SAN JOSE, CA — (Marketwired) — 05/08/13 — Quantum Corp. (NYSE: QTM), a proven global expert in data protection and big data management, today reported results for fiscal 2013 (FY13) and the fourth quarter (FQ4-13), ended March 31, 2013. Revenue for the year totaled $588 million, down 10 percent from fiscal 2012 (FY12), primarily due to decreased market demand for tape products. Quantum reported record revenue of $152 million from disk systems and software sales (including related service), an 11 percent increase over FY12 driven by record revenue from both StorNext® and midrange DXi® sales. For FQ4-13, Quantum reported $140 million in revenue, a 13 percent decline from the same period last year (FQ4-12), also primarily due to lower demand for tape. Disk systems and software revenue (including related service) grew for the seventh consecutive quarter on a year-over-year basis.
Quantum reported a GAAP net loss for FY13 of $52 million, or 22 cents per diluted share, compared to $9 million in the prior year. On a non-GAAP basis, Quantum had a net loss of $14 million for the year, or 6 cents per diluted share, down from $30 million of net income in FY12. For FQ4-13, Quantum had a GAAP net loss of $15 million, or 6 cents per diluted share, compared to a net loss of $11 million in the same quarter last year. Non-GAAP net loss for FQ4-13 was $5 million, or 2 cents per diluted share, down from $1 million of net income a year earlier. The year-over-year declines were largely due to the lower tape product and royalty revenue.
“Although this was a challenging year for storage generally, and a particularly tough one for tape, we grew our disk systems and software revenue to a new high, maintained our market share leadership in tape, introduced a broad range of innovative new products and further improved our balance sheet,” said Jon Gacek, president and CEO of Quantum. “We will build on this progress in the new fiscal year to drive a balance of growth and profit, and we are well-positioned to do so.
“Our product portfolio is a key strength, and we will continue to be aggressive about utilizing our technology assets to create products and solutions that are clearly differentiated and deliver superior value to customers in both data protection and big data management. This will include new deduplication, virtualization, cloud, workflow and archive offerings.”
Quantum generated $16 million in cash from operations in FQ4-13 and ended FY13 with $72 million in total cash and cash equivalents.
For the full 2014 fiscal year, Quantum expects:
Total revenue of $610 million to $630 million.
GAAP and non-GAAP gross margin rates in the mid-40 percent range.
GAAP and non-GAAP operating expenses of $265 million to $270 million and $245 million to $250 million, respectively.
Interest expense of $10 million and taxes of $2 million.
GAAP loss per share of 5 cents to breakeven and non-GAAP earnings per share of 5 cents to 10 cents.
For the first quarter of fiscal 2014, the company expects:
Total revenue of $135 million to $140 million.
GAAP gross margin rate of 41 to 42 percent and non-GAAP gross margin rate of 42 to 43 percent.
GAAP and non-GAAP operating expenses of $65 million to $67 million and $60 million to $62 million, respectively.
Interest expense of $2.5 million and taxes of $500,000.
Key business highlights for the March quarter include the following:
Quantum announced the DXi6800 backup and deduplication appliance, which combines industry-leading performance, scalability and efficiency with unique “pay-as-you-grow” extensibility to deliver better overall value than the market leader. The new appliance provides up to 16 TB/hour performance, 13-156 TB of usable capacity in a single system and the smallest footprint per TB available. It can replicate to Quantum Q-Cloud, enabling cloud-based data protection and disaster recovery, and also integrates with Symantec NetBackup AIR, reducing the time needed to return to business in the event of a disaster.
The company introduced its new Scalar i6000 HD enterprise tape library, offering best-in-class slot density and scalability as well as high performance and availability. Designed to address customers- big data and archive needs with slot densities that are twice those offered by competitors, the Scalar i6000 HD makes nearly 5 PB of data available in a single 19″ rack and scales to more than 75 PB of capacity. It also incorporates new high-availability and management features, including active-active dual robotics for fast data access times.
Contributing to the strong growth in StorNext appliance sales, the StorNext M440 Metadata Appliance began its first full quarter of availability. It enables central control of up to 500 million files for management of large-scale, fast-growing datasets, including petabytes of tiered content archives. Quantum also started early shipments of its StorNext QX Storage, primary disk storage optimized for StorNext collaborative workflow environments. Both appliances are 100 percent compatible with the large installed base of Apple Xsan solutions and ideal for mid-sized creative workflow environments.
In the latest global accolades for the company-s deduplication products, DXi6800 won the Initiative Mittelstand Innovation IT Award 2013 at the CeBIT trade show, and the DXi6701/02 took top honors as the Network Computing 2013 Product of the Year Award in the Storage Product category. In addition, Turner Studios- Sports Central received a prestigious 2012 Excellence Award from Broadcast Engineering magazine for a solution it created to streamline and centralize the video ingest, management and multi-screen distribution of its sports content. Turner uses Quantum-s StorNext File System and StorNext Storage Manager software to manage the high-performance sharing, accessing and archiving of content within the system.
Quantum will hold a conference call today, May 8, 2013, at 2:00 p.m. PDT, to discuss its fiscal fourth quarter and full year results. Press and industry analysts are invited to attend in listen-only mode. Dial-in number: (480) 629-9835 (U.S. & International). Quantum will provide a live audio webcast of the conference call beginning today, May 8, 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, Scalar, StorNext and Q-Cloud 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 that we will build on our progress to drive a balance of growth and profit in the new year, and that we will continue to be aggressive about utilizing our technology assets in our product development efforts 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 14, 2012 and in Quantum-s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on February 8, 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, loss on debt extinguishment, restructuring charges and share-based compensation expense for the following reasons:
Acquisition Expenses
The acquisition expenses were those expenses incurred to acquire Pancetera, Inc. and are not part of Quantum-s future core operations.
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.
Loss on Debt Extinguishment
The loss on debt extinguishment relates to specific debt refinancing actions and is not part of Quantum-s future core operations.
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.
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.
For fiscal 2014, we forecast GAAP and non-GAAP gross margin rates in the mid-40 percent range, with non-GAAP gross margin approximately 60 basis points higher than GAAP gross margin, comprised of 0.2% for intangible amortization and 0.4% for share-based compensation.
Estimates based on current (May 8, 2013) 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 14, 2012. 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.
Brad Cohen
Public Relations
Quantum Corp.
(408) 944-4044
Christi Lee
Investor Relations
Quantum Corp.
(253) 334-9823
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