STOCKREPORTS

Quantum Corporation

Nasdaq Symbol QNTM In S&P MidCap 400

Recent Price 26.31 52 Wk Range 26.31 - 6.41

Yield Nil 12-Mo. P/E 21.7

Quantitative Evaluation: Outlook (1 Lowest - 5 Highest) 1- Fair Value 17.60 Risk HIGH Earn/Div Rank B-
Technical Evaluation: BEARISH since 12/96 Rel. Strength Rank (1 Lowest - 99 Highest) 93 Insider Activity Neutral

Overview 06-MAY-97

Sales should increase over 20% in FY 98, spurred by greater unit volume of disk and tape drives, aided by continued strong demand and increased manufacturing capabilities by the company's partner, MKE. Operating margins, which narrowed in FY 96, on lower than expected sales that resulted from component shortages and weakness in the high-capacity drive segment, narrowed further in the first half of FY 97, on lower than expected PC demand and product transition issues. However, operating profitability improved in the third and fourth quarters of FY 97 and should widen further in FY 98, on the benefits of a restructuring in the high-capacity drive segment, as well as operating efficiencies in the head segment, the shipment of new products, and continued cost controls. Comparisons in FY 97 were aided by the absence of charges (totaling $3.06 a share) that penalized results in the third and fourth quarters of FY 96.

Valuation 06-MAY-97

The shares have risen sharply from their mid-1996 lows, reflecting higher PC unit shipments, progress in the introduction of new products and improvements in the company's high capacity disk drive business. While recording head operations remain unprofitable, we expect manufacturing yields on heads to continue to increase in FY 98. Demand remains strong for the company's drive products, and the pricing environment is favorable. Strong relationships with major OEMs, and increased confidence in continued profit growth make us bullish on the shares. The stock, which trades at just over 9 times our FY 98 (Mar.) estimate, is expected to outperform the market in the coming months.

Key Stock Statistics

Fiscal Year Ending Mar. 31

Business Summary 06-MAY-97

Quantum Corporation designs, manufactures and markets information storage products, including hard disk drives, recording heads and tape drives.

The company's Desktop and Portable Storage Group designs, develops and markets hard disk drives products for entry-level to high-end desktop PCs. Drive capacities range from 640 megabytes (MBs) to 3.2 gigabytes (GBs)

The Workstation and Systems Storage Group are designed for high-end desktop systems, workstations, RAID subsystems, servers and minicomputers.

The Specialty Storage Products Group makes 0.5-inch linear tape drives, tape autoloaders and tape libraries as well as solid state disk drives.

The Recording Heads Group designs, develops and manufactures both thin film inductive and magnetoresistive recording heads used in the company's products.

All company's disk drives are made by the company's Japanese partner, Matsushita-Kotobuki Electronics (MKE). Excluding a major restructuring in the fourth quarter of FY 96 (Mar.), through which Quantum switched all high capacity drive manufacturing to MKE, some 75% of sales were manufactured by MKE in FY 96, down from 80% in FY 95. Quantum continues to perform manufacturing for its head operations and tape products. In April 1997, Quantum signed a definitive agreement to form a joint venture company with MKE, to design, develop and manufacture recording heads.

Quantum markets its products directly to OEMs and distributors through a worldwide sales force.

In FY 96, Compaq Computer accounted for 12% of sales (16% in FY 95) and Apple Computer for 11% (12%). International sales provided 52% (53%) of the total.

In the fourth quarter of FY 96, Quantum recorded a charge of $209 million ($2.63 a share) to reflect costs associated with restructuring its high-capacity disk drive business. The restructuring included closing certain manufacturing facilities and transferring production of high-capacity hard disk drives to MKE. Earlier, in the third quarter, it recorded a separate charge of $38 million ($0.41 a share) for costs of restructuring the high capacity disk drive business.

Capitalization

Long Term Debt: $419,018,000 (3/97).

Curr. Ratio	2.1	1.9	1.7	2.4	2.6	1.9	1.6	2.2	2.1	4.1
% LT Debt of Cap.	16.1	51.8	39.2	34.1	34.8	Nil	Nil	Nil	Nil	Nil
% Net Inc.of Revs.	2.7	NM	2.4	0.1	5.5	4.2	8.4	10.6	6.2	NM
% Ret. on Assets	7.2	NM	6.6	0.3	12.7	8.7	19.8	23.2	9.5	NM
% Ret. on Equity	20.8	NM	17.7	0.7	26.4	16.5	36.9	36.6	13.4	NM

Data as orig. reptd.; bef. results of disc. opers. and/or spec. items. Per share data adj. for stk. divs. as of ex-div. date. E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked.

Office--500 McCarthy Blvd., Milpitas, CA 95035. Tel--(408) 894-4000. Website--http://www.quantum.com Chrmn--S. M. Berkley. Pres & CEO--M. A. Brown. VP-Fin--E. McClammy. Dirs--S. M. Berkley, M. A. Brown, R. J. Casale, E. M. Esber, Jr., W. J. Miller, S. C. Wheelwright. Transfer Agent--Harris Trust Co. of California (c/o Harris Trust & Savings Bank, Chicago). Incorporated--in California in 1980; reincorporated in Delaware in 1987. Empl-- 11,000. S&P Analyst: Peter C. Wood, CFA

This report is for information purposes and should not be considered a solicitation to buy or sell any security. Neither S&P nor any other party guarantee its accuracy or make warranties regarding results from its usage. Redistribution is prohibited without written permission. Copyright © 1997