Cover Page
Cover Page - shares | 9 Months Ended | |
Dec. 31, 2022 | Jan. 30, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-13449 | |
Entity Registrant Name | QUANTUM CORP /DE/ | |
Entity Incorporation, State | DE | |
Entity Tax Identification Number | 94-2665054 | |
Entity Address, Street Address | 224 Airport Parkway | |
Entity Address, Suite | Suite 550 | |
Entity Address, City | San Jose | |
Entity Address, State | CA | |
Entity Address, Postal Zip Code | 95110 | |
City Area Code | (408) | |
Local Phone Number | 944-4000 | |
Title of each class | Common Stock, $0.01 par value per share | |
Trading Symbol | QMCO | |
Name of each exchange on which registered | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 105,214,639 | |
Entity Central Index Key | 0000709283 | |
Current Fiscal Year End Date | --03-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 26,028 | $ 5,210 |
Restricted cash | 219 | 283 |
Accounts receivable, net of allowance for doubtful accounts of $219 and $422 | 72,911 | 69,354 |
Manufacturing inventories | 32,402 | 33,546 |
Service parts inventories | 25,822 | 24,254 |
Prepaid expenses | 7,198 | 7,853 |
Other current assets | 7,489 | 4,697 |
Total current assets | 172,069 | 145,197 |
Property and equipment, net | 16,794 | 12,853 |
Intangible assets, net | 6,497 | 9,584 |
Goodwill | 12,969 | 12,969 |
Right-of-use assets, net | 10,468 | 11,107 |
Other long-term assets | 13,600 | 9,925 |
Total assets | 232,397 | 201,635 |
Current liabilities: | ||
Accounts payable | 41,788 | 34,220 |
Deferred revenue | 72,669 | 86,517 |
Long-term debt, current portion | 5,000 | 4,375 |
Accrued compensation | 15,527 | 16,141 |
Other accrued liabilities | 15,852 | 16,562 |
Total current liabilities | 150,836 | 157,815 |
Deferred revenue | 41,076 | 41,580 |
Revolving credit facility | 27,736 | 17,735 |
Long-term debt, net of current portion | 67,306 | 89,448 |
Operating lease liabilities | 10,346 | 9,891 |
Other long-term liabilities | 12,150 | 11,849 |
Total liabilities | 309,450 | 328,318 |
Commitments and contingencies (Note 9) | ||
Stockholders' deficit | ||
Preferred stock, 20,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 225,000 shares authorized; 93,144 and 60,433 shares issued and outstanding | 932 | 605 |
Additional paid-in capital | 719,769 | 645,038 |
Accumulated deficit | (795,237) | (770,903) |
Accumulated other comprehensive loss | (2,517) | (1,423) |
Total stockholders’ deficit | (77,053) | (126,683) |
Total liabilities and stockholders’ deficit | $ 232,397 | $ 201,635 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 219 | $ 422 |
Preferred stock shares authorized (shares) | 20,000,000 | 20,000,000 |
Preferred stock shares issued (shares) | 0 | 0 |
Preferred stock shares outstanding (shares) | 0 | 0 |
Common stock par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (shares) | 225,000,000 | 225,000,000 |
Common stock shares issued (shares) | 93,144,000 | 60,433,000 |
Common stock shares outstanding (shares) | 93,144,000 | 60,433,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | ||||
Revenue | $ 111,196 | $ 95,344 | $ 307,407 | $ 277,623 |
Cost of revenue: | ||||
Cost of revenue | 70,907 | 60,134 | 205,239 | 166,746 |
Gross profit | 40,289 | 35,210 | 102,168 | 110,877 |
Operating expenses: | ||||
Research and development | 11,254 | 14,607 | 33,925 | 38,287 |
Sales and marketing | 16,339 | 16,714 | 47,894 | 46,128 |
General and administrative | 10,969 | 10,538 | 35,223 | 33,830 |
Restructuring charges | (41) | 576 | 1,605 | 850 |
Total operating expenses | 38,521 | 42,435 | 118,647 | 119,095 |
Income (loss) from operations | 1,768 | (7,225) | (16,479) | (8,218) |
Other income (expense), net | (544) | (150) | 2,638 | (223) |
Interest expense | (2,701) | (2,431) | (7,537) | (9,387) |
Loss on debt extinguishment | 0 | 0 | (1,392) | (4,960) |
Net loss before income taxes | (1,477) | (9,806) | (22,770) | (22,788) |
Income tax provision | 693 | 1,254 | 1,564 | 1,678 |
Net loss | (2,170) | (11,060) | (24,334) | (24,466) |
Deemed dividend on warrants | 0 | 0 | (389) | 0 |
Net loss attributable to common stockholders- basic | (2,170) | (11,060) | (24,723) | (24,466) |
Net loss attributable to common stockholders- diluted | $ (2,170) | $ (11,060) | $ (24,723) | $ (24,466) |
Net loss per share - basic (in dollars per share) | $ (0.02) | $ (0.19) | $ (0.28) | $ (0.42) |
Net loss per share - diluted (in dollars per share) | $ (0.02) | $ (0.19) | $ (0.28) | $ (0.42) |
Weighted average shares - basic (in shares) | 92,752 | 59,486 | 89,335 | 58,399 |
Weighted average shares - diluted (in shares) | 92,752 | 59,486 | 89,335 | 58,399 |
Foreign currency translation adjustments, net | $ 1,480 | $ (37) | $ (1,094) | $ (276) |
Total comprehensive loss | (690) | (11,097) | (25,428) | (24,742) |
Product | ||||
Revenue: | ||||
Revenue | 75,420 | 58,522 | 198,597 | 165,308 |
Cost of revenue: | ||||
Cost of revenue | 58,528 | 45,118 | 163,010 | 124,982 |
Service and subscription | ||||
Revenue: | ||||
Revenue | 32,950 | 33,162 | 99,066 | 100,352 |
Cost of revenue: | ||||
Cost of revenue | 12,379 | 15,016 | 42,229 | 41,764 |
Royalty | ||||
Revenue: | ||||
Revenue | $ 2,826 | $ 3,660 | $ 9,744 | $ 11,963 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | ||
Net loss | $ (24,334) | $ (24,466) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 7,235 | 6,795 |
Amortization of debt issuance costs | 1,201 | 1,981 |
Loss on debt extinguishment | 992 | 0 |
Provision for product and service inventories | 11,334 | 4,016 |
Stock-based compensation | 8,340 | 10,580 |
Paycheck Protection Program loan forgiveness | 0 | (10,000) |
Non-cash loss on debt extinguishment | 0 | 8,471 |
Other | (2,059) | 282 |
Unrealized foreign exchange loss | (1,134) | 0 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (3,367) | 7,008 |
Manufacturing inventories | (9,352) | (10,672) |
Service parts inventories | (2,671) | (2,281) |
Prepaid expenses | 654 | (5,653) |
Accounts payable | 7,015 | 5,369 |
Accrued restructuring charges | 130 | 17 |
Accrued compensation | (614) | (3,021) |
Deferred revenue | (14,351) | (8,598) |
Other current assets | (2,812) | (1,394) |
Other non-current assets | 1,357 | (1,148) |
Other current liabilities | 2,540 | (3,350) |
Other non-current liabilities | 300 | (617) |
Net cash used in operating activities | (19,596) | (26,681) |
Investing activities | ||
Purchases of property and equipment | (10,644) | (3,971) |
Business acquisition payments | (2,000) | (7,808) |
Net cash used in investing activities | (12,644) | (11,779) |
Financing activities | ||
Borrowings of long-term debt, net of debt issuance costs | 0 | 94,961 |
Repayments of long-term debt and payment of amendment fees | (23,346) | (93,677) |
Borrowings of credit facility | 363,103 | 207,563 |
Repayments of credit facility and payment of amendment fees | (353,502) | (200,007) |
Proceeds from issuance of common stock, net | 66,718 | 806 |
Net cash provided by financing activities | 52,973 | 9,646 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 21 | 12 |
Net change in cash, cash equivalents and restricted cash | 20,754 | (28,802) |
Cash, cash equivalents, and restricted cash at beginning of period | 5,493 | 33,137 |
Cash, cash equivalents, and restricted cash at end of period | 26,247 | 4,335 |
Cash, Cash Equivalents and Restricted Cash at end of period | ||
Cash and cash equivalents | 26,028 | 4,004 |
Restricted cash, current | 219 | 331 |
Cash and cash equivalents at the end of period | 26,247 | 4,335 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 6,270 | 7,180 |
Cash paid for income taxes, net | 837 | 541 |
