Quantum Corp. (QNTM) 28 5/16 +5/8: designer and developer of information storage products posts a fiscal Q3 operating net of $0.29 a share, five cents ahead of the First Call estimate, vs year-ago profit of $0.29 a share; revenues fell 12.7% to $1.33 mln, but rose 14% on a sequential basis; see press release.....
Quantum Corporation Reports Earnings for Third Fiscal 1999 Quarter; Hard Disk Drive Business Improves; Tape and Tape Automation Businesses Set Records
Business Wire - January 20, 1999 17:42
MILPITAS, Calif.--(BUSINESS WIRE)--Jan. 20, 1999--Quantum Corporation (Nasdaq/NMS:QNTM) today announced sales of $1.3 billion for its third fiscal quarter ended December 27, 1998. Net income, excluding special charges totaling $190 million, was $50.8 million on a fully taxed basis, or $.29 per share, diluted. These charges include $101 million associated with the dissolution of the company's recording heads joint venture, which represents the full extent of the charge the company will take for its portion of the closure. In addition, the special charges include $89 million related to the write off of in-process research and development following the company's acquisition of ATL Products, Inc., which was previously disclosed at the time the company announced the acquisition. Including those charges, the company had a net loss of $106.6 million, or $.64 per share, diluted.
Revenue for the December quarter grew 14 percent compared to the September quarter. Earnings per share, excluding special charges, more than doubled on a sequential basis. "These results were driven by a significant improvement in our desktop hard disk drive business and the record-breaking performance in our DLTtape(TM) and ATL tape automation businesses," said Michael Brown, Quantum's Chairman and Chief Executive Officer. "We continued to benefit from the strength of our diversified storage business model, as non-hard drive revenue grew to a record 28 percent of total company revenue for our fiscal third quarter."
Revenues from Quantum's industry leading desktop hard disk drive (HDD) business grew 11 percent sequentially and the company shipped 6.5 million desktop units in the quarter, a 12 percent increase from the September quarter. "After emerging from one of the industry's worst down-turns, this was the second consecutive quarter of growth for both units and revenues in our desktop HDD business," Brown said. "We continued to see healthy demand and improving business conditions in the desktop market throughout the quarter." The company's high-end HDD business also had strong sequential unit growth of 13 percent for the quarter. However, the continuing aggressive pricing environment for this business resulted in losses equivalent to the prior quarter.
Quantum's DLTtape business had a record quarter for revenue, units and royalty income. "As the installed base of DLTtape drives approaches one million units, we continue to be enthused about the strength and acceptance of the DLT platform and our competitive position in the growing tape back-up market," Brown said. The company also achieved record revenue for its ATL tape automation business, which included the combination of ATL's products and Quantum's autoloader products.
Brown also commented on the strength of the company's balance sheet in the December quarter. "In what was our ninth consecutive quarter of positive cash flow from operations, we generated $189 million in cash from operations, increasing our cash balance to $707 million." Brown said. Asset management performance also improved during the quarter, as the company reduced inventory levels by $37 million and increased inventory turns to 17, compared to 13 in the previous quarter.
About Quantum
Founded in 1980, Quantum Corporation (www.quantum.com) is a diversified mass storage company with leadership positions in both fixed and removable storage markets. Quantum is the highest volume global supplier of hard disk drives for personal computers, a leading supplier of high capacity hard drives and the worldwide revenue leader among all classes of tape drives. The company sells a broad range of storage products to OEM and distribution customers worldwide. Quantum's sales for the fiscal year ending March 1998 were $5.8 billion.
Note to Editors: Quantum and the Quantum logo are trademarks of Quantum Corporation, registered in the United States and other countries. DLTtape is a trademark of Quantum Corporation. Products mentioned are for identification purposes only and may be trademarks or registered trademarks of their respective companies.
QUANTUM CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
Dec. 27, Dec. 28, Dec. 27, Dec. 28,
1998 1997 1998 1997
Sales $ 1,325,581 $ 1,519,881 $ 3,593,315 $ 4,519,516
Cost of sales 1,086,492 1,384,208 2,995,964 3,809,826
Gross profit 239,089 135,673 597,351 709,690
Expenses:
Research and
development 87,921 88,275 254,859 236,797
Sales and
marketing 51,142 45,203 134,866 128,907
General and
administrative 22,380 23,375 61,275 75,114
Purchased
in-process
research and
development 89,000 - 89,000 -
Total operating
expenses 250,443 156,853 540,000 440,818
Income (loss)
from operations (11,354) (21,180) 57,351 268,872
Interest and other
expense, net 1,783 (340) 174 (523)
Loss from investee 100,700 22,651 142,050 42,222
Income (loss)
before income
taxes (113,837) (43,491) (84,873) 227,173
Income tax
provision
(benefit) (7,286) (11,308) 1,403 59,065
Net income (loss) $ (106,551) $ (32,183) $ (86,276) $ 168,108
Net income (loss)
per share:
Basic $ (0.64) $ (0.24) $ (0.54) $ 1.26
Diluted $ (0.64) $ (0.24) $ (0.54) $ 1.05
Weighted average
common and common
equivalent shares:
Basic 165,820 135,842 158,687 133,669
Diluted 165,820 135,842 158,687 165,642
QUANTUM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 27, March 31,
1998 1998
Assets
Current Assets:
Cash and investments $707,436 $713,723
Accounts receivable,
net of allowance for
doubtful accounts of
$11,823 and $12,928 664,238 737,928
Inventories 259,042 315,035
Deferred income taxes 136,020 133,981
Other current assets 88,710 124,670
Total current assets 1,855,446 2,025,337
Property and equipment, net 266,785 285,159
Intangibles, net 231,750 24,490
Other assets 39,587 103,425
---------- ----------
$2,393,568 $2,438,411
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $405,737 $446,243
Accrued warranty 73,611 74,017
Other accrued
liabilities 183,362 179,041
Current portion of
long-term debt 1,001 935
Total current
liabilities 663,711 700,236
Deferred income taxes 73,945 38,668
Convertible subordinated debt 287,500 287,500
Long-term debt 64,225 39,985
Shareholders' equity 1,304,187 1,372,022
--------- ---------
$2,393,568 $2,438,411
CONTACT: Quantum Investor Relations
Renee Budig, 408/894-5563
renee.budig@quantum.com
or
Quantum Public Relations
Holly Campbell, 408/894-5058
holly.campbell@quantum.com
|
