SAN JOSE, Calif., Jan. 28, 2016 /PRNewswire/ -- Quantum Corp.
(NYSE: QTM) today reported results for the fiscal third quarter
2016 ended Dec. 31, 2015.
Fiscal Third Quarter 2016 Results:
(All comparisons are relative to the fiscal third quarter
2015.)
- Revenue was $128.0 million,
driven by continued strength in scale-out storage offset by overall
weakness in the general storage market and pricing environment of
commodity tape media products.
- Scale-out storage and related service revenue grew
approximately $8.5 million to an
all-time high of $35.7 million, a 31
percent increase, marking the 18th consecutive quarter
of year-over-year growth.
- Royalty revenue increased $0.6
million to $11.3 million.
- Disk backup systems and related service revenue decreased to
$19.6 million.
- Branded tape automation and related service revenue decreased
to $38.5 million, while OEM tape
automation and related service revenue decreased to $12.7 million.
- Devices and media revenue decreased to $10.2 million as a result of a $3.5 million decline in tape media revenue.
- GAAP and non-GAAP operating income of $2.0 million and $7.2
million, respectively.
- The GAAP net loss was $0.3
million, or $0.00 per diluted
share.
- The non-GAAP net income was $5.3
million, or $0.02 per diluted
share.
"We are pleased with our overall results and the continued
scale-out revenue growth this quarter, to a new record high,
especially given the overall weakness in the broad storage market
environment," said Jon Gacek,
president and CEO of Quantum. "In response to the market
conditions, we also successfully implemented significant
operational changes during the quarter that improved our
profitability. For the quarter, our data protection revenue
increased sequentially — with higher sales of both disk and tape
automation products. In our scale-out storage solutions line,
targeted at specialized workflows, we grew revenue 31 percent over
the comparable quarter a year ago, even with no 'mega deals' above
$1 million in the just-completed
quarter. Excluding mega deals, scale-out storage revenue grew 48
percent and 49 percent, respectively, over the comparable three-
and nine-month periods in the prior year.
"For the fourth quarter, we will continue to focus on growing
our run-rate scale-out revenue driven by expanding our media and
entertainment, surveillance and technical workflow opportunities,
and we will continue to work to close the mega deals in our sales
funnel. In addition, similar to the third quarter, we will actively
manage tape media revenue based on the pricing environment and
optimize our activity for profit. We will also continue to manage
our spending and our investments to achieve the right balance
across our financial objectives."
The company also announced today that Linda Breard has resigned as senior vice
president and chief financial officer of Quantum to pursue another
opportunity. Chris Willis, vice
president, Financial Planning and Analysis of Quantum, will serve
as interim CFO while the company completes its search process for a
permanent CFO.
Fiscal Fourth Quarter 2016 Outlook
Based on current market conditions, including tape media pricing
dynamics and the difficulty in forecasting large and mega deals
given their long sales cycles, Quantum provided the following
guidance for the fiscal fourth quarter:
- Revenue of $118 million to $122
million.
- GAAP and non-GAAP gross margin of approximately 43-44
percent.
- GAAP and non-GAAP operating expenses of approximately
$50 million to $51 million and
$48 million to $49 million,
respectively.
- Interest expense of $1.5 million
and taxes of $400,000.
- GAAP and non-GAAP earnings per share of ($0.01) to $0.00 and $0.00
to $0.01, respectively.
Fiscal Third Quarter 2016 Business Highlights
- Quantum purchased the remaining $83.7
million of aggregate principal amount of its convertible
subordinated notes due November 2015,
plus accrued interest, using
$16.3 million in restricted cash and
$68.9 million of its revolving credit
facility with Wells Fargo Capital Finance.
- The company unveiled Xcellis™ workflow storage, Quantum's
next-generation, high-performance storage solution engineered to
optimize demanding workflows, accelerate time to insight and
empower organizations to drive greater success. The new solution
addresses the explosive growth of unstructured data and the
opportunity to capitalize on its strategic value by enabling users
to share and leverage this data more quickly, easily and
cost-effectively. Powered by Quantum StorNext® and its
industry-leading streaming performance, Xcellis can be deployed as
a standalone system or as the primary storage component within a
multi-tier storage environment incorporating object storage, tape
and cloud technologies.
