Exhibit 99.1

Contact:
Brad Cohen
Public Relations
Quantum Corp.
(408) 944-4044
brad.cohen@quantum.com

For Release:
Oct. 29, 2014
1:05 p.m. PDT

 

Monica Gould or Allise Furlani
Investor Relations
The Blueshirt Group
(212) 871-3927 or (212) 331-8433
monica@blueshirtgroup.com or allise@blueshirtgroup.com


QUANTUM CORPORATION REPORTS FISCAL SECOND QUARTER 2015 RESULTS

Highlights:

SAN JOSE, Calif., Oct. 29, 2014 – Quantum Corp. (NYSE: QTM) today reported results for the fiscal second quarter 2015 ended Sept. 30, 2014.

Fiscal Second Quarter 2015 Results

(Unless otherwise noted, all comparisons are relative to the fiscal second quarter 2014.)

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“Our positive second quarter results reflect the improvements we’ve made in our financial model and the increased leverage it provides as we capitalize on the market momentum we’re seeing across our business,” said Jon Gacek, President and CEO of Quantum. “In scale-out storage, we are driving significant growth through our unique combination of industry-leading performance and policy-driven tiering software, which is ideally suited to meeting customers’ evolving workflow needs. In data protection, we are taking advantage of growth and profit opportunities with a more efficient, integrated solutions approach that leverages our best-in-class disk and tape technologies to help organizations meet new backup and archive requirements.

“As we begin the second half of the fiscal year, we are well-positioned to build on this market momentum and the power of our scale-out storage and data protection portfolios to deliver greater growth, profit and shareholder value.”

Fiscal 2015 Updated Outlook

Reflecting its strong performance over the last two quarters and increasing market momentum, Quantum has raised the lower end of its revenue guidance for the full fiscal year and increased its net income and earnings per share guidance. The company now expects:

Fiscal Third Quarter 2015 Outlook

For the fiscal third quarter, Quantum expects:

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Fiscal Second Quarter 2015 Business Highlights

Conference Call and Audio Webcast Notification

Quantum will hold a conference call today, Oct. 29, 2014, at 2:00 p.m. PDT to discuss its fiscal second quarter results. Press and industry analysts are invited to attend in listen-only mode. Dial-in number: 719-457-2085, conference ID: 5622078. Quantum will provide a live audio webcast of the conference call beginning today, Oct. 29, 2014, at 2:00 p.m. PDT. Site for the webcast and related information: www.quantum.com/investors.

Following completion of the call, a recorded replay of the webcast will be available at www.quantum.com/investors. For those without access to the Internet, a replay of the call will be available beginning at 5:00 p.m. PDT on Oct. 29, 2014 through Nov. 3, 2014 at 5:00 p.m. PDT. To listen to the telephonic replay, call 719-457-0820, replay passcode: 5622078.

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About Quantum

Quantum is a leading expert in scale-out storage, archive and data protection, providing solutions for capturing, sharing and preserving digital assets over the entire data lifecycle. From small businesses to major enterprises, more than 100,000 customers have trusted Quantum to address their most demanding data workflow challenges. With Quantum, customers can Be Certain™ they have the end-to-end storage foundation to maximize the value of their data by making it accessible whenever and wherever needed, retaining it indefinitely and reducing total cost and complexity. See how at www.quantum.com/customerstories.

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Quantum, the Quantum logo, Be Certain, DXi, StorNext StorNext Pro, StorNext Connect and Lattus are either registered trademarks or trademarks of Quantum Corporation and its affiliates in the United States and/or other countries. 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 “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Specifically, without limitation, our statements regarding delivering greater growth, profit and shareholder value in the second half of the fiscal year, and all of our statements under the sections titled Fiscal 2015 Updated Outlook and Fiscal Third Quarter 2015 Outlook are forward-looking statements within the meaning of the Safe Harbor. All forward-looking statements in this press release are based on information available to Quantum on the date hereof. These statements involve known and unknown risks, uncertainties and other factors that may cause Quantum’s actual results to differ materially from those implied by the forward-looking statement. More detailed information about these risk factors, and additional risk factors are set forth in Quantum’s periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Risk Factors” in Quantum’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 6, 2014 and in Quantum’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2014. Quantum expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Measures

Quantum believes that the non-GAAP financial measures disclosed above provide useful and supplemental information to investors regarding its quarterly financial performance. Quantum management and Board of Directors use these non-GAAP financial measures internally to understand, manage and evaluate the company’s business results and make operating decisions. For instance, Quantum management often makes decisions regarding staffing, future management priorities and how the company will direct future operating expenses on the basis of non-GAAP financial measures. In addition, compensation of our employees is based in part on the performance of our business based on non-GAAP operating income.

