001100110100111 (Translation: Quantum is a leading data storage company). The company provides hardware and software used for data archiving, backup, and recovery. Its products include tape- and disk-based storage devices, automated tape library (ATL) systems, and related media. It also provides data management software and offers services in configuration, installation, technical support, and training. Quantum sells its products through resellers and distributors and to computing equipment makers such as Dell (10% of sales), EMC, Hewlett-Packard, IBM, and Oracle. The company makes two-thirds of its sales in the Americas; its top five customers account for about one-third of its revenues.
Year-over-year revenue fell 1% in 2011 as a result of less demand for devices, media, tape automation systems, and repairs. By segment, product revenue rose slightly, by .2%, on more demand for disk systems and software. Broken down further, product revenue from OEM customers was down 16%, though revenue from branded products rose 7% on strong demand for disk systems and software. The product segment represents 68% of sales.
Service revenue, 23% of sales, recorded a decrease of 3% due to less demand for repairs. Royalty, 9% of sales, fell about 7% behind lower sales of older DLT media.
While fiscal 2010 revenues were off by about 16% from the prior year, as the recession crimped sales of IT products in general, Quantum was able to make its first profit -- of more than $16 million -- in eight years, thanks to cost-cutting measures. In fiscal 2011 the company made a profit of more than $4.5 million. But after such an extended period of red ink, the company carries an accumulated deficit of around $456 million.
Although the slow economic recovery still keeps some customers from purchasing products, the rising tide of data in enterprises continues to help drive sales of disks and software for Quantum. For that market, the company has recently launched new disk products and upgrades of disk systems and software, including the StorNext software and the DXi-Series platform file sharing and data archiving products. DXi, a disk-based product that can handle more than 200 terabytes of data (200 trillion bytes or more than 200,000 gigabytes), is aimed at applications in disaster recovery and long-term archiving and compliance.
Quantum acquired Pancetera Software in 2011 for $12 million in cash and stock. Pancetera designed applications used to manage and protect data housed in virtual server network environments. After the acquisition, Quantum announced plans to integrate Pancetera's technology into its DXi and StorNext products.
One of Quantum's strategies for increasing sales of tape automation systems -- which is becoming obsolete -- is focused on gaining more market share by acquiring new customers.
Quantum maintains operations in Australia, China, France, Germany, Japan, Malaysia, Singapore, Switzerland, the UK, and the US. Contract manufacturers in Hungary and Malaysia make the company's tape drives. Some automation products and assemblies are produced in the US, as well as China, Malaysia, and Singapore. Most of the company's recording tape media is manufactured in Japan.
In a cost-saving measure, the company has announced plans to layoff 170 of its 305 employees at its plant in Colorado Springs and outsource its manufacturing to Texas-based Benchmark Electronics.