred revenue |
|
|
(8,928 |
) |
|
|
(1,182 |
) |
Accrued restructuring charges |
|
|
(2,197 |
) |
|
|
309 |
|
Accrued compensation |
|
|
6,774 |
|
|
|
(1,786 |
) |
Other assets and liabilities |
|
|
(2,247 |
) |
|
|
(776 |
) |
Net
cash provided by operating activities |
|
|
11,117 |
|
|
|
15,536 |
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of property and
equipment |
|
|
(2,882 |
) |
|
|
(5,026 |
) |
Proceeds from sale of assets |
|
|
462 |
|
|
|
- |
|
Change in restricted
cash |
|
|
(139 |
) |
|
|
517 |
|
Purchases of other investments |
|
|
(22 |
) |
|
|
(534 |
) |
Return of principal from other
investments |
|
|
104 |
|
|
|
- |
|
Payment
for business acquisition, net of cash acquired |
|
|
(517 |
) |
|
|
- |
|
Net
cash used in investing activities |
|
|
(2,994 |
) |
|
|
(5,043 |
) |
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Payment of taxes due upon
vesting of restricted stock |
|
|
(2,212 |
) |
|
|
(1,807 |
) |
Proceeds from issuance of common stock |
|
|
2,060 |
|
|
|
2,431 |
|
Net
cash provided by (used in) financing activities |
|
|
(152 |
) |
|
|
624 |
|
|
Effect of exchange rate changes on cash and
cash equivalents |
|
|
(113 |
) |
|
|
22 |
|
|
Net
increase in cash and cash equivalents |
|
|
7,858 |
|
|
|
11,139 |
|
Cash and cash equivalents at beginning of
period |
|
|
99,125 |
|
|
|
68,976 |
|
Cash
and cash equivalents at end of period |
|
$ |
106,983 |
|
|
$ |
80,115 |
|
Note 1 is presented above,
before the Condensed Consolidated Balance Sheets.
-more-
QUANTUM
CORPORATION
GAAP TO NON-GAAP RECONCILIATION
(In thousands, except per share
amounts)
(Unaudited)
|
|
Three Months Ended
December 31, 2014 |
|
|
Gross Margin |
|
Gross Margin
Rate |
|
Income
From Operations |
|
Operating Margin |
|
Net
Income |
|
Per Share
Net Income, Basic |
|
Per Share
Net Income, Diluted |
GAAP |
|
$ |
65,067 |
|
45.8% |
|
$ |
9,602 |
|
6.8% |
|
$ |
6,931 |
|
$ |
0.03 |
|
$ |
0.03 |
Non-GAAP Reconciling Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles |
|
|
160 |
|
|
|
|
160 |
|
|
|
|
160 |
|
|
|
|
|
|
Share-based
compensation |
|
|
362 |
|
|
|
|
2,918 |
|
|
|
|
2,918 |
|
|
|
|
|
|
Restructuring
charges |
|
|
- |
|
|
|
|
187 |
|
|
|
|
187 |
|
|
|
|
|
|
Proxy contest and
related costs |
|
|
- |
|
|
|
|
125 |
|
|
|
|
125 |
|
|
|
|
|
|
Crossroads patent
litigation costs |
|
|
- |
|
|
|
|
325 |
|
|
|
|
325 |
|
|
|
|
|
|
Symform expenses,
net |
|
|
30 |
|
|
|
|
265 |
|
|
|
|
265 |
|
|
|
|
|
|
Non-GAAP |
|
$ |
65,619 |
|
46.2% |
|
$ |
13,582 |
|
9.6% |
|
$ |
10,911 |
|
$ |
0.04 |
|
$ |
0.04 |
|
|
Computation of basic and diluted net income per share: |
|
|
|
|
|
|
|
|
|
GAAP |
|
Non-GAAP |
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,931 |
|
$ |
10,911 |
Interest on dilutive convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
902 |
|
|
902 |
Income for purposes of computing income per diluted share |
|
|
|
|
|
|
|
|
|
$ |
7,833 |
|
$ |
11,813 |
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
255,860 |
|
|
255,860 |
Dilutive shares from stock plans |
|
|
|
|
|
|
|
|
|
|
|
|
4,493 |
|
|
4,493 |
Dilutive shares from convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
42,502 |
|
|
42,502 |
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
302,855 |
|
|
302,855 |
|
|
|
|
Nine Months Ended
December 31, 2014 |
|
|
Gross Margin |
|
Gross Margin
Rate |
|
Income
From Operations |
|
Operating Margin |
|
Net
Income |
|
Per Share
Net Income, Basic |
|
Per Share
Net Income, Diluted |
GAAP |
|
$ |
182,522 |
|
45.0% |
|
$ |
11,940 |
|
2.9% |
|
$ |
3,855 |
|
$ |
0.02 |
|
$ |
0.01 |
Non-GAAP Reconciling Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles |
|
|
753 |
|
|
|
|
3,537 |
|
|
|
|
3,537 |
|
|
|
|
|
|
Share-based