- Quantum extended its StorNext scale-out platform with the
release of StorNext 5.3, providing a range of advanced data
management capabilities for multi-tier storage and hybrid cloud
environments. In addition to powering the company's new Xcellis
workflow storage solution, it also serves as the data management
engine in Artico™, Quantum's intelligent NAS archive
appliance.
- Quantum expanded its Q-Cloud® offerings with the
launch of Q-Cloud Vault, a new service that enables users to take
advantage of secure, low-cost public cloud storage for long-term
retention of digital assets. Q-Cloud Vault is available for
StorNext 5.3 users.
- The company released StorNext Connect 1.1, a significantly
enhanced version of its easy-to-use management tool that simplifies
the installation, discovery, administration and monitoring of
StorNext environments. StorNext Connect™ is the first product of
its kind to integrate management and reporting of a multi-tier
storage environment, including disk, tape, object storage and cloud
resources.
- Quantum added LTO-7 technology to its tiered storage portfolio,
more than doubling the capacity over previous generations and
enabling low-cost, energy-efficient and secure storage for
protecting and retaining data.
Conference Call and Audio Webcast Notification
Quantum
will hold a conference call today, Jan. 28,
2016, 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) 457-2083 (U.S. and International); access
code: 4726503
Replay number: (719) 457-0820 (U.S. and International); access
code: 4726503
Replay expiration: Tuesday, Feb. 2,
2016, at 5:00 p.m. PST
Webcast site: www.quantum.com/investors
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.
Quantum, the Quantum logo, Be Certain, Xcellis, Artico, Q-Cloud,
StorNext and StorNext Connect 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: This press release contains
"forward-looking" statements. All statements other than statements
of historical fact are statements that could be deemed
forward-looking statements. Specifically, but without limitation,
statements relating to: i) our focuses for the fourth quarter of
this fiscal year, including growing our run-rate scale-out revenue,
closing the mega deals in our sales funnel, managing our tape media
revenue and managing our spending and investments; and ii) all of
our statements under the heading "Fiscal Fourth Quarter 2016
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 Quantum's actual results to differ
materially from those implied by the forward-looking statements.
More detailed information about these risk factors are set forth in
Quantum's 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
Quantum's Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission on November 6,
2015 and in Quantum's Annual Report on Form 10-K filed with
the Securities and Exchange Commission on June 12, 2015. Quantum expressly disclaims any
obligation to update or alter its forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by applicable law.
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 company's
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 management's evaluation of potential
acquisitions or Quantum's performance after completion of the
acquisitions because they are not related to Quantum's 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 Quantum's control. Management believes that non-GAAP
measures adjusted for share-based compensation provide investors
with a basis to measure Quantum's 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 Quantum's 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 Quantum's non-GAAP financial measures, as it enhances
the ability of investors to compare Quantum's 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 Quantum's 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 Quantum's
period-over-period operating results from continuing
operations.
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 Quantum's period-over-period
operating results from continuing operations.
Acquisition Expenses
The acquisition expenses were those expenses incurred to acquire
Symform, Inc. ("Symform") and are not part of Quantum's future core
operations.
Symform Expenses, Net
Quantum acquired a cloud storage services platform from 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 Quantum's
business. Management believed that it was appropriate to exclude
these amounts in fiscal 2015 in order to provide investors with a
view of Quantum's results consistent with how management viewed and
ran the business. Beginning fiscal 2016, Symform has been fully
integrated into our core operations and therefore, Symform revenue
and expenses are no longer excluded from our results.
Loss on Debt Extinguishment
The loss on debt extinguishment relates to a specific debt
repurchase action undertaken in October
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 Quantum's
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 company's
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.
