Quantum Corporation has announced financial results for its fiscal fourth quarter and year ended March 31, 2020, noting revenue of $402.9 million, increased gross margins by 42.8 percent, decrease of total operating expenses by 12 percent and narrowed GAAP Net loss to $5.2 million, the company reported on Thursday.
"Quantum delivered significantly improved performance in fiscal 2020, particularly in terms of profitability, despite a marked slowdown in revenue in mid-March when the outbreak of the COVID-19 pandemic halted professional sporting events and many of our customers in the media and entertainment sectors temporarily ceased filming operations," commented Jamie Lerner, chairman and CEO, Quantum.
Quantum’s adjusted Net Income increased by $10.6 million to $15.4 million and its adjusted EBITDA increased by $13.3 million to $45.9 million. Revenue was driven by a 3 percent increase in product revenue with growth in primary storage and devices and media partially offset by a decline in secondary storage systems.
Strength in products was offset by modest declines in services primarily due to reduced support renewals from our legacy backup customers, and royalty driven by overall declines in market unit volumes as the primary use of tape transitions from backup to archive implementations.
Quantum’s gross profit for fiscal 2020 was $172.5 million, or 42.8 percent gross margin, compared to $167.6 million, or 41.6 percent gross margin, in fiscal 2019. Gross margins improved year over year across a wide range of products, primarily due to reductions in cost of service and a sales mix weighted towards more profitable product lines.
The company’s total operating expenses for fiscal 2020 were $151.3 million, or 37.5 percent of revenue, compared to $172.4 million, or 42.8 percent of revenue, in fiscal 2019. Research and development expenses increased 13 percent to $36.3 million for fiscal 2020 compared to $32.1 million in fiscal 2019.
Selling, general and administrative expenses declined 15 percent to $114.0 million for fiscal 2020 compared to $134.7 million for fiscal 2019 due to lower costs associated with the financial restatement and related activities, as well as lower operating expenses overall as a result of our efforts to streamline processes and reduce our facilities footprint.
Net loss was $5.2 million compared to a net loss of $42.8 million. Excluding non-recurring charges, stock compensation and restructuring charges, adjusted Net Income was $15.4 million, or $0.34 per diluted share for fiscal 2020, compared to $4.8 million, or $0.12 per diluted share, in fiscal 2019.
“The acquisition of the ActiveScale object storage business from Western Digital and the integration of Atavium software into our organization, has strategically bolstered our technology portfolio to strengthen our capabilities in each of these markets. As a result, our position in the industry continues to improve," Lerner added.
Quantum completed its acquisition of the ActiveScale object storage business from Western Digital Technologies, Inc., a subsidiary of Western Digital Corp., to expand Quantum's leadership role in storing and managing video, in March 2020.
Quantum will acquire the ActiveScale product line, adding object storage software and erasure coding technology to the company’s portfolio. With the addition, Quantum will expand its product offerings in the object storage market. Object storage has emerged as a response to the exponential growth of video and other forms of unstructured data.
The emerging content has required high-speed capture and processing, then retained for years or decades, including entertainment video and images, surveillance and security, and marketing and training. Prior to this acquisition Quantum successfully delivered and supported the ActiveScale object storage product line for over five years.
Quantum technology and services help customers capture, create and share digital content – and preserve and protect it for decades. With solutions built for every stage of the data lifecycle, Quantum's platforms provide the fastest performance for high-resolution video, images, and industrial IoT. That's why the world's leading entertainment companies, sports franchises, researchers, government agencies, enterprises, and cloud providers are making the world happier, safer, and smarter on Quantum.