Quantum: Fiscal 1Q13 Financial Results

Quantum Corp. reported results for the first quarter of fiscal 2013, ended June 30, 2012.

Revenue for the quarter totaled $141 million, down 8% from the first quarter of fiscal 2012 primarily due to lower-than-expected revenue in Europe and challenges closing large deals in the last few weeks of the quarter.

Despite the overall revenue decline, disk systems and software sales (including related service revenue) grew 11% year-over-year to $31 million, the highest level in a fiscal first quarter to date. The primary drivers of this growth were StorNext software and appliances for big data environments, which increased nearly 50% over FQ1’12, and midrange DXi disk-based data protection appliances, which increased 10% year-over-year.

Due largely to the overall revenue shortfall, Quantum reported a GAAP net loss of $17 million, or 7 cents per share, for FQ1’13, compared to a GAAP net loss of $5 million in FQ1’12. On a non-GAAP basis, the company had a net loss of $9 million, or 4 cents per share, down from net income of $3 million in the same quarter last year.

"Our overall June quarter results were not what we planned for and not what we expected when we started the fiscal year, and they were clearly disappointing," said Jon Gacek, president and CEO of Quantum. "Although we can’t do anything about the macroeconomic conditions that impacted Quantum and many other companies, we know we must adjust the business and improve our execution around what we can control to drive better financial performance, including revenue growth and profitability – and that is our focus.

"We are continuing to enhance and expand our already strong product portfolio in both data protection and big data management. In addition, we are driving increased brand awareness and end user marketing and engaging more closely with key channel partners. As a result, we believe we are still well-positioned to capitalize on market opportunities."

For the second quarter of fiscal 2013,
the company expects:
Revenue of approximately $150 million to $155 million.

• GAAP gross margin rate of approximately 41% and non-GAAP gross margin rate of
• 42%.
• GAAP operating expenses of $70 million to $72 million and non-GAAP operating expenses of $64 million to $66 million.
• Interest expense of $2 million and taxes of $1 million.

Business Highlights for June Quarter:

• It announced the Scalar LTFS appliance, offering new modes of portability and user accessibility for archived content on LTO tape. Because the appliance works with existing application and file system tools, it enables LTFS-based content to be managed and transported for long-term data protection and archival storage and accessed when needed. It can also be used to import and export LTFS open-standard media into a StorNext File System, providing a content distribution alternative for cloud services and applications.
• Helping customers manage and extract maximum value from big data content, the company announced that it will offer new solutions incorporating next generation object storage technology, which Quantum refers to as ‘wide area storage.’ These new solutions will enable both big data content and analytics customers to overcome current challenges in maintaining, protecting and accessing their data on disk over the long term.
• It unveiled the StorNext M660 metadata appliance which is built to provide centralized control of up to eight StorNext file systems and to manage large-scale, fast-growing datasets, including up to petabytes of economical, tiered content archives. By combining this scalability with the streaming performance, it delivers the power and flexibility required for data-intensive environments, ranging from digital media and life science research to surveillance and energy exploration.
• DXi6000 family received its third Product of the Year Award in the past year. The DXi6700 Series of disk backup, deduplication and replication appliances was named Disk-Based Product of the Year – Enterprise at the 2012 Storage Awards: The Storries IX in London.