otc: qmco investor presentation - amazon s3 · 2019. 8. 29. · –adjusted ebitda increased 82% to...

1© 2019 Quantum Corporation | Company Confidential

OTC: QMCO

Investor Presentation

August 2019


Disclaimer

This presentation may include “forward-looking” statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Quantum advises caution in reliance on forward-looking statements. Forward-looking statements include, without limitation, any projections of revenue, margins, expenses, Adjusted EBITDA, Adjusted Net Income, cash flows, or other financial items; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; and the expected timing of relisting our securities on a national exchange. All forward-looking statements are based on information available to Quantum on the date hereof. These statements involve known and unknown risks, uncertainties and other factors that may cause Quantum’s actual results to differ materially from those implied by the forward-looking statement, including unexpected changes in the Company’s business. More detailed information about these risk factors, and additional risk factors, are set forth in Quantum’s periodic filings with the Securities and Exchange Commission, including, but not limited to, those risks and uncertainties listed in the section entitled “Risk Factors,” in Quantum’s Quarterly Report on Form 10-Q and Annual Report on Form 10-K as filed with the Securities and Exchange Commission. Quantum expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

Also note that in this presentation the Company will be discussing non-GAAP financial information. We provide this information as a supplement to information prepared in accordance with Accounting Principles Generally Accepted in the United States or GAAP. You can find a reconciliation of these metrics to the reported GAAP results in the reconciliation table provided in the Company's earnings release furnished on Form 8-K, dated August 6, 2019.


Today’s Quantum: Leaner, More Product- and Technology-Focused, Poised for Growth and Improving Earnings Power

Current guidance of fiscal 2020 AdjustedEBITDA of a range of

$50 - 55 MILLION

For the second fiscal quarter, management expects revenues in

the range of

$99 - 105 MILLIONElimination of

OVER$70 MILLION

in annualized operating, service, and supply chain expenses


New Leadership with Proven Ability to Execute

Jamie Lerner Quantum Chairman and CEO

Mike DodsonQuantum CFO

Liz KingQuantum CRO

New Team

• Reconstituted Board of Directors to include significant shareholders; directed at corporate accountability and operational improvement

• Since January 2018, replaced almost three-fourths of prior management

• Recruited over 10 new executives from the best organizations worldwide including CEO, CFO, CRO, CAO, CIO, VP Supply Chain, General Counsel, Corporate Controller and Director of Internal Audit

• Previous experience includes HPE, IBM, Oracle, Seagate, Ernst & Young, Cisco, Pivot3, and more


Quantum Overview – Who We Are

Years storing and protecting data

Years of expertise working with video in Hollywood

Active support contracts around the world

World-class service and support organization

36+

20+

30,000+

24/7/365

Blockbusters

are created…

On Quantum.

Critical Infrastructure is

protected…

On Quantum.

The world’s biggest

brands are built…

On Quantum.

Exploration and

adventure happens…

On Quantum.

Your favorite sports are

captured…

On Quantum.

Our planet

is studied…

On Quantum.

Autonomous vehicles

are developed…

On Quantum.

Leading Enterprises are

protected...

On Quantum.

Nations are

secured…

On Quantum.

Breakthroughs are

discovered…

On Quantum.

Hyperscaler

archives...

On Quantum.

Your memories are

preserved...

On Quantum.


Video and Image Data is Everywhere

By 2025, This Digital Content Will be >80% of the Data on the PlanetSource: IDC Datasphere reports


Video is Not Well Supported by Traditional Enterprise Products

50x larger than average corp

database

Traditional Data Services

Compression, dedupe, snaps, clones, replication, backup……don’t work or less effective

Costly to move to the cloud

Petabytes of data $$$

Complexto search and analyze


Video and Image Data Sets Drive a Common Set of Requirements

CONTENT IS CAPTURED, CREATED,

UPLOADED

CONTENT IS CATALOGED,

WORKED ON,& ANALYZED

CONTENT IS PRESERVED AND PROTECTED FOR FUTURE USE

RETAIN

CONTENT IS FINISHED AND DISTRIBUTED

1 2 3 4


Quantum’s Portfolio Uniquely Delivers on These Requirements

Edge StorageRuggedized removable storage

designed for fast ingest andeasy upload/offload.

High-Performance Video PlatformsFastest streaming performance on the planet, IP (Internet

Protocol) & SAN (Storage Area Network) support, specifically designed for video & rich media use cases.

Archive Storage and Cloud Managed ServicesLowest-cost, massively scalable long-term storage of

video and rich media content and assets,on prem and in the cloud.

Use Cases: Autonomous vehicle design, rolling stock surveillance capture, military.

Use Cases: High-performance storage for video and rich media workflows, hyperconverged surveillance systems.

Use Cases: Digital media archives for broadcast and post, petabyte-scale archives for HPC (High-Performance Computing)/research rich media, exa-scale cloud archives.

