Quantum Provides Additional Business Updates; Q4 2024 Liquidity Update, Cash And Cash Equivalents Were $26.1M; Outstanding Term Loan Debt Was $87.9M

Author: Benzinga Newsdesk | April 12, 2024 04:10pm

Quantum Corporation (NASDAQ:QMCO), a leader in solutions for AI and unstructured data, provided additional updates on its business.

Fiscal Fourth Quarter 2024 Liquidity Update

Quantum's unaudited cash and long-term debt balances as of March 31, 2024, are provided below:

• Cash and cash equivalents were $26.1 million.
• Outstanding term loan debt was $87.9 million,
• Outstanding borrowings under the revolving credit facility was $26.6 million,
• Total interest expense for the three-month period ended March 31, 2024, was $4.1 million.

Quantum has not completed preparation of its financial statements for the fourth quarter and full fiscal year ended March 31, 2024. The unaudited financials presented in this press release for the fiscal year ended March 31, 2024, are based on preliminary estimates and are subject to adjustment.

Improving Working Capital and Debt Reduction

Subsequent to the Fiscal Fourth Quarter end, on April 2, 2024, Quantum completed a transaction with a partner to provide turnkey, third-party logistics, and asset management for its Global Services operations. As part of this arrangement, Quantum sold certain service inventory assets for an approximate payment of $15 million. Quantum used proceeds from the disposition of these assets to improve its financial flexibility, including paying down approximately $12.3 million of its existing debt. This transaction is consistent with the Company's broader efforts to prioritize certain financial and business projects targeting improvements to working capital, acceleration of new products and a more focused business. This transaction is not reflected in our Fiscal Fourth Quarter 2024 liquidity update provided earlier.

New ERP System Implemented

After a three-year process, Quantum has completed implementation of its new Enterprise Resource Planning (ERP) system, and as a result, expects to see a material reduction in associated capital expenditures in the future. The new ERP system is also expected to result in future operational efficiencies throughout the organization.

Nasdaq Update

Following the Company's prior announcement on March 25, 2024, The Nasdaq Stock Market LLC (Nasdaq) granted Quantum's request to stay the suspension of delisting of its common stock pending a scheduled hearing on May 14, 2024, with the Nasdaq Hearings Panel. Although there can be no assurance that the Panel will grant Quantum's request for an extension, Quantum is diligently working to comply with all of the applicable Nasdaq listing criteria within the period of time that the Panel may grant.

Board of Directors Transition

Quantum also announced that after 7 years of service on the Board of Directors, Marc E. Rothman, will be retiring from the board of directors, effective as of the earlier of August 31, 2024, or the date of Quantum's 2024 annual meeting of stockholders. "Marc has been a dedicated member of our board, and we thank him for his service. I appreciate him remaining on the board while we regain compliance with our SEC financial reporting," said Jamie Lerner, Quantum's Chairman and CEO. Mr. Rothman stated, "I am grateful for my time on the board and look forward to seeing Quantum's continued progress as it transitions to new products and benefits from recent operational initiatives." The Company is engaging a search firm to identify a new independent director to join the board.

Posted In: QMCO