Non-cash transactions | ||
Purchases of property and equipment included in accounts payable | 1,198 | 1,148 |
Paid-in-kind interest | 319 | 0 |
Deemed dividend on warrants | 389 | 0 |
Service Inventory | ||
Non-cash transactions | ||
Transfer of manufacturing industries | 2,308 | 1,212 |
Property And Equipment | ||
Non-cash transactions | ||
Transfer of manufacturing industries | $ 264 | $ 382 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income Loss |
Beginning balance at Mar. 31, 2021 | $ (112,245) | $ 570 | $ 626,664 | $ (738,623) | $ (856) |
Beginning balance (in shares) at Mar. 31, 2021 | 56,915,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (24,466) | (24,466) | |||
Foreign currency translation adjustments, net | (276) | (276) | |||
Shares issued under employee stock purchase plan | 806 | $ 1 | 805 | ||
Shares issued under employee stock purchase plan (in shares) | 145,000 | ||||
Shares issued under employee incentive plans, net | 0 | $ 19 | (19) | ||
Shares issued under employee stock incentive plans, net (in shares) | 1,935,000 | ||||
Shares issued in connection with business acquisition | 2,818 | $ 9 | 2,809 | ||
Shares issued in connection with business acquisition (in shares) | 821,000 | ||||
Deemed dividend on warrants | 0 | ||||
Stock-based compensation | 10,580 | 10,580 | |||
Ending balance at Dec. 31, 2021 | (122,783) | $ 599 | 640,839 | (763,089) | (1,132) |
Ending balance (in shares) at Dec. 31, 2021 | 59,816,000 | ||||
Beginning balance at Sep. 30, 2021 | (115,993) | $ 593 | 636,538 | (752,029) | (1,095) |
Beginning balance (in shares) at Sep. 30, 2021 | 59,272,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (11,060) | (11,060) | |||
Foreign currency translation adjustments, net | (37) | (37) | |||
Shares issued under employee incentive plans, net | 0 | $ 2 | (2) | ||
Shares issued under employee stock incentive plans, net (in shares) | 183,000 | ||||
Shares issued in connection with business acquisition | 0 | $ 4 | (4) | ||
Shares issued in connection with business acquisition (in shares) | 361,000 | ||||
Deemed dividend on warrants | 0 | ||||
Stock-based compensation | 4,307 | 4,307 | |||
Ending balance at Dec. 31, 2021 | (122,783) | $ 599 | 640,839 | (763,089) | (1,132) |
Ending balance (in shares) at Dec. 31, 2021 | 59,816,000 | ||||
Beginning balance at Mar. 31, 2022 | $ (126,683) | $ 605 | 645,038 | (770,903) | (1,423) |
Beginning balance (in shares) at Mar. 31, 2022 | 60,433,000 | 60,433,000 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | $ (24,334) | (24,334) | |||
Foreign currency translation adjustments, net | (1,094) | (1,094) | |||
Shares issued under employee stock purchase plan | 472 | $ 3 | 469 | ||
Shares issued under employee stock purchase plan (in shares) | 300,000 | ||||
Shares issued under employee incentive plans, net | 0 | $ 20 | (20) | ||
Shares issued under employee stock incentive plans, net (in shares) | 2,050,000 | ||||
Shares issued in connection with rights offering, net | 66,246 | $ 300 | 65,946 | ||
Shares issued in connection with rights offering, net (in shares) | 30,000,000 | ||||
Shares issued in connection with business acquisition | 0 | $ 4 | (4) | ||
Shares issued in connection with business acquisition (in shares) | 361,000 | ||||
Settlement of warrant down round provision | 389 | 389 | |||
Deemed dividend on warrants | (389) | (389) | |||
Stock-based compensation | 8,340 | 8,340 | |||
Ending balance at Dec. 31, 2022 | $ (77,053) | $ 932 | 719,769 | (795,237) | (2,517) |
Ending balance (in shares) at Dec. 31, 2022 | 93,144,000 | 93,144,000 | |||
Beginning balance at Sep. 30, 2022 | $ (79,342) | $ 922 | 716,800 | (793,067) | (3,997) |
Beginning balance (in shares) at Sep. 30, 2022 | 92,158,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net loss | (2,170) | (2,170) | |||
Foreign currency translation adjustments, net | 1,480 | 1,480 | |||
Shares issued under employee incentive plans, net | 0 | $ 6 | (6) | ||
Shares issued under employee stock incentive plans, net (in shares) | 625,000 | ||||
Shares issued in connection with business acquisition | 0 | $ 4 | (4) | ||
Shares issued in connection with business acquisition (in shares) | 361,000 | ||||
Rights offering expenses | (2) | (2) | |||
Deemed dividend on warrants | 0 | ||||
Stock-based compensation | 2,981 | 2,981 | |||
Ending balance at Dec. 31, 2022 | $ (77,053) | $ 932 | $ 719,769 | $ (795,237) | $ (2,517) |
Ending balance (in shares) at Dec. 31, 2022 | 93,144,000 | 93,144,000 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Quantum Corporation, together with its consolidated subsidiaries (“Quantum” or the “Company”), is a leader in storing and managing digital video and other forms of unstructured data, delivering top streaming performance for video and rich media applications, along with low-cost, long-term storage systems for data protection and archiving. The Company helps customers around the world capture, create and share digital data and preserve and protect it for decades. The Company’s software-defined, hyperconverged storage solutions span from non-violate memory express (“NVMe”), to solid state drives (“SSD”) hard disk drives (“HDD”) tape, the cloud, and video surveillance and are tied together leveraging a single namespace view of the entire data environment. The Company works closely with a broad network of distributors, value-added resellers (“VARs”), direct marketing resellers (“DMRs”), original equipment manufacturers (“OEMs”) and other suppliers to meet customers’ evolving needs. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included within the Company's most recent Annual Report on Form 10-K. The unaudited consolidated interim financial statements reflect all adjustments, consisting only of normal and recurring items, necessary to present fairly our financial position as of December 31, 2022, the results of operations and comprehensive loss, statements of cash flows, and changes in stockholder's deficit for the three and nine months ended December 31, 2022 and 2021. Interim results are not necessarily indicative of full year performance because of the impact of seasonal and short-term variations. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from these estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment from the ongoing COVID-19 pandemic. Such estimates include, but are not limited to, the determination of standalone selling price for revenue arrangements with multiple performance obligations, useful lives of intangible assets and property and equipment, stock-based compensation and provision for income taxes including related reserves. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Recently Issued but not Adopted Accounting Pronouncements |
REVENUE
