SAN JOSE, Calif. -- Quantum Corp.
(NYSE:QTM), the leading global specialist in backup, recovery and archive, today announced that revenue for its fiscal third quarter (FQ3'08), ended Dec. 31, 2007, was $253 million. Although this was down from $302 million in the same quarter last year (FQ3'07), the company more than doubled its GAAP operating income to $9 million. This was the highest level in three years and reflected Quantum's focus on pursuing higher margin sales over low-margin revenue opportunities.
The company reported a GAAP net loss of $2 million for FQ3'08, or 1 cent per share, compared to a $10 million net loss (5 cents per share) in FQ3'07. The
$2 million net loss in the recent December quarter included two major expense items totaling $16 million: $12 million in amortization of intangibles and $4 million in stock-based compensation charges. The net impact of these items reduced earnings per share on a diluted basis by approximately 8 cents.
Quantum increased its GAAP gross margin rate to 35 percent in FQ3'08, up from 29 percent in the comparable quarter last year. This was the highest GAAP gross margin rate for the company in more than five years. In addition to delivering strong gross margin performance, the company reduced its GAAP operating expenses to $78 million, from $85 million in the same period last year. During FQ3'08, Quantum also paid down $20 million of its debt related to the August 2006 acquisition of ADIC. At quarter end, the company had reduced this debt by 27 percent since the acquisition and had a balance of $360 million. Interest expense for the period was $11 million, down $4 million from the comparable quarter last year.
"We are pleased with the continued progress we made in executing on our financial model last quarter," said Rick Belluzzo, chairman and CEO of Quantum. "Our strategy of focusing on the higher margin segments of our business and reducing our expense structure has enabled us to deliver solid operating income, generate cash and pay down our debt. At the same time, however, we recognize the need to grow branded revenue and have undertaken a number of actions across the company which we believe will help drive such growth over the coming quarters. This includes building a stronger disk and software business, with an increasing contribution from our DXi-Series family of disk-based data de-duplication and replication solutions."