Contact:
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
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
December 31,
2015
|
|
March 31,
2015*
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
32,919
|
|
|
$
|
67,948
|
|
Restricted
cash
|
2,763
|
|
|
2,621
|
|
Accounts
receivable
|
101,269
|
|
|
124,159
|
|
Manufacturing
inventories
|
33,569
|
|
|
50,274
|
|
Service parts
inventories
|
22,367
|
|
|
24,640
|
|
Other current
assets
|
11,578
|
|
|
11,942
|
|
Total current
assets
|
204,465
|
|
|
281,584
|
|
Long-term
assets:
|
|
|
|
Property and
equipment
|
13,893
|
|
|
14,653
|
|
Intangible
assets
|
498
|
|
|
731
|
|
Goodwill
|
55,613
|
|
|
55,613
|
|
Other long-term
assets
|
3,732
|
|
|
4,577
|
|
Total long-term
assets
|
73,736
|
|
|
75,574
|
|
|
$
|
278,201
|
|
|
$
|
357,158
|
|
Liabilities and
Stockholders' Deficit
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
41,666
|
|
|
$
|
54,367
|
|
Accrued
warranty
|
3,422
|
|
|
4,219
|
|
Deferred revenue,
current
|
86,416
|
|
|
95,899
|
|
Accrued restructuring
charges, current
|
1,757
|
|
|
3,855
|
|
Convertible
subordinated debt, current
|
—
|
|
|
83,345
|
|
Accrued
compensation
|
24,680
|
|
|
35,414
|
|
Other accrued
liabilities
|
13,317
|
|
|
20,740
|
|
Total current
liabilities
|
171,258
|
|
|
297,839
|
|
Long-term
liabilities:
|
|
|
|
Deferred revenue,
long-term
|
34,182
|
|
|
39,532
|
|
Accrued restructuring
charges, long-term
|
831
|
|
|
991
|
|
Long-term
debt
|
68,920
|
|
|
—
|
|
Convertible
subordinated debt, long-term
|
69,138
|
|
|
68,793
|
|
Other long-term
liabilities
|
10,738
|
|
|
10,441
|
|
Total long-term
liabilities
|
183,809
|
|
|
119,757
|
|
Stockholders'
deficit
|
(76,866)
|
|
|
(60,438)
|
|
|
$
|
278,201
|
|
|
$
|
357,158
|
|
|
* Derived from
the March 31, 2015 audited Consolidated Financial
Statements.
|
QUANTUM
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
December 31,
2015
|
|
December 31,
2014
|
|
December 31,
2015
|
|
December 31,
2014
|
Revenue:
|
|
|
|
|
|
|
|
Product
|
$
|
79,672
|
|
|
$
|
92,166
|
|
|
$
|
213,448
|
|
|
$
|
257,576
|
|
Service
|
37,099
|
|
|
39,191
|
|
|
112,285
|
|
|
116,848
|
|
Royalty
|
11,277
|
|
|
10,706
|
|
|
30,196
|
|
|
30,873
|
|
Total
revenue
|
128,048
|
|
|
142,063
|
|
|
355,929
|
|
|
405,297
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
Product
|
56,323
|
|
|
59,772
|
|
|
156,360
|
|
|
170,273
|
|
Service
|
15,028
|
|
|
17,224
|
|
|
49,590
|
|
|
52,502
|
|
Total cost of
revenue
|
71,351
|
|
|
76,996
|
|
|
205,950
|
|
|
222,775
|
|
Gross
margin
|
56,697
|
|
|
65,067
|
|
|
149,979
|
|
|
182,522
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Research and
development
|
11,148
|
|
|
13,969
|
|
|
37,841
|
|
|
43,680
|
|
Sales and
marketing
|
28,212
|
|
|
27,494
|
|
|
83,860
|
|
|
83,417
|
|
General and
administrative
|
13,488
|
|
|
13,815
|
|
|
41,610
|
|
|
42,271
|
|
Restructuring
charges
|
1,895
|
|
|
187
|
|
|
2,540
|
|
|
1,676
|
|
Total operating
expenses
|
54,743
|
|
|
55,465
|
|
|
165,851
|
|
|
171,044
|
|
Gain on sale of
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
462
|
|
Income (loss)
from operations
|
1,954
|
|
|
9,602
|
|
|
(15,872)
|
|
|
11,940
|
|
Other income and
expense
|
(22)
|
|
|
125
|
|
|
406
|
|
|
215
|
|
Interest
expense
|
(1,406)
|
|
|
(2,460)
|
|
|
(5,304)
|
|
|
(7,360)
|
|
Loss on debt
extinguishment
|
(394)
|
|
|
—
|
|
