– First Quarter Revenues of $74.0 million, up 45% Year-Over-Year and 5% Sequentially –
– First Quarter GAAP EPS of $0.19 and Non-GAAP1 EPS of $0.27 –
– Company Raises 2011 Revenue and Non-GAAP EPS1 Estimates –
BEDFORD, Mass., Apr 26, 2011 (BUSINESS WIRE) — Acme Packet, Inc. (NASDAQ: APKT), the leader in session delivery network solutions, today announced record results for the quarter ended March 31, 2011 and raised its business outlook for 2011. All earnings per share results are on a fully diluted basis unless otherwise noted.
Results for the First Quarter of 2011
Total revenue in the first quarter of 2011 was $74.0 million, compared to $51.1 million in the first quarter of 2010 and $70.2 million in the fourth quarter of last year. Net income in the first quarter of 2011 was $13.7 million, or $0.19 per share, compared to $8.3 million, or $0.13 per share, in the first quarter of 2010 and $14.5 million, or $0.21 per share, in the fourth quarter of last year. Net income on a non-GAAP1 basis in the first quarter of 2011 was $18.9 million, or $0.27 per share, compared to $10.7 million, or $0.16 per share in the first quarter of last year, and $18.1 million, or $0.26 per share, in the fourth quarter of last year.
Company Raises Business Outlook for 2011
The Company today raised its business outlook for 2011. The Company’s outlook is based on the current indications for its business, which may change at any time.
| Business Outlook for Year Ending December 31, 2011 | |||||||
| Estimate | IssuedFebruary 1, 2011 | IssuedApril 26, 2011 | |||||
| Total revenue (in millions) | Approximately $300 | $310-$315 | |||||
| Total revenue growth rate | Approximately 30% | Approximately 35% | |||||
| GAAP diluted EPS | Approximately $0.76 | $0.77-$0.82 | |||||
| Total GAAP diluted EPS growth rate | Approximately 20% | Approximately 27% | |||||
| Non-GAAP1 diluted EPS | Approximately $1.05 | $1.10-$1.15 | |||||
| Total non-GAAP1 diluted EPS growth rate | Approximately 30% | Approximately 40% | |||||
| Diluted share count (in millions) | 71.0 | 71.5 | |||||
The Company expects net income on a non-GAAP1 basis to differ from net income on a GAAP basis in 2011 as it is expected to exclude estimated stock-based compensation expense and related payroll taxes, net of tax, of approximately $22.0 million, or $0.31 per share, amortization of acquired intangible assets, net of tax, of approximately $1.2 million, or $0.02 per share, and merger and integration-related costs of $0.2 million, or $0.00 per share. A reconciliation of the Company’s expected GAAP to non-GAAP1 business outlook, and a statement as to the use of non-GAAP1 financial measures, is included at the end of this press release.
Company to Host Live Conference Call and Webcast
The Company’s management team plans to host a live conference call and webcast at 4:30 p.m. eastern time today to discuss the financial results as well as management’s outlook for the business. The conference call may be accessed in the United States by dialing 1.800.230.1766 and using access code “APKT”. The conference call may be accessed outside of the United States by dialing +1.612.332.0226 and using access code “APKT”. The conference call will be simultaneously webcast on the Company’s investor relations website, which can be accessed at www.ir.acmepacket.com. A replay of the conference call will be available approximately two hours after the call by dialing 1.800.475.6701 and using access code 198306 or by accessing the webcast replay on the Company’s investor relations website.
__________________
1A reconciliation of GAAP to non-GAAP results, and a statement on the use of non-GAAP financial measures, is included at the end of this press release.
About Acme Packet
Acme Packet (NASDAQ: APKT), the leader in session delivery network solutions, enables the trusted, first-class delivery of next-generation voice, data and unified communications services and applications across IP networks. Our Net-Net product family fulfills demanding security, service assurance and regulatory requirements in service provider, enterprise and contact center networks. Based in Bedford, Massachusetts, Acme Packet designs and manufactures its products in the USA, selling them through over 140 reseller partners worldwide. More than 1,350 customers in 105 countries have deployed over 12,000 Acme Packet systems, including 90 of the top 100 service providers and 32 of the Fortune 100. For more information visit www.acmepacket.com.
