Form 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period endedOctober 1, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to For Quarter Ended Commission File Number October 1, 1995 0-12390 QUANTUM CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 94-2665054 (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 500 McCarthy Blvd. Milpitas, California 95035 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (408) 894-4000 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of October 29, 1995: 52,816,774
QUANTUM CORPORATION 10-Q REPORT INDEX Page Number PART I - FINANCIAL INFORMATION Item 1. Financial Statements 3 Consolidated Statements of Income 3 Consolidated Balance Sheets 4 Consolidated Statements of Cash Flows 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION 14 SIGNATURE 17
QUANTUM CORPORATION PART I - FINANCIAL INFORMATION Item 1. Financial Statements CONSOLIDATED STATEMENTS OF INCOME (In thousands except share and per share data) (unaudited) Three Months Ended Six Months Ended Oct. 1, Oct. 2, Oct. 1, Oct. 2, 1995 1994 1995 1994 Sales $1,033,048 $726,169 $1,974,363 $1,451,473 Cost of sales 890,622 593,439 1,707,448 1,172,666 Gross profit 142,426 132,730 266,915 278,807 Operating expenses: Research and development 55,147 28,554 110,258 57,153 Sales and marketing 34,802 23,106 68,505 45,866 General and administrative 15,453 11,353 27,635 21,684 105,402 63,013 206,398 124,703 Income from operations 37,024 69,717 60,517 154,104 Other (income) expense: Interest expense 7,318 3,448 15,465 7,004 Interest and other income (1,315) (3,164) (4,197) (5,534) 6,003 284 11,268 1,470 Income before income taxes 31,021 69,433 49,249 152,634 Income tax provision 8,996 20,830 14,282 45,790 Net income $ 22,025 $ 48,603 $ 34,967 $106,844 Net income per share: Primary $0.39 $1.03 $0.65 $2.27 Fully diluted $0.37 $0.85 $0.61 $1.87 Weighted average common and common equivalent shares: Primary 56,239,763 47,326,797 54,016,054 47,090,888 Fully diluted 63,566,680 59,037,402 62,942,630 58,800,191 See accompanying notes to consolidated financial statements.
QUANTUM CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) (unaudited) Oct. 1, March 31, 1995 1995 Assets Current assets: Cash and cash equivalents $ 158,805 $ 187,753 Accounts receivable, net of allowance for doubtful accounts of $9,971 and $11,963 635,013 497,887 Inventories 508,807 324,650 Deferred taxes 43,888 44,054 Other current assets 26,383 35,580 Total current assets 1,372,896 1,089,924 Property and equipment, net of accumulated depreciation of $149,174 and $119,831 346,812 280,099 Purchased intangibles, net 82,936 95,818 Other assets 14,292 15,187 $1,816,936 $1,481,028 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 529,660 $355,117 Accrued warranty expense 56,470 57,001 Accrued compensation 39,273 54,917 Income taxes payable 1,858 17,566 Accrued exit costs 32,213 32,213 Short-term debt 50,000 50,000 Other accrued liabilities 35,004 77,227 Total current liabilities 744,478 644,041 Subordinated debentures 132,933 212,500 Long-term debt 290,000 115,000 Shareholders' equity: Common stock 246,265 141,154 Retained earnings 403,260 368,333 Total shareholders' equity 649,525 509,487 $1,816,936 $1,481,028 See accompanying notes to consolidated financial statements.
QUANTUM CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited) Six Months Ended Oct. 1, Oct. 2, 1995 1994 Cash flows from operating activities: Net income $ 34,967 $106,844 Items not requiring the current use of cash: Depreciation and amortization 46,976 14,888 Changes in assets and liabilities: Accounts receivable (137,126) (111,792) Inventories (184,157) (6,795) Accounts payable 174,543 43,258 Income taxes payable (10,479) 12,651 Accrued warranty expense (531) 3,660 Other assets and liabilities (51,283) (26,947) Net cash provided by (used in) operating activities (127,090) 35,767 Cash flows from investing activities: Purchase of short-term investments - (20,474) Sales and maturities of short-term investments - 113,774 Investment in property and equipment, net (98,018) (37,232) Net cash provided by (used in) investing activities (98,018) 56,068 Cash flows from financing activities: Proceeds from revolving line of credit and term loan borrowings 225,000 - Principal payments on revolving line of credit (50,000) - Proceeds from issuance of common stock, net 21,160 7,485 Net cash provided by financing activities 196,160 7,485 Net increase (decrease) in cash and cash equivalents (28,948) 99,320 Cash and cash equivalents at beginning of period 187,753 217,531 Cash and cash equivalents at end of period $158,805 $316,851 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 13,249 $ 6,870 Income taxes $ 24,874 $ 29,835 See accompanying notes to consolidated financial statements.
