Exhibit 99.1   
News Release

Contact:
Brad Cohen
Public Relations
Quantum Corp.
+1 (408) 944-4044
brad.cohen@quantum.com

Brinlea Johnson or Allise Furlani
Investor Relations
The Blueshirt Group
+1 (212) 331-8424 or +1 (212) 331-8433
brinlea@blueshirtgroup.com or allise@blueshirtgroup.com




For Release:
May 10, 2016
1:15 p.m. PDT







Quantum Corporation Reports Fiscal Fourth Quarter and Full Year 2016 Results

Fiscal 2016 Scale-out Storage Revenue Grows 23% Over Prior Year to Record $126.5 Million

SAN JOSE, Calif. - May 10, 2016 - Quantum Corp. (NYSE: QTM) today reported results for the fiscal fourth quarter (FQ4) and full year 2016 (FY16) ended March 31, 2016.

Total revenue was $120.0 million for FQ4 and $476.0 million for the year. These results were down from the comparable prior year periods, reflecting weakness in the enterprise storage market that has also impacted many other companies in the industry.

Despite the challenging environment, Quantum generated $33.1 million in scale-out storage and related service revenue in FQ4. This was a 4 percent increase over the same quarter the year before — representing the 19th consecutive quarter of year-over-year growth — and was driven by a 44 percent increase in Americas product sales. For FY16, Quantum had $126.5 million in total scale-out storage and related service revenue. This was a 23 percent increase over fiscal 2015, and when deals over $1 million (“mega deals”) are excluded, total revenue in this category increased 34 percent for the full year.

Quantum also reported the following revenue totals for FQ4 and FY16, respectively:
Disk backup systems and related service: $18.1 million and $73.2 million.
Branded tape automation and related service: $34.6 million and $146.3 million.
OEM tape automation and related service: $10.1 million and $43.0 million.
Devices and media: $13.1 million and $45.8 million.




Royalty: $11.0 million and $41.2 million.

With a non-cash goodwill impairment charge of $55.6 million included, the company had a GAAP operating loss of $50.2 million in FQ4 and a GAAP net loss of $52.4 million, or $0.20 per diluted share. On a non-GAAP basis, Quantum generated operating income of $8.7 million for FQ4, resulting in the highest non-GAAP operating margin in five quarters and reflecting the cost structure reductions the company made in the second half of FY16. Non-GAAP net income for FQ4 was $6.5 million, or $0.02 per diluted share.

For the full year, Quantum had a GAAP net loss of $74.7 million, or $0.28 per diluted share, again including the fourth quarter goodwill impairment charge of $55.6 million. On a non-GAAP basis, the company had a net loss of $2.6 million, or $0.01 per diluted share, for FY16. The positive impact of Quantum’s cost structure reductions in the second half of the year are clear from a comparison of bottom line results for that period with the first half of the year — a $24.9 million improvement on a GAAP basis when the goodwill impairment charge is excluded and a $26.3 million non-GAAP improvement.

“In fiscal 2016 we made progress in key areas despite the weakness in the enterprise storage market making this a difficult year for the storage industry, overall,” said Jon Gacek, president and CEO of Quantum. “We grew scale-out storage 23 percent, expanded our reach in high-growth vertical markets and use cases, introduced a range of new, award-winning solutions, reduced our cost structure and improved our balance sheet. All of this provides a strong foundation for fiscal 2017 that makes us confident we will be able to achieve total revenue growth and higher profitability this year.

“We are excited about the opportunity to expand our scale-out storage leadership in media and entertainment while building on our momentum in video surveillance and unstructured data archives for technical workflows. Our ability to provide high-performance, low-cost capacity and easy access in a single, integrated tiered storage solution encompassing flash, spinning disk, object storage, tape and the cloud will be an increasingly key differentiator for customers.

“Finally, our new CFO, Fuad Ahmad, will focus on further balance sheet optimization to enhance free cash flow and on opportunities to further strengthen our capital structure.”

Fiscal 2017 Outlook
Noting that the fiscal first quarter is typically its weakest, Quantum provided the following guidance for the first quarter:
Total revenue of $111 million to $115 million.
GAAP and non-GAAP gross margin of 43-44 percent.