The non-GAAP financial measures used in this press release exclude the impact of amortization of intangible assets, share-based compensation expense, restructuring charges, outsourcing transition costs, proxy contest and related costs, Crossroads patent litigation costs, acquisition expenses and net Symform expenses for the following reasons:

Amortization of Intangible Assets
This includes acquired intangibles such as purchased technology and customer relationships in connection with prior acquisitions. These expenses are not factored into management’s evaluation of potential acquisitions or Quantum’s performance after completion of the acquisitions because they are not related to Quantum’s core operating performance. In addition, the frequency and amount of such charges can vary significantly based on the size and timing of acquisitions and the maturities of the businesses being acquired. Excluding acquisition-related charges from non-GAAP measures provides investors with a basis to compare Quantum against the performance of other companies without the variability caused by purchase accounting.

Share-Based Compensation Expense
Share-based compensation expense relates primarily to equity awards such as stock options and restricted stock units. Share-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Quantum’s control. Management believes that non-GAAP measures adjusted for share-based compensation provide investors with a basis to measure Quantum’s core performance against the performance of other companies without the variability created by share-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.

Restructuring Charges
Restructuring charges primarily relate to expenses associated with changes to Quantum’s operating structure. Restructuring charges are excluded from non-GAAP financial measures because they are not considered core operating activities. Although Quantum has engaged in various restructuring activities in the past, each has been a discrete event based on a unique set of business objectives. Management believes that it is appropriate to exclude restructuring charges from Quantum’s non-GAAP financial measures, as it enhances the ability of investors to compare Quantum’s period-over-period operating results from continuing operations.

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Outsourcing Transition Costs
Outsourcing transition costs are expenses attributable to transitioning our manufacturing to an outsourced model. These costs are excluded from non-GAAP financial measures because they are not considered core operating activities, and management believes that it is appropriate to exclude these costs in order to provide investors the ability to compare Quantum’s period-over-period operating results from continuing operations.

Proxy Contest and Related Costs
Proxy contest and related costs are expenses incurred to respond to activities and inquiries of Starboard Value LP, including their proxy solicitation. The Company has not incurred significant expenses in connection with such matters in historical periods and these costs are not considered core operating activities. Management believes that it is appropriate to exclude these costs in order to provide investors the ability to compare Quantum’s period-over-period operating results from continuing operations.

Crossroads Patent Litigation Costs
Crossroads patent litigation costs are expenses incurred to defend ourselves and perform other activities related to a patent infringement lawsuit filed by Crossroads Systems, Inc. These costs are excluded from non-GAAP financial measures because they are not considered core operating activities, and management believes that it is appropriate to exclude these costs in order to provide investors the ability to compare Quantum’s period-over-period operating results from continuing operations.

Acquisition Expenses
The acquisition expenses were those expenses incurred to acquire Symform, Inc. and are not part of Quantum’s future core operations.

Symform Expenses, Net
Quantum acquired a cloud storage services platform from Symform, Inc. (“Symform”) in July 2014. Symform revenue comprises revenue generated from the Symform cloud storage services platform. Symform expenses consist of costs related to running, maintaining and further developing the Symform cloud storage services platform as well as the costs of integrating Symform into Quantum’s business. Net Symform expenses represent Symform expenses less Symform revenue, and non-GAAP gross margin excludes both Symform revenue and cost of revenue. Management believes that it is appropriate to exclude these amounts in order to provide investors with a view of Quantum’s results consistent with how management views and is running the business.

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material impact on the company’s reported financial results and, therefore, should not be relied upon as the sole financial measures to evaluate the company. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures. Investors are encouraged to review the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures as provided in the tables accompanying this press release.

Note 1
In the fourth quarter of fiscal year 2014, Quantum identified errors related to the accounting for rent expense and certain allowances for estimated future price adjustments to customers which impacted prior reporting periods. As a result, the company's financial statements for the second quarter of fiscal 2014 have been revised. Revenue for the second quarter of fiscal 2014 has been increased less than $0.1 million and general and administrative expense has been reduced by less than $0.1 million. For additional information, refer to our Form 10-K filed with the Securities and Exchange Commission on June 6, 2014.