Acme Packet, Inc. Safe Harbor Statement
Statements contained herein that are not historical fact (including those in the section “Company Raises Business Outlook for 2011”) may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate to, among other things, expected financial and operating results, expected growth rates, future stock-based compensation and amortization expenses, future business prospects and market conditions. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated. These include, but are not limited to: the amount of stock-based compensation awarded; the applicable Company stock price used to determine stock-based compensation; the exercise pattern of employee stock options; difficulties expanding the Company’s customer base; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of customers; poor product sales; long sales cycles; difficulties developing new products; difficulties in relationships with vendors and partners; higher risks in international operations; difficulties managing rapid growth; difficulties managing the Company’s financial performance; the ability to hire and retain employees and appropriately staff operations; the Company’s cash needs; the impact of new accounting pronouncements and increased competition. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in the Company’s recent filings with the Securities and Exchange Commission, including those factors discussed under the caption “Risk Factors” in such filings.
| Acme Packet, Inc.
Condensed Consolidated Statements of Income (in thousands, except share and per share data) (unaudited) |
|||||||||
| Three Months Ended March 31, | |||||||||
| 2011 | 2010 | ||||||||
| Revenue: | |||||||||
| Product | $ | 59,742 | $ | 42,093 | |||||
| Maintenance, support and service | 14,225 | 8,957 | |||||||
| Total revenue | 73,967 | 51,050 | |||||||
| Cost of revenue (a) (b): | |||||||||
| Product | 9,945 | 7,549 | |||||||
| Maintenance, support and service | 3,006 | 2,268 | |||||||
| Total cost of revenue | 12,951 | 9,817 | |||||||
| Gross profit | 61,016 | 41,233 | |||||||
| Operating expenses (a) (b): | |||||||||
| Sales and marketing | 23,703 | 16,427 | |||||||
| Research and development | 11,294 | 8,693 | |||||||
| General and administrative | 4,577 | 3,284 | |||||||
| Merger and integration-related costs | 180 | – | |||||||
| Total operating expenses | 39,754 | 28,404 | |||||||
| Income from operations | 21,262 | 12,829 | |||||||
| Other income (expense), net | 102 | (11 | ) | ||||||
| Income before provision for income taxes | 21,364 | 12,818 | |||||||
| Provision for income taxes | 7,655 | 4,485 | |||||||
| Net income | $ | 13,709 | $ | 8,333 | |||||
| Net income per share: | |||||||||
| Basic | $ | 0.21 | $ | 0.14 | |||||
| Diluted | $ | 0.19 | $ | 0.13 | |||||
| Weighted average number of common shares used in the calculation of net income per share: |
|||||||||
| Basic | 65,076,303 | 59,821,379 | |||||||
| Diluted | 70,476,973 | 64,982,898 | |||||||
| (a) Amounts include stock-based compensation expense, as follows: | |||||||||
| Cost of product revenue | $ | 224 | $ | 168 | |||||
| Cost of maintenance, support and service revenue | 395 | 228 | |||||||
| Sales and marketing | 3,298 | 1,556 | |||||||
| Research and development | 1,971 | 1,148 | |||||||
| General and administrative | 898 | 421 | |||||||
| (b) Amounts include amortization of acquired intangible assets, as follows: | |||||||||
| Cost of product revenue | 371 | 379 | |||||||
| Sales and marketing | 46 | 30 | |||||||
| Research and development | 12 | 26 | |||||||
Acme Packet, Inc.