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GAAP and non-GAAP operating expenses of $54 million to $55 million and $52 million to $53 million, respectively.
Interest expense of $1.5 million and taxes of $400,000.
GAAP and non-GAAP loss per share of $0.02 to $0.03 and $0.01 to $0.02, respectively.

For the full fiscal 2017 year, the company expects:
Total revenue of at least $500 million, with scale-out storage and related service revenue driving the year-over-year growth and rising to 35-40 percent of total revenue.
A decline in overall data protection revenue, with modest growth in disk backup and related service revenue offset by declines in branded and OEM tape backup revenue.
Royalty revenue of approximately $35 million.
GAAP and non-GAAP gross margin of 43-44 percent.
GAAP and non-GAAP operating expense of $207 million and $200 million, respectively.
Interest expense of $6.1 million and taxes of $1.6 million.
GAAP and non-GAAP earnings per share of $0.01 and $0.04, respectively.

“We have a growing opportunity funnel in scale-out storage and multiple deals of significant size that we are actively working,” said Gacek. “As the year progresses, we believe we will close at least some of these deals, but we are not ready to include them in our guidance at this time.”

Fiscal Fourth Quarter 2016 Business Highlights
In its first full quarter shipping, Quantum’s new XcellisTM workflow storage system gained strong market traction. The company secured Xcellis deals at a broad range of customers, including a top U.S. broadcast network, a leading chemical manufacturer, an NFL team and a pioneering virtual reality company. Optimized for demanding workflows and powered by Quantum’s StorNext® platform, Xcellis addresses the explosive growth of unstructured data and the opportunity to capitalize on its strategic value by enabling users to share and leverage this data more quickly, easily and cost-effectively.
Demonstrating its expanding ecosystem partnerships in video surveillance, the company highlighted joint development initiatives with video management system (VMS) leaders 3VR, Genetec Inc. and Milestone Systems, as well as HauteSpot Networks, a leading provider of solutions for IP video. As members of the Quantum Advantage Program™ for technology partners, these companies have certified interoperability with Quantum offerings, including StorNext 5 data management and Quantum disk products.
Quantum announced that Q-Cloud® Protect is now available as a cloud-based appliance running on top of the Amazon Web Services (AWS) Marketplace infrastructure. Q-Cloud Protect™ is a virtual deduplication appliance that works with Quantum DXi® systems to provide a hybrid-cloud backup and disaster recovery (DR) solution. It is designed for companies with single sites looking to protect their business against localized

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disasters, organizations eliminating tape for off-site protection and users seeking a hybrid-cloud approach to backup and DR.
Quantum products continued to garner industry awards and honors. Xcellis won the 2016 Storage Visions Award for Visionary Products, Professional-Class System and was named a finalist in the StudioDaily Prime Awards, which “represent the top tier of new technology, creative thinking, and high-end craftsmanship in media and entertainment” (Xcellis won the award in the following quarter). Xcellis also won an innovation award in China and was shortlisted for a product of the year award in Europe. In addition, Quantum’s ArticoTM active archive appliance was a finalist in the Storage magazine/SearchStorage.com’s Product of the Year Awards.

Conference Call and Audio Webcast Notification
Quantum will hold a conference call today, May 10, 2016, at 2:00 p.m. PDT to discuss its fiscal fourth quarter and full year 2016 results. Press and industry analysts are invited to attend in listen-only mode.
Dial-in number: 1-503-343-6063 (U.S. and International); access code: 90829818
Replay number: 1-404-537-3406 (U.S. and International); access code: 90829818
Replay expiration: May 17, 2016
Webcast site: www.quantum.com/investors

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. Quantum’s end-to-end, tiered storage foundation enables customers 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.
###

Quantum, the Quantum logo, Artico, DXi, Q-Cloud, Q-Cloud Protect, Quantum Advantage Program, StorNext and Xcellis 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: This press release contains “forward-looking” statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Specifically, but without limitation, statements relating to: i) our confidence that we will be able to achieve total revenue growth and higher profitability this year; ii) our opportunity to expand our scale-out storage leadership in media and entertainment while building on our momentum in video surveillance and unstructured data archives for technical workflows; iii) our ability to provide high-performance, low-cost capacity and easy access in a single, integrated tiered storage solution encompassing flash, spinning disk, object storage, tape and the cloud being an increasingly key differentiator for customers; iv) our focus on further balance sheet optimization to enhance free cash flow and on opportunities to further strengthen our capital structure; v) all of our statements under the heading “Fiscal 2017 Outlook,” including our statement that we have a growing opportunity funnel in scale-out storage and multiple deals of significant size that we are actively working and that we believe we will close at least some of these deals, 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 statements. More detailed information about these 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on February 5, 2016 and in Quantum’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 12, 2015. Quantum expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.