REVENUE | 9 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Based on how the Company manages its business, the Company has determined that it currently operates in one reportable segment. The Company operates in three geographic regions: (a) Americas; (b) Europe, Middle East and Africa (“EMEA”); and (c) Asia Pacific (“APAC”). Revenue by geography is based on the location of the customer from which the revenue is earned. In the following table, revenue is disaggregated by major product offerings and geographies (in thousands): Three Months Ended December 31, Nine Months Ended December 31, 2022 2021 2022 2021 Americas 1 Primary storage systems $ 10,668 $ 8,768 $ 28,921 $ 27,228 Secondary storage systems 35,085 15,060 88,821 43,946 Device and media 4,107 7,737 13,773 19,527 Service and subscription 19,756 19,470 59,319 61,003 Total revenue 69,616 51,035 190,834 151,704 EMEA Primary storage systems 2,332 3,305 7,078 10,325 Secondary storage systems 10,096 10,377 25,380 27,856 Device and media 6,029 5,125 14,794 15,018 Service and subscription 10,989 11,606 32,748 33,454 Total revenue 29,446 30,413 80,000 86,653 APAC Primary storage systems 974 1,718 3,376 4,234 Secondary storage systems 5,541 5,193 13,651 13,291 Device and media 588 1,239 2,803 3,883 Service and subscription 2,205 2,086 6,999 5,895 Total revenue 9,308 10,236 26,829 27,303 Consolidated Primary storage systems 13,974 13,791 39,375 41,787 Secondary storage systems 50,722 30,630 127,852 85,093 Device and media 10,724 14,101 31,370 38,428 Service and subscription 32,950 33,162 99,066 100,352 Royalty 2 2,826 3,660 9,744 11,963 Total revenue $ 111,196 $ 95,344 $ 307,407 $ 277,623 1 Revenue for Americas geographic region outside of the United States is not significant. 2 Royalty revenue is not allocatable to geographic regions. Contract Balances The following table presents the Company’s contract liabilities and certain information related to this balance as of and for the nine months ended December 31, 2022 (in thousands): December 31, 2022 Contract liabilities (deferred revenue) $ 113,745 Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period 71,669 Remaining Performance Obligations Remaining performance obligations consisted of the following (in thousands): Current Non-Current Total As of December 31, 2022 $ 105,981 $ 42,645 $ 148,626 The Company's non-current remaining performance obligations are expected to be recognized in the next 13 to 60 months. |
BALANCE SHEET INFORMATION
BALANCE SHEET INFORMATION | 9 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
BALANCE SHEET INFORMATION | BALANCE SHEET INFORMATION Certain significant amounts included in the Company's condensed consolidated balance sheets consist of the following (in thousands): Manufacturing inventories December 31, 2022 March 31, 2022 Finished goods $ 13,639 $ 14,607 Work in progress 2,268 2,546 Raw materials 16,495 16,393 Total manufacturing inventories $ 32,402 $ 33,546 Service parts inventories December 31, 2022 March 31, 2022 Finished goods $ 21,215 $ 19,234 Component parts 4,607 5,020 Total service parts inventories $ 25,822 $ 24,254 Intangibles, net December 31, 2022 March 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Developed technology $ 9,013 $ (5,442) $ 3,571 $ 9,013 $ (2,926) $ 6,087 Customer lists 4,398 (1,472) 2,926 4,398 (901) 3,497 Intangible assets, net $ 13,411 $ (6,914) $ 6,497 $ 13,411 $ (3,827) $ 9,584 Intangible assets amortization expense was $0.7 million and $1.2 million for the three months ended December 31, 2022 and 2021, respectively and $3.1 million and $2.5 million for the nine months ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the remaining weighted-average amortization period for definite-lived intangible assets was approximately 1.8 years. As of December 31, 2022, the future expected amortization expense for intangible assets is as follows (in thousands): Fiscal year ending Estimated future amortization expense Remainder of 2023 $ 1,147 2024 3,523 2025 1,827 Thereafter — Total $ 6,497 Goodwill As of December 31, 2022 and March 31, 2022, goodwill was $13.0 million. There were no impairments to goodwill during the nine months ended December 31, 2022 and 2021. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The Company’s long-term debt consisted of the following (in thousands): December 31, 2022 March 31, 2022 Term Loan $ 75,917 $ 98,722 PNC Credit Facility 27,736 17,735 Less: current portion (5,000) (4,375) Less: unamortized debt issuance costs (1) (3,611) (4,899) Long-term debt, net $ 95,042 $ 107,183 (1) The unamortized debt issuance costs related to the Term Loan is presented as a reduction of the carrying amount of the corresponding debt balance on the accompanying condensed consolidated balance sheets. Unamortized debt issuance costs related to the PNC Credit Facility are presented within other assets on the accompanying condensed consolidated balance sheets. On December 27, 2018, the Company entered into a senior secured term loan (the "Senior Secured Term Loan”) and amended its existing PNC Bank Credit Facility Agreement (the "PNC Credit Facility"). On February 11, 2021, the Company prepaid $92.3 million of its outstanding Senior Secured Term Loan. On August 5, 2021, the Company entered into a new senior secured term loan to borrow an aggregate of $100.0 million (the “Term Loan”). A portion of the proceeds were used to repay in full all outstanding borrowings under the Senior Secured Term Loan. Borrowings under the Term Loan mature on August 5, 2026. Principal is payable at a rate per annum equal to (a) 2.5% of the original principal balance thereof during the first year following the closing date of the Term Loan and (b) 5% of the original principal balance thereof thereafter. Principal and interest payments are payable on a quarterly basis. On April 25, 2022, the Company entered into amendments to the Term Loan and the PNC Credit Facility. The Term Loan amendment, among other things, (a) amended the total net leverage ratio financial covenant and the minimum liquidity financial covenant commencing with the fiscal quarter ended June 30, 2022; and; (b) replaced the benchmark rate for LIBOR Rate Loans with a rate based on the Secured Overnight Financing Rate ("SOFR"). The amendment to the Term Loan was accounted for as a modification. The Company incurred $0.4 million in costs related to the modification which are reflected as a reduction to the carrying amount of the Term Loan and amortized to interest expense over the remaining loan term. Loans under the Term Loan designated as ABR Loans bear interest at a rate per annum equal to the greatest of (i) 1.75%; (ii) the Federal funds rate plus 0.50%; (iii) the SOFR Rate based upon an interest period of one month plus 1.0%; and (iv) the “Prime Rate” last quoted by the Wall Street Journal, plus an applicable margin of 5.00%. Loans designated as SOFR Rate Loans bear interest at a rate per annum equal to the SOFR Rate plus an applicable margin of 6.00%. The SOFR Rate is subject to a floor of 0.75%. The Company can designate a loan as an ABR Rate Loan or SOFR Rate Loan in its discretion. The PNC Credit Facility amendment, among other things, (a) increased the principal amount of revolving commitments from $30.0 million to $40.0 million; (b) waived compliance with the fixed charge coverage ratio financial covenant until the fiscal quarter ended March 31, 2025; (c) amended the total net leverage ratio financial covenant and the minimum liquidity financial covenant commencing with the fiscal quarter ended June 30, 2022; and (d) replaced the benchmark rate for PNC LIBOR Rate Loans with a rate based on SOFR. The amendment to the PNC Credit Facility was accounted for as a modification. The Company incurred $0.4 million in costs which were recorded to other assets and amortized to interest expense over the remaining term of the agreement. Loans designated as PNC SOFR Loans bear interest at a rate per annum equal to the SOFR Rate plus 2.75% until December 31, 2023 and thereafter between 2.25% and 2.75% determined based on the Company’s Total Net Leverage Ratio, (as defined in the PNC Credit Facility Agreement) for the most recently completed fiscal quarter (the "PNC SOFR Loan Interest Rate"). Loans under the PNC Credit Facility designated as PNC Domestic Rate Loans and Swing Loans bear interest at a rate per annum equal to the greatest of (i) the base commercial lending rate of PNC