Quantum’s final fiscal 2022 quarter and full year results, hit by supply chain issues, saw its cash balance drop necessitating a rights issue to strengthen the balance sheet and pay off some debt.
In the quarter ended March 31, this supplier of tape, object, video surveillance, HPC secondary storage and media workflow management software recorded revenues up 3 percent year on year at $92.5 million, with a loss of $7.8 million, better than the year-ago $17.5 million loss. Full year revenues were $372.8 million, up 6.7 percent annually, with a $32.3 million loss, slightly improved on the year-ago $35.5 million loss.
Quantum’s CEO and chairman Jamie Lerner, said “We made progressive improvements throughout the year to strengthen our business, highlighted by revenue for the fourth quarter exceeding our preliminary results. Additionally, we continue to gain increasing momentum transitioning new and existing customers to our software subscription model as demonstrated by $7.4 million of subscription software Annual Recurring Revenue (ARR) and $160.5 million in high-value recurring revenue exiting the year.”
The growth, restricted by supply chain problems, was not enough and was overshadowed by a money shortfall. Cash and cash equivalents including restricted cash was $5.5 million as of March 31, 2022, compared to $33.1 million a year previously. Quantum announced a $67.5 million rights offering on April 26, and said it had been over-subscribed.
There was broad participation for the 30 million shares on offer from outside investors with all eligible directors and officers participating. Lerner said at the time: “The proceeds enable us to strengthen our balance sheet, reducing our debt by $20 million and adding over $45 million to our cash position. Additionally, with the cooperation of our supporting banks, we have reset all debt covenants to more favorable levels while increasing our revolving line of credit by $10 million to $40 million.”
The cash was also needed for working capital and other general corporate purposes. CFO Mike Dodson said: “A stronger balance sheet allows us to better weather the ongoing supply chain headwinds broadly impacting companies across our industry.”
Quantum is looking at supply chain strengthening and a cost reduction program, with Lerner saying: “With backlog at near record levels, we have aggressively implemented supply chain strategies that will help us increase our revenues and margins. We are also implementing a series of cost reduction programs that are focused on reduced spending and continued integration efforts related to the recent acquisitions, which we expect will decrease our current operating expense run-rate by $1.5 to $2.0 million per quarter by the second half of fiscal 2023.”
Quantum set the revenue bar expectation for the next quarter at $94 million, plus or minus $3 million. That represents growth of 5.5 percent from the year-ago quarter’s $89.1 million. It’s a long and hard haul for Quantum
