SAN JOSE, Calif.--(BUSINESS WIRE)--Quantum Corporation (Nasdaq: QMCO) ("Quantum" or the "Company"), a leader in solutions for AI and unstructured data, announced today it will release financial results for its full year fiscal 2024 ended March 31, 2024 on Monday, June 17, 2024 after markets close. Jamie Lerner, Chairman and CEO, and Kenneth Gianella, Chief Financial Officer, will host a conference call on the same day. Conference call information will follow in the coming days. The timing of the filing and conference call is in conjunction with the Company's conclusion of its review of previously announced accounting matters.
Update on Accounting Matters
The Company also announced that it has completed its analysis of the Company's past application of standalone selling price ("SSP") under Accounting Standards Codification Topic 606 ("ASC 606") relating to the classification and recognition of aspects of the Company's revenue.
Based on this analysis, which was supported by outside experts, the Company currently estimates an increase in previously reported revenue and net income for the fiscal years ended March 31, 2022 and March 31, 2023, including for each of the first three fiscal quarters in such fiscal years, as well as the fiscal first quarter ended June 30, 2023. These estimated revenue adjustments would decrease the deferred revenue on the Company's balance sheet for the corresponding periods. The adjustments, due to the application of SSP, does not impact the Company's invoicing, cash, or contractual obligations to its customers. This is purely an accounting adjustment under its updated application of SSP under ASC 606. During this process, the Company found no evidence of fraud or intentional misconduct associated with its revenue recognition process.
Additionally, during the Company's in-depth analysis of its prior financial statements, it identified a series of outstanding warrant agreements issued to its prior and current lenders in 2018, 2020, and 2023, which required further evaluation under Accounting Standards Codification Topic 815 ("Topic 815"). After consulting with external advisors, the Company concluded that its prior classification of warrants as equity was not consistent with Topic 815 and has restated them as a liability. This restatement also requires accounting for the associated change in the fair value of the warrants through the income statement. The Company will now include the warrant liability adjustments for the fiscal years ended March 31, 2022 and March 31, 2023, including for each of the first three fiscal quarters in such years, as well as the fiscal first quarter ended June 30, 2023. The impact from the revised liability accounting treatment for outstanding warrants is estimated to increase net income in all restated periods. This change of accounting for outstanding warrants does not impact the Company's ongoing operations or its obligations to prior or current lenders.
As a result of the changes described above, the Company intends to restate its financial statements for the prior reported periods referenced above. The Company intends to file its Annual Report on Form 10-K covering the restated periods with both the revised SSP and warrant classification on Monday, June 17, 2024.
Other Business Updates
Also today, Quantum announced a revised agreement with its lenders to amend the Company's existing term loan and revolving credit agreements. These amendments, among other things, waived the total net leverage ratio financial covenant for the quarter ended March 31, 2024.
About Quantum
Quantum delivers end-to-end data management solutions designed for the AI era. With over four decades of experience, our data platform has allowed customers to extract the maximum value from their unique, unstructured data. From high-performance ingest that powers AI applications and demanding data-intensive workloads, to massive, durable data lakes to fuel AI models, Quantum delivers the most comprehensive and cost-efficient solutions. Leading organizations in life sciences, government, media and entertainment, research, and industrial technology trust Quantum with their most valuable asset - their data. Quantum is listed on Nasdaq (QMCO). For more information visit www.quantum.com.
Quantum and the Quantum logo are registered trademarks of Quantum Corporation and its affiliates in the United States and/or other countries. All other trademarks are the property of their respective owners.
Forward-Looking Information
The information provided in this press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). These forward-looking statements are largely based on the Company's current expectations and projections about future events affecting its business. Such forward-looking statements include, in particular, statements related to the Company's completion of its review of accounting matters, release of financial results for its full year fiscal 2024 ended March 31, 2024 and conference call relating to such results, including the timing thereof; expectations with respect to how the adjustments will impact the Company's financial statements; expectations regarding whether the adjustments will impact the Company's invoicing, cash, contractual obligations to its customers, operations or its obligations to prior or current lenders; and the Company's plans, objectives and intentions that are not historical facts generally. These forward-looking statements may be identified by the use of terms and phrases such as "anticipates", "believes", "can", "could", "estimates", "expects", "forecasts", "intends", "may", "plans", "projects", "targets", "will", and similar expressions or variations of these terms and similar phrases. Additionally, statements concerning future matters and other statements regarding matters that are not historical are forward-looking statements. Investors are cautioned that these forward-looking statements relate to future events or the Company's future performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements.
These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected, including without limitation, the following: the final outcome of the evaluation of accounting matters and the impact of the adjustments to the Company's financial statements; the discovery of additional and unanticipated information during the evaluation process; changes in assumptions regarding how the evaluation will impact the Company's financial results; risks related to the timely completion of the evaluation and filing of the Quarterly Reports on Form 10-Q and Annual Report on Form 10-K; the ability to meet stock exchange continued listing standards; the possibility that the Nasdaq may delist the Company's securities; risks related to the Company's ability to implement and maintain effective internal control over financial reporting in the future; and the impact of these factors on the Company's performance and outlook. See also other risks that are described in "Risk Factors" in the Company's filings with the Securities and Exchange Commission (the "SEC"), including its Annual Report on Form 10-K filed with the SEC for the fiscal year ended March 31, 2023, and any subsequent reports filed with the SEC. The Company does not intend 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 or regulation.
Contacts
Investor Relations Contacts:
Shelton Group
Leanne K. Sievers | Brett L. Perry
E: sheltonir@sheltongroup.com
