Business
Quantum Provides Updated Revenue Guidance for Fiscal Q4; Amends Loan Agreements
Company Provides Update on Supply Chain SAN JOSE, Calif., April 6, 2020 /PRNewswire/ -- Quantum Corporation (NASDAQ: QMCO) today provided an update to
About this update from Quantum Corporation
[{"type":"text","content":"Company Provides Update on Supply Chain\n\n\nSAN JOSE, Calif., April 6, 2020 /PRNewswire/ -- Quantum Corporation (NASDAQ: QMCO) today provided an update to investors regarding expected revenue levels for the fourth quarter, loan agreement amendments, and the status of its supply chain. \n\n \n \n \n \n \n \n\n \nRevenue Guidance UpdateBased on the analysis of preliminary operating results, management now expects revenues of approximately $87 million for the fourth fiscal quarter ended March 31, 2020. This level of revenue reflects the impact of the uncertainties associated with the COVID-19 pandemic and is within 8% of the midpoint of the previously provided guidance range of $90 to $100 million. The impact of COVID-19 related order delays were partially offset by the contribution of incremental revenue from ActiveScale products. The acquisition of the ActiveScale object storage business was finalized on March 17, 2020 and contributions from it in the first 13 days are expected to be accretive to the operations for the fourth fiscal quarter. \nLoan Agreement AmendmentsBased on our preliminary results for the fourth fiscal quarter combined with the uncertainties in estimating future business levels, management proactively entered into discussions with its lenders to ensure the current credit facilities enabled the flexibility to provide financial support during this challenging period and beyond. \nAs a result of these efforts, the Company and the term loan lenders agreed to amend the term loan agreement. Included in this amendment was a reduction in the cash interest payment to 7.5% from 12% for the fourth fiscal quarter, with the remaining portion being paid-in-kind, and a deferral of the loan amortization payment until next quarter resulting in an immediate cash savings of approximately $2.3 million.\nThe Company has also finalized an agreement with its revolver lender as well as the term loan lenders to amend the related credit agreements to waive applicable covenants for the fourth fiscal quarter. \nAs outlined in both Amendments, the Company and its lenders intend to work to further amend the credit agreements by May 15, 2020 to provide a framework that will be supportive of the Company beyond the current period. Additional details regarding the Amendments are set forth in the Company's Current Report on Form 8-K, filed wit...