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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 the items below 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.

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. (“Symform”) and are not part of Quantum’s future core operations.

Symform Expenses, Net
Quantum acquired a cloud storage services platform from 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. Management believed that it was appropriate to exclude these amounts in fiscal 2015 in order to provide investors with a view of Quantum’s results consistent with how management viewed and ran the business. Beginning fiscal 2016, Symform has been fully integrated into our core operations and therefore, Symform revenue and expenses are no longer excluded from our results.

Goodwill Impairment
The goodwill impairment was recorded in the fourth quarter of fiscal 2016 and resulted in a full write-off of Quantum’s goodwill balance. The impairment is excluded from non-GAAP financial measures because it is not considered a core operating activity and management believes that it is appropriate to exclude the impairment in order to provide investors the ability to compare Quantum’s period-over-period results from continuing operations.


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Loss on Debt Extinguishment
The loss on debt extinguishment relates to specific debt repurchase actions undertaken in fiscal 2015 and 2016. The losses are excluded from non-GAAP financial measures because they are not considered a core operating activity and management believes that it is appropriate to exclude the losses in order to provide investors the ability to compare Quantum’s period-over-period results from continuing operations.

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.


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

 
March 31, 2016
 
March 31, 2015*
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
33,870

 
$
67,948

Restricted cash
2,788

 
2,621

Accounts receivable
105,959

 
124,159

Manufacturing inventories
40,614

 
50,274

Service parts inventories
21,407

 
24,640

Other current assets
6,953

 
11,942

Total current assets
211,591

 
281,584

Long-term assets:
 
 
 
Property and equipment
12,939

 
14,653

Intangible assets
451

 
731

Goodwill

 
55,613

Other long-term assets
4,565

 
4,577

Total long-term assets
17,955

 
75,574

       
$
229,546

 
$
357,158

Liabilities and Stockholders’ Deficit
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
46,136

 
$
54,367

Accrued warranty
3,430

 
4,219

Deferred revenue, current
88,919

 
95,899

Accrued restructuring charges, current
1,621

 
3,855

Long-term debt, current
3,000

 

Convertible subordinated debt, current

 
83,345

Accrued compensation
22,744

 
35,414

Other accrued liabilities
13,806

 
20,740

Total current liabilities
179,656

 
297,839

Long-term liabilities:

 
 
Deferred revenue, long-term
35,427

 
39,532

Accrued restructuring charges, long-term
1,116

 
991

Long-term debt
62,709

 

Convertible subordinated debt, long-term
69,253

 
68,793

Other long-term liabilities
8,324

 
10,441

Total long-term liabilities
176,829

 
119,757

Stockholders' deficit
(126,939
)
 
(60,438
)
 
$
229,546

 
$
357,158


* Derived from the March 31, 2015 audited Consolidated Financial Statements.



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QUANTUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended
 
Twelve Months Ended
 
March 31, 2016
 
March 31, 2015
 
March 31, 2016
 
March 31, 2015
Revenue:
 
 
 
 
 
 
 
Product
$
72,769

 
$
98,003

 
$
286,217

 
$
355,579

Service
36,263

 
38,826

 
148,548

 
155,674

Royalty
10,997

 
10,969

 
41,193

 
41,842

Total revenue
120,029


147,798


475,958


553,095

Cost of revenue:
 
 
 
 
 
 
 
Product
50,499

 
67,406

 
206,859

 
237,679

Service
14,757

 
18,228

 
64,347

 
70,730

Total cost of revenue
65,256


85,634


271,206


308,409

Gross margin
54,773


62,164


204,752


244,686

Operating expenses:
 
 
 
 
 
 
 
Research and development
10,862

 
14,938

 
48,703

 
58,618

Sales and marketing
24,875

 
30,537

 
108,735

 
113,954

General and administrative
12,183

 
14,242

 
53,793

 
56,513

Restructuring charges (benefits)
1,466

 
(10
)
 
