Quantum corporation reports Fiscal fourth quarter and full year 2014 results

Fourth quarter highlights:

• Delivered Revenue and Operating Income Performance within Guidance Range
• Increased StorNext/Lattus Revenue 9% Year-over-Year, Driven by Near-50% Growth in North America and Closing Record Fiscal Year for StorNext Revenue
• Generated $20 Million in Cash from Operations
• Ended Quarter with More than $100 Million in Cash, the Highest Level in 4 Years

London, 8 May 2014 – Quantum Corp. (NYSE:QTM) today reported results for the fiscal fourth quarter and full year 2014 ended 31 March 2014.

Fiscal fourth quarter 2014 results

(All comparisons are relative to the fiscal fourth quarter 2013)

• 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

(All comparisons are relative to the fiscal year 2013)

• 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 capitalise 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 optimised 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 recognised for innovation and value.

Conference call and audio webcast notification

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

Contact details

Joanna Clark or Rebecca Adewale

quantum@rlyl.com

44 (0)20 7403 8878

www.rlyl.com 

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 maximise 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.

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