Bank; (ii) the Overnight Bank Funding Rate plus 0.5%; and (iii) the daily SOFR Rate plus 1.0%, plus 1.75% until December 31, 2023 and thereafter between 1.25% and 1.75% determined based on the Company’s Total Net Leverage Ratio (the “PNC Domestic Loan Interest Rate”). With respect to any PNC SOFR Rate Loan, the Company has agreed to pay affiliates of certain Term Loan lenders a fee equal to a percentage per annum equal to the sum of (x) 6.50%, minus (y) the PNC SOFR Loan Interest Rate, plus (z) if the SOFR Rate applicable to such interest payment is less than 0.75%, (i) 0.75% minus (ii) such SOFR Rate. With respect to any Domestic Rate Loan or Swing Loan, the Company has agreed to pay an affiliate of certain Term Loan lenders a fee equal to a percentage per annum equal to the sum of (x) 5.50%, minus (y) the PNC Domestic Loan Interest Rate, plus (z) if the Alternative Base Rate applicable to such interest payment is less than 1.00%, (i) 1.00% minus (ii) such Alternative Base Rate. During the nine months ended December 31, 2022, the Company recorded a loss on debt extinguishment of $1.4 million related to a $20.0 million prepayment of the Term Loan which was comprised of a $0.4 million prepayment penalty and the write-off of unamortized debt issuance costs of $1.0 million. |
LEASES
LEASES | 9 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES Supplemental balance sheet information related to leases is as follows (in thousands): Operating leases December 31, 2022 March 31, 2022 Operating lease right-of-use asset $ 10,468 $ 11,107 Other accrued liabilities 1,202 1,727 Operating lease liability 10,346 9,891 Total operating lease liabilities $ 11,548 $ 11,618 Components of lease cost were as follows (in thousands): Three Months Ended December 31, Nine Months Ended December 31, Lease Cost 2022 2021 2022 2021 Operating lease cost $ 994 $ 887 $ 3,023 $ 3,016 Variable lease cost 176 176 513 527 Short-term lease cost — 13 — 17 Total lease cost $ 1,170 $ 1,076 $ 3,536 $ 3,560 Maturity of Lease Liabilities Operating Leases Remainder of 2023 $ 657 2024 2,495 2025 2,185 2026 1,717 2027 1,586 Thereafter 14,696 Total lease payments $ 23,336 Less: imputed interest (11,788) Present value of lease liabilities $ 11,548 Lease Term and Discount Rate December 31, 2022 March 31, 2022 Weighted average remaining operating lease term (years) 11.11 10.88 Weighted average discount rate for operating leases 12.6 % 12.9 % Operating cash outflows related to operating leases totaled $2.4 million and $3.1 million for the nine months ended December 31, 2022 and 2021, respectively. |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK | COMMON STOCK In the quarter ended September 30, 2022, the Company’s shareholders approved an increase in its authorized shares of common stock from 125 million to 225 million. On December 30, 2022 the Leadership and Compensation Committee of the Board approved an amendment to the 2021 Inducement Plan to increase the number of shares of common stock of the Company authorized for issuance thereunder from 770,000 to 1.5 million. Common Stock Rights Offering On April 22, 2022, the Company completed a rights offering of 30 million shares of its common stock for $2.25 per share (the “Rights Offering”). The proceeds net of offering expenses was $66.0 million. A portion of the proceeds from the Rights Offering was used to prepay $20.0 million of the Company’s Term Loan. Warrants As of the date of the Rights Offering, the Company had outstanding warrants to purchase 7,110,616 shares of the Company’s common stock at an exercise price of $1.33 per share and outstanding warrants to purchase 3,400,000 shares of the Company's common stock at an exercise price of $3.00 per share (the “$3.00 Warrants"). The exercise price and the number of shares underlying these warrants are subject to adjustment in the event of specified events, including dilutive issuances of common stock linked equity instruments at a price lower than the exercise price of the warrants, a subdivision or combination of the Company’s common stock, a reclassification of the Company’s common stock or specified dividend payments (the “Down Round Feature”). On April 22, 2022, the Down Round Feature was triggered for the $3.00 Warrants due to the price per share received in the Rights Offering. The exercise price for the $3.00 Warrants was adjusted to $2.79 per share and an additional 256,113 warrants were subsequently issued with an exercise price of $2.79. The Company calculated the difference between the $3.00 Warrants’ fair value before and after the Down Round Feature was triggered using the original exercise price and the new exercise price in addition to the value of the newly issued warrants. The difference in fair value of the effect of the Down Round Feature of $0.4 million was reflected as a deemed dividend and a reduction to income available to common stockholders in the basic earnings per share calculation. The Company used the Black-Scholes-Merton option-pricing model to determine the fair value of the deemed dividend. The assumptions used in the model are as follows: dividend rate of 0%; expected term of 8 years; volatility of 56%; and a risk-free rate 2.85%. As of December 31, 2022, there were approximately 10.8 million warrants outstanding. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NET LOSS PER SHARE The following outstanding stock-based instruments which are comprised of performance share units, restricted stock units, and warrants were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive (in thousands): Three Months Ended December 31, Nine Months Ended December 31, 2022 2021 2022 2021 5,450 8,802 3,763 9,811 The dilutive impact related to common stock from restricted stock units and warrants is determined by applying the treasury stock method to the assumed vesting of outstanding restricted stock units and the exercise of outstanding warrants. The dilutive impact related to common stock from contingently issuable performance share units is determined by applying a two-step approach using both the contingently issuable share guidance and the treasury stock method. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective tax rate for the three and nine months ended December 31, 2022 was (7.1)% and (6.7)%, respectively, as compared to (12.6)% and (7.3)%, respectively, for the three and nine months ended December 31, 2021. The effective tax rates differed from the federal statutory tax rate of 21% during each of these periods due primarily to unbenefited losses experienced in jurisdictions with valuation allowances on deferred tax assets as well as the forecasted mix of earnings in domestic and international jurisdictions. As of December 31, 2022, including interest and penalties, the Company had $103.0 million of unrecognized tax benefits, $84.3 million of which, if recognized, would favorably affect the effective tax rate without consideration of the valuation allowance. As of December 31, 2022, the Company had accrued interest and penalties related to these unrecognized tax benefits of $1.4 million. The Company recognizes interest and penalties related to income tax matters in the income tax provision in the condensed consolidated statements of operations. As of December 31, 2022, $95.0 million of unrecognized tax benefits were recorded as a contra deferred tax asset in other long-term assets in the condensed consolidated balance sheets and $8.0 million (including interest and penalties) were recorded in other long-term liabilities in the condensed consolidated balance sheets. During the next 12 months, it is reasonably possible that approximately $10.8 million of tax benefits, inclusive of interest and penalties, that are currently unrecognized could be recognized as a result of the expiration of applicable statutes of limitations. Upon recognition of the tax benefit related to the expiring statutes of limitation, $10.1 million will be offset by the establishment of a related valuation allowance. The net tax benefit recognized in the statements of operation is estimated to be $0.7 million. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESCommitments to Purchase Inventory The Company uses contract manufacturers for its manufacturing operations. Under these arrangements, the contract manufacturer procures inventory to manufacture products based upon the Company’s forecast of customer demand. The Company has similar arrangements with certain other suppliers. The Company is responsible for the financial impact on the supplier or contract manufacturer of any reduction or product mix shift in the forecast relative to materials that the third party had already purchased under a prior forecast. Such a variance in forecasted demand could require a cash payment for inventory in excess of current customer demand or for costs of excess or obsolete inventory. As of December 31, 2022, the Company had issued non-cancelable commitments for $36.7 million to purchase inventory from its contract manufacturers and suppliers. Legal Proceedings On July 22, 2016, Realtime Data LLC d/b/a IXO (“Realtime Data”) filed a patent infringement lawsuit against the Company in the U.S. District Court for the Eastern District of Texas, alleging infringement of U.S. Patents Nos. 7,161,506, 7,378,992, 7,415,530, 8,643,513, 9,054,728, and 9,116,908. The lawsuit has been transferred to the U.S. District Court for the Northern District of California for further proceedings. Realtime Data asserts that the Company has incorporated Realtime Data’s patented technology into its compression products and services. Realtime Data seeks unspecified monetary damages and other relief that the Court deems appropriate. On July 31, 2017, the District Court stayed proceedings in this litigation pending the outcome of Inter Partes Review proceedings before the Patent Trial and Appeal Board relating to the Realtime patents. In those proceedings the asserted claims of the ’506 patent, the ’992 patent, and the ’513 patent were found unpatentable. In addition, on July 19, 2019, the United States District Court for the District of Delaware issued a decision finding that all claims of the ’728 patent, the ’530 patent, and the ’908 patent are not eligible for patent protection under 35 U.S.C. § 101 (the “Delaware Action”). On appeal, the Federal Circuit vacated the decision in the Delaware Action and remanded for the Court to “elaborate on its ruling.” The case pending against Quantum in the Northern District of California remains stayed pending the final outcome in the Delaware Action. On May 4, 2021, the Court in the Delaware Action reaffirmed its earlier ruling and granted defendants’ motions to dismiss under Section 101. The Court also granted Realtime Data fourteen days to file amended complaints in the Delaware Action where they sought leave to do so. On May 19, 2021, Realtime Data filed amended complaints including revised bases for claims of infringement of the same patents. On June 29, 2021, defendants in the Delaware Action filed a renewed motion to dismiss under Section 101. Realtime Data filed its opposition to the motion to dismiss on July 13, 2021. On August 23, 2021, the Court again reaffirmed its earlier ruling and granted defendants’ motions to dismiss under Section 101. Realtime Data has appealed that decision to the Federal Circuit. On September 7, 2021, the case against Quantum in the Northern District of California was stayed pending the outcome of Realtime Data’s appeal in the Delaware Action. The Federal Circuit Court has not yet heard oral arguments. Quantum believes the probability that this lawsuit will have a material adverse effect on our business, operating results or financial condition is remote. On July 14, 2020, Starboard Value LP, Starboard Value and Opportunity Master Fund Ltd., Starboard Value and Opportunity S LLC, and Starboard Value and Opportunity C LP (collectively, “Starboard”) filed a lawsuit against Quantum Corporation, Quantum’s former CEO and board member Jon Gacek, and former Quantum board member Paul Auvil in the California Superior Court in Santa Clara County alleging that between 2012 and 2014, Starboard purchased shares of Quantum’s common stock, obtained three seats on Quantum’s board of directors and then, in July 2014, entered into an agreement with Quantum whereby Starboard would not seek control of Quantum’s board but would instead support Quantum’s slate of board nominees so long as Quantum met certain performance objectives by the end of fiscal 2015. The lawsuit further alleges that Quantum hid its failure to meet those performance objectives by improperly recognizing revenue in fiscal 2015. The California action was stayed and then dismissed. On April 14, 2021, Starboard filed a new action in the Delaware Court of Chancery, naming as defendants Messrs. Gacek and Auvil and Quantum. The new action largely repeats the allegations of the California action, alleging claims for fraud against all defendants, fraudulent concealment against all defendants, negligent misrepresentation against all defendants, breach of contract against Quantum, breach of the implied covenant of good faith and fair dealing against Quantum, and breach of fiduciary duty against Messrs. Gacek and Auvil. As of January 12, 2023, all parties signed a settlement agreement amicably resolving both actions. The litigation will have no material effect on the Company’s financial statements or business operations. Other Commitments |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s assets, measured and recorded at fair value on a recurring basis, may consist of money market funds which are included in cash and cash equivalents in the Condensed Consolidated Balance Sheets and are valued using quoted market prices (level 1 fair value measurements) at the respective balance sheet dates. No impairment charges were recognized for non-financial assets in the nine months ended December 31, 2022 and 2021. The Company has no non-financial liabilities measured and recorded at fair value on a non-recurring basis. Long-term Debt The Company’s financial liabilities were comprised primarily of long-term debt at December 31, 2022. The Company uses significant other observable market data or assumptions (Level 2 inputs as defined in the accounting guidance) that it believes market participants would use in pricing debt. The carrying value and fair value of the Company’s financial liabilities were primarily comprised of the following as of December 31, 2022 (in thousands): December 31, 2022 2021 Carrying Value Fair Value Carrying Value Fair Value Term Loan $ 75,917 $ 75,917 $ 98,750 $ 98,750 PNC Credit Facility 27,736 27,736 7,556 7,556 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS As of January 12, 2023, all parties in the Starboard legal matter signed a settlement agreement amicably resolving both actions (see Note 9, Commitments and Contingencies |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. All intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. The Company believes the disclosures made are adequate to prevent the information presented from being misleading. However, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included within the Company's most recent Annual Report on Form 10-K. The unaudited consolidated interim financial statements reflect all adjustments, consisting only of normal and recurring items, necessary to present fairly our financial position as of December 31, 2022, the results of operations and comprehensive loss, statements of cash flows, and changes in stockholder's deficit for the three and nine months ended December 31, 2022 and 2021. Interim results are not necessarily indicative of full year performance because of the impact of seasonal and short-term variations. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and accompanying notes. Actual results could differ from these estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment from the ongoing COVID-19 pandemic. Such estimates include, but are not limited to, the determination of standalone selling price for revenue arrangements with multiple performance obligations, useful lives of intangible assets and property and equipment, stock-based compensation and provision for income taxes including related reserves. Management bases its estimates on historical experience and on various other assumptions which management believes to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. |
Recently Issued but not Adopted Accounting Pronouncement | Recently Issued but not Adopted Accounting PronouncementsNone. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue from External Customers by Geographic Areas | In the following table, revenue is disaggregated by major product offerings and geographies (in thousands): Three Months Ended December 31, Nine Months Ended December 31, 2022 2021 2022 2021 Americas 1 Primary storage systems $ 10,668 $ 8,768 $ 28,921 $ 27,228 Secondary storage systems 35,085 15,060 88,821 43,946 Device and media 4,107 7,737 13,773 19,527 Service and subscription 19,756 19,470 59,319 61,003 Total revenue 69,616 51,035 190,834 151,704 EMEA Primary storage systems 2,332 3,305 7,078 10,325 Secondary storage systems 10,096 10,377 25,380 27,856 Device and media 6,029 5,125 14,794 15,018 Service and subscription 10,989 11,606 32,748 33,454 Total revenue 29,446 30,413 80,000 86,653 APAC Primary storage systems 974 1,718 3,376 4,234 Secondary storage systems 5,541 5,193 13,651 13,291 Device and media 588 1,239 2,803 3,883 Service and subscription 2,205 2,086 6,999 5,895 Total revenue 9,308 10,236 26,829 27,303 Consolidated Primary storage systems 13,974 13,791 39,375 41,787 Secondary storage systems 50,722 30,630 127,852 85,093 Device and media 10,724 14,101 31,370 38,428 Service and subscription 32,950 33,162 99,066 100,352 Royalty 2 2,826 3,660 9,744 11,963 Total revenue $ 111,196 $ 95,344 $ 307,407 $ 277,623 1 Revenue for Americas geographic region outside of the United States is not significant. 2 Royalty revenue is not allocatable to geographic regions. |
Schedule of Deferred Revenue, by Arrangement | The following table presents the Company’s contract liabilities and certain information related to this balance as of and for the nine months ended December 31, 2022 (in thousands): December 31, 2022 Contract liabilities (deferred revenue) $ 113,745 Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period 71,669 |
Schedule of Remaining Performance Obligations | Remaining performance obligations consisted of the following (in thousands): Current Non-Current Total As of December 31, 2022 $ 105,981 $ 42,645 $ 148,626 |
BALANCE SHEET INFORMATION (Tabl
BALANCE SHEET INFORMATION (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Manufacturing Inventories | Manufacturing inventories December 31, 2022 March 31, 2022 Finished goods $ 13,639 $ 14,607 Work in progress 2,268 2,546 Raw materials 16,495 16,393 Total manufacturing inventories $ 32,402 $ 33,546 |
Schedule of Service Part Inventories | Service parts inventories December 31, 2022 March 31, 2022 Finished goods $ 21,215 $ 19,234 Component parts 4,607 5,020 Total service parts inventories $ 25,822 $ 24,254 |
Summary of Carrying Value of Intangible Assets | Intangibles, net December 31, 2022 March 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Developed technology $ 9,013 $ (5,442) $ 3,571 $ 9,013 $ (2,926) $ 6,087 Customer lists 4,398 (1,472) 2,926 4,398 (901) 3,497 Intangible assets, net $ 13,411 $ (6,914) $ 6,497 $ 13,411 $ (3,827) $ 9,584 |
Future Expected Amortization Expense for Intangible Assets | As of December 31, 2022, the future expected amortization expense for intangible assets is as follows (in thousands): Fiscal year ending Estimated future amortization expense Remainder of 2023 $ 1,147 2024 3,523 2025 1,827 Thereafter — Total $ 6,497 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s long-term debt consisted of the following (in thousands): December 31, 2022 March 31, 2022 Term Loan $ 75,917 $ 98,722 PNC Credit Facility 27,736 17,735 Less: current portion (5,000) (4,375) Less: unamortized debt issuance costs (1) (3,611) (4,899) Long-term debt, net $ 95,042 $ 107,183 (1) The unamortized debt issuance costs related to the Term Loan is presented as a reduction of the carrying amount of the corresponding debt balance on the accompanying condensed consolidated balance sheets. Unamortized debt issuance costs related to the PNC Credit Facility are presented within other assets on the accompanying condensed consolidated balance sheets. |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Supplemental Balance Sheet | Supplemental balance sheet information related to leases is as follows (in thousands): Operating leases December 31, 2022 March 31, 2022 Operating lease right-of-use asset $ 10,468 $ 11,107 Other accrued liabilities 1,202 1,727 Operating lease liability 10,346 9,891 Total operating lease liabilities $ 11,548 $ 11,618 |
Components of Lease Cost | Components of lease cost were as follows (in thousands): Three Months Ended December 31, Nine Months Ended December 31, Lease Cost 2022 2021 2022 2021 Operating lease cost $ 994 $ 887 $ 3,023 $ 3,016 Variable lease cost 176 176 513 527 Short-term lease cost — 13 — 17 Total lease cost $ 1,170 $ 1,076 $ 3,536 $ 3,560 Lease Term and Discount Rate December 31, 2022 March 31, 2022 Weighted average remaining operating lease term (years) 11.11 10.88 Weighted average discount rate for operating leases 12.6 % 12.9 % |
Maturity of Operating Lease Liability | Maturity of Lease Liabilities Operating Leases Remainder of 2023 $ 657 2024 2,495 2025 2,185 2026 1,717 2027 1,586 Thereafter 14,696 Total lease payments $ 23,336 Less: imputed interest (11,788) Present value of lease liabilities $ 11,548 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities | The following outstanding stock-based instruments which are comprised of performance share units, restricted stock units, and warrants were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive (in thousands): Three Months Ended December 31, Nine Months Ended December 31, 2022 2021 2022 2021 5,450 8,802 3,763 9,811 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Value and Total Estimated Fair Value | December 31, 2022 2021 Carrying Value Fair Value Carrying Value Fair Value Term Loan $ 75,917 $ 75,917 $ 98,750 $ 98,750 PNC Credit Facility 27,736 27,736 7,556 7,556 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) | 9 Months Ended |
Dec. 31, 2022 segment region | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Number of reportable segments | segment | 1 |
Geographic regions operated in (regions) | region | 3 |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligation, timing of satisfaction | 13 months |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |
Remaining performance obligation, timing of satisfaction | 60 months |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue | ||||
Revenue | $ 111,196 | $ 95,344 | $ 307,407 | $ 277,623 |
Americas | ||||
Disaggregation of Revenue | ||||
Revenue | 69,616 | 51,035 | 190,834 | 151,704 |
EMEA | ||||
Disaggregation of Revenue | ||||
Revenue | 29,446 | 30,413 | 80,000 | 86,653 |
APAC | ||||
Disaggregation of Revenue | ||||
Revenue | 9,308 | 10,236 | 26,829 | 27,303 |
Primary storage systems | ||||
Disaggregation of Revenue | ||||
Revenue | 13,974 | 13,791 | 39,375 | 41,787 |
Primary storage systems | Americas | ||||
Disaggregation of Revenue | ||||
Revenue | 10,668 | 8,768 | 28,921 | 27,228 |
Primary storage systems | EMEA | ||||
Disaggregation of Revenue | ||||
Revenue | 2,332 | 3,305 | 7,078 | 10,325 |
Primary storage systems | APAC | ||||
Disaggregation of Revenue | ||||
Revenue | 974 | 1,718 | 3,376 | 4,234 |
Secondary storage systems | ||||
Disaggregation of Revenue | ||||
Revenue | 50,722 | 30,630 | 127,852 | 85,093 |
Secondary storage systems | Americas | ||||
Disaggregation of Revenue | ||||
Revenue | 35,085 | 15,060 | 88,821 | 43,946 |
Secondary storage systems | EMEA | ||||
Disaggregation of Revenue | ||||
Revenue | 10,096 | 10,377 | 25,380 | 27,856 |
Secondary storage systems | APAC | ||||
Disaggregation of Revenue | ||||
Revenue | 5,541 | 5,193 | 13,651 | 13,291 |
Device and media | ||||
Disaggregation of Revenue | ||||
Revenue | 10,724 | 14,101 | 31,370 | 38,428 |
Device and media | Americas | ||||
Disaggregation of Revenue | ||||
Revenue | 4,107 | 7,737 | 13,773 | 19,527 |
Device and media | EMEA | ||||
Disaggregation of Revenue | ||||
Revenue | 6,029 | 5,125 | 14,794 | 15,018 |
Device and media | APAC | ||||
Disaggregation of Revenue | ||||
Revenue | 588 | 1,239 | 2,803 | 3,883 |
Service and subscription | ||||
Disaggregation of Revenue | ||||
Revenue | 32,950 | 33,162 | 99,066 | 100,352 |
Service and subscription | Americas | ||||
Disaggregation of Revenue | ||||
Revenue | 19,756 | 19,470 | 59,319 | 61,003 |
Service and subscription | EMEA | ||||
Disaggregation of Revenue | ||||
Revenue | 10,989 | 11,606 | 32,748 | 33,454 |
Service and subscription | APAC | ||||
Disaggregation of Revenue | ||||
Revenue | 2,205 | 2,086 | 6,999 | 5,895 |
Royalty | ||||
Disaggregation of Revenue | ||||
Revenue | $ 2,826 | $ 3,660 | $ 9,744 | $ 11,963 |
REVENUE - Certain Information R
REVENUE - Certain Information Related to Contract Liabilities (Details) $ in Thousands | 9 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities (deferred revenue) | $ 113,745 |
Revenue recognized in the period from amounts included in contract liabilities at the beginning of the period | $ 71,669 |
REVENUE - Remaining Performance
REVENUE - Remaining Performance Obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Current | $ 105,981 |
Non-Current | 42,645 |
Total | $ 148,626 |
BALANCE SHEET INFORMATION - Sch
BALANCE SHEET INFORMATION - Schedule of Manufacturing Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Inventories | ||
Finished goods | $ 13,639 | $ 14,607 |
Work in progress | 2,268 | 2,546 |
Raw materials | 16,495 | 16,393 |
Total manufacturing inventories | $ 32,402 | $ 33,546 |
BALANCE SHEET INFORMATION - S_2
BALANCE SHEET INFORMATION - Schedule of Service Parts Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Balance Sheet Related Disclosures [Abstract] | ||
Finished goods | $ 21,215 | $ 19,234 |
Component parts | 4,607 | 5,020 |
Total service parts inventories | $ 25,822 | $ 24,254 |
BALANCE SHEET INFORMATION - S_3
BALANCE SHEET INFORMATION - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Finite-Lived Intangible Assets | ||
Gross | $ 13,411 | $ 13,411 |
Accumulated Amortization | (6,914) | (3,827) |
Net | 6,497 | 9,584 |
Developed technology | ||
Finite-Lived Intangible Assets | ||
Gross | 9,013 | 9,013 |
Accumulated Amortization | (5,442) | (2,926) |
Net | 3,571 | 6,087 |
Customer lists | ||
Finite-Lived Intangible Assets | ||
Gross | 4,398 | 4,398 |
Accumulated Amortization | (1,472) | (901) |
Net | $ 2,926 | $ 3,497 |
BALANCE SHEET INFORMATION - Nar
BALANCE SHEET INFORMATION - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |||||
Intangible assets amortization expense | $ 700,000 | $ 1,200,000 | $ 3,100,000 | $ 2,500,000 | |
Weighted-average remaining amortization period (in years) | 1 year 9 months 18 days | ||||
Goodwill | $ 12,969,000 | $ 12,969,000 | $ 12,969,000 | ||
Goodwill impairment loss | $ 0 | $ 0 |
BALANCE SHEET INFORMATION - S_4
BALANCE SHEET INFORMATION - Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Fiscal year ending | ||
Remainder of 2023 | $ 1,147 | |
2024 | 3,523 | |
2025 | 1,827 | |
Thereafter | 0 | |
Net | $ 6,497 | $ 9,584 |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Debt Instrument | ||
PNC Credit Facility | $ 27,736 | $ 17,735 |
Less: current portion | (5,000) | (4,375) |
Less: unamortized debt issuance costs | (3,611) | (4,899) |
Long-term debt, net of current portion | 95,042 | 107,183 |
Term Loan | Senior Secured Debt | ||
Debt Instrument | ||
Term Loan | 75,917 | 98,722 |
Amended Revolving Credit Agreement with PNC | Line of Credit | ||
Debt Instrument | ||
PNC Credit Facility | $ 27,736 | $ 17,735 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Apr. 25, 2022 | Dec. 31, 2021 | Feb. 11, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 24, 2022 | Aug. 05, 2021 | |
Debt Instrument | |||||||||
Repayments of long-term debt and payment of amendment fees | $ 23,346,000 | $ 93,677,000 | |||||||
Loss on debt extinguishment | $ 0 | $ 0 | 1,392,000 | $ 4,960,000 | |||||
Amended PNC Credit Facility | |||||||||
Debt Instrument | |||||||||
Line of credit facility, maximum borrowing amount | 33,400,000 | 33,400,000 | |||||||
Line of credit, current borrowing capacity | $ 5,700,000 | 5,700,000 | |||||||
Term Loan | Senior Secured Debt | |||||||||
Debt Instrument | |||||||||
Repayments of long-term debt and payment of amendment fees | $ 92,300,000 | ||||||||
Debt amendment costs | $ 400,000 | ||||||||
Term Loan Credit Agreement | Term Loan | |||||||||
Debt Instrument | |||||||||
Repayments of long-term debt and payment of amendment fees | 20,000,000 | ||||||||
Aggregate principal amount | $ 100,000,000 | ||||||||
Loss on debt extinguishment | 1,400,000 | ||||||||
Prepayment penalty cost | 400,000 | ||||||||
Debt issuance cost | $ 1,000,000 | ||||||||
Term Loan Credit Agreement | Term Loan | Base Rate | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 1.75% | ||||||||
Term Loan Credit Agreement | Term Loan | Federal funds rate | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 0.50% | ||||||||
Term Loan Credit Agreement | Term Loan | One month LIBOR | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 1% | ||||||||
Term Loan Credit Agreement | Term Loan | Prime Rate | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 5% | ||||||||
Term Loan Credit Agreement | Term Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 6% | ||||||||
Term Loan Credit Agreement | Term Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 0.75% | ||||||||
Term Loan Credit Agreement | Term Loan | Covenant Period One | |||||||||
Debt Instrument | |||||||||
Stated interest rate (in percent) | 2.50% | ||||||||
Term Loan Credit Agreement | Term Loan | Covenant Period Two | |||||||||
Debt Instrument | |||||||||
Stated interest rate (in percent) | 5% | ||||||||
Amended Revolving Credit Agreement with PNC | Line of Credit | |||||||||
Debt Instrument | |||||||||
Aggregate principal amount | $ 400,000 | ||||||||