QUANTUM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of presentation The accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for the full fiscal year. The accompanying financial statements should be read in conjunction with the audited financial statements of Quantum Corporation for the fiscal year ended March 31, 1995. 2. Inventories Inventories consisted of the following: (In thousands) Oct. 1, March 31, 1995 1995 Materials and purchased parts $134,471 $116,732 Work in process 129,915 42,091 Finished goods 244,421 165,827 $508,807 $324,650 3. Net income per share Net income per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding. For fiscal 1995, net income per share computed on a fully diluted basis assumes conversion of the Company's outstanding 6 3/8% convertible subordinated debentures having a principal value of $212,500,000. During the six months ended October 1, 1995, approximately 37% of the outstanding debentures were converted to common stock (See Note 4 in Notes to Consolidated Financial Statements). Therefore, net income per share for the three and six months ended October 1, 1995, computed on a fully diluted basis, assumed conversion of the outstanding debentures having a principal value of $132,933,000. 4. Debt In October 1994, the Company entered into a three year $350 million senior credit facility structured as a $225 million revolving credit line and a $125 million term loan. The revolving credit is governed by a borrowing base of eligible accounts receivable and inventory, and the term loan amortizes in five equal semiannual installments commencing October 1995. The borrowings, at the ongoing option of the Company bear interest at either LIBOR plus a margin or a base rate with option periods of one to six months. The facility is secured by all the Company's domestic assets and 66% of the Company's ownership of certain of its subsidiaries. In September 1995, the Company executed an amendment to the senior credit facility. This amendment extended the revolving line of credit term one year to September 1998 and increased the total amount available under the revolving credit line portion of the facility from $225 million to $325 million. Also in September 1995, the Company entered into a one-year $85 million unsecured Letter of Credit facility with certain banks to issue standby letters of credit to Matsushita-Kotobuki Electronics and its affiliates. The Company's convertible subordinated debentures became redeemable at the Company's option on or after April 2, 1995, at prices ranging from 104.5% of the principal to 100% at maturity. Each debenture is convertible, at the option of the holder into the Company's common stock at a conversion price of approximately $18.15 per share. During the three months ended October 1, 1995, $16,123,000, approximately 7%, of the outstanding convertible subordinated debentures were converted into the Company's Common Stock. This conversion resulted in the issuance of 887,716 shares. In the six months ended October 1, 1995, a total of $79,567,000 of the debentures, approximately 37%, were converted, resulting in the issuance of 4,383,477 shares. 5. Acquisition of businesses from Digital Equipment Corporation On October 3, 1994, Quantum Corporation ("Quantum" or "the Company") acquired the Hard Disk Drive, Heads and Tape Drives Business of the Storage Business Unit of Digital Equipment Corporation ("the acquired Business"), in a transaction accounted for as a purchase. The operating results of the acquired Business from the date of the purchase through October 1, 1995, have been reflected in the Company's consolidated financial statements. The purchase price of the Acquisition was finalized during the second quarter of fiscal 1996, resulting in a reduction of the purchase price of approximately $5.7 million. The unaudited pro forma combined condensed results of operations for the Company for the three months and six months ended October 2, 1994, had the Acquisition occurred at the beginning of the period and which eliminates the non-recurring charges, are as follows: (In thousands except per share data) Three Months Ended Six Months Ended ------------------------- --------------------- Oct. 1, Oct. 2, Oct. 1, Oct. 2, 1995 1994 1995 1994 (actual) (pro forma) (actual) (pro forma) ----------- ----------- ---------- ---------- Net sales $1,033,048 $ 884,619 $1,974,363 $1,874,258 Net income $ 22,025 $ (14,265) $ 34,967 $ 29,947 Net income per share: Primary $0.39 ($0.30) $0.65 $0.64 Fully diluted $0.37 ($0.30) $0.61 $0.58 The unaudited pro forma results for the three months and six months ended October 2, 1994, exclude the effects of the charge for purchased research and development and other merger costs of $73 million, as such amounts are non-recurring. The pro forma results for the three months and six months ended October 2, 1994, and the actual results for the three months and six months ended October 1, 1995, reflect intangible asset amortization, depreciation of acquired fixed assets, amortization of loan fees and interest expense on the new debt related to the Acquisition. The unaudited pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have occurred had the transaction been completed at the beginning of the period indicated, nor is it necessarily indicative of future operating results. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations On October 3, 1994, Quantum acquired the Hard Disk Drive, Heads and Tape Drive Business of the Storage Business Unit of Digital Equipment Corporation (the "acquired Business"), in a transaction (the "Acquisition") accounted for as a purchase. The operating results of the acquired Business from the date of the purchase through October 1, 1995, have been reflected in the Company's consolidated financial statements. Consolidated sales for the three and six months ended October 1, 1995, were $1,033 million and $1,974 million, respectively, compared to $726 million and $1,451 million for the corresponding periods in fiscal 1995. The increase in consolidated sales year to year is attributable to increased unit shipments due in part to products acquired in the Acquisition, and a change in sales mix to higher-priced products. These increases were partially offset by a decline in average unit sales prices on a comparable unit basis. Unit shipments for the second quarter of fiscal 1996 increased 22% compared to the corresponding period in fiscal 1995, with sales for the second quarter of fiscal 1996 increasing 42% over the second quarter of fiscal 1995. For the six months ended October 1, 1995, unit shipments increased 20% and sales increased 36% over the comparable period in fiscal 1995. Historically, a limited number of disk drive products have contributed the majority of the consolidated sales for the Company. The Company anticipates that this trend will continue in the future. Subsequent to the end of the second quarter, the Company learned that a major customer was experiencing problems integrating a specific configuration of a product family qualified and shipped during the quarter. The Company agreed to accept a return of the drives for credit, and the Company reversed the $32 million in revenue from the second quarter results. Sales to the top five customers for the three and six months ended October 1, 1995, represented 49% and 48% of consolidated sales, respectively, with three customers having sales greater than 10% of consolidated sales for each period. For the corresponding periods in fiscal 1995, sales to the top five customers represented 51% and 49% of consolidated sales, with two customers having sales greater than 10% of consolidated sales for each period. Any significant decrease in sales to a major customer or the loss of a major customer could have a material adverse effect on the Company's results of operations. In conjunction with the Acquisition, the Company and Digital signed a multi-year supply agreement pursuant to which the Company will provide a substantial percentage of Digital's internal hard disk drive requirements for its Storageworks subsystems and core computer systems businesses, subject to the Company meeting Digital's qualification standards. During the second quarter of fiscal 1996, Digital did not complete its internal qualification procedures for certain of the Company's new products. There can be no assurance that Digital's future requirements for hard disk products will increase or remain at the current levels or that the Company will be able to meet Digital's qualification requirements on a timely basis. Gross margin for the quarter ended October 1, 1995, decreased to 13.8% from 18.3% for the quarter ended October 2, 1994. For the six months ended October 1, 1995, gross margin was 13.5%, compared to 19.2% for the six months ended October 2, 1994. This decrease was due to the acquired Business and slower than anticipated transition to higher margin products in the high capacity product line, as well as component availability issues. The Company anticipates that there will continue to be component availability issues through at least the third quarter of fiscal 1996 ending December 31, 1995, which may potentially constrain shipment of product. Although the Company is making efforts to avoid significant component shortages, the Company may not be able to meet all orders for certain products. In the future, gross margin may be affected by pricing and other competitive conditions, as well as the Company's ability to integrate the acquired Business, including phasing out the older, lower gross margin product lines and transitioning the manufacturing of its high capacity disk drive products to its lower-cost facility. Over the past ten years, Quantum has established a strong business relationship with Matsushita-Kotobuki Electronics Industries, Ltd. ("MKE") of Japan. This relationship has been built on Quantum's engineering and design expertise and MKE's high-volume, high-quality manufacturing expertise. The Company's master agreement with MKE, which covers the general terms of the business relationship, was renegotiated during fiscal 1993 for a period of five years. In the first half of fiscal 1996, 73% of Quantum's sales were derived from products manufactured by MKE. For the comparable period of the prior fiscal year, products manufactured by MKE represented approximately 90% of the Company's sales. The decline in MKE products as a percentage of sales is a result of Quantum's manufacturing of the products acquired from Digital. There can be no assurance that the increase in Quantum manufactured products will not adversely influence the gross margin rate. In the event MKE is unable to supply such products or increases its prices for manufacturing services, the Company's results of operations