News Column

Quantum Corporation Reports Fiscal Fourth Quarter and Full Year 2014 Results

May 12, 2014



ENP Newswire - 12 May 2014

Release date- 09052014 - SAN JOSE, CA - Quantum Corporation (NYSE: QTM) today reported results for the fiscal fourth quarter and full year 2014 ended March 31, 2014.

Fiscal Fourth Quarter 2014 Results

Revenue was $128.0 million, within the January guidance range but down 9 percent, primarily due to lower tape automation and DXi sales.

Scale-out storage (StorNext and Lattus) revenue grew 9 percent, driven by a nearly 50 percent increase in North America sales.

GAAP operating loss was $12.5 million, a slight improvement from a $12.9 million operating loss.

GAAP net loss was $14.4 million, or $0.06 per diluted share, compared to a net loss of$15.2 million, or $0.06 per diluted share.

Non-GAAP operating loss was $159,000 - reduced from an operating loss of $3.7 million.

Non-GAAP net loss was $2.1 million, an improvement of 65 percent compared to a net loss of $6.0 million.

Cash generated from operations was $20 million.

Fiscal Year 2014 Results

Revenue was $553.2 million, down 6 percent, due primarily to lower tape automation and DXi sales.

Scale-out storage revenue reached a record level, growing 12 percent overall and approximately 50 percent in North America.

GAAP net loss was $21.5 million, an improvement of approximately 60 percent from a net loss of $52.2 million.

Non-GAAP net income was $13.7 million, up $27.2 million.

Cash generated from operations was $35.5 million, compared to $7.7 million.

Quantum ended the fiscal year with $101.9 million in total cash and cash equivalents, the highest level in four years.

'We're very pleased with our progress over the past year-financially, operationally and strategically,' said Jon Gacek, president and CEO at Quantum. 'We reduced our cost structure and achieved our goal of significantly improving bottom line results and increasing cash flow. We also took a number of actions that successfully drove greater operational and sales effectiveness, including aligning our engineering and product groups to better leverage cross-company strengths and refining our sales model to create greater focus in both key verticals and the broader storage market.

Lastly, we enhanced our strategic position and value to customers, introducing a range of new offerings, including: our StorNext 5 platform and related appliances for high-performance, scale-out content storage and collaboration; DXi deduplication and vmPRO backup software products for virtual environments and a Lattus object storage solution data center customers can deploy as a highly scalable, self-healing and self-protecting nearline disk tier-onsite or as the foundation for a private cloud.

'In this new fiscal year, we will build on our progress through several strategic initiatives that leverage our technology, product and install base strengths and capitalize on the market trends in data protection and scale-out storage-with the goal of delivering profitable growth in our core business and increased shareholder value.'

Fiscal Year 2015 Outlook

For the fiscal first quarter, Quantum expects:

Revenue of approximately $125 million to $130 million.

GAAP gross margin of 43.3 to 44.3 percent and non-GAAP gross margin of 44 to 45 percent.

GAAP operating expenses of approximately $59 million and non-GAAP operating expenses of approximately $54 million.

Interest expense of $2.5 million and taxes of $500,000.

For the full fiscal year, Quantum expects:

Revenue of approximately $540 million to $550 million.

GAAP gross margin of 44.6 to 45.6 percent and non-GAAP gross margin of 45 to 46 percent.

GAAP operating expenses of $227 million to $232 million and non-GAAP operating expenses of $215 million to $220 million.

Interest expense of $10 million and taxes of $2 million.

Fiscal Fourth Quarter 2014 Business Highlights

Quantum announced several new products based on its StorNext 5 platform. These include StorNext Pro Solutions which are specifically designed and optimized to meet today's toughest workflow challenges, thereby enabling greater levels of efficiency for broadcasters and post-production facilities. The initial three Pro Solutions offerings provide high-performance storage for refreshing or enhancing older Apple Xsan environments, meeting new 4K workflow demands and supporting end-to-end content production and library management.

Extending its technology leadership in disk-based backup and deduplication, the company launched the DXi4700 appliance. It provides best-in-class scalability (5-135 TB of usable capacity), density and cost per terabyte under a 'pay-as-you-grow' model, along with security, performance and value features that make it a particularly good fit in the data center, hosted environments and remote sites.

Quantum continued to see increasing market traction in selling StorNext to its data center customers for video storage streamlining. The company turned several small tape library opportunities into $200,000 plus deals incorporating StorNext-including at one of the largest athletic shoe companies in the world, which needed a better storage solution for all its marketing videos.

Capping off a year of numerous industry awards and accolades, Quantum had four products named as finalists in Storage magazine/SearchStorage.com's 2013 Product of the Year Awards, more than any other storage provider. The products-DXi6800 physical backup and deduplication systems, DXi V4000 virtual backup and deduplication appliances, Scalar i6000 HD tape libraries and Lattus Object Storage solutions-span a cross section of the company's data protection and scale-out storage portfolios and were recognized for innovation and value.

Conference Call and Audio Webcast Notification

Quantum will hold a conference call today, May 7, 2014, 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 7, 2014, at 2:00 p.m. PDT. Site for the webcast and related information: www.quantum.com/investors.

About Quantum

Quantum is a leading expert in scale-out storage, archive and data protection, providing solutions for capturing, sharing, transforming 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.

Quantum, the Quantum logo, Be Certain, DXi, StorNext, Lattus, vmPRO and Scalar 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, our statement that we will build on our progress through several strategic initiatives that leverage our technology, product and install base strengths and capitalize on the market trends in data protection and scale-out storage-with the goal of delivering profitable growth in our core business and increased shareholder value, and all of the statements under the Fiscal Year 2015 Outlook heading 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.

These risks include operational difficulties, unforeseen technical limitations, 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 February 7, 2014 and 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.

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 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, restructuring charges and outsourcing transition costs 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 valuation 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.

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.

Note 1

During fiscal year 2014, Quantum identified errors related to the accounting for rent expense and 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 fiscal 2014 would be material to the year'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 and fiscal year ended March 31, 2013 to record reduced rent expense, additional accounts receivable allowance for future price adjustments and revised sales commission expense.

The net impact of the revision was to (a) increase the previously reported net loss for the quarter ended March 31, 2013 by $600,000, (b) reduce the previously reported net loss for the fiscal year ended March 31, 2013 by $200,000 and (c) increase the previously reported accumulated deficit and stockholders' deficit at March 31, 2013 by $800,000.

Contact:

Brad Cohen

Public Relations

Quantum Corp.

Tel: (408) 944-4044

Email: brad.cohen@quantum.com


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: ENP Newswire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters