RESTATEMENT (Tables)

6 Months Ended

Sep. 30, 2018

QUANTUM CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands)


	September 30, 2017
	As Reported			Restatement Adjustments			Restatement Reference		As Restated
ASSETS
Current Assets
Cash and cash equivalents	$	9,504		$	4,479			k	$	13,983
Accounts receivable,		105,771			(6,545	)		a		99,226
Manufacturing inventories		29,119			5,593			a		34,712
Service part inventories		19,915			—					19,915
Other current assets		8,795			786			g, q		9,581
Restricted cash		1,969			1,094			f		3,063

Total current assets		175,073			5,407					180,480
Property and equipment, less accumulated depreciation		10,745			(325	)		r		10,420
Restricted cash, long-term		20,000			—					20,000
Other long-term assets		5,332			1,418			h, m, p, r		6,750

Total assets	$	211,150		$	6,500				$	217,650

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Liabilities
Current liabilities:
Accounts payable	$	48,488			—				$	48,488
Accrued warranty		2,950			(2,950	)		l		—
Deferred revenue, current		77,090			11,415			a, b		88,505
Accrued restructuring charges, current		1,743			627			i		2,370
Convertible subordinated debt, current		57,034			—					57,034
Accrued compensation		23,180			(925	)		e, f		22,255
Other accrued liabilities		12,927			3,634			a, d, l, n, q, r		16,561

Total current liabilities		223,412			11,801					235,213
Deferred revenue, long-term		35,906			868			b		36,774
Accrued restructuring charges, long-term		423			3,192			i		3,615
Long-term debt, net of current portion		70,631			5,860			h, m		76,491
Other long-term liabilities		5,112			5,924			n, p, q		11,036

Total liabilities		335,484			27,645					363,129
Commitment and contingencies (Note 12)
Stockholders’ deficit
Preferred stock		—			—					—
Common stock		347			—					347
Additional paid-in capital		476,409			(316	)		j		476,093
Accumulated deficit		(604,832	)		(16,197	)		a, b, d, e, m, o, p, q, r		(621,029	)
Accumulated other comprehensive income (loss)		3,742			(4,632	)		n, r		(890	)

Total stockholders’ deficit		(124,334	)		(21,145	)				(145,479	)

Total liabilities and stockholders’ deficit	$	211,150		$	6,500				$	217,650

Consolidated statements of operations


	Six Months Ended September 30, 2017
	As Reported			Restatement Adjustments			Restatement References		As Restated
Revenue:
Product revenue	$	135,224		$	1,855			a, c	$	137,079
Service revenue		69,410			617			b		70,027
Royalty revenue		19,275			—					19,275

Total revenue		223,909			2,472					226,381

Costs and expenses:
Product cost of revenue		99,510			2,772			a		102,282
Service cost of revenue		29,807			135			d		29,942
Total cost of revenue		129,317			2,907					132,224

Gross profit		94,592			(435	)				94,157

Operating expenses:
Research and development		20,795			—					20,795
Sales and marketing		54,003			(1,101	)		c, e		52,902
General and administrative		24,667			(737	)		j, r		23,930
Restructuring charges		2,366			(665	)		i		1,701

Total operating expenses		101,831			(2,503	)				99,328

Loss from operations		(7,239	)		2,068					(5,171	)
Other expenses and losses, net:
Interest expense, net		5,175			42			r		5,217
Loss on debt extinguishment		39			—					39
Other income, net		(175	)		—					(175	)

Loss before income taxes		(12,278	)		2,026					(10,252	)
Income tax benefit		(741	)		(293	)		m, o, p, q		(1,034	)

Net loss	$	(11,537	)	$	2,319				$	(9,218	)

Net loss per share:
Basic	$	(0.34	)						$	(0.27	)
Diluted	$	(0.34	)						$	(0.27	)

Weighted average common shares outstanding - basic		34,337								34,338
Weighted average common shares outstanding - diluted		34,337								34,338


	Three Months Ended September 30, 2017
	As Reported			Restatement Adjustments			Restatement References		As Restated
Revenue:
Product revenue	$	63,606		$	3,990			a, c	$	67,596
Service revenue		34,165			745			b		34,910
Royalty revenue		9,280			—					9,280

Total revenue		107,051			4,735					111,786

Costs and expenses:
Product cost of revenue		48,561			3,041			a		51,602
Service cost of revenue		14,717			148			d		14,865
Total cost of revenue		63,278			3,189					66,467