|
(394)
|
|
|
—
|
|
Income (loss)
before income taxes
|
132
|
|
|
7,267
|
|
|
(21,164)
|
|
|
4,795
|
|
Income tax
provision
|
431
|
|
|
336
|
|
|
1,117
|
|
|
940
|
|
Net income
(loss)
|
$
|
(299)
|
|
|
$
|
6,931
|
|
|
$
|
(22,281)
|
|
|
$
|
3,855
|
|
|
|
|
|
|
|
|
|
Basic net income
(loss) per share
|
$
|
(0.00)
|
|
|
$
|
0.03
|
|
|
$
|
(0.09)
|
|
|
$
|
0.02
|
|
Diluted net income
(loss) per share
|
$
|
(0.00)
|
|
|
$
|
0.03
|
|
|
$
|
(0.09)
|
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
|
|
Basic
|
264,003
|
|
|
255,860
|
|
|
261,849
|
|
|
253,773
|
|
Diluted
|
264,003
|
|
|
302,855
|
|
|
261,849
|
|
|
257,807
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in the above
Statements of Operations:
|
|
|
|
|
|
|
|
Amortization of
intangibles:
|
|
|
|
|
|
|
|
Cost of
revenue
|
$
|
48
|
|
|
$
|
160
|
|
|
$
|
233
|
|
|
$
|
753
|
|
Sales and
marketing
|
—
|
|
|
—
|
|
|
—
|
|
|
2,784
|
|
|
48
|
|
|
160
|
|
|
233
|
|
|
3,537
|
|
Share-based
compensation:
|
|
|
|
|
|
|
|
Cost of
revenue
|
313
|
|
|
362
|
|
|
1,006
|
|
|
1,109
|
|
Research and
development
|
488
|
|
|
600
|
|
|
1,529
|
|
|
1,983
|
|
Sales and
marketing
|
658
|
|
|
830
|
|
|
2,367
|
|
|
2,627
|
|
General and
administrative
|
780
|
|
|
1,126
|
|
|
2,437
|
|
|
2,936
|
|
|
2,239
|
|
|
2,918
|
|
|
7,339
|
|
|
8,655
|
|
Outsourcing
transition costs:
|
|
|
|
|
|
|
|
Cost of
revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
126
|
|
Proxy contest and
related costs:
|
|
|
|
|
|
|
|
General and
administrative
|
—
|
|
|
125
|
|
|
—
|
|
|
972
|
|
|
—
|
|
|
125
|
|
|
—
|
|
|
972
|
|
Crossroads patent
litigation costs:
|
|
|
|
|
|
|
|
General and
administrative
|
1,054
|
|
|
325
|
|
|
2,694
|
|
|
744
|
|
|
1,054
|
|
|
325
|
|
|
2,694
|
|
|
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
|
|
|
|
|
|
|
|
|
|
QUANTUM
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
Nine Months
Ended
|
|
December 31,
2015
|
|
December 31,
2014
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
|
(22,281)
|
|
|
$
|
3,855
|
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
Depreciation
|
4,945
|
|
|
6,364
|
|
Amortization of
intangible assets
|
233
|
|
|
3,537
|
|
Amortization and
write-off of debt issuance costs
|
894
|
|
|
1,246
|
|
Service parts lower
of cost or market adjustment
|
4,640
|
|
|
2,690
|
|
Gain on sale of
assets
|
—
|
|
|
(462)
|
|
Deferred income
taxes
|
(1)
|
|
|
(11)
|
|
Share-based
compensation
|
7,339
|
|
|
8,655
|
|
Changes in assets and
liabilities, net of effect of acquisition:
|
|
|
|
Accounts
receivable
|
22,890
|
|
|
(9,023)
|
|
Manufacturing
inventories
|
13,503
|
|
|
(6,145)
|
|
Service parts
inventories
|
(547)
|
|
|
(686)
|
|
Accounts
payable
|
(12,708)
|
|
|
9,325
|
|
Accrued
warranty
|
(797)
|
|
|
(1,328)
|
|
Deferred
revenue
|
(14,833)
|
|
|
(8,928)
|
|
Accrued restructuring
charges
|
(2,258)
|
|
|
(2,197)
|
|
Accrued
compensation
|
(10,711)
|
|
|
6,774
|
|
Other assets and
liabilities
|
(6,222)
|
|
|
(2,549)
|
|
Net cash provided by
(used in) operating activities
|
(15,914)
|
|
|
11,117
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(2,800)
|
|
|
(2,882)
|
|
Proceeds from sale of
assets
|
—
|
|
|
462
|
|
Change in restricted
cash
|
(142)
|
|
|
(139)
|
|
Purchases of other
investments
|
—
|
|
|
(22)
|
|
Return of principal
from other investments
|
—
|
|
|
104
|
|
Payment for business
