Quantum Corporation Reports Fiscal Third Quarter 2016 Results

Record Scale-out Storage Revenue of $35.7 Million

GAAP Operating Profit of $2.0 Million

Jan 28, 2016, 16:15 ET from Quantum Corp.

SAN JOSE, Calif., Jan. 28, 2016 /PRNewswire/ -- Quantum Corp. (NYSE: QTM) today reported results for the fiscal third quarter 2016 ended Dec. 31, 2015.

Fiscal Third Quarter 2016 Results:
(All comparisons are relative to the fiscal third quarter 2015.)

  • Revenue was $128.0 million, driven by continued strength in scale-out storage offset by overall weakness in the general storage market and pricing environment of commodity tape media products.
  • Scale-out storage and related service revenue grew approximately $8.5 million to an all-time high of $35.7 million, a 31 percent increase, marking the 18th consecutive quarter of year-over-year growth.
  • Royalty revenue increased $0.6 million to $11.3 million.
  • Disk backup systems and related service revenue decreased to $19.6 million.
  • Branded tape automation and related service revenue decreased to $38.5 million, while OEM tape automation and related service revenue decreased to $12.7 million.
  • Devices and media revenue decreased to $10.2 million as a result of a $3.5 million decline in tape media revenue.
  • GAAP and non-GAAP operating income of $2.0 million and $7.2 million, respectively.
  • The GAAP net loss was $0.3 million, or $0.00 per diluted share.
  • The non-GAAP net income was $5.3 million, or $0.02 per diluted share.

"We are pleased with our overall results and the continued scale-out revenue growth this quarter, to a new record high, especially given the overall weakness in the broad storage market environment," said Jon Gacek, president and CEO of Quantum. "In response to the market conditions, we also successfully implemented significant operational changes during the quarter that improved our profitability. For the quarter, our data protection revenue increased sequentially — with higher sales of both disk and tape automation products. In our scale-out storage solutions line, targeted at specialized workflows, we grew revenue 31 percent over the comparable quarter a year ago, even with no 'mega deals' above $1 million in the just-completed quarter. Excluding mega deals, scale-out storage revenue grew 48 percent and 49 percent, respectively, over the comparable three- and nine-month periods in the prior year.

"For the fourth quarter, we will continue to focus on growing our run-rate scale-out revenue driven by expanding our media and entertainment, surveillance and technical workflow opportunities, and we will continue to work to close the mega deals in our sales funnel. In addition, similar to the third quarter, we will actively manage tape media revenue based on the pricing environment and optimize our activity for profit. We will also continue to manage our spending and our investments to achieve the right balance across our financial objectives."

The company also announced today that Linda Breard has resigned as senior vice president and chief financial officer of Quantum to pursue another opportunity. Chris Willis, vice president, Financial Planning and Analysis of Quantum, will serve as interim CFO while the company completes its search process for a permanent CFO.

Fiscal Fourth Quarter 2016 Outlook

Based on current market conditions, including tape media pricing dynamics and the difficulty in forecasting large and mega deals given their long sales cycles, Quantum provided the following guidance for the fiscal fourth quarter:

  • Revenue of $118 million to $122 million.
  • GAAP and non-GAAP gross margin of approximately 43-44 percent.
  • GAAP and non-GAAP operating expenses of approximately $50 million to $51 million and $48 million to $49 million, respectively.
  • Interest expense of $1.5 million and taxes of $400,000.
  • GAAP and non-GAAP earnings per share of ($0.01) to $0.00 and $0.00 to $0.01, respectively.

