|
Quantum Corporation Reports Fiscal Second Quarter Results
(Market Wire Via Acquire Media NewsEdge) SAN JOSE, CA -- (MARKET WIRE) -- 10/27/09 --
Quantum Corp. (NYSE: QTM), the leading global
specialist in backup, recovery and archive, today announced that revenue
for its fiscal second quarter (FQ2'10), ended Sept. 30, 2009, was $175
million. This represented a 19 percent decline from the same period last
year (FQ2'09), primarily due to the significantly weaker economy, a
continued sales mix shift toward higher margin opportunities, and lower
royalties (partly reflecting a one-time royalty payment from Riverbed
Technology, Inc. last year). Despite the year-over-year decline, revenue
grew 9 percent on a sequential basis. In addition, the company increased
its GAAP gross margin rate to 43.8 percent and GAAP operating income margin
to 8.5 percent -- up from 38.5 percent and 2.6 percent, respectively, in
FQ2'09. In both cases, this was the highest level achieved in more than
eight years.
Quantum also reported its second consecutive quarter of GAAP profits, with
$11 million in net income, or basic earnings per share of six cents. This
compared to a GAAP net loss of $3 million in FQ2'09 and represented the
company's best performance in nearly five years. The $11 million profit
included a $2 million net gain related to the retirement of convertible
debt, offset by $9 million in amortization of intangibles, $3 million in
stock-based compensation charges and $2 million in restructuring costs. The
net impact of these four items reduced basic earnings per share by five
cents.
Quantum generated $31 million in cash from operations for the quarter, paid
down $20 million of its senior debt, and ended the quarter with $85 million
in cash and cash equivalents.
"Despite the continuing impact of the economic downturn and changes in the
deduplication landscape, we delivered some of our best results in many
years," said Rick Belluzzo, chairman and CEO of Quantum. "This included
significantly higher gross margin rates, operating income and margins, and
net income, compared to both last year and the prior quarter. We also
generated strong growth in disk systems and software revenue, with our
branded DXi backup/deduplication sales up significantly, both
year-over-year and sequentially.
"Our September quarter results reflect a number of initiatives we have
implemented over the past year, as well as an aggressive shift we made in
our go-to-market focus during the quarter in response to changed industry
dynamics," continued Belluzzo. "While we have more work to do in completing
our transformation to a storage systems company, our performance clearly
shows the substantial progress we've made."
Quantum's product revenue, which includes sales of the company's hardware
and software products, totaled $118 million in FQ2'10. This represented a
decrease of $25 million from FQ2'09, primarily reflecting expected declines
in both OEM tape automation sales and OEM devices and media revenue.
Disk systems and software revenue, inclusive of related software
maintenance and service revenue, was $28 million in the September quarter.
This was up approximately $7 million from the same quarter last year,
primarily due to record sales of Quantum's DXi7500 enterprise disk backup
and deduplication system. Contributing to these record sales were several
deals of more than a million dollars, including new DXi account wins at one
of the top utility companies in the world and another national utility
provider in Europe. Other notable DXi7500 wins included a large deal with
one of the biggest U.S. insurance companies -- a new DXi customer -- and
repeat business with one of the largest wireless providers in America, a
U.S. Federal Reserve Bank and Aéroports de Paris.
The increase in disk systems and software revenue also included modest
growth in StorNext® sales on both a year-over-year and sequential basis.
In addition to a strong contribution from federal government business,
Quantum closed several major StorNext deals, including a new win at one of
the leading U.S. cable TV networks and repeat purchases by a large
multimedia retailer and one of the biggest system integrators in China.
Looking beyond FQ2'10, Quantum said it expects to build on its branded
revenue momentum in disk systems and software with last week's announcement
of the company's new DXi6500 family, a set of preconfigured disk backup and
deduplication appliances targeted at the midrange NAS market and optimized
for sale through independent channel partners (see press release titled,
"New Quantum DXi6500 Family Delivers
Unparalleled Combination of Simplicity and Value in Midrange
Deduplication," Oct. 21, 2009).