would be adversely affected. In conjunction with the acquisition of the thin film heads business from Digital, the Company assumed Digital's relationship with Lafe Computer Magnetics Ltd. ("Lafe"). The Company has reached an agreement with Lafe, in principal, on providing manufacturing services and a contract is expected to be completed in the third quarter. In the event Lafe is unable to supply manufacturing services, the Company could experience an interruption in business. The Company's transactions with MKE and Lafe are denominated in dollars with prices for product purchases negotiated periodically. Thus, fluctuations in the exchange rate have no material short-term impact on Quantum's results of operations. However, such fluctuations may impact future negotiated prices. Quantum operates in an extremely competitive industry and its rapid growth has been the result of the Company's ability to identify customer needs and develop quality products to meet those requirements. The Company expects that sales from new products will account for a significant portion of sales for the latter half of fiscal 1996 and will replace sales of some current products. The Company's ability to produce new products economically and manage the transition of customers to these new products is essential for continued success. The hard disk drive industry is characterized by increasingly shorter product life cycles and is dependent on the strength of unit demand in the personal computer market. As a result, the industry tends to experience periods of excess product inventory and intense price competition. These and other factors may affect the Company's results of operations, and past financial performance should not be considered a reliable indicator of future performance. Investors should not use historical trends to anticipate results or trends in future periods. Operating Expenses Research and development expenses in the second quarter of fiscal 1996 were $55 million, or 5.3% of sales, compared to $29 million, or 3.9% of sales in the corresponding period in fiscal 1995. For the first half of fiscal 1996, research and development expenses were $110 million, or 5.6% of sales, compared to $57 million, or 3.9% of sales, in the corresponding period in fiscal 1995. The increase is due primarily to the acquired Business and reflects spending for both the vertically integrated heads business and the additional high capacity disk drive products, which are more research and development intensive than the Company's other businesses. Principally as a result of the Acquisition, the Company expects to continue this higher level of expenditures for research and development. The hard disk drive industry is subject to rapid technological advances, and the future success of the Company is dependent upon continued development and timely introduction of new products and technologies. Sales and marketing expenses in the second quarter of fiscal 1996 were $35 million, or 3.4% of sales, compared to $23 million, or 3.2% of sales in the corresponding period in fiscal 1995. Sales and marketing expenses for the first half of fiscal 1996 were $69 million, or 3.5% of sales, compared to $46 million, or 3.2% of sales, in the corresponding period in fiscal 1995. The increase is principally due to the Acquisition and the costs associated with supporting the higher sales volume and the expanded Company infrastructure. The Company anticipates a continued higher level of absolute dollar spending for sales and marketing related to the Acquisition, with expenditures as a percentage of sales remaining relatively consistent. General and administrative expenses in the second quarter of fiscal 1996 were $15 million, or 1.5% of sales, compared to $11 million, or 1.6% of sales in the corresponding period in fiscal 1995. General and administrative expenses for the first half of fiscal 1996 were $28 million, or 1.4% of sales, compared to $22 million, or 1.5% of sales, in the corresponding period in fiscal 1995. The increase in absolute dollars is primarily related to the infrastructure required to operate the acquired Business. The percentage decline is due to the increase in consolidated sales. The Company expects a continued higher level of general and administrative absolute dollar spending, principally due to the Acquisition, with expenditures as a percentage of sales remaining relatively consistent. Net interest and other income/expense in the quarter ended October 1, 1995, was $6 million net expense, compared to $0.3 million net expense in the corresponding period in fiscal 1995. Net interest and other income/expense for the six months ended October 1, 1995, were $11.3 million, compared to $1.5 million in the corresponding period in fiscal 1995. The increase in net expense in the fiscal 1996 period can be principally attributed to higher interest expense resulting from the Acquisition financing and lower cash balances due to cash used for the Acquisition. The Acquisition will continue to have an effect on both operating and net income resulting from the amortization of intangibles, depreciation of the acquired fixed assets and interest expense on the debt. The purchase price of the Acquisition was finalized during the second quarter of fiscal 1996, resulting in a reduction of the purchase price of approximately $5.7 million. The Company estimates that charges for the