Financial

posted on 30 July 2008 06:21

For its Q1 fy089 Quantum reported a ten percent year-on-year fall in revenues to $222 million from $202 million.

There was a GAAP net loss of $14 million ($0.07/share), an improvement of 4 percent on Q1 fy08.

Positive news was the growth in Quantum's disk systems and software sales. Product and service revenue in this category totaled $20 million, an increase of 100 percent over Q1 fy08 and 60 percent over the prior quarter. Quantum's newly released DXi7500 enterprise deduplication and replication system was a significant contributor to this growth, and the company also received revenue from its software license agreement with EMC.

This good deduplication performance fits in with ExaGrid and Data Domain also reporting good dedupe product sales growth.

Non-royalty branded revenue was up 3 percent. Quantum's overall GAAP gross margin rate rose from 32 to 34 percent, year-over-year. Quantum's Q1 fy09 product revenue was $158 million, a net decrease of $24 million from Q1 fy08, primarily due to an expected decline in overall OEM revenue. 

Tape automation product revenue totaled $86 million in the June quarter, a decrease of $22 million from the comparable period last year, with two-thirds of the decline related to OEM products and the other third mainly due to lower branded sales in North America.

Quantum generated $26 million in cash from operations for the quarter and paid down $50 million of debt. The company's cash balance as of June 30, 2008 was $67 million.

Rick Belluzzo, Quantum chairman and CEO, said: "Although the June quarter was a transitional one in many ways, we demonstrated significant progress in several key areas. We achieved record disk systems and software revenue with just a month's contribution from our branded DXi7500 shipments and expanded relationship with EMC. We also had record service revenue and increased both our branded revenue and gross margin rate. And our cash generation enabled us to pay down an even larger amount of debt than we have in recent quarters. While we have more work to do, all of this reflects our continuing focus on further improving our operating model and delivering a stable and more profitable revenue stream by growing our branded business."

Going on this then the disk systems will bring the company into profit and help pay for the ADIC acquisition. It is also hoped that the DXi product sales will help stabilize tape automation revenues due to the integration between the DXi and Quantum tape automation products.

Guidance for fy09 was revenue of $950 million to $1.050 billion.

^{[Chris Mellor.]}