4,006

 
1,666

Goodwill impairment
55,613

 

 
55,613

 

Total operating expenses
104,999


59,707


270,850


230,751

Gain on sale of assets

 

 

 
462

Income (loss) from operations
(50,226
)

2,457


(66,098
)

14,397

Other income and expense
(597
)
 
13,621

 
(191
)
 
13,836

Interest expense
(1,513
)
 
(2,100
)
 
(6,817
)
 
(9,460
)
Loss on debt extinguishment

 
(1,295
)
 
(394
)
 
(1,295
)
Income (loss) before income taxes
(52,336
)

12,683


(73,500
)

17,478

Income tax provision
66

 
(222
)
 
1,183

 
718

Net income (loss)
$
(52,402
)

$
12,905


$
(74,683
)

$
16,760

 
 
 
 
 
 
 
 
Basic net income (loss) per share
$
(0.20
)
 
$
0.05

 
$
(0.28
)
 
$
0.07

Diluted net income (loss) per share
$
(0.20
)
 
$
0.04

 
$
(0.28
)
 
$
0.06

 
 
 
 
 
 
 
 
Weighted average shares:
 
 
 
 
 
 
 
Basic
265,392

 
257,391

 
262,730

 
254,665

Diluted
265,392

 
307,076

 
262,730

 
260,027

Included in the above Statements of Operations:
 
 
 
 
 
 
 
Amortization of intangibles:
 
 
 
 
 
 
 
Cost of revenue
$
47

 
$
160

 
$
280

 
$
913

Sales and marketing

 

 

 
2,784

 
47

 
160

 
280

 
3,697

Share-based compensation:
 
 
 
 
 
 
 
Cost of revenue
235

 
380

 
1,241

 
1,489

Research and development
335

 
576

 
1,864

 
2,559

Sales and marketing
540

 
879

 
2,907

 
3,506

General and administrative
467

 
1,093

 
2,904

 
4,029

 
1,577


2,928


8,916


11,583

Outsourcing transition costs:
 
 
 
 
 
 
 
Cost of revenue

 

 

 
126

 






126

Proxy contest and related costs:
 
 
 
 
 
 
 
General and administrative

 

 

 
972

 

 

 

 
972

Crossroads patent litigation costs:
 
 
 
 
 
 
 
General and administrative
213

 
416

 
2,907

 
1,160

 
213

 
416

 
2,907

 
1,160

Acquisition expenses:
 
 
 
 
 
 
 
General and administrative

 

 

 
4

 

 

 

 
4

Symform expenses, net:
 
 
 
 
 
 
 
Gross margin

 
28

 

 
78

Research and development

 
136

 

 
377

Sales and marketing

 
143

 

 
338

 
$

 
$
307

 
$

 
$
793

 
 
 
 
 
 
 
 

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

 
Twelve Months Ended
 
March 31, 2016
 
March 31, 2015
Cash flows from operating activities:
 
 
 
Net income (loss)
$
(74,683
)
 
$
16,760

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
 
Depreciation
6,410

 
8,281

Amortization of intangible assets
280

 
3,697

Amortization and write off of debt issuance costs
1,062

 
1,896

Service parts lower of cost or market adjustment
5,972

 
3,698

Gain on sale of assets

 
(462
)
Deferred income taxes
(85
)
 
(160
)
Share-based compensation
8,916

 
11,583

Goodwill impairment
55,613

 

Gain on sale of other investments

 
(13,574
)
Changes in assets and liabilities, net of effect of acquisition:
 
 
 
Accounts receivable
18,200

 
(22,554
)
Manufacturing inventories
6,325

 
(19,688
)
Service parts inventories
(780
)
 
(1,010
)
Accounts payable
(8,180
)
 
12,849

Accrued warranty
(789
)
 
(1,897
)
Deferred revenue
(11,085
)
 
(2,721
)
Accrued restructuring charges
(2,109
)
 
(3,548
)
Accrued compensation
(12,712
)
 
11,318

Other assets and liabilities
(4,075
)
 
1,566

Net cash provided by (used in) operating activities
(11,720
)

6,034

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(3,482
)
 
(3,241
)
Proceeds from sale of assets

 
462

Change in restricted cash
(139
)
 
