Quantum Corporation (Nasdaq: QMCO), a leader in solutions for AI
and unstructured data, provided additional updates on its
business.
Fiscal Fourth Quarter 2024 Liquidity Update
Quantum’s unaudited cash and long-term debt balances as of March
31, 2024, are provided below:
- Cash and cash equivalents were $26.1 million.
- Outstanding term loan debt was $87.9 million,
- Outstanding borrowings under the revolving credit facility was
$26.6 million,
- Total interest expense for the three-month period ended March
31, 2024, was $4.1 million.
Quantum has not completed preparation of its financial
statements for the fourth quarter and full fiscal year ended March
31, 2024. The unaudited financials presented in this press release
for the fiscal year ended March 31, 2024, are based on preliminary
estimates and are subject to adjustment.
Improving Working Capital and Debt Reduction
Subsequent to the Fiscal Fourth Quarter end, on April 2, 2024,
Quantum completed a transaction with a partner to provide turnkey,
third-party logistics, and asset management for its Global Services
operations. As part of this arrangement, Quantum sold certain
service inventory assets for an approximate payment of $15 million.
Quantum used proceeds from the disposition of these assets to
improve its financial flexibility, including paying down
approximately $12.3 million of its existing debt. This transaction
is consistent with the Company’s broader efforts to prioritize
certain financial and business projects targeting improvements to
working capital, acceleration of new products and a more focused
business. This transaction is not reflected in our Fiscal Fourth
Quarter 2024 liquidity update provided earlier.
New ERP System Implemented
After a three-year process, Quantum has completed implementation
of its new Enterprise Resource Planning (ERP) system, and as a
result, expects to see a material reduction in associated capital
expenditures in the future. The new ERP system is also expected to
result in future operational efficiencies throughout the
organization.
Nasdaq Update
Following the Company’s prior announcement on March 25, 2024,
The Nasdaq Stock Market LLC (Nasdaq) granted Quantum’s request to
stay the suspension of delisting of its common stock pending a
scheduled hearing on May 14, 2024, with the Nasdaq Hearings Panel.
Although there can be no assurance that the Panel will grant
Quantum’s request for an extension, Quantum is diligently working
to comply with all of the applicable Nasdaq listing criteria within
the period of time that the Panel may grant.
Board of Directors Transition
Quantum also announced that after 7 years of service on the
Board of Directors, Marc E. Rothman, will be retiring from the
board of directors, effective as of the earlier of August 31, 2024,
or the date of Quantum’s 2024 annual meeting of stockholders. “Marc
has been a dedicated member of our board, and we thank him for his
service. I appreciate him remaining on the board while we regain
compliance with our SEC financial reporting,” said Jamie Lerner,
Quantum's Chairman and CEO. Mr. Rothman stated, “I am grateful for
my time on the board and look forward to seeing Quantum’s continued
progress as it transitions to new products and benefits from recent
operational initiatives.” The Company is engaging a search firm to
identify a new independent director to join the board.
About Quantum
Quantum delivers end-to-end data management solutions designed
for the AI era. With over four decades of experience, our data
platform has allowed customers to extract the maximum value from
their unique, unstructured data. From high-performance ingest that
powers AI applications and demanding data-intensive workloads, to
massive, durable data lakes to fuel AI models, Quantum delivers the
most comprehensive and cost-efficient solutions. Leading
organizations in life sciences, government, media and
entertainment, research, and industrial technology trust Quantum
with their most valuable asset – their data. Quantum is listed on
Nasdaq (QMCO). For more information visit www.quantum.com.
Quantum and the Quantum logo are registered 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.
Forward-Looking Information
The information provided in this press release may include
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements are largely based on
our current expectations and projections about future events
affecting our business. Such forward-looking statements include, in
particular: Preliminary financial updates for the fourth quarter
ended March 31, 2024, including cash and outstanding debt;
Quantum’s efforts to regain and maintain compliance with the
listing standards of Nasdaq; expected benefits of the ERP system on
its capital expenditures and operational efficiencies; Quantum’s
efforts to identify a new independent director; and the Quantum’s
plans, objectives and intentions that are not historical facts
generally.
These forward-looking statements may be identified by the use of
terms and phrases such as “anticipates”, “believes”, “can”,
“could”, “estimates”, “expects”, “forecasts”, “intends”, “may”,
“plans”, “projects”, “targets”, “will”, and similar expressions or
variations of these terms and similar phrases. Additionally,
statements concerning future matters and other statements regarding
matters that are not historical are forward-looking statements.
Investors are cautioned that these forward-looking statements
relate to future events or our future performance and are subject
to business, economic, and other risks and uncertainties, both
known and unknown, that may cause actual results, levels of
activity, performance or achievements to be materially different
from those expressed or implied by any forward-looking
statements.
These forward-looking statements involve risks and uncertainties
that could cause actual results to differ materially from those
projected, including without limitation, the following: actual
results for the fourth quarter ended March 31, 2024, the quarter
and year end close process and audit of Quantum’s financial
statements; the outcome of the pending re-evaluation of accounting
matters and the possibility of adjustments, including material
adjustments, to Quantum’s financial statements as the re-evaluation
progresses; the discovery of additional and unanticipated
information during the re-evaluation process; risks related to the
timely completion of the re-evaluation and filing of the Form 10-Qs
within the expected timeframe; the ability to meet stock exchange
continued listing standards; the possibility that the Nasdaq may
delist Quantum’s common stock; the possibility that the Nasdaq
Hearings Panel may not grant an additional extension; risks related
to Quantum’s ability to implement and maintain effective internal
control over financial reporting in the future; assumptions related
to implementation of the ERP system; and the impact of these
factors on Quantum’s performance and outlook. See also other risks
that are described in “Risk Factors” in Quantum’s filings with the
Securities and Exchange Commission (the SEC), including its Annual
Report on Form 10-K filed with the SEC for the fiscal year ended
March 31, 2023, and any subsequent reports filed with the SEC.
Quantum does not intend 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 or
regulation.
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Investor Relations Contacts: Shelton Group Leanne K.
Sievers | Brett L. Perry P: 949-224-3874 | 214-272-0070 E:
sheltonir@sheltongroup.com
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