History (1996): Quantum Becoming More Than $4 Billion Company

Quantum Corp. announced record sales of $1.2 billion for its 4FQ96 quarter ended March 31.

Net income was $21 million or 35 cents per share fully diluted, before a nonrecurring charge of $209 million, pre-tax, associated with: 1) a restructuring of its high-capacity business announced in January and including the closing of manufacturing facilities in Milpitas, CA, and Penang, Malaysia; and 2) transitioning manufacturing of the company’s high-capacity hard disk drives to Matsushita-Kotobuki Electronics Industry. Including this one-time charge, the company had a net loss of $123 million.

For FY96, Quantum’s net income excluding unusual charges was $77 million, or $1.32 per share fully diluted, on sales of $4.4 billion. Including unusual charges related to the resizing of the company’s high-capacity business and the new manufacturing model, the net loss was $90 million or $1.74 per share for the year.

CEO Michael Brown said: “We shipped over 5.7 million desktop drives, again leading te industry in that market. We believe we currently have both a time-to-volume lead in our desktop product line and the strongest customer base in the industry.”

The company’s 5 largest OEM customers accounted for 43% of the sales in 4FQ96, Compaq being the largest at 13%, IBM following with 10%.

During this fourth quarter, Quantum began shipping its first 1.2 and 2.5GB drives in the 5.25- inch form factor.

“We are pleased with the customer acceptance of these products and are shipping or qualifying the Bigfoot products at 7 of the 10 largest personal computer OEMs,” said Brown.

DLT tape drive business accounted for $110 million.

“Based on our fourth quarter sales, Quantum is now the second largest tape drive supplier in the world.”

Currently, Quantum’s greatest challenge is to succeed in its high-end disk drive business with MKE. Until then, the company must ship, beginning in June, its first desktop devices based on 1, 2 and 3 3.5-inch 1GB platters using MR heads.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 100, published on May 1996.

Note: For FY20, the company recorded revenue of only $403 million, around 10x less.