Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 1, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarter Ended Commission File Number
January 1, 1995 0-12390
QUANTUM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 94-2665054
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
500 McCarthy Blvd.
Milpitas, California 95035
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (408) 894-4000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934, during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of January 19, 1995: 46,027,105
<PAGE>
QUANTUM CORPORATION
10-Q REPORT
INDEX
Page
Number
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Consolidated Statements of Operations 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II - OTHER INFORMATION 13
SIGNATURE 14
<PAGE>
QUANTUM CORPORATION
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
(unaudited)
Three Months Ended Nine Months Ended
-------------------- ----------------------
Jan. 1, Jan. 2, Jan. 1, Jan. 2,
1995 1994 1995 1994
-------- --------- --------- ----------
Sales $932,702 $523,021 $2,384,175 $1,496,088
Cost of sales 797,447 466,199 1,970,113 1,370,239
-------- --------- ---------- ----------
Gross profit 135,255 56,822 414,062 125,849
Operating expenses:
Research and development 54,004 19,632 111,158 61,205
Sales and marketing 28,355 17,453 74,221 53,775
General and administrative 14,218 9,576 35,901 32,376
Purchased research & development
and in merger costs 72,945 - 72,945 -
Restructuring and non-recurring
charges - - - 22,753
--------- --------- --------- ---------
169,522 46,661 294,225 170,109
Income (loss) from operations (34,267) 10,161 119,837 (44,260)
Other (income) expense:
Interest expense 8,301 3,385 15,306 10,426
Interest and other income (2,300) (1,634) (7,835) (5,607)
---------- --------- --------- ---------
6,001 1,751 7,471 4,819
Income (loss) before income
taxes (40,268) 8,410 112,366 (49,079)
Income tax provision (benefit) 8,042 2,271 53,832 (13,251)
--------- --------- --------- ----------
Net income (loss) $(48,310) $6,139 $58,534 $(35,828)
========= ========= ========= ==========
Net income (loss) per share:
Primary $(1.06) $0.14 $1.24 $(0.83)
Fully diluted $(1.06) $0.14 $1.10 $(0.83)
Weighted average common and
common equivalent shares
Primary 45,448 44,357 47,180 43,151
Fully diluted 45,448 44,357 58,889 43,151
See accompanying notes to consolidated financial statements.
<PAGE>
QUANTUM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)
Jan. 1, March 31,
1995 1994
-------- ---------
Assets
Current assets:
Cash and cash equivalents $ 165,376 $ 217,531
Short-term investments 89,781 112,508
Accounts receivable, net of allowance for
doubtful accounts of $11,942 and $11,379 415,230 324,376
Inventories 382,574 194,083
Deferred taxes 37,697 32,821
Other current assets 12,896 14,365
--------- ---------
Total current assets 1,103,554 895,684
Property and equipment, net of accumulated
depreciation of $107,347 and $72,801 244,011 85,874
Other assets 18,084 14,586
Purchased intangibles, net 100,457 1,294
-------- ---------
$1,466,106 $ 997,438
========= =========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 350,649 $ 267,189
Accrued warranty expense 55,762 55,617
Accrued compensation 40,965 15,315
Income taxes payable 16,717 -
Accrued merger costs 64,675 -
Current portion of long term debt 25,000 -
Other accrued liabilities 50,413 35,545
-------- ---------
Total current liabilities 604,181 373,666
Subordinated debentures 212,500 212,500
Long term debt 170,000 -
Shareholders' equity:
Common stock 134,150 124,530
Retained earnings 345,275 286,742
-------- ---------
Total shareholders' equity 479,425 411,272
-------- ---------
$1,466,106 $997,438
========= =========
See accompanying notes to consolidated financial statements.
<PAGE>
QUANTUM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended
Jan. 1, Jan. 2,
1995 1994
------- ---------
Cash flows from operating activities:
Net income (loss) $ 58,534 $(35,828)
Items not requiring the current use of cash:
Depreciation and amortization 33,705 22,088
Write off of goodwill - 6,338
Purchased research and development 67,184 -
Changes in assets and liabilities:
Accounts receivable (90,854) (27,016)
Inventories (41,839) 36,283
Accounts payable 83,460 1,311
Income taxes payable 17,726 (19,026)
Accrued warranty expense 145 16,522
Other assets and liabilities 28,403 3,218
-------- --------
Net cash provided by operating activities 156,464 3,890
-------- --------
Cash flows from investing activities:
Purchase of short-term investments (105,474) (105,905)
Sales and maturities of short-term investments 128,201 165,668
Investment in property and equipment (79,786) (26,734)
Purchase of Digital Equipment's Data Storage Business (355,171) -
-------- ---------
Net cash provided by (used in) investing activities (412,230) 33,029
-------- ----------
Cash flows from financing activities:
Proceeds from issuance of short term note 70,000 -
Proceeds from revolving line of credit and term
loan borrowings 220,500 -
Principal payments on short term note (70,000) -
Principal payments on revolving line of credit (25,500) -
Repurchase of common stock - (17,479)
Proceeds from issuance of common stock 8,611 8,819
-------- ---------
Net cash provided by (used in) financing activities 203,611 (8,660)
-------- ---------
Net increase (decrease) in cash and cash equivalents (52,155) 28,259
Cash and cash equivalents at beginning of period 217,531 121,838
-------- ---------
Cash and cash equivalents at end of period $165,376 $150,097
======== =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $17,297 $ 13,671
Income taxes $31,594 $ 11,406
See accompanying notes to consolidated financial statements.
<PAGE>
QUANTUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of presentation
The accompanying unaudited consolidated financial statements reflect all
adjustments, consisting only of normal recurring adjustments which, in the
opinion of management, are necessary for a fair presentation of the results for
the periods shown. The results of operations for such periods are not
necessarily indicative of the results expected for the full fiscal year. The
accompanying financial statements should be read in conjunction with the
audited financial statements of Quantum Corporation for the fiscal year ended
March 31, 1994.
2. Inventories
Inventories consisted of the following:
(In thousands)
Jan. 1, Mar. 31,
1995 1994
------- --------
Materials and purchased parts $ 78,911 $ 27,841
Work in process 72,841 14,729
Finished goods 230,822 151,513
-------- ---------
$382,574 $194,083
======== =========
3. Net income (loss) per share
Net income (loss) per share is computed using the weighted average number
of common and dilutive common equivalent shares outstanding. Net income per
share computed on a fully diluted basis assumes conversion of the Company's
outstanding 6 3/8% convertible subordinated debentures having a principal value
of $212,500,000. For the three months ended January 1, 1995 and the three and
nine months ended January 2, 1994, the primary net income (loss) per share is
shown in the statement of income as both primary and fully diluted, as the
effect of the assumed conversion of the subordinated debentures is anti-
dilutive.
4. Acquisition of businesses from Digital Equipment Corporation
On October 3, 1994, Quantum Corporation ("Quantum" or "the Company")
acquired the Disks, Heads, and Tapes Business of the Storage Business Unit of
Digital Equipment Corporation ("the acquired Business"), in a transaction which
is being accounted for as a purchase. The operating results of the acquired
Business from the date of the purchase through January 1, 1995 have been
reflected in the Company's consolidated financial statements for the quarter
and year to date periods.
<PAGE>
The Company retained independent valuation professionals to assist it in
the final determination of the value to be assigned to the individual assets
acquired, including intangibles and purchased research and development. The
results of this valuation are included in the consolidated balance sheet for
the third quarter of fiscal 1995. However, the final allocation of the
purchase price is not yet complete as the Company's management is still
awaiting certain information related to the purchase. While the consolidated
financial statement information has been presented based on the best
information currently available to Company's management, the final allocation
could change, and the change could affect the consolidated financial
information. The types of information that the Company is awaiting include:
* Determination of the final purchase price - The purchase agreement contained
several adjustment provisions related to the level and value of inventory and
property, plant and equipment, and such adjustment provisions are still being
negotiated.
* Management's plans regarding utilization and deployment of the acquired
Business' assets and operations - Management is still evaluating the utility
and deployment of the assets and operations acquired in this transaction. The
magnitude of costs to be incurred or asset impairments related to the acquired
operations are still being assessed.
Company management expects that the final purchase price will be known by
the time the Company's March 31, 1995 Report on Form 10K is filed.
Finalization of management's plans regarding utility and deployment of assets
and operations acquired is expected by March 31, 1995.
The Company has assumed a purchase price of $350.5 million, and direct
costs of the transaction for investment banker and professional fees and other
direct incremental transaction costs of $4.7 million.
