SAN JOSE, Calif., Feb. 10 /PRNewswire-FirstCall/ -- Quantum Corp. , a global leader in storage, today announced that it has arranged for the sale of its Colorado Springs site, paid off and terminated its synthetic lease of the property, and entered into an agreement to lease back the site's three buildings for terms ranging from 5 to 15 years. This transaction enables the company to eliminate $50 million of off-balance sheet financing and a corresponding $25 million letter of credit pledged against Quantum's revolving credit facility, thereby providing greater financial flexibility. The agreement also eliminates a $50 million end-of-term payment due in 2007 had Quantum been unable to negotiate a renewal of the synthetic lease or find a third party to purchase the property. In addition, by replacing a floating interest rate synthetic lease instrument with an operating lease, Quantum will have a more predictable future rent payment stream.
"The sale and leaseback of our Colorado Springs site is yet another example of the significant progress we've made in improving our financial position," said Ned Hayes, executive vice president of Finance and CFO at Quantum. "It follows last quarter's early renewal of our $145 million revolving credit facility, with improved rates, terms and covenants. And just last week, we announced our December quarter results, in which we reported solidly higher revenue, gross margins and net income compared to the first two quarters of our fiscal year."
Quantum negotiated the synthetic lease agreement for its Colorado Springs site in December 2002, and it was due to expire in December 2007. The lease was partially secured by a standby letter of credit issued under Quantum's revolving line of credit and a blanket lien on all of Quantum's assets.
Further details on Quantum's sale and leaseback agreement are contained in a Form 8-K the company filed today with the Securities and Exchange Commission.
About Quantum
Quantum Corp., a global leader in storage, delivers highly reliable backup, recovery and archive solutions that meet demanding requirements for data integrity and availability with superior price/performance and comprehensive service and support. Quantum offers customers of all sizes an unparalleled range of solutions, from leading tape drive and media technologies, autoloaders and libraries to disk-based backup systems. Quantum is the world's largest volume supplier of both tape drives and tape automation and has pioneered the development of disk-based systems optimized for backup and recovery. Quantum Corp., 1650 Technology Drive, Suite 800, San Jose, CA 95110, 408-944-4000, http://www.quantum.com/.
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