QUANTUM CORP /DE/ (QMCO): restructuring charge — Quantum Q4 revenue $105.3M (+10.7% YoY); secures $15M debt, cuts >10% workforce

On June 6, 2023, we reported our financial results for the quarter and full year ended March 31, 2023. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Effective as of June 6, 2023, the Board appointed Laura A. Nash as Chief Accounting Officer of the Company.

Ms. Nash will succeed Lewis Moorehead, who will be transitioning out of his current role of Chief Accounting Officer effective June 6, 2023, and will serve as the Company’s Vice President, Finance and Treasurer.

In connection with the Term Loan Amendment, on the Closing Date, the Company issued to the lender of the 2023 Term Loan under the Term Loan Credit Agreement (the “Initial Warrantholder”) a warrant (the “2023 Term Loan Warrant”) to purchase an aggregate of 1,250,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at an exercise price of $1.00 per share.

On the Closing Date, the Company entered into an amendment (the “Revolver Amendment”) to the Amended and Restated Revolving Credit and Security Agreement, dated as of December 27, 2018 (as the same has been and may further be amended, modified, supplemented, renewed, restated or replaced from time to time, the “Revolving Credit Agreement”), among the Company, Quantum LTO, the other borrowers and guarantors from time to time party thereto, the lenders from time to time party thereto, and PNC Bank, National Association, as administrative agent and collateral agent for such lenders (the “Revolving Agent”).

On June 1, 2023 (the “Closing Date”), Quantum Corporation (the “Company”) entered into an amendment (the “Term Loan Amendment”) to the Term Loan Credit and Security Agreement, dated as of August 5, 2021 (as the same has been and may be further amended, modified, supplemented, renewed, restated or replaced from time to time, the “Term Loan Credit Agreement”), among the Company, Quantum LTO Holdings, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Quantum LTO”), the other borrowers and guarantors from time to time party thereto, the lenders from time to time party thereto, and Blue Torch Finance LLC, as disbursing agent and collateral agent for such lenders (the “Term Loan Agent”).

On May 31, 2023, the Company’s board of directors (the “Board”) approved a global efficiency plan (the “Efficiency Plan”). The Efficiency Plan is intended to support the Company’s strategic plan and reduce operating expenses by further aligning its cost structure to focus on areas the Company believes are more likely to generate the best long-term results, in light of the current industry and macro-economic environment. As a result, the Company's activities under the Efficiency Plan include a reduction of the Company’s global workforce by over 10%. These activities are expected to be substantially completed by the end of fiscal year 2025. The Company currently estimates it will incur cash pre-tax restructuring charges of approximately $8.5 million through the end of fiscal year 2025, as a result of the Efficiency Plan, comprised primarily of severance and related costs.