SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT 

Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

May 20, 2003
Date of Report (Date of earliest event reported)

QUANTUM CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

 

 

408-944-4000
(Registrant’s telephone number, including area code)

 

ITEM 5. OTHER EVENTS

On May 19, 2003, Quantum Corporation issued a press release, a copy of which is attached as Exhibit 99.1 hereto and incorporated herein by reference.

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Dated:    May 20, 2003

EXHIBIT INDEX

Exhibit 99.1   Press release, dated May 19, 2003.

Exhibit 99.1-Press release, dated May 19, 2003.

QUANTUM REPORTS CHARGE RELATED TO CUSTOMER BANKRUPTCY

No Impact on Previously Announced Revenue, Net Income and Earnings Per Share

Milpitas, Calif., May 19, 2003 – Quantum Corp. (NYSE:DSS), a leading provider of data protection systems, today announced it recorded a net bad debt charge of $1.4 million following the May 7, 2003, Chapter 11 bankruptcy protection filing of one of its media distributors – Digital Storage, Inc., a subsidiary of Daisytek Incorporated.  The bad debt became known after the end of Quantum’s fiscal fourth quarter 2003 (ended March 31, 2003) and was not reflected in Quantum’s previously discussed financial results for the quarter because customer payment was anticipated, consistent with Digital Storage’s previous payment history.  This event had no impact on previously announced fiscal fourth quarter (FQ4) revenue, net income, non-GAAP earnings per share and GAAP loss per share.  It also is not expected to have any material effect on Quantum’s fiscal first quarter 2004 guidance provided on April 28^th.

The total bad debt exposure, partially offset by the allowance for doubtful accounts, caused the company to reverse the entire previously planned employee incentive payout recorded in FQ4 and scheduled to occur in July.  This results in the neutral impact mentioned above. 

This situation is not expected to have a material impact on end customer media demand or media availability.

In the March quarter, on a GAAP basis, Quantum reduced its net loss, as compared to the prior quarter, to $5 million, or 3 cents per share, and was again profitable on a non-GAAP basis.  Non-GAAP net income in FQ4 was $5 million, or 3 cents per share, diluted.  These results were reported on April 28, 2003, and have not changed.  For a reconciliation between GAAP and non-GAAP results, please refer to Quantum’s press release on April 28, 2003 (“Quantum Reports Third Consecutive Quarter of Increased Revenues”).

Included with this release are three tables showing the impact on certain income statement and balance sheet classifications.

About Quantum

Quantum Corp. (NYSE:DSS), founded in 1980, is a global leader in data protection, meeting the needs of business customers with enterprise-wide storage solutions and services. Quantum is the world's largest supplier of tape drives, and its DLTtape™ technology is the standard for backup, archiving, and recovery of mission-critical data.  Quantum is also a leader in the design, manufacture and service of automated tape libraries used to manage, store and transfer data.  Over the past year, Quantum has been one of the pioneers in the emerging market of disk-based backup, offering a solution that emulates a tape library and is optimized for data protection.  Quantum sales for the fiscal year ending March 31, 2003, were approximately $871 million. Quantum Corp., 501 Sycamore Dr., Milpitas, CA 95035, (408) 944-4000, www.quantum.com

NOTE: 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. All other trademarks are the property of their respective owners.

Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995: This press release contains certain "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Specifically, statements regarding the effects of the announced bad debt charge on the demand for, and availability of, media, and the company’s anticipated financial results for the first quarter of fiscal year 2004, are forward-looking statements within the meaning of the Safe Harbor. These statements are based on management's current expectations and are subject to certain risks and uncertainties. As a result, actual results may differ materially from the forward-looking statements contained herein. Factors that could cause actual results to differ materially from those described herein include further, unanticipated effects attributable to the bad debt charge.  More detailed information about risk factors and uncertainties relating to Quantum's business generally, including risk factors and uncertainties in addition to those described above, are set forth in Quantum's periodic filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, those described in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Trends and Uncertainties," pages 44 to 54, in our Annual Report on Form 10-K filed with the SEC on July 1, 2002, those described in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Trends and Uncertainties," pages 59 to 71, in our Quarterly Report on Form 10-Q filed with the SEC on February 12, 2003 and those described in subsequently filed reports. Such reports contain and identify important factors that could cause actual events and results to differ materially from those contained in our projections or forward-looking statement. Quantum expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.   

QUANTUM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

Notes
(1)	Reversal of accrued employee performance incentive payment.
(2)	Bad debt charge related to media distributor.		$	1,385
	Reversal of accrued employee performance incentive payment.			(321	)
			$	1,064

QUANTUM CORPORATION
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

		Press release: April 28, 2003									Adjustments		Notes			Adjusted Amounts
		March 31, 2003														March 31, 2003
		Three   Months Ended				Twelve   Months   Ended										Three Months   Ended				Twelve   Months   Ended
Product revenue		$	187,031			$	684,156									$	187,031			$	684,156
Royalty revenue			48,105				186,653										48,105				186,653
Total revenue			235,136				870,809										235,136				870,809
Cost of revenue			157,819				593,405			$	(275	)	(1)				157,544				593,130
Gross margin			77,317				277,404				275						77,592				277,679
Operating expenses:
Research and development			29,503				112,153				(528	)	(1)				28,975				111,625
Sales and marketing			21,866				96,176				(261	)	(1)				21,605				95,915
General and administrative			14,678				69,698				1,064		(2)				15,742				70,762
			66,047				278,027				275						66,322				278,302
Income (loss) from operations			11,270				(623	)			--						11,270				(623	)
Interest income and other, net			2,577				11,481										2,577				11,481
Interest expense			(6,169	)			(24,419	)									(6,169	)			(24,419	)
Income (loss) before income taxes			7,678				(13,561	)									7,678				(13,561	)
Income tax provision (benefit)			2,304				(4,068	)									2,304				(4,068	)
Net income (loss)		$	5,374			$	(9,493	)								$	5,374			$	(9,493	)
Net income (loss) per share
Basic		$	0.03			$	(0.06	)								$	0.03			$	(0.06	)
Diluted		$	0.03			$	(0.06	)								$	0.03			$	(0.06	)
Weighted average common and common equivalent shares
Basic			171,550				162,208										171,550				162,208
Diluted			174,970				162,208										174,970				162,208

Notes
(1)	Reversal of accrued employee performance incentive payment.
(2)	Bad debt charge related to media distributor.		$	1,385
	Reversal of accrued employee performance incentive payment.			(321	)
			$	1,064

QUANTUM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

Notes
(1)	Bad debt charge related to media distributor.
(2)	Reversal of accrued employee performance incentive payment.