Fiscal Third Quarter 2016 Business Highlights

  • Quantum purchased the remaining $83.7 million of aggregate principal amount of its convertible subordinated notes due November 2015, plus accrued interest, using
    $16.3 million in restricted cash and $68.9 million of its revolving credit facility with Wells Fargo Capital Finance.
  • The company unveiled Xcellis™ workflow storage, Quantum's next-generation, high-performance storage solution engineered to optimize demanding workflows, accelerate time to insight and empower organizations to drive greater success. The new solution addresses the explosive growth of unstructured data and the opportunity to capitalize on its strategic value by enabling users to share and leverage this data more quickly, easily and cost-effectively. Powered by Quantum StorNext® and its industry-leading streaming performance, Xcellis can be deployed as a standalone system or as the primary storage component within a multi-tier storage environment incorporating object storage, tape and cloud technologies.
  • Quantum extended its StorNext scale-out platform with the release of StorNext 5.3, providing a range of advanced data management capabilities for multi-tier storage and hybrid cloud environments. In addition to powering the company's new Xcellis workflow storage solution, it also serves as the data management engine in Artico™, Quantum's intelligent NAS archive appliance.
  • Quantum expanded its Q-Cloud® offerings with the launch of Q-Cloud Vault, a new service that enables users to take advantage of secure, low-cost public cloud storage for long-term retention of digital assets. Q-Cloud Vault is available for StorNext 5.3 users.
  • The company released StorNext Connect 1.1, a significantly enhanced version of its easy-to-use management tool that simplifies the installation, discovery, administration and monitoring of StorNext environments. StorNext Connect™ is the first product of its kind to integrate management and reporting of a multi-tier storage environment, including disk, tape, object storage and cloud resources.
  • Quantum added LTO-7 technology to its tiered storage portfolio, more than doubling the capacity over previous generations and enabling low-cost, energy-efficient and secure storage for protecting and retaining data.

Conference Call and Audio Webcast Notification
Quantum will hold a conference call today, Jan. 28, 2016, at 2:00 p.m. PST to discuss its fiscal third quarter results. Press and industry analysts are invited to attend in listen-only mode.
Dial-in number: (719) 457-2083 (U.S. and International); access code: 4726503
Replay number: (719) 457-0820 (U.S. and International); access code: 4726503
Replay expiration: Tuesday, Feb. 2, 2016, at 5:00 p.m. PST
Webcast site: www.quantum.com/investors

About Quantum

Quantum is a leading expert in scale-out storage, archive and data protection, providing solutions for capturing, sharing 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. See how at www.quantum.com/customerstories.

Quantum, the Quantum logo, Be Certain, Xcellis, Artico, Q-Cloud, StorNext and StorNext Connect 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, statements relating to: i) our focuses for the fourth quarter of this fiscal year, including growing our run-rate scale-out revenue, closing the mega deals in our sales funnel, managing our tape media revenue and managing our spending and investments; and ii) all of our statements under the heading "Fiscal Fourth Quarter 2016 Outlook" 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. More detailed information about these 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2015 and in Quantum's Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 12, 2015. Quantum expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

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 and Board of Directors use 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 the items below 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. 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.

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.

Proxy Contest and Related Costs
Proxy contest and related costs are expenses incurred to respond to activities and inquiries of Starboard Value LP, including their proxy solicitation. The Company has not incurred significant expenses in connection with such matters in historical periods and these costs are not considered core operating activities. 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.

Crossroads Patent Litigation Costs
Crossroads patent litigation costs are expenses incurred to defend ourselves and perform other activities related to a patent infringement lawsuit filed by Crossroads Systems, Inc. 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.

Acquisition Expenses
The acquisition expenses were those expenses incurred to acquire Symform, Inc. ("Symform") and are not part of Quantum's future core operations.

Symform Expenses, Net
Quantum acquired a cloud storage services platform from Symform in July 2014. Symform revenue comprises revenue generated from the Symform cloud storage services platform. Symform expenses consist of costs related to running, maintaining and further developing the Symform cloud storage services platform as well as the costs of integrating Symform into Quantum's business. Management believed that it was appropriate to exclude these amounts in fiscal 2015 in order to provide investors with a view of Quantum's results consistent with how management viewed and ran the business. Beginning fiscal 2016, Symform has been fully integrated into our core operations and therefore, Symform revenue and expenses are no longer excluded from our results.

Loss on Debt Extinguishment
The loss on debt extinguishment relates to a specific debt repurchase action undertaken in October 2015. The loss is excluded from non-GAAP financial measures because it is not considered a core operating activity and management believes that it is appropriate to exclude the loss in order to provide investors the ability to compare Quantum's period-over-period 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. 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.