Gross profit		43,773			1,546					45,319

Operating expenses:
Research and development		10,190			—					10,190
Sales and marketing		26,179			(355	)		c, e		25,824
General and administrative		12,158			(652	)		j, r		11,506
Restructuring charges		31			39			i		70

Total operating expenses		48,558			(968	)				47,590

Loss from operations		(4,785	)		2,514					(2,271	)
Other expenses and losses, net:
Interest expense, net		2,617			21			r		2,638
Loss on debt extinguishment		39			—					39
Other income, net		(77	)		—					(77	)

Loss before income taxes		(7,364	)		2,493					(4,871	)
Income tax expense		499			(271	)		m, o, p, q		228

Net loss	$	(7,863	)	$	2,764				$	(5,099	)

Net loss per share:
Basic	$	(0.23	)						$	(0.15	)
Diluted	$	(0.23	)						$	(0.15	)

Weighted average common shares outstanding - basic		34,561								34,580
Weighted average common shares outstanding - diluted		34,561								34,580

Consolidated statements of cash flows


	For the Six Months Ended September 30, 2017
	As Reported			Restatement Adjustments			Restatement Reference		As Restated
Cash flows from operating activities:
Net loss	$	(11,537	)	$	2,319			a, b, e, f, g, h, i, l, n, p, q	$	(9,218	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		2,525			85			l, r		2,610
Amortization of debt issuance costs		855			—					855
Product and service parts lower of cost or market adjustment		2,319			1,844			l		4,163
Tax benefit from settlement		(1,656	)		1,656			l		—
Share-based compensation expense		3,330			(317	)		l		3,013
Non-cash interest expense		621			(621	)		l		—
Non-cash loss on debt extinguishment		9			30			l		39
Pension expense		—			733			l		733
Bad debt expense		—			292			l		292
Deferred income taxes, net		144			(463	)		l, m, o, p		(319	)
Loss on disposal of property and equipment		—			2			l		2
Unrealized foreign exchange (gain)/loss		—			1,019			l		1,019
Loss on investments		—			72			l		72
Changes in assets and liabilities:
Accounts receivable		10,284			(7,219	)		a, l		3,065
Manufacturing inventories		(1,752	)		553			a, l		(1,199	)
Service parts inventories		(2,737	)		353			l		(2,384	)
Accounts payable		6,537			838			g, l		7,375
Accrued warranty		(313	)		313			l		—
Accrued restructuring charges		817			(1,114	)		e, f, g		(297	)
Accrued compensation		(1,236	)		(1,031	)		i, l		(2,267	)
Deferred revenue		(9,329	)		3,382			a, b, l		(5,947	)
Other assets and liabilities		815			(3,728	)		a, d, g, h, l, m, n, p, q		(2,913	)

Net cash used in operating activities		(304	)		(1,002	)				(1,306	)

Cash flows from investing activities:
Purchases of property and equipment		(1,156	)		5			l		(1,151	)
Proceeds from sale of assets		—			275			l		275
Cash distributions from investments		278			—					278

Net cash used in investing activities		(878	)		280					(598	)

Cash flows from financing activities:
Borrowings of long-term debt and subordinated convertible debt, net of debt issuance costs		164,650			620			k		165,270
Repayments on long-term debt		(160,245	)		4,479			k		(155,766	)
Repayment of convertible subordinated debt		(6,000	)		(30	)		l		(6,030	)
Payment of tax withholding due upon vesting of restricted stock		(1,775	)		(2	)		l		(1,777	)
Proceeds from issuance of common stock, net		1,010			2			l		1,012

Net cash provided by (used in) financing activities		(2,360	)		5,069					2,709

Effect of exchange rate changes on cash, cash equivalents and restricted cash		82			247			l		329

Net decrease in cash, cash equivalents and restricted cash		(3,454	)		4,588					1,134
Cash, cash equivalents and restricted cash at the beginning of period		36,658			(746	)				35,912

Cash, cash equivalents and restricted cash at the end of period	$	33,204		$	3,842				$	37,046

Supplemental disclosure of cash flow information:
Purchases of property and equipment included in accounts payable	$	335		$	(48	)		l	$	287
Transfer of inventory to property and equipment	$	—		$	919			l	$	919
Cash Paid For:
Interest	$	—		$	4,515			l	$	4,515
Taxes, net of refunds	$	—		$	914			l	$	914