amortization of intangibles and the depreciation of the fixed assets acquired in the Acquisition will approximate $25 million and $30 million, respectively, over each of the next three fiscal years. Interest expense on the debt will be dependent on the loan balance and interest rate. See Note 4 of Notes to the Financial Statements. On November 8, 1995, the Company announced plans to reorganize the High Capacity Storage Group ("HCSG"), as part of a plan to improve its operating results. The reorganization will include closing the production launch line in Shrewsbury, Massachusetts, canceling the Empire II development program and accelerating end-of-life plans for less cost effective products. The Company expects to record a non-recurring charge of $35 to $40 million, pre-tax, primarily to cost of goods sold, in the third quarter of fiscal 1996. Additionally, the Company is accelerating the shutdown of the Colorado Springs disk drive manufacturing plant and now expects to close the plant by December 31, 1995. Income Taxes The effective tax rate for the quarter and six months ended October 1, 1995, was 29%, compared to 30% for the corresponding periods in fiscal 1995. The effective tax rates are below the combined U.S. federal and state statutory rates primarily as a result of the tax benefit associated with the income of foreign subsidiaries taxed at lower than the combined U.S. federal and state income tax rates. Liquidity and Capital Resources At October 1, 1995, the Company had $159 million in cash and cash equivalents and short-term investments, compared to $188 million at March 31, 1995. The decrease in cash is a result of cash used in operating and investing activities offset by cash provided by financing activities. Cash used in operating and investing activities is primarily a result of increases in accounts receivable and inventories and investing in property and equipment, partially offset by an increase in accounts payable. Cash provided by financing activities is primarily a result of borrowing under the credit facility described below. In October 1994, the Company entered into a three year $350 million senior credit facility structured as a $225 million revolving credit line and a $125 million term loan. The revolving credit is governed by a borrowing base of eligible accounts receivable and inventory, and the term loan amortizes in five equal semiannual installments commencing October 1995. The borrowings, at the ongoing option of the Company bear interest at either LIBOR plus a margin or a base rate with option periods of one to six months. The facility is secured by all the Company's domestic assets and 66% of the Company's ownership of certain of its subsidiaries. In September 1995, the Company executed an amendment to the senior credit facility. This amendment extended the revolving line of credit term one year to September 1998 and increased the total amount available under the revolving credit line portion of the facility from $225 million to $325 million. Also in September 1995, the Company entered into a one-year $85 million unsecured Letter of Credit facility with certain banks to issue standby letters of credit to MKE and its affiliates. The Company's convertible subordinated debentures became redeemable at the Company's option on or after April 2, 1995, at prices ranging from 104.5% of the principal to 100% at maturity. Each debenture is convertible, at the option of the holder into the Company's common stock at a conversion price of approximately $18.15 per share. During the first half of fiscal 1996, $79,567,000, or approximately 37%, of the outstanding convertible subordinated debentures were converted into the Company's Common Stock. This conversion resulted in the issuance of 4,383,477 shares. The Company expects to spend approximately $200 million for leasehold improvements, capital equipment and expansion of the Company's facilities during fiscal 1996. Included in this amount is a significant amount of additional capital expenditures that will be required to expand the Asia manufacturing facilities and to support the recording heads business of the acquired Business. In conjunction with the Acquisition, the Company recorded an accrual for exit costs related to exiting facilities and operations acquired from Digital. The Company anticipates that cash outlays during fiscal 1996 for the exit activities will be approximately $23 million. During the six months ended October 1, 1995, there were no cash outlays related to the exit costs. In conjunction with the HCSG reorganization announced November 8, 1995, the Company expects to record a non-recurring charge of $35 to $40 million during the third quarter of fiscal 1996. The Company anticipates that cash outlays during fiscal 1996 for the reorganization will be approximately $20 to $25 million. The Company believes that its existing capital resources, including its credit facilities and any cash generated from operations, will be sufficient to meet all currently planned expenditures and sustain operations through the 1996 fiscal year. However, the Company continues to work to identify additional sources of cash and there can be no assurance that the Company will not be required, or choose, to raise capital in advance of that date. There can be no assurance that the Company will be able to obtain any such financing on acceptable terms, or at all.
