Quantum Corporation (QTM) swung to a net loss for the quarter ended Dec. 31, 2015. The company has made a net loss of $0.30 million in the quarter, against a net profit of $6.93 million in the last year period. On the other hand, adjusted net income for the quarter stood at $5.33 million, or $0.02 a share compared with $10.91 million or $0.04 a share, a year ago. Revenue during the quarter dropped 9.87 percent to $128.05 million from $142.06 million in the previous year period. Gross margin for the quarter contracted 152 basis points over the previous year period to 44.28 percent. Total expenses were 98.47 percent of quarterly revenues, up from 93.24 percent for the same period last year. That has resulted in a contraction of 523 basis points in operating margin to 1.53 percent.
Operating income for the quarter was $1.95 million, compared with $9.60 million in the previous year period.
"We are pleased with our overall results and the continued scale-out revenue growth this quarter, to a new record high, especially given the overall weakness in the broad storage market environment," said Jon Gacek, president and chief executive officer of Quantum. "In response to the market conditions, we also successfully implemented significant operational changes during the quarter that improved our profitability."
For the fourth-quarter 2016, Quantum Corporation expects revenue to be in the range of $118 million to $122 million and Interest expense of $1.5 million and taxes of $400,000.
Operating cash flow turns negative
Quantum Corporation has spent $15.91 million cash to meet operating activities during the nine month period as against cash inflow of $11.12 million in the last year period. The company has spent $2.94 million cash to meet investing activities during the nine month period as against cash outgo of $2.99 million in the last year period.
The company has spent $16.16 million cash to carry out financing activities during the nine month period as against cash outgo of $0.15 million in the last year period.
Cash and cash equivalents stood at $32.92 million as on Dec. 31, 2015, down 69.23 percent or $74.06 million from $106.98 million on Dec. 31, 2014.
Working capital turns positive
Working capital of Quantum Corporation has turned positive to $33.21 million on Dec. 31, 2015 from negative $34.76 million on Dec. 31, 2014. Current ratio was at 1.19 as on Dec. 31, 2015, up from 0.89 on Dec. 31, 2014.
Cash conversion cycle (CCC) has decreased to 82 days for the quarter from 84 days for the last year period. Days sales outstanding went up to 70 days for the quarter compared with 66 days for the same period last year.
Days inventory outstanding has increased to 76 days for the quarter compared with 74 days for the previous year period. At the same time, days payable outstanding went up to 63 days for the quarter from 56 for the same period last year.
Debt comes down significantly
Quantum Corporation has recorded a decline in total debt over the last one year. It stood at $138.06 million as on Dec. 31, 2015, down 32.24 percent or $65.68 million from $203.74 million on Dec. 31, 2014. Total debt was 49.63 percent of total assets as on Dec. 31, 2015, compared with 54.48 percent on Dec. 31, 2014. Debt to equity ratio was at 1.80 as on Dec. 31, 2015, up from 2.66 as on Dec. 31, 2014. Interest coverage ratio deteriorated to 1.39 for the quarter from 3.90 for the same period last year.
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