EXHIBIT 99.3 FOR RELEASE: May 7, 1996, 2:15 PM, PDT Contact: Catherine Hartsog, Communications (408) 894-4334 Ed McClammy, Finance (408) 894-5703 QUANTUM ANNOUNCES RESULTS FOR FOURTH FISCAL 1996 QUARTER Sales for 1996 Fiscal Year of $4.4 Billion MILPITAS, Calif., May 7, 1996 -- Quantum Corporation (NMS: QNTM), today announced record sales of $1.2 billion for its fourth fiscal 1996 quarter, ended March 31, 1996. Net income was $21 million or 35 cents per share fully diluted, before a non-recurring charge of $209 million, pre-tax, associated with a restructuring of the company's high-capacity business announced in January. This restructuring includes closing manufacturing facilities in Milpitas, Calif. and Penang, Malaysia; and transitioning manufacturing of the company's high-capacity hard disk drives to Matsushita-Kotobuki Electronics Industries, Ltd. (MKE), Quantum's long-time manufacturing partner for desktop drives. Including this one-time charge, the company had a net loss of $123 million or $2.28 per share fully diluted. For the 1996 fiscal year, Quantum's net income excluding unusual charges was $77 million or $1.32 per share fully diluted on sales of $4.4 billion. Including unusual charges related to the resizing of the company's high-capacity business and the new manufacturing model, the net loss was $90 million or $1.74 per share for the year. "The strength of customer demand for Quantum's desktop drives and our DLT(TM) tape drives during the quarter was very impressive," said Michael A. Brown, Quantum's chief executive officer. "We shipped over 5.7 million desktop drives, again leading the industry in that market. We believe we currently have both a time-to-volume lead in our desktop product line and the strongest customer base in the industry." Quantum's five largest OEM customers accounted for 43 percent of the company's sales in the fourth quarter. Compaq was the company's largest customer at 13% of sales; IBM represented 10% of Quantum's sales for the quarter. During the fourth quarter, Quantum announced and began shipping its Bigfoot(TM) products, 1.2- and 2.5-gigabyte drives in the 5.25-inch form factor. "Our Bigfoot drives are the highest value solution for the capacity-hungry consumer personal computer marketplace," said Brown. "We are pleased with the customer acceptance of these products and are shipping or qualifying the Bigfoot products at 7 of the 10 largest personal computer OEMs." Quantum's DLT tape drive business accounted for nearly ten percent of its sales for the quarter. "We continue to be pleased with our success in growing our DLT tapes business and the emergence of DLT tape as an industry standard," said Brown. "Based on our fourth quarter sales, Quantum is now the second largest tape drive supplier in the world. "The high-end market continues to be an exciting opportunity, " said Brown. "We are confident that expanding our relationship with MKE to our high-end business is the right model for Quantum, and although we face significant challenges during the transition, the benefits of this strategy should be apparent this fiscal year. If we are successful in delivering the quality, consistency and ramp capability in our high-capacity disk drives we believe we can achieve through our partnership with MKE, we will have the opportunity to offer a significant, competitive advantage in the high-end marketplace." Founded in 1980, Quantum Corporation designs and manufactures storage products for today's digitized world. Widely recognized as the industry's quality leader, Quantum sells a broad range of storage products to OEM and distribution customers worldwide. The company's sales for the fiscal year ending March 1996 were $4.4 billion. Quantum's World Wide Web home page address is http://www.quantum.com. This release contains forward-looking statements based on current expectations. Actual results could differ materially as a result of several factors including those related to the change in the high-end manufacturing strategy. See the risk factors as outlined