Recap of purchase price allocation:
(in millions)
Inventories $146.7
Property and equipment 104.3
Intangible assets 106.1
Accrual for merger related costs (64.7)
Other assets/liabilities, net (4.4)
Purchased research and development (expense) 67.2
-------
$355.2
=======
Intangible assets include completed technology, workforce in place, a
supply agreement and customer list. The estimated useful lives range from 3 to
10 years. The $67.2 million allocated to purchased research and development
was expensed immediately as required under generally accepted accounting
principles.
<PAGE>
The unaudited pro forma combined condensed results of operations of the
Company for the three months and nine months ended January 1, 1995 and January
2, 1994 had the acquisition occurred on April 1, 1993, on the basis described
above, would have been as follows:
(in thousands, except per share data)
Three Months Ended Nine Months Ended
-------------------- ----------------------
Jan. 1, Jan. 2, Jan. 1, Jan. 2,
1995 1994 1995 1994
-------- --------- --------- ----------
Net sales $932,702 $669,589 $2,806,960 $2,127,160
Net income (loss) 22,874 (17,921) 52,820 (125,845)
Net income (loss) per share:
Primary $0.48 ($0.42) $1.12 ($2.92)
Fully diluted $0.42 ($0.42) $1.00 ($2.92)
Note: All material intercompany transactions have been eliminated.
The unaudited pro forma results for the nine months ended January 2, 1994
reflect a charge for purchased research and development and other in merger
costs of $73 million. The pro forma results for the three months and nine
months ended January 1, 1995 and January 2, 1994 also reflect intangible asset
amortization, depreciation on net book value of acquired assets, amortization
of loan fees and interest expense on the new debt related to the acquisition.
The unaudited pro forma information is presented for illustrative
purposes only and is not necessarily indicative of the operating results that
would have occurred had the transaction been completed at the beginning of the
period indicated, nor is it necessarily indicative of future operating results.
5. Debt
On October 3, 1994, the Company purchased the acquired Businesses from
Digital. The purchase was financed with cash, bank debt and a note to Digital
for $70 million.
The bank debt consists of a three year $350 million senior credit
facility structured as a $225 million revolving credit line and a $125 million
term loan. The revolving credit will be governed by a borrowing base of
eligible accounts receivable and inventory, and the term loan amortizes in five
equal semi-annual installments commencing twelve months from closing. The
borrowings, at the option of the Company, could have interest rates of either
LIBOR plus a margin or a base rate.
The facility is secured by all the Company's domestic assets and 66% of
the Company's ownership of certain of it's foreign subsidiaries.
The note to Digital was subsequently paid during the quarter with funds
from the revolving credit line.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
On October 3, 1994, the Company acquired the Disks, Heads and Tapes
Business of the Storage Business Unit of Digital Equipment Corporation
("Digital" or "the acquired Businesses"). The transaction includes Digital's
interest in Digital Equipment Storage Products (Malaysia) Sdn. Bhd., it's 81%
ownership in Rocky Mountain Magnetics, Inc., and substantially all of the
assets related to the data storage business conducted by Digital directly. The
operating results of the acquired Businesses from the date of purchase through
January 1, 1995 have been reflected in the Company's consolidated financial
statements for the quarter. Refer to note 4 of the Notes to Consolidated
Financial Statements for details of the acquisition.
Consolidated sales for the three and nine months ended January 1, 1995
were $933 million and $2,384 million, respectively, compared to $523 million
and $1,496 million for the corresponding periods in fiscal 1994. The increase
in consolidated sales on a year-to-year basis was attributable to the newly
acquired products as well as increased unit shipments of existing Quantum
products.
Sales to major customers, as a percentage of consolidated sales, for the
three and nine months ended January 1, 1995 and January 2, 1994 were as
follows:
Three Months Ended Nine Months Ended
-------------------- ----------------------
Jan. 1, Jan. 2, Jan. 1, Jan. 2,
1995 1994 1995 1994
-------- --------- --------- ----------
Digital Equipment Corporation 14% * * *
Compaq Computer, Inc. 14% * 17% 10%
Apple Computer, Inc. 11% 17% 13% 24%
* sales represented less than 10% of consolidated sales for the period
In conjunction with the acquisition, the Company and Digital signed a
multi year supply agreement providing the Company a substantial percentage of
Digital's internal hard disk drive requirements for its Storageworks subsystems
and core computer systems businesses. The Company has no other long term
supply commitments with these customers. Any significant decrease in sales to
these customers, or the loss of one or all of these customers, could have a
material adverse effect on the Company's results of operations.
