Quantum Corporation Reports Sales, Earnings for Fourth Quarter and Fiscal Year 1999
MILPITAS, Calif.--(BUSINESS WIRE)--April 27, 1999--Quantum Corporation (NMS: QNTM) today reported sales of $1.31 billion for the fiscal 1999 fourth quarter ended March 31, 1999, up from sales of $1.29 billion in the comparable period last year. Net income for the quarter was $56.7 million, or $.33 per share, diluted, compared with $2.7 million or $.02 per share, diluted, in the fourth quarter of fiscal 1998.
Revenue for fiscal 1999 was $4.9 billion compared with $5.8 billion for fiscal 1998, declining as a result of aggressive industry-wide price declines in the hard disk drive market throughout much of the company's fiscal year. For the year, net income, excluding special charges of $190 million, was $127.8 million on a fully taxed basis, or $.76 per share, diluted, compared with net income, excluding special charges of $103 million, of $250.3 million, or $1.55 per share, diluted, in fiscal 1998. The special charges in fiscal 1999 included $101 million associated with the dissolution of the company's recording heads joint venture, and $89 million to write off in-process research and development associated with Quantum's acquisition of ATL Products Inc. Including those charges the company had a net loss of $29.5 million, or $.18 per share, diluted, for fiscal 1999. The special charges in fiscal 1998 consisted of inventory write-downs and adjustments related to product transitions in the company's high-end hard disk drive business.
''Once again we saw clearly the value of our diversified business model, as we continued to see improvement in our hard drive business and as our DLTtapeTM and storage systems business continued to set records in both revenue and units shipped,'' said Michael Brown, Quantum's Chairman and Chief Executive Officer.
Quantum shipped 7.1 million hard disk drive units during the quarter, of which 6.7 million were desktop units, an increase of approximately 200,000 units sequentially. High-end disk drive shipments for the quarter were a record 427,000 units, a 10 percent increase from the prior quarter. ''We were pleased with our improvements in the HDD business during the quarter and with our overall market position and competitiveness,'' said Brown. ''Our desktop business was profitable for the quarter and we continued to strengthen our number 1 position in this market. We were also pleased with the increased competitiveness of our high-end drive business. In addition to our industry-leading quality, we led the industry in asset turns, and began shipping our new generations of high-end drive families, Atlas IV and Atlas 10K. Although we shipped a record number of high-end drives during the quarter, this business continued to incur losses as a result of continuing pricing pressures on these products.''
Growth in revenues and units for DLTtape drives and media reflected the continued, broad acceptance of DLTtape as the industry standard for storage backup in the mid-range server market. ''During the March quarter, we shipped the one-millionth DLTtape drive and 30 millionth DLTtape cartridge,'' said Brown. ''Our installed base of DLTtape drives increased by 70 percent this year and revenues of the total DLTtape market, consisting of both Quantum and our licensed media partners, grew by 25 percent.'' The ATL tape automation business also achieved record revenues and unit shipments for its tape library and autoloader products. Non-hard drive revenue for the quarter accounted for 30 percent of total revenues, up from 28 percent in the third quarter and 20 percent in the fourth quarter of fiscal 1998.
Brown also commented on the strength of the company's balance sheet in the March quarter. ''This was Quantum's 10th consecutive quarter of positive cash flow from operations,'' said Brown. ''Given our continued ability to consistently generate positive cash from operations and our record cash position, we are pleased with the overall strength in our balance sheet and our asset management capabilities.'' The company generated $108 million in cash from operations during the March quarter and a total of $464 million for the fiscal year. Cash and investments increased $89 million to a record $797 million.
About Quantum
Founded in 1980, Quantum Corporation (www.quantum.com) is a diversified mass storage company committed to achieving customer satisfaction through high quality and reliability. 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. Quantum sells a broad range of storage products to OEM and distribution customers worldwide. Quantum's sales for the fiscal year ending March 1999 were $4.9 billion.
Quantum Corp., 500 McCarthy Blvd., Milpitas, Calif. 95035, www.quantum.com, 408 894-4000
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.
QUANTUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
THREE MONTHS ENDED TWELVE MONTHS ENDED
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
Sales $1,308,741 $1,285,719 $4,902,056 $5,805,235
Cost of sales 1,034,754 1,119,887 4,030,718 4,929,714
Gross profit 273,987 165,832 871,338 875,521
Expenses:
Research and
development 98,364 84,944 353,223 321,741
Sales and
marketing 56,261 40,125 191,126 169,031
General and
administrative 30,177 14,250 93,750 89,364
Purchased
in-process
research and
development -- -- 89,000 --
Total operating
expenses 184,802 139,319 727,099 580,136
Income from
operations 89,185 26,513 144,239 295,385
Interest and
other (income)
expense, net 4,497 (966) 2,374 (1,490)
Loss from
investee -- 23,838 142,050 66,060
Income (loss)
before income
taxes 84,688 3,641 (185) 230,815
Income tax
provision 27,947 949 29,350 60,014
Net income
(loss) $ 56,741 $ 2,692 $ (29,535) $ 170,801
Net income
(loss) per share:
Basic $ 0.34 $ 0.02 $ (0.18) $ 1.25
Diluted $ 0.33 $ 0.02 $ (0.18) $ 1.07
Weighted average
common and common
equivalent shares:
Basic 166,619 144,620 160,670 136,407
Diluted 173,787 152,342 160,670 166,016
QUANTUM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, March 31,
1999 1998
Assets
Current Assets:
Cash and investments $ 796,794 $ 713,723
Accounts receivable, net
of allowance for
doubtful accounts
of $12,130 and $12,928 646,557 737,928
Inventories 271,986 315,035
Deferred income taxes 107,701 133,981
Other current assets 104,835 124,670
Total current assets 1,927,873 2,025,337
Property and equipment, net 271,928 285,159
Intangibles, net 225,567 24,490
Other assets 58,228 103,425
$2,483,596 $2,438,411
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 406,369 $ 446,243
Accrued warranty 76,905 74,017
Other accrued liabilities 197,707 179,041
Current portion of long-term debt 1,024 935
Total current liabilities 682,005 700,236
Deferred income taxes 67,340 38,668
Convertible subordinated debt 287,500 287,500
Long-term debt 56,961 39,985
Stockholders' equity 1,389,790 1,372,022
$2,483,596 $2,438,411
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Contact:
Quantum Corporation
Renee Budig, 408/894-5563 (Investor Relations)
renee.budig@quantum.com
or
Holly Campbell, 408/894-5058 (Public Relations)
holly.campbell@quantum.com
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