Conference Call and Audio Webcast Notification
Quantum will hold a conference call today, Oct. 27, 2009, at 2:00 p.m. PDT,
to discuss its fiscal second quarter results. Press and industry analysts
are invited to attend in listen-only mode. Dial-in number: (480) 629-9643
(U.S. & International). Quantum will provide a live audio webcast of the
conference call beginning today, Oct. 27, 2009, at 2:00 p.m. PDT. Site for
the webcast and related information: http://www.quantum.com/investors.
About Quantum
Quantum Corp. (NYSE: QTM) is the leading global storage company
specializing in backup, recovery and archive. Combining focused expertise,
customer-driven innovation, and platform independence, Quantum provides a
comprehensive, integrated range of disk, tape, and software solutions
supported by a world-class sales and service organization. This includes
the DXi(TM)-Series, the first disk backup solutions to extend the power of
data deduplication and replication across the distributed enterprise. As a
long-standing and trusted partner, the company works closely with a broad
network of resellers, OEMs and other suppliers to meet customers' evolving
data protection needs. Quantum Corp., 1650 Technology Drive, Suite 800, San
Jose, CA 95110, (408) 944-4000, www.quantum.com.
Quantum, the Quantum logo and StorNext are registered trademarks of Quantum
Corporation and its affiliates. DXi is a trademark of Quantum Corporation.
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, the statement that Quantum expects to build on its
branded revenue momentum in disk systems and software with last week's
announcement of the company's new DXi6500 family, is a forward-looking
statement 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. These risks include operational difficulties, unforeseen
technical limitations, unexpected material deviation in product operation,
the ability of competitors to introduce new solutions that compete more
successfully with our solutions, unexpected changes in market conditions
and unanticipated changes in customers' needs or requirements, as well as
the risks 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 August 7, 2009 and in Quantum's Annual Report on Form 10-K
filed with the Securities and Exchange Commission on June 30, 2009. 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 CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per-share amounts)
(Unaudited)
Three Months Ended Six Months Ended
-------------------------- --------------------------
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
------------ ------------ ------------ ------------
Revenue:
Product $ 118,327 $ 143,192 $ 223,551 $ 300,776
Service 39,757 41,579 78,659 83,836
Royalty 16,842 30,619 33,056 52,569
------------ ------------ ------------ ------------
Total revenue 174,926 215,390 335,266 437,181
Cost of Revenue:
Product 73,077 99,631 145,163 214,634
Service 25,220 32,884 51,831 64,833
------------ ------------ ------------ ------------
Total cost of
revenue 98,297 132,515 196,994 279,467
------------ ------------ ------------ ------------
Gross margin 76,629 82,875 138,272 157,714
Operating expenses:
Research and
development 16,907 18,766 33,439 37,756
Sales and
marketing 27,880 38,148 55,173 78,185
General and
administrative 15,218 19,820 29,723 41,845
Restructuring
charges 1,696 457 4,806 407
------------ ------------ ------------ ------------
61,701 77,191 123,141 158,193
------------ ------------ ------------ ------------
Income (loss) from
operations 14,928 5,684 15,131 (479)
Interest income and
other, net 1,265 (385) 1,269 1,097
Interest expense (6,935) (7,510) (12,586) (16,285)
Gain on debt
extinguishment,
net of costs 1,569 -- 12,859 --
------------ ------------ ------------ ------------
Income (loss)
before income
taxes 10,827 (2,211) 16,673 (15,667)
Income tax provision
(benefit) (528) 1,053 310 1,935
------------ ------------ ------------ ------------
Net income
(loss) $ 11,355 $ (3,264) $ 16,363 $ (17,602)
============ ============ ============ ============
Net income (loss)
per share:
Basic $ 0.06 $ (0.01) $ 0.08 $ (0.08)
Diluted 0.04 (0.01) 0.02 (0.08)
Income (loss) for
purposes of
computing net
income(loss)
per share:
Basic $ 11,355 $ (3,264) $ 16,363 $ (17,602)
Diluted 9,792 (3,264) 4,753 (17,602)
Weighted average
common and common
equivalent shares:
Basic 212,475 208,960 211,372 207,943