Contact:

Brinlea Johnson or Allise Furlani

Investor Relations

The Blueshirt Group

(212) 331-8424 or (212) 331-8433

brinlea@blueshirtgroup.com or allise@blueshirtgroup.com

 

QUANTUM CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)



December 31, 2015


March 31, 2015*

Assets




Current assets:




Cash and cash equivalents

$

32,919



$

67,948


Restricted cash

2,763



2,621


Accounts receivable

101,269



124,159


Manufacturing inventories

33,569



50,274


Service parts inventories

22,367



24,640


Other current assets

11,578



11,942


Total current assets

204,465



281,584


Long-term assets:




Property and equipment

13,893



14,653


Intangible assets

498



731


Goodwill

55,613



55,613


Other long-term assets

3,732



4,577


Total long-term assets

73,736



75,574



$

278,201



$

357,158


Liabilities and Stockholders' Deficit




Current liabilities:




Accounts payable

$

41,666



$

54,367


Accrued warranty

3,422



4,219


Deferred revenue, current

86,416



95,899


Accrued restructuring charges, current

1,757



3,855


Convertible subordinated debt, current



83,345


Accrued compensation

24,680



35,414


Other accrued liabilities

13,317



20,740


Total current liabilities

171,258



297,839


Long-term liabilities:




Deferred revenue, long-term

34,182



39,532


Accrued restructuring charges, long-term

831



991


Long-term debt

68,920




Convertible subordinated debt, long-term

69,138



68,793


Other long-term liabilities

10,738



10,441


Total long-term liabilities

183,809



119,757


Stockholders' deficit

(76,866)



(60,438)



$

278,201



$

357,158



*  Derived from the March 31, 2015 audited Consolidated Financial Statements.

 

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)



Three Months Ended


Nine Months Ended


December 31, 2015


December 31, 2014


December 31, 2015


December 31, 2014

Revenue:








Product

$

79,672



$

92,166



$

213,448



$

257,576


Service

37,099



39,191



112,285



116,848


Royalty

11,277



10,706



30,196



30,873


Total revenue

128,048



142,063



355,929



405,297


Cost of revenue:








Product

56,323



59,772



156,360



170,273


Service

15,028



17,224



49,590



52,502


Total cost of revenue

71,351



76,996



205,950



222,775


  Gross margin

56,697



65,067



149,979



182,522


Operating expenses:








Research and development

11,148



13,969



37,841



43,680


Sales and marketing

28,212



27,494



83,860



83,417


General and administrative

13,488



13,815



41,610



42,271


Restructuring charges

1,895



187



2,540



1,676


Total operating expenses

54,743



55,465



165,851



171,044


Gain on sale of assets







462


  Income (loss) from operations

1,954



9,602



(15,872)



11,940


Other income and expense

(22)



125



406



215


Interest expense

(1,406)



(2,460)



(5,304)



(7,360)


Loss on debt extinguishment

(394)





(394)




  Income (loss) before income taxes

132



7,267



(21,164)



4,795


Income tax provision

431



336



1,117



940


  Net income (loss)

$

(299)



$

6,931



$

(22,281)



$

3,855










Basic net income (loss) per share

$

(0.00)



$

0.03



$

(0.09)



$

0.02


Diluted net income (loss) per share

$

(0.00)



$

0.03



$

(0.09)



$

0.01










Weighted average shares:








Basic

264,003



255,860



261,849



253,773


Diluted

264,003



302,855



261,849



257,807


























Included in the above Statements of Operations:








Amortization of intangibles:








Cost of revenue

$

48



$

160



$

233



$

753


Sales and marketing







2,784



48



160



233



3,537


Share-based compensation:








Cost of revenue

313



362



1,006



1,109


Research and development

488



600



1,529



1,983


Sales and marketing

658



830



2,367



2,627


General and administrative

780



1,126



2,437



2,936



2,239



2,918



7,339



8,655


Outsourcing transition costs:








Cost of revenue







126









126


Proxy contest and related costs:








General and administrative



125





972





125





972


Crossroads patent litigation costs:








General and administrative

1,054



325



2,694



744



1,054



325



2,694



744


Acquisition expenses:








General and administrative







4









4


Symform expenses, net:








Gross margin



30





50


Research and development



131





241


Sales and marketing



104





195



$



$

265



$



$

486










 

QUANTUM CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Nine Months Ended


December 31, 2015


December 31, 2014

Cash flows from operating activities:




Net income (loss)

$

(22,281)



$

3,855


Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:




Depreciation

4,945



6,364


Amortization of intangible assets

233



3,537


Amortization and write-off of debt issuance costs

894



1,246


Service parts lower of cost or market adjustment

4,640



2,690


Gain on sale of assets



(462)


Deferred income taxes

(1)



(11)


Share-based compensation

7,339



8,655


Changes in assets and liabilities, net of effect of acquisition:




Accounts receivable

22,890



(9,023)


Manufacturing inventories

13,503



(6,145)


Service parts inventories

(547)



(686)


Accounts payable

(12,708)



9,325


Accrued warranty

(797)



(1,328)


Deferred revenue

(14,833)



(8,928)


Accrued restructuring charges

(2,258)



(2,197)


Accrued compensation

(10,711)



6,774


Other assets and liabilities

(6,222)



(2,549)


Net cash provided by (used in) operating activities

(15,914)



11,117


Cash flows from investing activities:




Purchases of property and equipment

(2,800)



(2,882)


Proceeds from sale of assets



462


Change in restricted cash

(142)



(139)


Purchases of other investments



(22)


Return of principal from other investments



104


Payment for business acquisition, net of cash acquired



(517)


Net cash used in investing activities

(2,942)



(2,994)


Cash flows from financing activities:




Borrowings of long-term debt, net

68,920




Repayments of convertible subordinated debt

(83,735)




Payment of taxes due upon vesting of restricted stock

(3,112)



(2,212)


Proceeds from issuance of common stock

1,772



2,060


Net cash used in financing activities

(16,155)



(152)


Effect of exchange rate changes on cash and cash equivalents

(18)



(113)


Net increase (decrease) in cash and cash equivalents

(35,029)



7,858


Cash and cash equivalents at beginning of period

67,948



99,125


Cash and cash equivalents at end of period

$

32,919



$

106,983


 

QUANTUM CORPORATION

GAAP TO NON-GAAP RECONCILIATION

(In thousands, except per share amounts)

(Unaudited)



Three Months Ended December 31, 2015


Gross Margin


Gross Margin Rate


Income From Operations


Operating Margin


Net Income (Loss)


Per Share Net Income (Loss), Basic


Per Share Net Income (Loss), Diluted

GAAP

$

56,697



44.3

%


$

1,954



1.5

%


$

(299)



$

(0.00)



$

(0.00)


Non-GAAP Reconciling Items:














Amortization of intangibles

48





48





48






Share-based compensation

313





2,239





2,239






Restructuring charges





1,895





1,895






Crossroads patent litigation costs





1,054





1,054






Loss on debt extinguishment









394






Non-GAAP

$

57,058



44.6

%


$

7,190



5.6

%


$

5,331



$

0.02



$

0.02
















 Computation of basic and diluted net income (loss) per share:






 GAAP


 Non-GAAP

 Net income (loss)











$

(299)



$

5,331
















 Weighted average shares:














 Basic and diluted











264,003



264,003


 Dilutive shares from stock plans










305


 Diluted











264,003



264,308



































Nine Months Ended December 31, 2015


Gross Margin


Gross Margin Rate


Loss From Operations


Operating Margin


Net Loss


Per Share Net Loss, Basic


Per Share Net Loss, Diluted

GAAP

$

149,979



42.1

%


$

(15,872)



(4.5)

%


$

(22,281)



$

(0.09)



$

(0.09)


Non-GAAP Reconciling Items:














Amortization of intangibles

233





233





233






Share-based compensation

1,006





7,339





7,339






Restructuring charges





2,540





2,540






Crossroads patent litigation costs





2,694





2,694






Loss on debt extinguishment









394






Non-GAAP

$

151,218



42.5

%


$

(3,066)



(0.9)

%


$

(9,081)



$

(0.03)



$

(0.03)
















 Computation of basic and diluted net loss per share:









 GAAP


 Non-GAAP

 Net loss











$

(22,281)



$

(9,081)
















 Weighted average shares:














 Basic and diluted











261,849



261,849



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.

 

QUANTUM CORPORATION

GAAP TO NON-GAAP RECONCILIATION

(In thousands, except per share amounts)

(Unaudited)



Three Months Ended December 31, 2014


Gross Margin


Gross Margin Rate


Income From Operations


Operating Margin


Net Income


Per Share Net Income, Basic


Per Share Net Income, Diluted

GAAP

$

65,067



45.8

%


$

9,602



6.8

%


$

6,931



$

0.03



$

0.03


Non-GAAP Reconciling Items:














Amortization of intangibles

160





160





160






Share-based compensation

362





2,918





2,918






Restructuring charges





187





187






Proxy contest and related costs





125





125






Crossroads patent litigation costs





325





325






Symform expenses, net

30





265





265






Non-GAAP

$

65,619



46.2

%


$

13,582



9.6

%


$

10,911



$

0.04



$

0.04
















 Computation of basic and diluted net income per share:








 GAAP


 Non-GAAP

 Net income











$

6,931



$

10,911


Interest of dilutive convertible notes








902



902


Income for purposes of computing income per diluted share






$

7,833



$

11,813
















 Weighted average shares:














 Basic











255,860



255,860


 Dilutive shares from stock plans








4,493



4,493


 Dilutive shares from convertible notes








42,502



42,502


 Diluted











302,855



302,855



































Nine Months Ended December 31, 2014


Gross Margin


Gross Margin Rate


Income From Operations


Operating Margin


Net Income


Per Share Net Income, Basic


Per Share Net Income, Diluted

GAAP

$

182,522



45.0

%


$

11,940



2.9

%


$

3,855



$

0.02



$

0.01


Non-GAAP Reconciling Items:














Amortization of intangibles

753





3,537





3,537






Share-based compensation

1,109





8,655





8,655






Restructuring charges





1,676





1,676






Outsourcing transition costs

126





126





126






Proxy contest and related costs





972





972






Crossroads patent litigation costs





744





744






Acquisition expenses





4





4






Symform expenses, net

50





486





486






Non-GAAP

$

184,560



45.5

%


$

28,140



6.9

%


$

20,055



$

0.08



$

0.08
















 Computation of basic and diluted net income per share:








 GAAP


 Non-GAAP

Net income











$

3,855



$

20,055


Interest of dilutive convertible notes










2,707


Income for purposes of computing income per diluted share






$

3,855



$

22,762
















 Weighted average shares:














 Basic











253,773



253,773


 Dilutive shares from stock plans








4,034



4,034


 Dilutive shares from convertible notes










42,502


 Diluted











257,807



300,309



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.

 


QUANTUM CORPORATION

SELECTED RESULTS EXCLUDING SCALE-OUT STORAGE REVENUE MEGA DEALS

(In thousands)

(Unaudited)



Three Months Ended




December 31, 2015


December 31, 2014


Change


% Change


As Reported


Mega Deals (1)


Excluding Mega Deals


As Reported


Mega Deals (1)


Excluding Mega Deals





















Scale-out storage solutions:
















Product revenue

$

29,805



$



$

29,805



$

22,819



$

(3,098)



$

19,721



$

10,084



51

%

Product and service revenue(2)

$

35,704



$



$

35,704



$

27,162



$

(3,098)



$

24,064



$

11,640



48

%


















Nine Months Ended




December 31, 2015


December 31, 2014


Change


% Change


As Reported


Mega Deals (1)


Excluding Mega Deals


As Reported


Mega Deals (1)


Excluding Mega Deals





















Scale-out storage solutions:
















Product revenue

$

76,548



$

(1,452)



$

75,096



$

59,077



$

(9,232)



$

49,845



$

25,251



51

%

Product and service revenue(2)

$

93,367



$

(1,452)



$

91,915



$

70,716



$

(9,232)



$

61,484



$

30,431



49

%

















(1) Mega deals are defined as deals over $1.0 million. Management considers revenue excluding mega deals in its evaluation of the business for decision making. 


(2) Management considers product and service revenue in its evaluation of the business for decision making and to compare against competitors. Total product and service revenue less total product revenue equals service revenue in our GAAP results.

 


QUANTUM CORPORATION

FORECAST FOURTH QUARTER FISCAL 2016

GAAP TO NON-GAAP RECONCILIATION

(In thousands, except per share amounts)

(Unaudited)



Percentage Range

Forecast gross margin rate on a GAAP basis

42.7

%

43.8

%

Forecast share-based compensation

0.2

%

0.3

%

Forecast gross margin rate on a non-GAAP basis

43.0

%

44.0

%






Dollar Range

Forecast operating expense on a GAAP basis

$

50.0


$

51.0


Forecast share-based compensation

(2.0)

Forecast operating expense on a non-GAAP basis

$

48.0


$

49.0







Dollars per Share

Forecast diluted earnings per share on a GAAP basis

$

(0.01)


$

0.00


Forecast share-based compensation

0.01

Forecast diluted earnings per share on a non-GAAP basis

$

0.00


$

0.01






Estimates based on current (January 28, 2016) 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 12, 2015.  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.

 

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SOURCE Quantum Corp.



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