Line of credit facility, maximum borrowing amount | $ 40,000,000 | $ 30,000,000 | |||||||
Loan servicing fee (in percent) | 6.50% | ||||||||
Amended Revolving Credit Agreement with PNC | LIBOR | Line of Credit | |||||||||
Debt Instrument | |||||||||
Loan servicing trigger (in percent) | 0.75% | ||||||||
Loan servicing trigger, rate below libor (in percent) | 0.75% | ||||||||
Amended Revolving Credit Agreement with PNC | Covenant Period One | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Line of Credit | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 2.75% | ||||||||
Amended Revolving Credit Agreement with PNC | Covenant Period Two | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | Line of Credit | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 2.25% | ||||||||
Amended Revolving Credit Agreement with PNC | Covenant Period Two | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | Line of Credit | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 2.75% | ||||||||
Domestic Rate And Swing Line Loans | Line of Credit | |||||||||
Debt Instrument | |||||||||
Loan servicing fee (in percent) | 5.50% | ||||||||
Loan servicing trigger (in percent) | 1% | ||||||||
Loan servicing trigger, rate below libor (in percent) | 1% | ||||||||
Domestic Rate And Swing Line Loans | Minimum | Line of Credit | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 1.25% | ||||||||
Domestic Rate And Swing Line Loans | Maximum | Line of Credit | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 1.75% | ||||||||
Domestic Rate And Swing Line Loans | Overnight Bank Funding Rate | Line of Credit | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 0.50% | ||||||||
Domestic Rate And Swing Line Loans | Daily Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Line of Credit | |||||||||
Debt Instrument | |||||||||
Variable rate rate (in percent) | 1% | ||||||||
Domestic Rate And Swing Line Loans | Covenant Period Two | Line of Credit | |||||||||
Debt Instrument | |||||||||
Stated interest rate (in percent) | 9.25% | 9.25% | |||||||
Term Loan | Line of Credit | |||||||||
Debt Instrument | |||||||||
Stated interest rate (in percent) | 9.81% | 9.81% |
LEASES - Supplemental Balance S
LEASES - Supplemental Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Leases [Abstract] | ||
Operating lease right-of-use asset | $ 10,468 | $ 11,107 |
Other accrued liabilities | 1,202 | 1,727 |
Operating lease liabilities | 10,346 | 9,891 |
Total operating lease liabilities | $ 11,548 | $ 11,618 |
Operating Lease, Liability, Current, Statement of Financial Position | Other accrued liabilities | Other accrued liabilities |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||||
Operating lease cost | $ 994 | $ 887 | $ 3,023 | $ 3,016 |
Variable lease cost | 176 | 176 | 513 | 527 |
Short-term lease cost | 0 | 13 | 0 | 17 |
Total lease cost | $ 1,170 | $ 1,076 | $ 3,536 | $ 3,560 |
LEASES - Schedule of Lessee Ope
LEASES - Schedule of Lessee Operating Lease Liability Maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Mar. 31, 2022 |
Lessee, Operating Lease, Liability, Payment, Due | ||
Remainder of 2023 | $ 657 | |
2024 | 2,495 | |
2025 | 2,185 | |
2026 | 1,717 | |
2027 | 1,586 | |
Thereafter | 14,696 | |
Total lease payments | 23,336 | |
Less: imputed interest | (11,788) | |
Present value of lease liabilities | $ 11,548 | $ 11,618 |
LEASES - Supplemental Balance_2
LEASES - Supplemental Balance Sheet Information (Details) | Dec. 31, 2022 | Mar. 31, 2022 |
Weighted average remaining lease term and discount rate | ||
Weighted average remaining operating lease term (years) | 11 years 1 month 9 days | 10 years 10 months 17 days |
Weighted average discount rate for operating leases (percentage) | 12.60% | 12.90% |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 2.4 | $ 3.1 |
COMMON STOCK (Details)
COMMON STOCK (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |||||
Apr. 22, 2022 USD ($) yr $ / shares shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | Sep. 30, 2022 shares | Apr. 21, 2022 $ / shares shares | Mar. 31, 2022 shares | |
Subsidiary, Sale of Stock | ||||||
Common stock shares authorized (shares) | shares | 225,000,000 | 125,000,000 | 225,000,000 | |||
Repayments of long-term debt and payment of amendment fees | $ | $ 23,346 | $ 93,677 | ||||
Reduction in equity value due to round down | $ | (389) | |||||
Warrants outstanding | $ | $ 10,800 | |||||
Inducement Plan 2021 | ||||||
Subsidiary, Sale of Stock | ||||||
Common stock shares authorized (shares) | shares | 1,500,000 | 770,000 | ||||
December Twenty Twenty Eight Amendments Of Warrants | ||||||
Subsidiary, Sale of Stock | ||||||
Warrants issued (in shares) | shares | 7,110,616 | |||||
Warrant exercise price (in dollars per share) | $ / shares | $ 1.33 | |||||
$3.00 Warrants | ||||||
Subsidiary, Sale of Stock | ||||||
Warrants issued (in shares) | shares | 3,400,000 | |||||
Warrant exercise price (in dollars per share) | $ / shares | $ 2.79 | $ 3 | ||||
Additional warrants issues (in shares) | shares | 256,113 | |||||
Reduction in equity value due to round down | $ | $ 400 | |||||
$3.00 Warrants | Dividend rates | ||||||
Subsidiary, Sale of Stock | ||||||
Warrant measurement inputs | 0 | |||||
$3.00 Warrants | Expected term | ||||||
Subsidiary, Sale of Stock | ||||||
Warrant measurement inputs | yr | 8 | |||||
$3.00 Warrants | Volatility | ||||||
Subsidiary, Sale of Stock | ||||||
Warrant measurement inputs | 0.56 | |||||
$3.00 Warrants | Risk free interest rate | ||||||
Subsidiary, Sale of Stock | ||||||
Warrant measurement inputs | 0.0285 | |||||
Rights Offering | ||||||
Subsidiary, Sale of Stock | ||||||
Number of shares issued in transaction (in shares) | shares | 30,000,000 | |||||
Sale of stock price (in dollars per share) | $ / shares | $ 2.25 | |||||
Proceeds from issuance of stock, net | $ | $ 66,000 | |||||
Repayments of long-term debt and payment of amendment fees | $ | $ 20,000 |
NET LOSS PER SHARE - Anti-dilut
NET LOSS PER SHARE - Anti-dilutive shares excluded from the computations of diluted net income (loss) (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||||
Antidilutive shares excluded (in shares) | 5,450 | 8,802 | 3,763 | 9,811 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Contingency | ||||
Effective income tax rate (percentage) | (7.10%) | (12.60%) | (6.70%) | (7.30%) |
Unrecognized tax benefits | $ 103 | $ 103 | ||
Unrecognized tax benefits that would impact effective tax rate | 84.3 | 84.3 | ||
Accrued interest and penalties related to unrecognized tax benefits | 1.4 | 1.4 | ||
Deferred tax assets, gross | 10.8 | 10.8 | ||
Deferred tax assets, valuation allowance | 10.1 | 10.1 | ||
Deferred tax assets, net of valuation allowance | 0.7 | 0.7 | ||
Other long-term assets | ||||
Income Tax Contingency | ||||
Unrecognized tax benefits | 95 | 95 | ||
Other long-term liabilities | ||||
Income Tax Contingency | ||||
Unrecognized tax benefits | $ 8 | $ 8 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remaining purchase commitments | $ 36.7 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Debt (Details) - Level 2 fair value measurements - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Term Loan | $ 75,917 | $ 98,750 |
Carrying Value | Revolving Credit Agreement with PNC | Line of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
PNC Credit Facility | 27,736 | 7,556 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Term Loan | 75,917 | 98,750 |
Fair Value | Revolving Credit Agreement with PNC | Line of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
PNC Credit Facility | $ 27,736 | $ 7,556 |