Diluted 213,794 208,960 225,752 207,943
Included in the
above Statements
of Operations:
Amortization of
intangibles:
Cost of revenue 5,499 6,730 10,974 13,648
Research and
development 100 100 200 200
Sales and
marketing 3,394 4,117 6,788 8,248
General and
administrative 25 25 50 50
------------ ------------ ------------ ------------
9,018 10,972 18,012 22,146
Share-based
compensation:
Cost of revenue 319 603 619 958
Research and
development 582 807 1,220 1,572
Sales and
marketing 760 972 1,218 1,713
General and
administrative 1,014 684 1,756 1,517
------------ ------------ ------------ ------------
2,675 3,066 4,813 5,760
QUANTUM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, March 31,
2009 2009*
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 84,772 $ 87,305
Accounts receivable, net 106,007 107,851
Manufacturing inventories 51,069 61,237
Service parts inventories 57,140 63,029
Deferred income taxes 9,917 9,935
Other current assets 18,353 24,745
------------ ------------
Total current assets 327,258 354,102
Long-term assets:
Property and equipment, less accumulated
depreciation 25,495 28,553
Purchased technology, less accumulated
amortization 37,974 49,148
Other intangible assets, less accumulated
amortization 53,250 60,088
Goodwill 46,770 46,770
Other long-term assets 10,859 10,708
------------ ------------
Total long-term assets 174,348 195,267
------------ ------------
$ 501,606 $ 549,369
============ ============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $ 50,362 $ 45,182
Accrued warranty 7,100 11,152
Deferred revenue, current 103,538 84,079
Current portion of long-term debt 1,884 4,000
Current portion of convertible subordinated
debt 22,099 --
Accrued restructuring charges 5,392 4,681
Accrued compensation 28,648 27,334
Income taxes payable 2,569 4,752
Other accrued liabilities 25,599 34,550
------------ ------------
Total current liabilities 247,191 215,730
Long-term liabilities:
Deferred revenue, long-term 28,096 32,082
Deferred income taxes 10,906 11,190
Long-term debt 306,841 244,000
Convertible subordinated debt -- 160,000
Other long-term liabilities 7,122 6,326
------------ ------------
Total long-term liabilities 352,965 453,598
Stockholders' deficit (98,550) (119,959)
------------ ------------
$ 501,606 $ 549,369
============ ============
* Derived from the March 31, 2009 audited Consolidated Financial Statements
QUANTUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
--------------------------
September 30, September 30,
2009 2008
------------ ------------
Cash flows from operating activities:
Net income (loss) $ 16,363 $ (17,602)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 6,257 8,524
Amortization 19,513 23,333
Service parts lower of cost or market
adjustment 4,391 9,068
Gain on debt extinguishment (15,613) --
Deferred income taxes (266) 174
Share-based compensation 4,813 5,760
Changes in assets and liabilities:
Accounts receivable 1,844 34,976
Manufacturing inventories 7,937 (7,490)
Service parts inventories 3,729 (1,099)
Accounts payable 5,180 (19,973)
Accrued warranty (4,052) (4,622)
Deferred revenue 15,473 3,356
Accrued restructuring charges 711 (320)
Accrued compensation 1,314 960
Income taxes payable (2,183) (154)
Other assets and liabilities (690) (4,312)
------------ ------------
Net cash provided by operating activities 64,721 30,579
Cash flows from investing activities:
Purchases of property and equipment (3,096) (3,025)
------------ ------------
Net cash used in investing activities (3,096) (3,025)
Cash flows from financing activities:
Borrowings of long-term debt, net 120,042 --
Repayments of long-term debt (60,992) (90,000)
Repayments of convertible subordinated debt (122,288) --
Payment of taxes due upon vesting of
restricted stock (928) (759)
Proceeds from issuance of common stock, net 8 2,739
------------ ------------
Net cash used in financing activities (64,158) (88,020)
Net decrease in cash and cash equivalents (2,533) (60,466)
Cash and cash equivalents at beginning of
period 87,305 93,643
------------ ------------
Cash and cash equivalents at end of period $ 84,772 $ 33,177
============ ============
Contact:
Brad Cohen
Public Relations
Quantum Corp.
(408) 944-4044
brad.cohen@quantum.com
Marilyn Keys
Investor Relations
Quantum Corp.
(408) 944-4450
ir@quantum.com
[ Back To TMCnet.com's Homepage ]
|
TMCnet LOGIN
Webinars