in Quantum's fiscal year 1995 10K and 10Q for the quarter ended December 31, 1995. ### Bigfoot and DLT are the trademarks of Quantum Corporation QUANTUM CORPORATION CONSOLIDATED BALANCE SHEETS ( In thousands ) March 31, March 31, 1996 1995 ---------- ---------- Assets Current Assets: Cash and investments $ 164,752 $ 187,753 Accounts receivable, net of allowance for doubtful accounts of $10,497 and $11,963 711,107 497,887 Inventories 459,538 324,650 Deferred income taxes 109,625 44,054 Other current assets 81,472 35,580 ---------- ---------- Total current assets 1,526,494 1,089,924 Property and equipment, net 364,111 280,099 Purchased intangibles, net 66,313 95,818 Other assets 18,437 15,187 ---------- ---------- $1,975,355 $1,481,028 ========== ========== Liabilities and Shareholders' Equity Current Liabilities: Accounts payable $ 498,829 $ 355,117 Accrued warranty 62,289 57,001 Other accrued liabilities 152,734 181,923 Accrued restructuring costs 103,165 -- Short term debt 4,125 50,000 ---------- ---------- Total current liabilities 821,142 644,041 Deferred income taxes 11,232 -- Subordinated debt 374,283 212,500 Long term debt 223,875 115,000 Shareholders' equity 544,823 509,487 ---------- ---------- $1,975,355 $1,481,028 ========== ========== 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, 1996 1995 1996 1995 Sales $ 1,232,491 $ 983,809 $ 4,422,726 $ 3,367,984 Cost of sales 1,070,943 834,158 3,880,309 2,804,271 ----------- ----------- ----------- ----------- Gross profit 161,548 149,651 542,417 563,713 ----------- ----------- ----------- ----------- Expenses: Research and development 65,177 58,124 239,116 169,282 Sales and marketing 36,697 34,069 142,413 108,290 General and administrative 19,781 16,232 65,145 52,134 Restructuring and non-recurring charges 209,122 -- 209,122 -- Purchased research and development and in merger costs -- -- -- 72,945 ----------- ----------- ----------- ----------- Total operating expenses 330,777 108,425 655,796 402,651 ----------- ----------- ----------- ----------- Income (loss) from operations (169,229) 41,226 (113,379) 161,062 Interest expense, net 12,716 8,288 27,959 15,757 ----------- ----------- ----------- ----------- Income (loss) before income taxes (181,945) 32,938 (141,338) 145,305 Income tax provision (benefit) (59,003) 9,881 (50,882) 63,714 ----------- ----------- ----------- ----------- Net income (loss) $ (122,942) $ 23,057 $ (90,456) $ 81,591 =========== =========== =========== =========== Net income (loss) per share: Primary $ (2.28) $ 0.48 $ (1.74) $ 1.72 Fully diluted $ (2.28) $ 0.42 $ (1.74) $ 1.52 Weighted average common and common equivalent shares: Primary 53,971 47,736 51,841 47,319 Fully diluted 53,971 59,485 51,841 59,038
QUANTUM CORPORATION PRO-FORMA CONSOLIDATED STATEMENTS OF OPERATIONS BEFORE NON-RECURRING CHARGES FOR ANALYTICAL PURPOSES ONLY ( In thousands except per share amounts ) Three Months Ended Twelve Months Ended March 31, March 31, 1996 (A) 1996 (B) (Unaudited) (Unaudited) ------------ ------------ Sales $ 1,232,491 $ 4,422,726 Cost of sales 1,070,943 3,844,359 ------------ ------------ Gross profit 161,548 578,367 ------------ ------------ Expenses: Research and development 65,177 238,426 Sales and marketing 36,697 141,163 General and administrative 19,781 65,035 ------------ ------------ Total operating expenses 121,655 444,624 ------------ ------------ Income from operations 39,893 133,743 Interest expense, net 12,716 27,959 ------------ ------------ Income before income taxes 27,177 105,784 Income tax provision 5,765 28,562 ------------ ------------ Net income $ 21,412 $ 77,222 ============ ============ Net income per share: Fully diluted $ 0.35 $ 1.32 Weighted average common and common equivalent shares: Fully diluted 68,562 64,283 NOTES: (A) Excludes $209 million restructuring charge incurred in the quarter ended March 31, 1996. (B) Excludes $38 million resizing expenses incurred in the quarter ended December 31, 1995 and $209 million restructuring charge incurred in the quarter ended March 31, 1996.