SAN JOSE, CA — (Marketwire) — 07/27/11 — Quantum Corp. (NYSE: QTM)
Quantum Corp. (NYSE: QTM), the leading global specialist in backup, recovery and archive, today reported results for the first quarter of fiscal 2012 (FQ1-12), ended June 30, 2011. Revenue for the quarter totaled $154 million, down 6 percent from the first quarter of fiscal 2011 (FQ1-11) primarily due to the recognition of $9.5 million in OEM deduplication software license revenue in FQ1-11 that was not repeated. Branded revenue, which represented 80 percent of total non-royalty revenue for the quarter, grew 3 percent year-over-year.
For FQ1-12, GAAP net loss was $5 million, or 2 cents per diluted share, compared to a GAAP net loss of $3 million, or 1 cent per diluted share, in FQ1-11. Non-GAAP net income for the quarter was $3 million, or 1 cent per diluted share, down from $9 million, or 4 cents per diluted share, in the comparable quarter last year.
“We are not pleased with our overall revenue result for the quarter and specifically the fact that disk systems and software sales did not meet our growth expectations; however, our branded business grew 3 percent and we delivered another strong quarter for tape automation,” said Jon Gacek, president and CEO of Quantum. “We also took a number of actions that we believe will expand our market reach and drive growth in the coming quarters, including introducing our first StorNext® appliance, acquiring Pancetera Software and preparing for today-s launch of our new DXi6701 and DXi6702 appliances. We believe these actions, along with our continued focus on improving sales and go-to-market execution, will enable us to get back on track and deliver on our fiscal 2012 goals.”
For the second quarter of fiscal 2012, the company expects:
Revenue of approximately $160 million.
A GAAP gross margin rate slightly higher and non-GAAP gross margin rate slightly lower than those in FQ1-12.
GAAP operating expenses of $66 million and non-GAAP operating expenses of $60 million.
Interest expense of approximately $3 million and taxes of $1 million.
Key business highlights for the June quarter include the following:
Quantum announced and began shipping the StorNext M330, the first in a new family of StorNext appliances. It combines the high-performance, heterogeneous software file sharing and tiered, vendor-agnostic archiving benefits found in Quantum-s StorNext data management software with the simplicity of purpose-built hardware. Targeting organizations with sustained large data throughput challenges, the StorNext M330 addresses complex “big data” management needs yet is designed for ease of deployment with minimal configuration requirements.
Also extending the market reach for StorNext, the company announced that NetApp would begin reselling StorNext software in combination with its disk-based products, giving customers a powerful unified storage solution for simultaneous sharing, managing, on-demand distribution and archiving of rich media files.
With its acquisition of Pancetera Software Inc., Quantum gained key assets for dramatically reducing the complexity and cost of managing and protecting data in virtual server environments. Pancetera technology is already compatible with Quantum-s DXi disk backup and deduplication products, and the company plans to further integrate the technology into its DXi and StorNext roadmaps.
The company finalized its new DXi6701 and DXi6702 deduplication appliances . Incorporating Quantum-s latest generation DXi 2.0 software, the new appliances provide industry-leading performance (twice that of leading competitors) and scalability, as well as a unique approach to distributing deduplication across a network. The DXi6701 and DXi6702 also deliver unparalleled value, starting at a price point as low as half that of leading competitors and with all the necessary software licenses included in the base price.
Quantum-s disk backup and deduplication appliances were named “Storage Product of the Year” at the 2011 Storage Awards: The Storries VIII. The awards were based on votes cast by the readers of Storage Magazine, the UK-s leading IT and storage publication.
The company announced a new OEM agreement with HP under which HP will brand and sell a new enterprise tape library based on Quantum-s Scalar i6000 platform. The agreement builds on the strong partnership the two companies have established in tape-based storage, including a previous OEM relationship in enterprise tape automation.
Enhancing its tape archiving capabilities, Quantum introduced a new Extended Data Life Management (EDLM) feature that is part of the Scalar i6000 tape library-s iLayer management software. EDLM automates the integrity checking of tapes, improving resiliency and helping to protect valuable archived content that can be stored for years on tape. EDLM also integrates with StorNext Storage Manager archiving software to migrate content automatically from a suspect tape based on the results of an EDLM scan.
Quantum will hold a conference call today, July 27, 2011, 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) 629-9692 (U.S. & International). Quantum will provide a live audio webcast of the conference call beginning today, July 27, 2011, at 2:00 p.m. PDT. Site for the webcast and related information: .
Quantum Corp. (NYSE: QTM) is the leading global specialist in backup, recovery, and archive. From small businesses to multinational enterprises, more than 50,000 customers trust Quantum to solve their data protection, retention and management challenges. Quantum-s best-of-breed, open systems solutions provide significant storage efficiencies and cost savings while minimizing risk and protecting prior investments. They include three market-leading, highly scalable platforms: ®-Series disk-based deduplication and replication systems for fast backup and restore, ® tape automation products for disaster recovery and long-term data retention, and ® data management software and appliances for high-performance file sharing and archiving. Quantum Corp., 1650 Technology Drive, Suite 800, San Jose, CA 95110, (408) 944-4000, .
Quantum, the Quantum logo, DXi, iLayer, Scalar, StorNext and StorNext Storage Manager 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, the statements regarding actions we believe will expand our market reach and drive growth in the coming quarters; that we believe these actions, along with our continued focus on improving sales and go-to-market execution, will enable us to get back on track and deliver on our fiscal 2012 goals; that we plan to further integrate the Pancetera technology into our DXi and StorNext roadmaps; and that HP will brand and sell a new enterprise tape library based on our Scalar i6000 platform, as well as 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 “Item 1A. Risk Factors,” in Quantum-s Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 14, 2011. 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 amortization of intangibles, share-based compensation expense, restructuring charges and acquisition expenses 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. 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.
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.
Acquisition Expenses
The acquisition expenses are those expenses incurred to acquire Pancetera and are not part of Quantum-s future core 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.
Brad Cohen
Public Relations
Quantum Corp.
(408) 944-4044
Christi Lee
Investor Relations
Quantum Corp.
(408) 944-4450
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