acquisition, net of cash acquired
|
—
|
|
|
(517)
|
|
Net cash used in
investing activities
|
(2,942)
|
|
|
(2,994)
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings of
long-term debt, net
|
68,920
|
|
|
—
|
|
Repayments of
convertible subordinated debt
|
(83,735)
|
|
|
—
|
|
Payment of taxes due
upon vesting of restricted stock
|
(3,112)
|
|
|
(2,212)
|
|
Proceeds from
issuance of common stock
|
1,772
|
|
|
2,060
|
|
Net cash used in
financing activities
|
(16,155)
|
|
|
(152)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(18)
|
|
|
(113)
|
|
Net increase
(decrease) in cash and cash equivalents
|
(35,029)
|
|
|
7,858
|
|
Cash and cash
equivalents at beginning of period
|
67,948
|
|
|
99,125
|
|
Cash and cash
equivalents at end of period
|
$
|
32,919
|
|
|
$
|
106,983
|
|
QUANTUM
CORPORATION
|
GAAP TO NON-GAAP
RECONCILIATION
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months Ended
December 31, 2015
|
|
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
|
$
|
56,697
|
|
|
44.3
|
%
|
|
$
|
1,954
|
|
|
1.5
|
%
|
|
$
|
(299)
|
|
|
$
|
(0.00)
|
|
|
$
|
(0.00)
|
|
Non-GAAP Reconciling
Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
48
|
|
|
|
|
48
|
|
|
|
|
48
|
|
|
|
|
|
Share-based
compensation
|
313
|
|
|
|
|
2,239
|
|
|
|
|
2,239
|
|
|
|
|
|
Restructuring
charges
|
—
|
|
|
|
|
1,895
|
|
|
|
|
1,895
|
|
|
|
|
|
Crossroads patent
litigation costs
|
—
|
|
|
|
|
1,054
|
|
|
|
|
1,054
|
|
|
|
|
|
Loss on debt
extinguishment
|
—
|
|
|
|
|
—
|
|
|
|
|
394
|
|
|
|
|
|
Non-GAAP
|
$
|
57,058
|
|
|
44.6
|
%
|
|
$
|
7,190
|
|
|
5.6
|
%
|
|
$
|
5,331
|
|
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computation of
basic and diluted net income (loss) per share:
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
|
Net income
(loss)
|
|
|
|
|
|
|
|
|
|
|
$
|
(299)
|
|
|
$
|
5,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
|
|
|
|
|
|
|
|
264,003
|
|
|
264,003
|
|
Dilutive shares
from stock plans
|
|
|
|
|
|
|
|
—
|
|
|
305
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
264,003
|
|
|
264,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
December 31, 2015
|
|
Gross
Margin
|
|
Gross Margin
Rate
|
|
Loss From
Operations
|
|
Operating
Margin
|
|
Net
Loss
|
|
Per Share Net
Loss, Basic
|
|
Per Share Net
Loss, Diluted
|
GAAP
|
$
|
149,979
|
|
|
42.1
|
%
|
|
$
|
(15,872)
|
|
|
(4.5)
|
%
|
|
$
|
(22,281)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.09)
|
|
Non-GAAP Reconciling
Items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangibles
|
233
|
|
|
|
|
233
|
|
|
|
|
233
|
|
|
|
|
|
Share-based
compensation
|
1,006
|
|
|
|
|
7,339
|
|
|
|
|
7,339
|
|
|
|
|
|
Restructuring
charges
|
—
|
|
|
|
|
2,540
|
|
|
|
|
2,540
|
|
|
|
|
|
Crossroads patent
litigation costs
|
—
|
|
|
|
|
2,694
|
|
|
|
|
2,694
|
|
|
|
|
|
Loss on debt
extinguishment
|
—
|
|
|
|
|
—
|
|
|
|
|
394
|
|
|
|
|
|
Non-GAAP
|
$
|
151,218
|
|
|
42.5
|
%
|
|
$
|
(3,066)
|
|
|
(0.9)
|
%
|
|
$
|
(9,081)
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.03)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computation of
basic and diluted net loss per share:
|
|
|
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(22,281)
|
|
|
$
|
(9,081)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
|
|
|
|
|
|
|
|
261,849
|
|
|
261,849
|
|
|
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.
