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To: Dr. Doktor who wrote (2011)	12/10/1997 5:39:00 PM
From: TIMMY T.	Respond to of 6317

Quantum Earnings for Third Fiscal Quarter to be Lower Than Prior Quarter Business Editors MILPITAS, Calif.--(BUSINESS WIRE)--Dec. 10, 1997--Quantum Corporation (NMS:QNTM) today stated that its third quarter earnings will be below what the company achieved in the prior quarter. The company expects to report earnings per share fully diluted in the range of 25(cent) to 35(cent) for the quarter, excluding previously announced special charges. The decline in earnings relative to the prior quarter is driven in part by the continued aggressive pricing in the distribution channel for desktop hard disk drives. Although unit shipments of hard disk drives will likely be up from the prior quarter, revenue could be relatively flat with the $1.5 billion reported in the September quarter. In addition, as a result of some transition issues in the DLTtape(tm) systems business, revenue and contributions to earnings will be relatively flat with the September quarter. As the company has stated recently, the aggressive pricing for desktop hard drives that has been referenced by others in the storage industry added significant risk to the company's quarter. "Now one week into the final month of the quarter, it is clear that the significant negative impact of the continued intense pricing pressures in the distribution channel will outweigh any positive impact of improved channel or product mix in terms of our overall results," said Michael Brown, Quantum's chief executive officer. "To avoid contributing to the over-supply of drives in the distribution channel, we reduced our build plan, but we still expect to have record unit shipmentsbased on the strength of our OEM shipments to date. OEM demand for ourdesktop products remains strong, we have a strong product portfolio, and we are pleased with the ramps of our new desktop products." Both the Fireball(tm) SE (2.1 GB/platter) and the Bigfoot(tm) TX (4 GB/platter 5 1/4-inch) drives are qualified and shipping to major OEMs. "In terms of the DLTtape systems business, tape drive demand remains strong, we continue to successfully ramp the DLT(tm) 7000, and we continue to exceed our model for profitability," Brown said. "However,revenue from DLTtape systems as well as the resulting contribution toQuantum's earnings could be relatively flat with last quarter as a result of two transitional issues. First, as customers transition from our older DLTtape products to the DLT 7000, we are seeing a decrease in shipments of older products offset by the continued strength of the DLT 7000. Second, media sales have been relatively soft as customers adjust to the cartridge requirements of the DLT 7000 which has greater capacity per cartridge. These types of transition issues are difficult to anticipate in terms of timing,but are typical of product transitions of the magnitude we are executing with the DLT 7000. We expect both of these transition issues to ease as we enter our next quarter."