(250
)
Purchases of other investments

 
(22
)
Return of principal from other investments

 
112

Payment for business acquisition, net of cash acquired

 
(517
)
Proceeds from sale of other investments

 
15,097

Net cash provided by (used in) investing activities
(3,621
)

11,641

Cash flows from financing activities:
 
 
 
Borrowings of long-term debt, net
68,920

 

Repayments of long-term debt
(3,211
)
 

Repayments of convertible subordinated debt
(83,735
)
 
(50,000
)
Payment of taxes due upon vesting of restricted stock
(3,176
)
 
(2,378
)
Proceeds from issuance of common stock
2,478

 
3,737

Net cash used in financing activities
(18,724
)

(48,641
)
Effect of exchange rate changes on cash and cash equivalents
(13
)
 
(211
)
Net decrease in cash and cash equivalents
(34,078
)

(31,177
)
Cash and cash equivalents at beginning of period
67,948

 
99,125

Cash and cash equivalents at end of period
$
33,870

 
$
67,948


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QUANTUM CORPORATION
GAAP TO NON-GAAP RECONCILIATION
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended March 31, 2016
 
Gross Margin
 
Gross Margin Rate
 
Income (Loss) From Operations
 
Operating Margin
 
Net Income
(Loss)
 
Per Share Net Income (Loss), Basic
 
Per Share Net Income (Loss), Diluted
GAAP
$
54,773

 
45.6
%
 
$
(50,226
)
 
(41.8
)%
 
$
(52,402
)
 
$
(0.20
)
 
$
(0.20
)
Non-GAAP Reconciling Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangibles
47

 
 
 
47

 
 
 
47

 
 
 
 
Share-based compensation
235

 
 
 
1,577

 
 
 
1,577

 
 
 
 
Restructuring charges

 
 
 
1,466

 
 
 
1,466

 
 
 
 
Crossroads patent litigation costs

 
 
 
213

 
 
 
213

 
 
 
 
Goodwill impairment

 
 
 
55,613

 
 
 
55,613

 
 
 
 
Non-GAAP
$
55,055

 
45.9
%
 
$
8,690

 
7.2
 %
 
$
6,514

 
$
0.02

 
$
0.02

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Computation of basic and diluted net income (loss) per share:
 
 
 
 
 
 GAAP
 
 Non-GAAP
 Net income (loss)
 
 
 
 
 
 
 
 
 
 
$
(52,402
)
 
$
6,514

Interest of dilutive convertible notes
 
 
 
 
 
 
 

 
902

Income (loss) for purposes of computing income (loss) per diluted share
 
 
 
 
 
$
(52,402
)
 
$
7,416

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Weighted average shares:
 
 
 
 
 
 
 
 
 
 
 
 
 
 Basic
 
 
 
 
 
 
 
 
 
 
265,392

 
265,392

 Dilutive shares from stock plans
 
 
 
 
 
 
 

 
540

 Dilutive shares from convertible notes
 
 
 
 
 
 
 

 
42,502

 Diluted
 
 
 
 
 
 
 
 
 
 
265,392

 
308,434


 
Twelve Months Ended March 31, 2016
 
Gross Margin
 
Gross Margin Rate
 
Income (Loss) From Operations
 
Operating Margin
 
Net Loss
 
Per Share Net Loss, Basic
 
Per Share Net Loss, Diluted
GAAP
$
204,752

 
43.0
%
 
$
(66,098
)
 
(13.9
)%
 
$
(74,683
)
 
$
(0.28
)
 
$
(0.28
)
Non-GAAP Reconciling Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangibles
280

 
 
 
280

 
 
 
280

 
 
 
 
Share-based compensation
1,241

 
 
 
8,916

 
 
 
8,916

 
 
 
 
Restructuring charges

 
 
 
4,006

 
 
 
4,006

 
 
 
 
Crossroads patent litigation costs

 
 
 
2,907

 
 
 
2,907

 
 
 
 
Goodwill impairment

 
 
 
55,613

 
 
 
55,613

 
 
 
 
Loss on debt extinguishment

 
 
 

 
 
 
394

 
 
 
 
Non-GAAP
$
206,273

 
43.3
%
 
$
5,624

 
1.2
 %
 
$
(2,567
)
 
