Filed by Maxtor Corporation (Commission File No. 000-14016)
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Quantum Corporation
(Commission File No. 000-12390)
MAXTOR(R) CORPORATION REPORTS STRONG FINANCIAL RESULTS
FOR THE FOURTH QUARTER OF 2000
CONSISTENT STRONG EXECUTION RESULTED IN PROFITS FOR
THE FOURTH QUARTER AND FISCAL YEAR
MILPITAS, CALIF., JANUARY 24, 2001 -- Maxtor Corporation (NASDAQ: MXTR) today
announced strong financial results for the fourth quarter ended December 30,
2000. Revenue for the quarter was $727.2 million, 5% above revenue of $690.6
million in the fourth quarter of 1999. The company reported net income of $5.0
million in the fourth quarter of 2000 compared with $4.0 million in the fourth
quarter of 1999. Diluted earnings per share were $0.04 for the fourth quarter of
2000 compared with $0.03 for the same quarter in 1999. Included in the recent
fourth quarter results was a pre-tax charge of $7.7 million, representing the
settlement of a legal dispute that has been resolved pending final Court
approval in February. Excluding this charge, net income in the fourth quarter
would have been $12.1 million and diluted earnings per share would have been
$0.10.
Revenue for 2000 was $2.7 billion compared with $2.5 billion in 1999. Net
income was $31.8 million, or $0.27 per share, in 2000, compared with a net loss
of $50.1 million, or $(0.48) per share, in 1999.
"This was an outstanding quarter for Maxtor," said Mike Cannon, president
and CEO. "During the fourth quarter, we shipped 7.4 million drives and generated
a gross profit margin of 14.5%. Inventory turns improved to 23.3 compared with
21.6 in the third quarter, and we increased cash and marketable securities by
$25 million to $376 million at year-end compared with $351 million at the end of
September 2000."
"The strength of the quarter and the year was the result of Maxtor's
continued focus on consistent execution and our ability to quickly respond to
changing market conditions. We were able to rapidly ramp up production of new
products, especially the 20 GB per disk
Maxtor Reports Strong Fourth Quarter 2000 Financial Results
January 24, 2001
configuration; we managed the supply chain effectively; and we were able to meet
customer requirements while improving asset utilization."
"We continued to make progress with our network attached storage business.
Our MaxAttach line generated $5.9 million in revenue in the fourth quarter, an
increase of 22% from the third quarter. In addition, our recently-introduced
1394 External Storage solution, which allows users up to 80 GB of additional
storage for video editing, MP3 downloads, digital photos and games, saw good
consumer acceptance in the quarter."
"We are working closely with Quantum to complete the proposed merger of
Quantum's Hard Disk Drive Group with Maxtor. In December, we cleared the
Hart-Scott-Rodino regulatory requirement and received European Union approval
for the combination to proceed. Once the SEC has declared the final registration
statement effective, we will send a joint proxy statement out to shareholders of
Maxtor and Quantum and schedule a shareholder meeting. We continue to anticipate
a closing in late March or April, pending stockholder approvals," concluded Mr.
Cannon.
ABOUT MAXTOR
Maxtor Corporation is a leading supplier of information storage solutions.
The company's current hard disk drive products include the award-winning
DiamondMax(TM) and DiamondMax Plus line of products for mainstream and high
performance personal computers and consumer electronics applications, as well as
the DiamondMax VL line for entry-level PCs. Maxtor also offers a new 1394
External Storage(TM) solution and the MaxAttach(TM) family of network attached
storage servers.
Maxtor's leadership position has been built by consistently providing
leading products, and by delivering high levels of quality and support for its
customers. More information about Maxtor and its products can be found at
www.maxtor.com or by calling toll-free (800) 2-MAXTOR. Maxtor is traded on
Nasdaq under the MXTR symbol.
SAFE HARBOR
This release contains forward-looking statements concerning the hard disk
drive and network attached storage industries, Maxtor's execution, and the
consummation of the combination with Quantum's Hard Disk Drive Group. These
statements are based on current
2
Maxtor Reports Strong Fourth Quarter 2000 Financial Results
January 24, 2001
expectations and are subject to risks and uncertainties which could materially
affect the company's results, including, but not limited to, market demand for
hard disk drives and server appliances, market acceptance of the company's
products, the company's ability to execute future production ramps and utilize
manufacturing assets efficiently, changes in product and customer mix, pricing
trends, and actions by competitors. Risks regarding the consummation of the
combination with Quantum HDD include receipt of stockholder approval and
satisfaction of customary closing documents, the inability to successfully
integrate the businesses of Quantum's HDD operations and Maxtor, costs related
to the merger, and labor integration issues. These and other risk factors are
contained in periodic reports filed with the SEC, including, but not limited to,
the Form 10-K for fiscal 1999, recent 10-Qs and the registration statement on
Form S-4 related to the combination with Quantum HDD. Maxtor is under no
obligation to (and expressly disclaims any obligation to) update or alter its
forward-looking statements, whether as a result of new information, future
events or otherwise.