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

Three Months Ended Six Months Ended
      September 30, 2014       September 30, 2013       September 30, 2014       September 30, 2013
(Revised) Note 1 (Revised) Note 1
Revenue:
       Product $                 85,216 $                 84,756 $                 165,410 $                 170,605
       Service 39,157 36,194 77,657 72,686
       Royalty 10,733 10,529 20,167 36,037
              Total revenue 135,106 131,479 263,234 279,328
Cost of revenue:
       Product 55,593 57,882 110,501 116,665
       Service 17,584 17,116 35,278 36,347
       Restructuring charges related to cost of revenue - 89 - 89
              Total cost of revenue 73,177 75,087 145,779 153,101
                     Gross margin 61,929 56,392 117,455 126,227
 
       Operating expenses:
              Research and development 15,157 16,359 29,711 33,053
              Sales and marketing 28,218 29,995 55,923 60,153
              General and administrative 14,085 14,795 28,456 29,484
              Restructuring charges 624 208 1,489 2,767
       Total operating expenses 58,084 61,357 115,579 125,457
       Gain on sale of assets - - 462 -
                            Income (loss) from operations 3,845 (4,965 ) 2,338 770
 
       Other income and expense 215 46 90 421
       Interest expense (2,456 ) (2,440 ) (4,900 ) (4,879 )
                            Income (loss) before income taxes 1,604 (7,359 ) (2,472 ) (3,688 )
       Income tax provision 356 534 604 924
                            Net income (loss) $ 1,248 $ (7,893 ) $ (3,076 ) $ (4,612 )
 
       Basic and diluted net income (loss) per share $ 0.00 $ (0.03 ) $ (0.01 ) $ (0.02 )
 
       Weighted average shares:
                            Basic 254,760 247,074 252,724 246,569
                            Diluted 257,579 247,074 252,724 246,569
                                 
 
       Included in the above Statements of Operations:
 
       Amortization of intangibles:
                     Cost of revenue $ 215 $ 368 $ 593 $ 736
                     Sales and marketing 928 1,857 2,784 3,713
1,143 2,225 3,377 4,449
       Share-based compensation:
                     Cost of revenue 333 523 747 1,051
                     Research and development 603 908 1,383 1,776
                     Sales and marketing 887 1,080 1,797 2,154
                     General and administrative 846 980 1,810 1,866
2,669 3,491 5,737 6,847
       Outsourcing transition costs:
                     Cost of revenue - - 126 -
- - 126 -
       Proxy contest and related costs:
                     General and administrative 659 - 847 -
659 - 847 -
       Crossroads patent litigation costs:
                     General and administrative 197 - 419 -
197 - 419 -
       Acquisition expenses:
                     General and administrative 4 - 4 -
4 - 4 -
       Symform expenses, net:
                     Gross margin 20 - 20 -
                     Research and development 110 - 110 -
                     Sales and marketing 91 - 91 -
221 - 221 -

Note 1 is presented above, before the Condensed Consolidated Statements of Operations.

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QUANTUM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

September 30, 2014       March 31, 2014*
Assets
Current assets:
       Cash and cash equivalents $ 105,031 $ 99,125
       Restricted cash 2,685 2,760
       Accounts receivable 92,882 101,605
       Manufacturing inventories 36,200 34,815
       Service parts inventories 24,627 25,629
       Other current assets 10,382 10,161
              Total current assets 271,807 274,095
 
Long-term assets:
       Property and equipment 16,261 17,574
       Intangible assets 1,051 3,911
       Goodwill 55,613 55,613
       Other long-term assets 9,451 10,605
              Total long-term assets 82,376 87,703
 
$                  354,183 $ 361,798
 
Liabilities and Stockholders' Deficit
Current liabilities:
       Accounts payable $ 42,157 $ 41,792
       Accrued warranty 5,290 6,116
       Deferred revenue, current 88,088 98,098
       Accrued restructuring charges, current 3,424 4,345
       Accrued compensation 26,873 25,036
       Other accrued liabilities 18,941 15,168
              Total current liabilities 184,773 190,555
 
Long-term liabilities:
       Deferred revenue, long-term 38,197 40,054
       Accrued restructuring charges, long-term 3,577     4,023
       Convertible subordinated debt 203,735 203,735  
       Other long-term liabilities   10,103 10,831
              Total long-term liabilities 255,612 258,643
 
       Stockholders' deficit (86,202 ) (87,400 )
 
$ 354,183 $             361,798

* Derived from the March 31, 2014 audited Consolidated Financial Statements.

