Just over a year after getting the boot from a senior US exchange, the media technology company is getting a fresh start on the NASDAQ.
Just over a year after being kicked off the New York Stock Exchange (NYSE), a media technology company is getting a fresh start on another major US bourse.
It’s a big step for the company, as it was around this time last year that Quantum lost its spot on the NYSE after it failed to submit late annual and quarterly reports and financial statements to the US Securities and Exchange Commission (SEC). At the time, the company said it had made progress in completing the reports, but was not able to meet the SEC’s deadline.
After the delisting, the company offered its shares instead on OTC Markets Group’s OTC Pink exchange.
The video management and storage company’s shares opened at US$7.15 on Monday before dropping 5.2 percent to US$6.54 by 3:16 p.m. EST.
Quantum’s emergence back into the senior exchange space comes after an “arduous restructuring process,” said CEO Jamie Lerner in a press release.
“With our relisting, we are pivoting to the second phase of transformation where we will be moving from making the company sustainable on a long-term basis to growing on a long-term basis,” Lerner added.
The uplisting represents a shift in the company’s strategy, as Lerner indicated the firm was working to resolve its NYSE delisting “as quickly as possible” when it was first booted from the exchange.
In a blog post uploaded on Friday (January 31), Quantum CFO Mike Dodson said a weak executive management team was to blame for the company’s previous woes.
Under its former leadership, Quantum faced the SEC investigation mentioned above, plus an internal investigation and multiple financial document restatements, which all led to its eventual NYSE delisting.
The new management team has spent the last two years settling not only the requirements for the SEC, but a shareholder lawsuit as well. The team also removed US$70 million in annual costs.
“The change to Nasdaq reflects Quantum’s transformation, as well as our aspiration to stand shoulder to shoulder with the most influential, innovative and vital technology companies of our time,” Dodson wrote, saying the exchange has a reputation as a hub for some of the world’s largest tech companies.
In its results for the third quarter of its 2020 fiscal year, the company reported US$4.7 million in net income, up significantly from a loss of US$4.3 million reported in the same quarter the previous year.
The company also reduced its full-year outlook, noting that it expects total revenues for the 2020 fiscal year to reach US$410 million — plus or minus US$5 million — while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) will be approximately US$50 million.
In its report for the second quarter of its 2020 fiscal year, Quantum reported that it expected to see revenue results between US$424 million and US$430 million, while hitting an EBITDA in the range of US$51 million to US$55 million.
Quantum said the reduction was due to lower-than-expected revenues from its hyperscaler business, which focuses on scaling up the size and computing power of digital systems to meet demand.
As a part of the deal, Quantum will get its hands on the ActiveScale product line, adding object storage software and coding technology to its current portfolio of products. The transaction, which is subject to customary closing conditions, is expected to close on March 31, 2020.
Don’t forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.