compensation |
|
|
1,109 |
|
|
|
|
8,655 |
|
|
|
|
8,655 |
|
|
|
|
|
|
Restructuring
charges |
|
|
- |
|
|
|
|
1,676 |
|
|
|
|
1,676 |
|
|
|
|
|
|
Outsourcing transition
costs |
|
|
126 |
|
|
|
|
126 |
|
|
|
|
126 |
|
|
|
|
|
|
Proxy contest and
related costs |
|
|
- |
|
|
|
|
972 |
|
|
|
|
972 |
|
|
|
|
|
|
Crossroads patent
litigation costs |
|
|
- |
|
|
|
|
744 |
|
|
|
|
744 |
|
|
|
|
|
|
Acquisition
expenses |
|
|
- |
|
|
|
|
4 |
|
|
|
|
4 |
|
|
|
|
|
|
Symform expenses,
net |
|
|
50 |
|
|
|
|
486 |
|
|
|
|
486 |
|
|
|
|
|
|
Non-GAAP |
|
$ |
184,560 |
|
45.5% |
|
$ |
28,140 |
|
6.9% |
|
$ |
20,055 |
|
$ |
0.08 |
|
$ |
0.08 |
|
Computation of basic and diluted net income per share: |
|
|
|
|
|
|
|
|
|
GAAP |
|
Non-GAAP |
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,855 |
|
$ |
20,055 |
Interest on dilutive convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
2,707 |
Income for purposes of computing income per diluted share |
|
|
|
|
|
|
|
|
|
$ |
3,855 |
|
$ |
22,762 |
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
253,773 |
|
|
253,773 |
Dilutive shares from stock plans |
|
|
|
|
|
|
|
|
|
|
|
|
4,034 |
|
|
4,034 |
Dilutive shares from convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
42,502 |
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
257,807 |
|
|
300,309 |
The non-GAAP financial
information set forth in this table is not prepared in accordance with generally
accepted accounting principles and may be different from non-GAAP financial
information used by other companies.
-more-
QUANTUM
CORPORATION
GAAP TO NON-GAAP RECONCILIATION
(In thousands, except per share
amounts)
(Unaudited)
|
|
Three Months Ended
December 31, 2013 |
|
|
(Revised) Note 1 |
|
|
Gross
Margin |
|
Gross
Margin Rate |
|
Income
(Loss) From
Operations |
|
Operating Margin |
|
Net Income (Loss
) |
|
Per Share Net Income
(Loss), Basic |
|
Per Share Net Income
(Loss), Diluted |
GAAP |
|
$ |
61,373 |
|
42.1 |
% |
|
$ |
(80 |
) |
|
(0.1 |
)% |
|
$ |
(2,458 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
Non-GAAP Reconciling Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
368 |
|
|
|
|
|
2,224 |
|
|
|
|
|
|
2,224 |
|
|
|
|
|
|
|
|
|
Share-based
compensation |
|
|
509 |
|
|
|
|
|
3,421 |
|
|
|
|
|
|
3,421 |
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
|
288 |
|
|
|
|
|
2,046 |
|
|
|
|
|
|
2,046 |
|
|
|
|
|
|
|
|
|
Outsourcing transition
costs |
|
|
952 |
|
|
|
|
|
952 |
|
|
|
|
|
|
952 |
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
63,490 |
|
43.5 |
% |
|
$ |
8,563 |
|
|
5.9 |
% |
|
$ |
6,185 |
|
|
$ |
0.02 |
|
|
$ |
0.02 |
|
|
Computation of basic and diluted net income (loss) per share: |
|
|
|
|
|
|
GAAP |
|
Non-GAAP |
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(2,458 |
) |
|
$ |
6,185 |
|
Interest on dilutive convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
902 |
|
Income (loss) for purposes of computing income (loss) per diluted
share |
|
|
$ |
(2,458 |
) |
|
$ |
7,087 |
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
248,135 |
|
|
|
248,135 |
|
Dilutive shares from stock plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
1,952 |
|
Dilutive shares from convertible notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
42,502 |
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
248,135 |
|
|
|
292,589 |
|
|
|
Nine Months Ended
December 31, 2013 |
|
|
(Revised) Note
1 |
|
|
Gross
Margin |
|
Gross
Margin Rate |
|
Income
From Operations |
|
Operating Margin |
|
Net
Income (Loss) |
|
Per Share Net Income
(Loss), Basic |
|
Per Share Net Income
(Loss), Diluted |
GAAP |
|
$ |
187,600 |
|
44.1 |
% |
|
$ |
690 |
|
0.2 |
% |
|
$ |
(7,070 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