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QUANTUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Six Months Ended
September 30, 2014       September 30, 2013
(Revised) Note 1
Cash flows from operating activities:
       Net loss $ (3,076 ) $                     (4,612 )
       Adjustments to reconcile net loss to net cash provided by operating
       activities:
              Depreciation 4,272 5,671
              Amortization of intangible assets 3,377 4,449
              Amortization of debt issuance costs 829 816
              Service parts lower of cost or market adjustment 2,007 6,659
              Gain on sale of assets (462 ) -
              Deferred income taxes (50 ) 59
              Share-based compensation 5,737 6,847
              Other non-cash (302 ) -
              Changes in assets and liabilities, net of effect of acquisition:
                     Accounts receivable 8,723 10,520
                     Manufacturing inventories (3,213 ) 185
                     Service parts inventories (687 ) 1,688
                     Accounts payable 390 (14,245 )
                     Accrued warranty (826 ) (1,031 )
                     Deferred revenue (11,867 ) (6,449 )
                     Accrued restructuring charges (1,393 ) 359
                     Accrued compensation 2,151 (5,195 )
                     Other assets and liabilities 2,941 2,507
Net cash provided by operating activities 8,551 8,228
 
Cash flows from investing activities:
       Purchases of property and equipment (1,912 ) (3,226 )
       Proceeds from sale of assets 462 -
       Increase in restricted cash (69 ) (117 )
       Purchases of other investments - (534 )
       Return of principal from other investments 104 -
       Payment for business acquisition, net of cash acquired (517 ) -
Net cash used in investing activities (1,932 ) (3,877 )
 
Cash flows from financing activities:
       Payment of taxes due upon vesting of restricted stock (2,187 ) (1,770 )
       Proceeds from issuance of common stock 1,533 2,247
Net cash provided by (used in) financing activities (654 ) 477
 
Effect of exchange rate changes on cash and cash equivalents (59 ) 25
 
Net increase in cash and cash equivalents 5,906   4,853
Cash and cash equivalents at beginning of period   99,125     68,976
Cash and cash equivalents at end of period $                   105,031 $ 73,829

Note 1 is presented above, before the Condensed Consolidated Statements of Operations.

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QUANTUM CORPORATION
GAAP TO NON-GAAP RECONCILIATION
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended September 30, 2014
Gross Gross Income From Operating Net Income Per Share Net Per Share Net
    Margin     Margin Rate     Operations     Margin         Income, Basic     Income, Diluted
GAAP $      61,929 45.8% $ 3,845 2.8% $      1,248 $ 0.00 $ 0.00
Non-GAAP Reconciling Items:
       Amortization of intangibles 215 1,143 1,143
       Share-based compensation 333 2,669 2,669
       Restructuring charges - 624 624
       Proxy contest and related costs - 659 659
       Crossroads patent litigation costs - 197 197
       Acquisition expenses - 4 4
       Symform expenses, net 20 221 221
Non-GAAP $ 62,497 46.3% $      9,362 6.9% $ 6,765 $ 0.03 $ 0.03
 
 
                     Computation of basic and diluted net income per share: GAAP Non-GAAP
                            Net income $ 1,248 $ 6,765
                                   Interest on dilutive convertible notes - 788
                            Income for purposes of computing income per diluted share $ 1,248 $ 7,553
 
                     Weighted average shares:    
                            Basic           254,760 254,760
                                   Dilutive shares from stock plans           2,819     2,819
                                   Dilutive shares from convertible notes   - 42,502
                            Diluted        257,579      300,081

Six Months Ended September 30, 2014
Per Share Net Per Share Net
    Gross    Gross     Income From     Operating    Net Income    Income (Loss),     Income (Loss),
  Margin Margin Rate Operations Margin (Loss) Basic Diluted
GAAP $ 117,455 44.6% $ 2,338 0.9% $ (3,076 ) $ (0.01 ) $ (0.01 )
Non-GAAP Reconciling Items:
       Amortization of intangibles 593 3,377 3,377
       Share-based compensation 747   5,737   5,737
       Restructuring charges -   1,489 1,489
       Outsourcing transition costs   126 126 126
       Proxy contest and related costs - 847   847
       Crossroads patent litigation costs -   419 419
       Acquisition expenses - 4   4
       Symform expenses, net 20 221 221
Non-GAAP $      118,941 45.2% $      14,558 5.5% $            9,144 $ 0.04 $ 0.04
 
              Computation of basic and diluted net income (loss) per share: GAAP Non-GAAP
                     Net income (loss) $ (3,076 ) $ 9,144
 
              Weighted average shares:    
                     Basic          252,724            252,724
                            Dilutive shares from stock plans       -   2,878
                     Diluted 252,724 255,602

The non-GAAP financial information set forth in this table is not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial information used by other companies.