$
(0.01
)
 
$
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Computation of basic and diluted net loss per share:
 
 
 
 
 
 
 
 
 GAAP
 
 Non-GAAP
 Net loss
 
 
 
 
 
 
 
 
 
 
$
(74,683
)
 
$
(2,567
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Weighted average shares:
 
 
 
 
 
 
 
 
 
 
 
 
 
 Basic and diluted
 
 
 
 
 
 
 
 
 
 
262,730

 
262,730


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 March 31, 2015
 
Gross Margin
 
Gross Margin Rate
 
Income From Operations
 
Operating Margin
 
Net Income
 
Per Share Net Income, Basic
 
Per Share Net Income, Diluted
GAAP
$
62,164

 
42.1
%
 
$
2,457

 
1.7
%
 
$
12,905

 
$
0.05

 
$
0.04

Non-GAAP Reconciling Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangibles
160

 
 
 
160

 
 
 
160

 
 
 
 
Share-based compensation
380

 
 
 
2,928

 
 
 
2,928

 
 
 
 
Restructuring benefits

 
 
 
(10
)
 
 
 
(10
)
 
 
 
 
Crossroads patent litigation costs

 
 
 
416

 
 
 
416

 
 
 
 
Symform expenses, net
28

 
 
 
307

 
 
 
307

 
 
 
 
Loss on debt extinguishment

 
 
 

 
 
 
1,295

 
 
 
 
Non-GAAP
$
62,732

 
42.4
%
 
$
6,258

 
4.2
%
 
$
18,001

 
$
0.07

 
$
0.06

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Computation of basic and diluted net income per share:
 
 
 
 
 
 
 
 GAAP
 
 Non-GAAP
 Net income
 
 
 
 
 
 
 
 
 
 
$
12,905

 
$
18,001

Interest of dilutive convertible notes
 
 
 
 
 
 
 
902

 
1,968

Income for purposes of computing income per diluted share
 
 
 
 
 
$
13,807

 
$
19,969

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Weighted average shares:
 
 
 
 
 
 
 
 
 
 
 
 
 
 Basic
 
 
 
 
 
 
 
 
 
 
257,391

 
257,391

 Dilutive shares from stock plans
 
 
 
 
 
 
 
7,183

 
7,183

 Dilutive shares from convertible notes
 
 
 
 
 
 
 
42,502

 
65,675

 Diluted
 
 
 
 
 
 
 
 
 
 
307,076

 
330,249


 
Twelve Months Ended March 31, 2015
 
Gross Margin
 
Gross Margin Rate
 
Income From Operations
 
Operating Margin
 
Net Income
 
Per Share Net Income, Basic
 
Per Share Net Income, Diluted
GAAP
$
244,686

 
44.2
%
 
$
14,397

 
2.6
%
 
$
16,760

 
$
0.07

 
$
0.06

Non-GAAP Reconciling Items:
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of intangibles
913

 
 
 
3,697

 
 
 
3,697

 
 
 
 
Share-based compensation
1,489

 
 
 
11,583

 
 
 
11,583

 
 
 
 
Restructuring charges

 
 
 
1,666

 
 
 
1,666

 
 
 
 
Outsourcing transition costs
126

 
 
 
126

 
 
 
126

 
 
 
 
Proxy contest and related costs

 
 
 
972

 
 
 
972

 
 
 
 
Crossroads patent litigation costs

 
 
 
1,160

 
 
 
1,160

 
 
 
 
Acquisition expenses

 
 
 
4

 
 
 
4

 
 
 
 
Symform expenses, net
78

 
 
 
793

 
 
 
793

 
 
 
 
Loss on debt extinguishment

 
 
 

 
 
 
1,295

 
 
 
 
Non-GAAP
$
247,292

 
44.7
%
 
$
34,398

 
6.2
%
 
$
38,056

 
$
0.15

 
$
0.14

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Computation of basic and diluted net income per share:
 
 
 
 
 
 
 
 GAAP
 
 Non-GAAP
Net income
 
 
 
 
 
 
 
 
 
 
$
16,760

 
$
38,056

Interest of dilutive convertible notes
 
 
 
 
 
 
 

 
3,610

Income for purposes of computing income per diluted share
 
 
 
 
 