The gross margin for the quarter ended January 1, 1995 increased to 14.5%
from 10.9% for the third quarter of fiscal 1994. The Company's gross margin
for the first nine months of fiscal 1995 was 17.4%, compared to 8.4% for the
corresponding period in fiscal 1994. The improvement in gross margin from the
previous fiscal year was a result of a better cost structure for given drive
capacities during the first nine months of fiscal 1995, compared to the same
period in fiscal 1994. During the same period a year ago, the Company
experienced intense pricing pressures in both the distribution and OEM channels
which resulted from an industry wide oversupply of disk drives.
For at least the next quarter, the Company anticipates that gross margin
will continue to be impacted as certain issues associated with the acquisition
of the acquired Businesses are addressed. While significant progress was made
in the third quarter, the Company will continue to focus on phasing out the
older, lower gross margin product lines acquired from Digital, and integrating
the thin film heads across the Company's existing product lines to reduce
excess head manufacturing capacity. Also, gross margin will be impacted as the
Company's desktop and portable group begins mass production of new follow-on
products. These new products will provide significant cost benefits over
current products; however, margins will remain under pressure until the Company
can begin transitioning customers to these new products.
Over the past ten years, Quantum has established a strong business
relationship with Matsushita-Kotobuki Electronics Industries, Ltd. (MKE) of
Japan. This relationship has been built on Quantum's engineering and design
expertise and MKE's high-volume, high-quality manufacturing expertise. The
Company's master agreement with MKE, which covers the general terms of the
business relationship, was renegotiated during fiscal 1993 and was extended for
a period of five years. Sales derived from products manufactured by MKE
accounted for 82% of Quantum's sales for the first nine months of fiscal 1995,
compared to 72% of sales during the third quarter of fiscal 1995. The decline
in MKE products as a percentage of sales is a result of the increase in
consolidated sales due to the newly acquired products and Quantum's
manufacturing of those products. In the event MKE is unable to supply such
products or increases its prices for manufacturing services, the Company's
results of operations would be adversely affected. The Company's transactions
with MKE are denominated in U.S. dollars with prices for product purchases
negotiated periodically. Thus, fluctuations in the exchange rate have no
material short term impact on Quantum's results of operations. However, such
fluctuations may impact future negotiated prices.
In conjunction with the acquisition of the thin film heads business, the
Company is continuing Digital's relationship with Lafe Computer Magnetics Ltd.
("Lafe") of China and is in the process of negotiating a manufacturing
agreement. In the event Lafe is unable to supply manufacturing services the
Company could experience an interruption in business. The Company's
transactions with Lafe are denominated in U.S. dollars, thus fluctuations in
the exchange rate have no material short term impact on Quantum's results of
operations. However, such fluctuations may impact future negotiated prices.
Quantum operates in an extremely competitive industry and its rapid
growth has been the result of the Company's ability to identify customer needs
and develop quality products to meet those requirements. The Company expects
that sales from new products, including those products acquired from Digital,
will account for a significant portion of sales for the last quarter of fiscal
1995 and the first quarter of fiscal 1996, replacing sales of some current
products. The Company's continued ability to produce new products economically
and manage the transition of customers to these new products is essential for
continued success. The hard disk drive industry is characterized by shorter
product life cycles and is dependent on the strength of unit demand in the
personal computer market. These and other factors may affect the Company's
results of operations, and past financial performance should not be considered
a reliable indicator of future performance. Investors should not use
historical trends to anticipate results or trends in future periods.
Operating Expenses
Research and development expenses in the third quarter of fiscal 1995
were $54 million or 6% of sales, compared to $20 million or 4% of sales in the
corresponding period in fiscal 1994. Research and development expenses in the
nine months ended January 1, 1995 were $111 million or 5% of sales, compared to
$61 million or 4% of sales in the corresponding period in fiscal 1994. The
increases during the three months and nine months ended January 1, 1995 are due
primarily to the acquired Businesses and reflect spending for both the
vertically integrated heads business and the additional high capacity products,
which tend to be more research and development intensive. With the acquisition
of the acquired Businesses the Company expects a continued higher level of
expenditures for research and development and that research and development
expenses will represent a higher percentage of sales on an ongoing basis. The
hard disk drive industry is subject to rapid technological advances and the
future success of the Company is dependent upon continued successful and timely
introductions of new products and technologies.