|
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 of 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 of 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.
|
QUANTUM
CORPORATION
|
SELECTED RESULTS
EXCLUDING SCALE-OUT STORAGE REVENUE MEGA DEALS
|
(In
thousands)
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2015
|
|
December 31,
2014
|
|
Change
|
|
%
Change
|
|
As
Reported
|
|
Mega Deals
(1)
|
|
Excluding Mega
Deals
|
|
As
Reported
|
|
Mega Deals
(1)
|
|
Excluding Mega
Deals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scale-out storage
solutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
revenue
|
$
|
29,805
|
|
|
$
|
—
|
|
|
$
|
29,805
|
|
|
$
|
22,819
|
|
|
$
|
(3,098)
|
|
|
$
|
19,721
|
|
|
$
|
10,084
|
|
|
51
|
%
|
Product and service
revenue(2)
|
$
|
35,704
|
|
|
$
|
—
|
|
|
$
|
35,704
|
|
|
$
|
27,162
|
|
|
$
|
(3,098)
|
|
|
$
|
24,064
|
|
|
$
|
11,640
|
|
|
48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
December 31,
2015
|
|
December 31,
2014
|
|
Change
|
|
%
Change
|
|
As
Reported
|
|
Mega Deals
(1)
|
|
Excluding Mega
Deals
|
|
As
Reported
|
|
Mega Deals
(1)
|
|
Excluding Mega
Deals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scale-out storage
solutions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
revenue
|
$
|
76,548
|
|
|
$
|
(1,452)
|
|
|
$
|
75,096
|
|
|
$
|
59,077
|
|
|
$
|
(9,232)
|
|
|
$
|
49,845
|
|
|
$
|
25,251
|
|
|
51
|
%
|
Product and service
revenue(2)
|
$
|
93,367
|
|
|
$
|
(1,452)
|
|
|
$
|
91,915
|
|
|
$
|
70,716
|
|
|
$
|
(9,232)
|
|
|
$
|
61,484
|
|
|
$
|
30,431
|
|
|
49
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Mega
deals are defined as deals over $1.0 million. Management considers
revenue excluding mega deals in its evaluation of the business for
decision making.
|
|
(2)
Management considers product and service revenue in its
evaluation of the business for decision making and to compare
against competitors. Total product and service revenue less total
product revenue equals service revenue in our GAAP
results.
|
QUANTUM
CORPORATION
|
FORECAST FOURTH
QUARTER FISCAL 2016
|
GAAP TO NON-GAAP
RECONCILIATION
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Percentage
Range
|
Forecast gross
margin rate on a GAAP basis
|
42.7
|
%
|
—
|
43.8
|
%
|
Forecast share-based
compensation
|
0.2
|
%
|
—
|
0.3
|
%
|
Forecast gross
margin rate on a non-GAAP basis
|
43.0
|
%
|
—
|
44.0
|
%
|
|
|
|
|
|
Dollar
Range
|
Forecast operating
expense on a GAAP basis
|
$
|
50.0
|
|
—
|
$
|
51.0
|
|
Forecast share-based
compensation
|
(2.0)
|
Forecast operating
expense on a non-GAAP basis
|
$
|
48.0
|
|
—
|
$
|
49.0
|
|
|
|
|
|
|
Dollars per
Share
|
Forecast diluted
earnings per share on a GAAP basis
|
$
|
(0.01)
|
|
—
|
$
|
0.00
|
|
Forecast share-based
compensation
|
0.01
|
Forecast diluted
earnings per share on a non-GAAP basis
|
$
|
0.00
|
|
—
|
$
|
0.01
|
|
|
|
|
|
Estimates based on
current (January 28, 2016) 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 12, 2015. 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.
|
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SOURCE Quantum Corp.