SAN JOSE, CA — (Marketwired) — 08/01/13 — Quantum Corp. (NYSE: QTM)
Quantum Corp. (NYSE: QTM), a proven global expert in data protection and big data management, today reported results for the first quarter of fiscal 2014 (FQ1-14), ended June 30, 2013. Revenue for the quarter totaled $148 million, up 5 percent from the first quarter of fiscal 2013 (FQ1-13), primarily due to a $15 million one-time royalty payment associated with an intellectual property agreement. Quantum generated revenue of $31 million from disk system and software sales (including related service), a 2 percent increase over FQ1-13 driven mostly by growth of 23 percent in midrange DXi® revenue and 13 percent in big data sales.
Quantum reported GAAP net income of $3 million, or 1 cent per diluted share, for FQ1-14, compared to a GAAP net loss of $17 million in the same quarter of last year. On a non-GAAP basis, the company had net income of $12 million, or 4 cents per diluted share, up from a net loss of $8 million a year earlier. The year-over-year increases were largely driven by the higher overall revenue.
“Our June quarter results clearly reflect the benefits of our strong intellectual property portfolio and the actions we-ve taken to drive growth and profit,” said Jon Gacek, president and CEO of Quantum. “With a few exceptions, our revenue performance was generally good and in line with our expectations, and we were particularly pleased by the double-digit growth we generated in midrange DXi and overall StorNext® revenue. We also significantly improved our gross margin rates and operating income, even without the additional royalty revenue resulting from the intellectual property agreement we concluded during the quarter.
“Moving forward we will maintain our balanced approach of driving revenue growth and spending wisely to generate cash and profit. This will include the continued expansion of our data protection and big data management offerings for physical, virtual and cloud environments, leveraging our technology leadership to help customers store, manage and quickly access their increasingly valuable digital content throughout its lifecycle.”
Quantum generated $9 million in cash from operations in FQ1-14, ending the quarter with $80 million in total cash and cash equivalents.
For the second quarter of fiscal 2014, Quantum expects:
Revenue of approximately $135 million to $140 million.
GAAP gross margin rate of approximately 41 to 42 percent and non-GAAP gross margin rate of 42 to 43 percent.
GAAP operating expenses of $63 million to $65 million and non-GAAP operating expenses of $58 million to $60 million.
Interest expense of $2.5 million and taxes of $500,000.
Key business highlights for the June quarter include the following:
Quantum expanded its Lattus object storage product line to include a lower-capacity, lower-cost model that extends its value beyond big data archive for large enterprises to smaller organizations with rapidly growing big data archives as well as commercial data center customers seeking a consolidated backup and archive solution. Lattus enables nearline access to archived data in an extremely durable, scalable and cost-effective disk solution that never requires a “forklift” upgrade — a forever disk archive.
The company continued to expand and enhance its virtual data protection technologies, announcing that its vmPRO software can now leverage Scalar LTFS tape technology to provide user-accessible, searchable archive capabilities for VMware data. In addition, Quantum introduced DXi V4000, an all-software, all-virtual solution delivering up to 24 TB of usable capacity for deduplication and replication to other DXi appliances and its Q-Cloud service.
Quantum announced a partnership with BlackBridge Networks Ltd., a Canadian cloud and colocation company, to provide cloud-based enterprise backup as a service in Canada. BlackBridge Stratus – Powered by Quantum enables customers to protect data both locally and in the BlackBridge secure cloud, leveraging Quantum-s DXi and vmPRO technologies.
Revenue from sales of the company-s Scalar i500 tape library surpassed $1 billion. The Scalar i500, which offers best-in-class scalability, reliability, intelligence and management for midrange and enterprise environments, is the highest selling library in Quantum-s history. In addition, Quantum-s Scalar i6000 was named “Tape Based Product of the Year” at the 2013 Storage Awards: The Storries X.
A lab evaluation conducted by industry analyst firm Enterprise Strategy Group affirmed the market-leading performance, scalability and security of Quantum-s DXi6800 backup and deduplication appliance as well as the strength of the company-s overall data protection portfolio in meeting customers- needs across physical, virtual and cloud environments.
Quantum will hold a conference call today, Aug. 1, 2013, at 2:00 p.m. PDT, to discuss its fiscal first quarter results. Press and industry analysts are invited to attend in listen-only mode. Dial-in number: (480) 629-9867 (U.S. & International). Quantum will provide a live audio webcast of the conference call beginning today, Aug. 1, 2013, at 2:00 p.m. PDT. Site for the webcast and related information: .
Quantum is a proven global expert in data protection and big data management, providing specialized storage solutions for physical, virtual and cloud environments. From small businesses to major enterprises, more than 100,000 customers have trusted Quantum to help maximize the value of their data by protecting and preserving it over its entire lifecycle. With Quantum, customers can Be Certain they-re able to adapt in a changing world — keeping more data longer, bridging from today to tomorrow, and reducing costs. See how at .
Quantum, the Quantum logo, Be Certain, DXi, Lattus, Scalar, StorNext, vmPRO and BlackBridge Stratus – Powered by Quantum 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 statements regarding our go-forward business approaches and priorities, our product and technology expansion plans, expected product features and performance and all of our statements under the “Outlook” section 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 statement. More detailed information about these risk factors, and additional 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 Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 7, 2013. Quantum expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Quantum believes that the non-GAAP financial measures disclosed above provide useful and supplemental information to investors regarding its quarterly financial performance. Quantum management uses 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 acquisition expenses, amortization of intangibles, restructuring charges and share-based compensation expense 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.
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.
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. As a result, management excludes this item from Quantum-s internal operating forecasts and models. 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.
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.
In the first quarter of fiscal year 2014, Quantum identified an error related to the accounting for certain allowances for estimated future price adjustments to customers which impacted prior reporting periods. In addition, the company had previously identified errors related to the accrual for sales commissions that also impacted prior reporting periods. While these errors were not material to any previously issued annual or quarterly consolidated financial statements, management concluded that correcting the errors in the current quarter would be material to the current quarter-s consolidated financial statements. Quantum will revise its prior period annual and quarterly consolidated financial statements to correct the errors when next presented in future SEC filings.
In this earnings release, the company has revised the March 31, 2013 Condensed Consolidated Balance Sheet and the Condensed Consolidated Statements of Operations and Cash Flows for the quarter ended June 30, 2012 to record additional accounts receivable allowance for future price adjustments and revised sales commission expense. The net impact of the revision was to reduce the previously reported net loss for the quarter ended June 30, 2012 by $800,000 and increase the previously reported accumulated deficit and stockholders- deficit at March 31, 2013 by $2.2 million.
Brad Cohen
Public Relations
Quantum Corp.
(408) 944-4044
Christi Lee
Investor Relations
Quantum Corp.
(253) 334-9823
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