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QUANTUM CORPORATION
GAAP TO NON-GAAP RECONCILIATION
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended September 30, 2013
(Revised) Note 1
Income (Loss)
Gross Gross From Operating Per Share Net Per Share Net
     Margin      Margin Rate      Operations      Margin      Net Loss      Loss, Basic      Loss, Diluted
GAAP $     56,392 42.9% $             (4,965 )       (3.8 )% $    (7,893 ) $         (0.03 ) $          (0.03 )
Non-GAAP Reconciling Items:  
       Amortization of intangibles 368 2,225 2,225
       Share-based compensation 523 3,491 3,491  
       Restructuring charges 89   297   297  
Non-GAAP $ 57,372 43.6% $ 1,048 0.8 % $ (1,880 ) $ (0.01 ) $ (0.01 )
  
              Computation of basic and diluted net loss per share: GAAP Non-GAAP
                     Net loss $ (7,893 ) $ (1,880 )
 
              Weighted average shares:
                     Basic and diluted 247,074 247,074

Six Months Ended September 30, 2013
(Revised) Note 1
Per Share Net Per Share Net
Gross Gross Income From Operating Net Income Income (Loss), Income (Loss),
     Margin      Margin Rate      Operations      Margin      (Loss)      Basic      Diluted
GAAP $    126,227 45.2% $ 770 0.3% $       (4,612 ) $                (0.02 ) $                (0.02 )
Non-GAAP Reconciling Items:  
       Amortization of intangibles 736 4,449 4,449
       Share-based compensation 1,051   6,847   6,847  
       Restructuring charges 89 2,856 2,856  
Non-GAAP $ 128,103 45.9% $ 14,922 5.3% $ 9,540 $ 0.04 $ 0.04

              Computation of basic and diluted net income (loss) per share:      GAAP      Non-GAAP
                     Net income (loss) $     (4,612 )   $     9,540
                            Interest on dilutive convertible notes   -     1,575
                     Income (loss) for purposes of computing income (loss) per diluted share $ (4,612 ) $ 11,115
 
              Weighted average shares:
                     Basic   246,569 246,569
                            Dilutive shares from stock plans - 2,851
                            Dilutive shares from convertible notes - 42,502
                     Diluted 246,569 291,922

Note 1 is presented above, before the Condensed Consolidated Statements of Operations.

The non-GAAP financial information set forth in this table is not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial information used by other companies.

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QUANTUM CORPORATION
FORECAST THIRD QUARTER AND FISCAL 2015
GAAP TO NON-GAAP RECONCILIATION
(Dollars in millions)

FORECAST THIRD QUARTER FISCAL 2015
  
  Dollar Range
Forecast net income on a GAAP basis* $       7.9   -   $       8.9
Forecast amortization of intangibles 0.2
Forecast share-based compensation 2.9
Forecast net income on a non-GAAP basis $ 11.0 - $ 12.0
 
Dollars per Share
Forecast diluted earnings per share on a GAAP basis* $0.03
Forecast amortization of intangibles 0.00
Forecast share-based compensation 0.01
Forecast diluted earnings per share on a non-GAAP basis $0.04
 
FORECAST FULL YEAR FISCAL 2015
 
Dollar Range
Forecast net income on a GAAP basis* $ 8.9 - $ 9.9
Forecast amortization of intangibles 3.7
Forecast share-based compensation 11.4
Forecast net income on a non-GAAP basis $ 24.0 - $ 25.0
 
Dollars per Share
Forecast diluted earnings per share on a GAAP basis* $ 0.03 - $ 0.04
Forecast amortization of intangibles 0.01
Forecast share-based compensation 0.04
Forecast diluted earnings per share on a non-GAAP basis $ 0.08 - $ 0.09

* Forecast third quarter and fiscal 2015 GAAP net income and diluted earnings per share do not reflect facility restructuring charges, outsourcing transition costs, proxy contest and related costs, Crossroads patent litigation costs, acquisition expenses or Symform expenses (net). The facility restructuring charges will be recognized when we vacate the various locations, which may occur in the third quarter of fiscal 2015 or a later period in fiscal 2015.

Estimates based on current (October 29, 2014) projections.

The projected GAAP and non-GAAP financial information set forth in this table represent forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For risk factors that could impact these projections, see our Annual Report on Form 10-K as filed with the SEC on June 6, 2014. We disclaim any obligation to update information in any forward-looking statement.

The non-GAAP financial information set forth in this table is not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial information used by other companies.

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