Quantum Corporation's DLT & Storage Systems Group Fiscal Q3 Earnings To Be Lower Than Anticipated - Company Financial Information

Edge: Work-Group Computing Report, Jan 17, 2000

Quantum Corporation's DLT & Storage Systems Group Monday stated that its third fiscal quarter earnings per share are expected to be around $.30 on revenue of approximately $366 million for the quarter ended December 26, 1999.

The sequential decline in earnings was primarily due to lower than expected gross margins for the company's DLTtape drives. The lower than expected gross margins were a result of an unexpected shift primarily in the mix of products, with a higher percentage of low-end DLT drives shipping than previously expected. To a lesser extent, it also included a shift to a higher percentage of OEM shipments during the quarter. Despite these results, DLTtape maintained its leadership market share position in the mid-range tape market.

For its fourth fiscal quarter, the company expects flat to single digit percentage sequential declines in unit shipments, with a single digit percentage sequential decline in revenue for DLTtape drives, which will lower DSSG's outlook for revenue and earnings.

"While we are disappointed in the lower gross margins from our DLTtape drive business this quarter," said Michael Brown, Quantum's Chairman and Chief Executive Officer, "we achieved record or near-record performance in the other parts of our DSSG business, including record revenue for our DLTtape media business and strong year-over-year growth in our storage systems business."

Founded in 1980, Quantum Corporation (www.quantum.com) is the world's leading storage supplier in five of the seven markets it serves: desktop hard disk drives, tape drives, network attached storage (NAS) appliances, solid state systems and hard disk drives for the emerging personal video recorder (PVR) market. Quantum is also the second largest supplier of mid-range tape automation systems and a leading supplier of high-end hard disk drives. In 1999 Quantum became the first Silicon Valley company to issue tracking stock, replacing its existing common stock with the ticker symbols DSS and HDD, which track the separate performance of the company's DLT and Storage Systems and Hard Disk Drive businesses. Both stocks are traded on the New York Stock Exchange. Selling its products through OEM and distribution channels worldwide, sales for the fiscal year ending March 1999 were $1.3 billion for Quantum's DLT and Storage Systems Group and $3.6 billion for Quantum's Hard Disk Drive Group. FMI: www.quantum.com, 408/894-4000.