$
16,760

 
$
41,666

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Weighted average shares:
 
 
 
 
 
 
 
 
 
 
 
 
 
 Basic
 
 
 
 
 
 
 
 
 
 
254,665

 
254,665

 Dilutive shares from stock plans
 
 
 
 
 
 
 
5,362

 
5,362

 Dilutive shares from convertible notes
 
 
 
 
 
 
 

 
42,502

 Diluted
 
 
 
 
 
 
 
 
 
 
260,027

 
302,529


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
FISCAL 2016
SELECTED RESULTS
(In thousands)
(Unaudited)

Selected Results Excluding Mega Deals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Twelve Months Ended
 
 
 
March 31, 2016
 
March 31, 2015
 
Change
 
% Change
 
As Reported
 
Mega Deals (1)
 
Excluding Mega Deals
 
As Reported
 
Mega Deals (1)
 
Excluding Mega Deals
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Scale-out storage solutions:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product revenue
$
103,274

 
$
(3,768
)
 
$
99,506

 
$
85,887

 
$
(10,653
)
 
$
75,234

 
$
24,272

 
32
%
Product and service revenue(2)
$
126,457

 
$
(3,768
)
 
$
122,689

 
$
102,427

 
$
(10,653
)
 
$
91,774

 
$
30,915

 
34
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Mega deals are defined as deals over $1.0 million. Management considers revenue excluding mega deals in its evaluation of the business for decision making.

(2)
 Management considers product and service revenue in its evaluation of the business for decision making and to compare against competitors. Total product and service revenue less total product revenue equals service revenue in our GAAP results.


Selected Results Excluding Goodwill Impairment Charges
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
Six Months Ended
 
 
 
March 31, 2016
 
December 31, 2015
 
March 31, 2016
 
September 30, 2015
 
Change
 
As Reported
 
Goodwill Impairment
 
Excluding Goodwill Impairment
 
As Reported
 
Excluding Goodwill Impairment
 
As Reported
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss)
$
(52,402
)
 
55,613

 
3,211

 
$
(299
)
 
$
2,912

 
$
(21,982
)
 
$
24,894

Non-GAAP net income (loss)
$
6,514

 

 
6,514

 
$
5,331

 
$
11,845

 
$
(14,412
)
 
$
26,257






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QUANTUM CORPORATION
FORECAST FIRST QUARTER AND FULL FISCAL 2017
GAAP TO NON-GAAP RECONCILIATION
(In millions, except per share amounts)
(Unaudited)
Forecast First Quarter Fiscal 2017
 
Percentage Range
Forecast gross margin rate on a GAAP basis
42.7
%
43.7
%
Forecast share-based compensation
0.3
%
 
Forecast gross margin rate on a non-GAAP basis
43.0
%
44.0
%
 
 
 
 
 
Dollar Range
Forecast operating expense on a GAAP basis
$
54.0

$
55.0

Forecast share-based compensation
(2.0)
Forecast operating expense on a non-GAAP basis
$
52.0

$
53.0

 
 
 
 
 
Dollars per Share
Forecast diluted earnings per share on a GAAP basis
$
(0.02
)
$
(0.03
)
Forecast share-based compensation
0.01
Forecast diluted earnings per share on a non-GAAP basis
$
(0.01
)
$
(0.02
)
 
 
 
 

Forecast Full Fiscal 2017
 
Percentage Range
Forecast gross margin rate on a GAAP basis
42.8
%
43.8
%
Forecast share-based compensation
0.2
%
 
Forecast gross margin rate on a non-GAAP basis
43.0
%
44.0
%
 
 
 
 
 
Dollars
Forecast operating expense on a GAAP basis
$
206.9
 
 
Forecast share-based compensation
(6.4
)
 
Forecast Crossroads patent litigation costs
(0.5
)
 
Forecast operating expense on a non-GAAP basis
$
200.0
 
 
 
 
 
 
 
Dollars per Share
Forecast diluted earnings per share on a GAAP basis
$
0.01
 
 
Forecast share-based compensation
0.03
 
 
Forecast Crossroads patent litigation costs
0.00
 
 
Forecast diluted earnings per share on a non-GAAP basis
$
0.04
 
 
 
 
 
 
Estimates based on current (May 10, 2016) 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 12, 2015. 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.



- end-