) reported second quarter fiscal 2013 adjusted loss per share of
3 cents, which is slightly better than the Zacks Consensus
Estimate of loss of 4 cents a share. The adjusted or non-GAAP
earnings per share exclude amortization of acquisition-related
intangible assets, but include stock-based compensation
Total revenue for the second quarter was $147.0 million, down
10.7% on a year-over-year basis. The year-on-year decline in
revenue was attributable to weaker-than-expected OEM sales and
also lowers sales of branded tapes and automation revenue.
Year over year, Product revenue decreased 13.1% to $100.1
million, Service revenue slipped 0.5% to $35.7 million, and
Royalty revenue decreased 17.5% to $11.6 million.
Reported gross margin in the quarter was 40.2%, down from
43.4% in the year-ago quarter.
Operating loss margin was (6.8%) versus operating profit margin
of 4.2% in the year-ago quarter. The company's total operating
expenses increased 4.5% on a year-over-year basis. Higher
operating expenses were mainly due to 10.7% year-over-year
increase in selling and marketing expenses.
Net loss on a GAAP basis was $12.3 million or 5 cents per
diluted share compared with net earnings of $3.6 million or 1
cent in the year-ago quarter.
Excluding the amortization of acquisition-related intangible
assets but including stock-based compensation expense, adjusted
net loss for the second quarter was $48.0 million or 3 cents per
diluted share compared with net income of $9.9 million or 4 cents
in the year-ago quarter.
Cash, cash equivalents and restricted cash were $32.9 million
versus $50.2 million in the previous quarter. Long-term debt
remained unchanged sequentially at $49.5 million.
Management will continue to introduce new products and focus more
on increasing brand value.
For the third quarter, management expects revenues to be
roughly $160 million. This apart, the company expects GAAP Gross
margin of 41.0% and non-GAAP gross margin of 42.0%. The company
expects GAAP operating expenses to range between $67.0 million
and $69.0 million. Non-GAAP operating expenses are pegged at
$62.0 million to $64.0 million.
For fiscal 2013, revenue is projected to be approximately $600
million and GAAP gross margin is expected to be 41.0%. Non-GAAP
gross margin rate is estimated at 42.0%. Management expects GAAP
operating expenses to be around $273 million and non-GAAP
operating expenses are projected to be roughly $250 million.
Quantum's second quarter loss per share was better than the
Zacks Consensus loss Estimate. However, Quantum provided an
upbeat third quarter revenue guidance irrespective of its
discouraging first and second quarter performance.
The company is facing intense competition from
) as they are slowly tightening their grip on the market. Though
the company's commentary on its product strategy is encouraging,
persisting Euro concerns and high debt burden make us a little
apprehensive about the stock.
Currently, Quantum has a Zacks #3 Rank, implying a short-term
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