In connection with the proposed transaction, Maxtor has filed a registration
statement on Form S-4 and Quantum has filed a proxy statement-prospectus, each
with the Securities and Exchange Commission. INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT-PROSPECTUS
BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors
and security holders may obtain a free copy of the registration statement and
the proxy statement-prospectus and other documents filed by Quantum and Maxtor
with the Securities and Exchange Commission at the Securities and Exchange
Commission's web site at http://www.sec.gov. Free copies of the registration
statement and other documents filed by Maxtor with the Securities and Exchange
Commission may also be obtained from Maxtor by directing a request to Maxtor,
Attention: Jenifer Kirtland, 408-432-4270. Free copies of the proxy
statement-prospectus and other documents filed by Quantum with the Securities
and Exchange Commission may also be obtained from Quantum by directing a request
to Quantum, Attention: Chris Golson, 408-894-5590.
CONFERENCE CALL
Maxtor has scheduled a conference call for financial analysts and investors
today, Wednesday, January 24, 2001 at 2:30 p.m. PST to discuss the fourth
quarter results and an outlook on financial results going forward. The dial-in
number for the live call is (800) 482-5567. The call will be webcast on the
company's site at www.maxtor.com. There will be a replay available shortly
following the call through January 31, 2001. The dial-in number for the replay
is (800) 696-1558, access code 897329.
CONTACT:
Jenifer Kirtland
Senior Director, Investor Relations
408/432-4270
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Maxtor Reports Strong Fourth Quarter 2000 Financial Results
January 24, 2001
MAXTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 30, January 1,
2000 2000
---------- --------
(Unaudited)
ASSETS
Current assets:
Cash and marketable securities ................... $ 376,177 $353,922
Accounts receivable, net ......................... 284,654 231,616
Inventories, net ................................. 106,405 103,854
Prepaid expenses and other ....................... 34,577 12,338
---------- --------
Total current assets ........................ 801,813 701,730
Property, plant and equipment, net ..................... 165,926 132,089
Goodwill and other intangible assets, net .............. 44,237 55,107
Other assets ........................................... 13,679 17,409
---------- --------
Total assets ................................ $1,025,655 $906,335
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings, including current portion
of long-term debt ...................... $ 15,432 $ 5,000
Accounts payable ................................. 421,338 404,874
Accrued and other liabilities .................... 191,277 127,321
---------- --------
Total current liabilities ................ 628,047 537,195
Long-term debt ......................................... 92,259 113,770
---------- --------
Total liabilities ........................... 720,306 650,965
Total stockholders' equity ............................. 305,349 255,370
---------- --------
Total liabilities and stockholders' equity .. $1,025,655 $906,335
========== ========
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Maxtor Reports Strong Fourth Quarter 2000 Financial Results
January 24, 2001
MAXTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except share and per share amounts)
Three months ended Twelve months ended
------------------------------- -------------------------------
December 30, January 1, December 30, January 1,
2000 2000 2000 2000
------------- ------------- ------------- -------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Total revenue $ 727,185 $ 690,624 $ 2,704,859 $ 2,486,123
Total cost of revenue 621,753 608,401 2,328,345 2,287,316
------------- ------------- ------------- -------------
Gross profit 105,432 82,223 376,514 198,807
Operating expenses:
Research and development 63,573 49,614 235,006 191,511
Selling, general and administrative 35,265 26,483 110,507 91,711
Acquired in-process technology -- -- -- 7,028
Amortization of goodwill and intangible assets 2,346 2,520 9,906 3,118
------------- ------------- ------------- -------------
Total operating expenses 101,184 78,617 355,419 293,368
------------- ------------- ------------- -------------
Income from operations 4,248 3,606 21,095 (94,561)
Interest expense (3,326) (3,753) (13,731) (13,723)
Interest and other income 4,346 4,049 26,111 15,592
Gain on sale of investment -- -- -- 44,085
------------- ------------- ------------- -------------
Income (Loss) before income taxes 5,268 3,902 33,475 (48,607)
Provision for income taxes 263 (91) 1,673 1,541
------------- ------------- ------------- -------------
Net Income (Loss) $ 5,005 $ 3,993 $ 31,802 $ (50,148)
============= ============= ============= =============
Net income (Loss) per share - basic $ 0.04 $ 0.04 $ 0.28 $ (0.48)
Net income (Loss) per share - diluted $ 0.04 $ 0.03 $ 0.27 $ (0.48)
Shares used in per share calculation
-basic 116,179,938 113,341,080 115,225,179 105,503,281
-diluted 119,038,276 115,237,590 119,115,982 105,503,281