QUANTUM CORPORATION PART II - OTHER INFORMATION Item 1. Legal proceedings As previously reported, Quantum's declaratory judgment lawsuit against Rodime PLC of Glasgow, Scotland, resulted in a summary judgment that claims of Rodime's U.S. Patent No. 4,638,383 were invalid because of impermissible broadening in reexamination proceedings. This summary judgment was affirmed on September 22, 1995, by the U.S. Court of Appeals for the Federal Circuit. Subsequently, Rodime has petitioned the court for a rehearing and a hearing in banc. This petition remains pending. If the appellate decision is left undisturbed by any further appellate proceedings, Quantum believes that it is fully dispositive of its dispute with Rodime. Due to the inherent uncertainties of ongoing litigation, there can be no assurance that the appellate decision will become finally dispositive. Item 2. Changes in securities - Not Applicable. Item 3. Defaults upon senior securities - Not Applicable. Item 4. Submission of matters to a vote of security holders. The 1995 Annual Meeting of Shareholders was held on September 6, 1995. The matters voted upon were the election of directors, an amendment to the Company's Employee Stock Purchase Plan, and the appointment of the independent auditors. The shareholders approved the election of directors as follows: For Against Stephen M. Berkley 42,804,909 157,308 David A. Brown 42,818,359 143,858 Robert J. Casale 42,818,259 143,958 Edward M. Esber, Jr. 42,818,409 143,808 William J. Miller 42,804,759 157,458 Steven C. Wheelwright 42,820,309 141,908 The shareholders approved and ratified an amendment to the Company's Employee Stock Purchase Plan, increasing the number of shares reserved for issuance thereunder from 6,300,000 to 8,500,000 shares of Common Stock. The number of affirmative votes cast for this matter was 39,991,891. The number of negative votes cast with respect to this matter were 2,071,627, with 135,977 votes abstaining and 8,528,004 broker non-votes. The appointment of Ernst & Young LLP as independent auditors of the Company for the fiscal year ending March 31, 1996, was approved with 42,834,738 affirmative votes, 32,844 negative votes, 64,635 votes abstaining and 7,795,282 broker non-votes. In addition, the shareholders voted to allow the directors to vote on any other matters of business that might come before the meeting with 28,417,202 affirmative votes, 5,514,456 negative votes, 9,000,289 abstaining votes, and 7,795,552 broker non-votes. Item 5. Other information. William J. Miller resigned as Chairman of the Board of Directors and Chief Executive Officer ("CEO") for personal reasons, effective August 23, 1995. Stephen M. Berkley, who was Chairman and CEO until Mr. Miller joined the company in 1992, became Chairman of the Board. On September 26, 1995, Michael A. Brown was named to the position of Chief Executive Officer of the Company. Mr. Brown has been at Quantum since 1984, and was most recently President of the Desktop and Portable Storage Group ("DPSG"), which represents approximately 70% of Quantum's revenues. Mark Jackson, who was previously Vice President of Worldwide Logistics reporting to Mr. Brown, succeeded Mr. Brown as President of DPSG. Effective November 1, 1995, Robert K. Maeser resigned as President and General Manager of the Company's High Capacity Storage Group ("HCSG"). He was replaced by Kenneth Lee, Executive Vice President, Engineering and Technology, and Chief Technical Officer. Mr. Lee will continue to lead the advanced technology and engineering efforts of the Company in addition to his new role.
Item 6. Exhibits and reports on Form 8-K. (a) Exhibits. The exhibits listed on the accompanying index to exhibits immediately following the signature page are filed as part of this report. (b) Reports on Form 8-K. None
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. QUANTUM CORPORATION (Registrant) Date: November 20, 1995 By: /s/ Joseph T. Rodgers Joseph T. Rodgers Executive Vice President, Finance and Chief Financial Officer
QUANTUM CORPORATION INDEX TO EXHIBITS Sequentially Exhibit Numbered Number Page 10.31 Third Amendment, dated September 29, 1995, to Credit Agreement (dated October 3, 1994) among Quantum Corporation and the Banks named therein and ABN AMRO BANK N.V., San Francisco International Branch, BARCLAYS BANK PLC and CIBC INC. as Managing Agents for the Banks, and CANADIAN IMPERIAL BANK OF COMMERCE as Administrative Agent and Collateral Agent for the Banks 19 10.32 Credit Agreement dated September 22, 1995, among Quantum Corporation and the Banks named therein and THE SUMITOMO BANK, LIMITED, acting through its San Francisco branch, as Agent for the Banks and as Issuer 49 10.33 Lease Agreement, dated August 31, 1995, between CRAY COMPUTER CORPORATION, as Landlord, and QUANTUM 88 Corporation, as Tenant 11.1 Statement of Computation of Net Income Per Share 113 27 Financial Data Schedule 114