Sales and marketing expenses in the third quarter of fiscal 1995 were $28
million, compared to $17 million in the corresponding period in fiscal 1994, or
3% of sales for each respective quarter. Sales and marketing expenses in the
nine months ended January 1, 1995 were $74 million or 3% of sales, compared to
$54 million or 4% of sales in the corresponding period of fiscal 1994. The
increases in absolute dollars are related to the Digital acquisition and the
costs associated with supporting the higher sales volume and the expanded
Company infrastructure. The Company anticipates a continued higher level of
absolute dollar spending in sales and marketing related to the Digital
acquisition, with expenditures as a percentage of sales remaining relatively
consistent.
General and administrative expenses in the third quarter of fiscal 1995
were $14 million compared to $10 million for the corresponding period in fiscal
1994. General and administrative expenses in the nine months ended January 1,
1995 were $36 million, compared to $32 million in the corresponding period in
fiscal 1994. In each of these periods general and administrative expenses were
2% of sales for the respective period. Due to the acquisition of the acquired
Businesses, the Company expects a continued higher level of absolute dollar
spending in general and administrative, with expenditures as a percentage of
sales remaining relatively consistent.
As a result of the acquisition of the acquired Businesses, the Company
incurred a one time charge of $73 million, which included $67 million of
purchased research and development and $6 million in related merger costs.
Merger costs are comprised of incremental integration costs incurred through
January 1, 1995.
Net interest and other income/expense in the third quarter of fiscal 1995
were $6.0 million net expense, compared to $1.8 million net expense in the
corresponding period in fiscal 1994. Net interest and other income/expense for
the nine months ended January 1, 1995 were $7.5 million net expense, compared
to $4.8 million net expense in the corresponding period in fiscal 1994. The
increase in net expense in fiscal 1995 can be attributed to higher interest
expense resulting from the acquisition financing and lower cash balances due to
cash paid for the acquisition.
The Company anticipates that the acquisition of the acquired Businesses
will have a future effect on both operating and net income resulting from the
amortization of intangibles, depreciation on net book value of acquired assets,
and interest expense on the debt. As detailed in Note 4 of the Notes to
Consolidated Financial Statements, the final allocation of the purchase price
is not yet complete and the allocation could change, as the Company's
management is still awaiting certain information related to the purchase.
Based on the best information currently available the Company estimates that
charges for the amortization of intangibles and depreciation on net book value
of acquired assets could range from $53 to $56 million during the next three
fiscal years. Interest expense on the debt will be dependent on the loan
balance and the interest rate (refer to Note 5 of the Notes to Consolidated
Financial Statements).
Income Taxes
For the quarter and nine months ended January 1, 1995 the effective tax
rate was 30%, excluding purchased research and development charges. This 30%
effective tax rate reflects the benefits of subsidiary earnings taxed at rates
lower than the US rate. For fiscal 1995, including the purchased research and
development charges generates a higher tax rate as there is no tax benefit
associated with technology which the Company anticipates will be utilized
offshore. For the three months ended January 2, 1994 the tax provision was 27%
and for the nine months ended January 2, 1994 the benefit provision was 27%.
The tax benefit for the nine months ended January 2, 1994 resulted from an
overall US net operating loss.
Liquidity and Capital Resources
At January 1, 1995, the Company had $255 million in cash and cash
equivalents and short-term investments, compared to $330 million at March 31,
1994. The decrease is due primarily to cash used for the Digital acquisition.
On October 3, 1994, the Company purchased the acquired Businesses from
Digital. The purchase was financed with cash, bank debt and a note to Digital
for $70 million.
The bank debt consists of a three year $350 million senior credit
facility structured as a $225 million revolving credit line and a $125 million
term loan. The revolving credit will be governed by a borrowing base of
eligible accounts receivable and inventory, and the term loan amortizes in five
equal semi-annual installments commencing twelve months from closing.
The note to Digital was subsequently paid during the quarter with funds
from the revolving credit line.
The Company expects to spend approximately $20 to $30 million for
leasehold improvements, capital equipment and the expansion of the Company's
facilities for the remainder of fiscal year 1995. Over the next twelve months,
the Company anticipates a significant amount of additional capital expenditures
will be required to ramp the Asia manufacturing facilities and to support the
recording heads business of the acquired Businesses. The Company believes that
the credit facilities, as well as cash generated from its operations, will be
sufficient to meet these capital requirements as well as working capital
requirements during the next twelve months.