CONTENT IS CAPTURED, CREATED,

UPLOADED

CONTENT IS CATALOGED,

WORKED ON,& ANALYZED

CONTENT IS PRESERVED AND PROTECTED FOR FUTURE USE

RETAIN

CONTENT IS FINISHED AND DISTRIBUTED

1 2 3 4


A More Product- and Technology-Focused Quantum

VS-Series for Surveillance Recording

StorNext File System Provides Fastest

Streaming Performance

R-Series Ruggedized StorageFor Edge Data Collection

F-Series NVMe ApplianceFor Video Editing, Rendering

Cloud-Based Analytics Software Enables Distributed

Cloud Services

Quantum Cold Storage Software and Services

Distributed Cloud Services to Drive Recurring Services Revenue


Where We Are Going

Right-sized expense structure

Poised for growth via unique products and technology

Software-defined enables recurring services and software revenue

Stabilized Financials

Significant y-y EBITDA Growth

Sustained Profitable Growth Based on Video and Image Markets


QUANTUM. MAKING THE WORLD…

HAPPIER SAFER SMARTER


OTC: QMCO

Financial Details

August 2019


Financial Overview

First Fiscal Quarter 2020 ended June 30, 2019

– Revenue of $105.6, down 2% from $107.5 in the prior year quarter

– Adjusted EBITDA increased 82% to $13.1, compared to $7.2 in the prior year quarter

Full Year Fiscal 2019 ended March 31, 2019

– Revenue of $402.6, down 8% from $437.7 in the prior year

– Adjusted EBITDA reached $32.5, compared to (-$4.5) in the prior year

Balance Sheet and Liquidity at June 30, 2019

– $10.8 in cash and cash equivalents

– $164 in total debt outstanding

– Undrawn revolving credit facility of $45

($ in millions)

($ in millions)


Financial Highlights - First Quarter Fiscal 2020

Three Months Ended June 30 Increase (Decrease)2019 2018

Revenue $105.6 $107.5 (2%)

Gross Margin 43% 43% -

Total Operating Expenses $43.1 $50.7 (15%)

Net Loss $(3.8) $(7.5) 49%

EPS $(0.11) $(0.21) 48%

Non-recurring Charges $8.3 $9.8 (15%)

Adjusted Net Income $4.4 $2.3 91%

Adjusted EPS $0.11 $0.06 83%

Adjusted EBITDA $13.1 $7.2 82%

($ in millions, except per share amounts)


Restructuring Eliminated Annualized Spending by $70 Million

Operating expenses reduced by $60 million

Cost of sales reduced by $10 million

95% of the cost reductions were in three categories:

– Just over 75% represented headcount related costs

– Just over 10% represented marketing programs

– Just under 10% represented travel related expenses

All spending reductions exclude non-recurring costs


Balance Sheet Highlights

Cash and cash equivalents = $11– Excluding $5 million in restricted cash required under

the Credit Agreements

Total debt outstanding = $164– Revolving credit facility that was not drawn down at

either March 31, 2019 or June 30, 2019

DSO Improvement – Lower DSO by 19 days from the prior quarter end

June 30, 2019

March 31, 2019

Cash & Cash Equivalents $11 $11

Accounts Receivable $67 $87

DSO 57 76

Inventories $44 $38

Payables DPO 60 54

Accounts Payable $40 $37

Deferred Revenues $120 $127

Total Debt Outstanding $164 $165

($ in millions)


Bank Covenant Summary – Quarter Ended June 30, 2019

Covenant PNC Target PIMCO Target Q1 FY2020

EBITDA (TTM) || Greater than → $31 $28 $41

Net Leverage Ratio || Less than → 4.80 5.50 3.69

Total Leverage Ratio || Less than → 5.30 N/A 3.98

Fixed Charge Ratio || Greater than → 0.97 0.85 1.46

Total Liquidity || Greater than → $10.0 $10.0 $36

($ in millions)


FY 2020 Projected Cash Flows

Interest Payments

$22

Capital Expenditures

Debt Payments

Income Tax Payments

Working Capital Supporting

Growth

FY 2020 Adj. EBITDA

Guidance

($ in millions)

$8$2

$2

$18.5

$52.5(mid-point of range)


Financial Guidance Outlook

Second Quarter Fiscal 2020

Full-Year Fiscal 2020

– Adjusted EBITDA – range of $50 - $55 ▪ 54% to 69% increase over the prior year

– For the remaining three quarters of fiscal 2020 revenues to increase by $15 to $30 over the same period of the prior year▪ 6% to 10% compared to same period in the prior year

▪ Mid-point of guidance is a 5% increase over the prior year

Revenues $99 - $105

Adjusted Net Income ¹ $2 - $4

Adjusted EBITDA ¹ $10 - $12

¹ Adjusted Net Income and Adjusted EBITDA Guidance Excludes approximately $3 million in forecasted non-recurring charges

($ in millions)


GAAP to Non-GAAP Reconciliations


© 2019 Quantum Corporation. Company Confidential. Forward-looking information is based upon multiple assumptions and uncertainties,does not necessarily represent the company’s outlook and is for planning purposes only.

otc: qmco investor presentation - amazon s3 · 2019. 8. 29. · –adjusted ebitda increased 82% to...

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