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.



RELATED LINKS

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