Non-GAAP Reconciling Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
1,104 |
|
|
|
|
|
6,673 |
|
|
|
|
|
6,673 |
|
|
|
|
|
|
|
|
|
Share-based
compensation |
|
|
1,560 |
|
|
|
|
|
10,268 |
|
|
|
|
|
10,268 |
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
|
377 |
|
|
|
|
|
4,902 |
|
|
|
|
|
4,902 |
|
|
|
|
|
|
|
|
|
Outsourcing transition
costs |
|
|
952 |
|
|
|
|
|
952 |
|
|
|
|
|
952 |
|
|
|
|
|
|
|
|
|
Non-GAAP |
|
$ |
191,593 |
|
45.1 |
% |
|
$ |
23,485 |
|
5.5 |
% |
|
$ |
15,725 |
|
|
$ |
0.06 |
|
|
$ |
0.06 |
|
|
Computation of basic and diluted net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP |
|
Non-GAAP |
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(7,070 |
) |
|
$ |
15,725 |
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
246,183 |
|
|
|
246,183 |
|
Dilutive shares from stock plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
2,925 |
|
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
246,183 |
|
|
|
249,108 |
|
Note 1 is presented above,
before the Condensed Consolidated Balance Sheets.
The non-GAAP financial
information set forth in this table is not prepared in accordance with generally
accepted accounting principles and may be different from non-GAAP financial
information used by other companies.
-more-
QUANTUM CORPORATION
FORECAST FOURTH QUARTER FISCAL 2015
GAAP TO NON-GAAP
RECONCILIATION
(Dollars in
millions)
|
|
Percentage Range |
Forecast gross margin rate on a
GAAP basis |
|
42.6% - 44.6% |
Forecast amortization of intangibles |
|
0.1% |
Forecast share-based compensation |
|
0.3% |
Forecast gross margin rate on a non-GAAP basis |
|
43.0% - 45.0% |
|
|
|
Dollar Range |
Forecast operating expense on a
GAAP basis |
|
$54.9 - $55.9 |
Forecast share-based compensation |
|
(2.4) |
Forecast Crossroads patent litigation
costs |
|
(0.3) |
Forecast Symform expenses, net |
|
(0.2) |
Forecast operating expense on a
non-GAAP basis |
|
$52.0 - $53.0 |
|
|
|
Dollar Range |
Forecast income from operations on
a GAAP basis |
|
$2.5
- $3.5 |
Forecast amortization of intangibles |
|
0.2 |
Forecast share-based compensation |
|
2.8 |
Forecast Crossroads patent litigation
costs |
|
0.3 |
Forecast Symform expenses, net |
|
0.2 |
Forecast income from operations on a non-GAAP
basis |
|
$6.0 - $7.0 |
|
|
|
Dollar Range |
Forecast net loss on a GAAP
basis |
|
$(1.8) - $(0.8) |
Forecast amortization of intangibles |
|
0.2 |
Forecast share-based compensation |
|
2.8 |
Forecast Crossroads patent litigation
costs |
|
0.3 |
Forecast Symform expenses, net |
|
0.2 |
Forecast loss on debt extinguishment |
|
1.3 |
Forecast net income on a non-GAAP
basis |
|
$3.0 - $4.0 |
|
|
|
Dollars per Share |
Forecast diluted earnings per
share on a GAAP basis |
|
$(0.01) - $(0.00) |
Forecast amortization of intangibles |
|
0.00 |
Forecast share-based compensation |
|
0.01 |
Forecast Crossroads patent litigation
costs |
|
0.00 |
Forecast Symform expenses, net |
|
0.00 |
Forecast loss on debt extinguishment |
|
0.01 |
Forecast diluted earnings per
share on a non-GAAP basis |
|
$0.01 - $0.02 |
Estimates based on current
(January 29, 2015) projections.
The projected GAAP and
non-GAAP financial information set forth in this table represent forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. For risk factors that could impact these projections, see our Annual
Report on Form 10-K as filed with the SEC on June 6, 2014. We disclaim any
obligation to update information in any forward-looking statement.
The non-GAAP financial
information set forth in this table is not prepared in accordance with generally
accepted accounting principles and may be different from non-GAAP financial
information used by other companies.
-more-