<PAGE>
QUANTUM CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal proceedings - Not Applicable.
Item 2. Changes in securities - Not Applicable.
Item 3. Defaults upon senior securities - Not Applicable.
Item 4. Submission of matters to a vote of security holders -Not Applicable
Item 5. Other information - Not Applicable.
Item 6. Exhibits and reports on Form 8-K.
(a) Exhibits. The exhibits listed on the accompanying index to
exhibits immediately following the signature page are
filed as part of this report.
(b) Reports on Form 8-K.
(1) Form 8-K dated October 3, 1994, filed on October 17, 1995.
Item 2. Acquisitions or Dispositions of Assets
Item 7. Financial statements and Exhibits - Financial
Statements and Pro Forma Financial Information
omitted.
(2) Form 8-K/A-1 dated October 3, 1994, filed January 31, 1995.
Item 7. Financial Statements and Exhibits.
(a) Audited Statements of Assets Sold and Liabilities
Assumed of the Disks, Heads and Tapes Business of the
Storage Business Unit of Digital Equipment
Corporation, as of July 2, 1994 and July 3, 1993 and
Statements of Operations for fiscal years ended
July 2, 1994, July 3, 1993 and June 27, 1992.
Unaudited Statement of Assets Sold and Liabilities
Assumed of the Disks, Heads and Tapes Business of the
Storage Business Unit of Digital Equipment
Corporation, as of October 1, 1994 and Unaudited
Statements of Operations for the three months ended
October 1, 1994 and October 2, 1993.
(b) Unaudited Pro Forma Condensed Consolidated Balance
Sheet of Registrant as of October 2, 1994 and
Unaudited Pro Forma Condensed Consolidated Statement
of Operations of Registrant for the year ended
March 31, 1994 and for the period from April 1, 1994
to October 1, 1994.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
QUANTUM CORPORATION
(Registrant)
Date: February 15, 1995 By: /s/ Joseph T. Rodgers
Executive Vice President, Finance
and Chief Financial Officer
<PAGE>
QUANTUM CORPORATION
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Page
11.1 Statement of Computation of Net Income per Share 16
27 Financial Data Schedule 17
EXHIBIT 11.1
QUANTUM CORPORATION
COMPUTATION OF NET INCOME PER SHARE
(In thousands except share and per share data)
Three Months Ended Nine Months Ended
Jan. 1, Jan. 2, Jan. 1, Jan. 2,
1995 1994 1995 1994
PRIMARY
Weighted average number 45,448,185 42,754,076 45,167,337 43,150,701
of common shares during the
period
Incremental common shares 0 1,602,566 2,012,561 0
attributable to exercise
of outstanding options
---------- ---------- ---------- ----------
Total shares 45,448,185 44,356,642 47,179,898 43,150,701
========== ========== ========== ==========
Net income (loss) $(48,310) $6,139 $58,534
$(35,828)
========== ========== ========== ==========
Net income (loss) per share $ (1.06) $ .14 $ 1.24 $
(0.83)
========== ========== ========== ==========
FULLY DILUTED
Weighted average number of 45,448,185 42,754,076 45,167,337 43,150,701
common shares during the
period
Incremental common shares 13,617,733 13,823,488 13,721,429 13,190,505
attributable to exercise
of outstanding options and
conversion of 6 3/8%
convertible subordinated
debentures
---------- ---------- ---------- ----------
Total shares 59,065,918 56,577,564 58,888,766 56,341,206
========== ========== ========== ==========
Net income (loss):
Net income (loss) $(48,310) $ 6,139 $ 58,534
$(35,828)
Add 6 3/8% convertible
subordinated debentures
interest, net of income
tax effect 2,026 2,229 6,146 6,785
-------- -------- -------- --------
Net income, as adjusted $(46,284) $ 8,368 $ 64,680
$(29,043)
======== ======== ======== ========
Net income per share $ (0.78)* 0.15* $ 1.10 $
(0.52)*
======== ======== ======== ========
* The primary net income (loss) per share is shown in the statements of
operations as both primary and fully diluted, as the effect of the assumed
conversion of the subordinated debentures is anti-dilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS OF QUANTUM CORPORATION FOR THE NINE MONTH
PERIOD ENDED JANUARY 1, 1995.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
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0
0
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</TABLE>