Statement on Use of Non-GAAP Financial Measures and
Reconciliation of Non-GAAP Net Income and Non-GAAP Net Income Per Share
(in thousands, except per share data)
(unaudited)
Statement on Use of Non-GAAP Financial Measures:
The Company uses the financial measures “non-GAAP net income”, “net income on a non-GAAP basis”, “non-GAAP net income per share” and “net income per share on a non-GAAP basis” to supplement its condensed consolidated financial statements, which are presented in accordance with accounting principles generally accepted in the United States (“GAAP”). The presentation of “non-GAAP net income”, “net income on a non-GAAP basis”, “non-GAAP net income per share” and “net income per share on a non-GAAP basis” is not meant to be a substitute for “net income” or “net income per share”, presented in accordance with GAAP, but rather should be evaluated in conjunction with net income and net income per share. The Company’s management believes that the presentation of “non-GAAP net income”, “net income on a non-GAAP basis”, “non-GAAP net income per share” and “net income per share on a non-GAAP basis” provides useful information to investors because these financial measures exclude stock-based compensation expense which is a non-cash charge and related payroll taxes, as well as amortization of acquired intangible assets and merger and integration-related costs associated with the Company’s acquisition activities. By excluding stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and integration-related costs, management can compare the Company’s operations to prior periods and to the operations of other companies in its industry who may have materially different unusual charges. Management does not consider any of stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and integration-related costs to be part of the Company’s operating activities or meaningful in evaluating the Company’s past financial performance or future prospects. Management believes that excluding these items is useful to investors because it is more representative of ongoing costs and therefore more comparable to historical operations. Non-GAAP net income and non-GAAP net income per share are primary financial indicators that the Company’s management uses to evaluate the Company’s financial results and forecast anticipated financial results for future periods. Management also uses these non-GAAP measures to make financial and operational decisions as these numbers exclude non-operational activities. These non-GAAP measures should not be considered measures of the Company’s liquidity. The Company’s definition of non-GAAP net income and non-GAAP net income per share may differ from similar measures used by other companies and may differ from period to period. Management may make other adjustments for expenses and gains that it does not consider reflective of core operating performance in a particular period and may modify non-GAAP net income and non-GAAP net income per share by excluding these expenses and gains.
Reconciliation of Non-GAAP Net Income and Diluted Non-GAAP Net Income Per Share for the Three Months Ended March 31, 2011, December 31, 2010 and March 31, 2010 (unaudited):
| Three Months Ended | |||||||||||||||
| March 31, 2011 | December 31,2010 | March 31,2010 | |||||||||||||
| Reconciliation of non-GAAP net income: | |||||||||||||||
| Net income | $ | 13,709 | $ | 14,510 | $ | 8,333 | |||||||||
| Adjustments: | |||||||||||||||
| Stock-based compensation expense and related payroll taxes, net of taxes | 4,777 | 3,098 | 2,097 | ||||||||||||
| Amortization of acquired intangible assets, net of taxes | 273 | 292 | 283 | ||||||||||||
| Merger and integration-related costs | 180 | 223 | – | ||||||||||||
| Non-GAAP net income | $ | 18,939 | $ | 18,123 | $ | 10,713 | |||||||||
| Reconciliation of diluted non-GAAP net income per share: | |||||||||||||||
| Net income per share | $ | 0.19 | $ | 0.21 | $ | 0.13 | |||||||||
| Adjustments: | |||||||||||||||
| Stock-based compensation expense, and related payroll taxes, net of taxes | 0.08 | 0.05 | 0.03 | ||||||||||||
| Amortization of acquired intangible assets, net of taxes | – | – | – | ||||||||||||
| Merger and integration-related costs | – | – | – | ||||||||||||
| Non-GAAP net income per share | $ | 0.27 | $ | 0.26 | $ | 0.16 | |||||||||
Reconciliation of Expected Non-GAAP Net Income and Diluted Non-GAAP Net Income Per Share for the Year Ending December 31, 2011 (Unaudited):
| Twelve Months Ending December 31, 2011 | |||||||||
| Low | High | ||||||||
| Revenue | $ | 310,000 | $ | 315,000 | |||||
| Reconciliation of non-GAAP net income: | |||||||||
| Net income | $ | 55,400 | $ | 59,000 | |||||
| Adjustments: | |||||||||
| Stock-based compensation expense and related payroll taxes, net of taxes | 22,000 | 22,000 | |||||||
| Amortization of acquired intangible assets, net of taxes | 1,200 | 1,200 | |||||||
| Merger and integration-related costs | 200 | 200 | |||||||
| Non-GAAP net income | $ | 78,800 | $ | 82,400 | |||||
| Reconciliation of diluted non-GAAP net income per share: | |||||||||
| Net income per share | $ | 0.77 | $ | 0.82 | |||||
| Adjustments: | |||||||||
| Stock-based compensation expense and related payroll taxes, net of taxes | 0.31 | 0.31 | |||||||
| Amortization of acquired intangible assets, net of taxes | 0.02 | 0.02 | |||||||
| Merger and integration-related costs | 0.00 | 0.00 | |||||||
| Non-GAAP net income per share | $ | 1.10 | $ | 1.15 | |||||
| Acme Packet, Inc.
Other Operational Data (in thousands) (unaudited) |
||||||||||||||||
| Three Months Ended | ||||||||||||||||
| March 31, 2011 | December 31,2010 | March 31,2010 | ||||||||||||||
| Other operational data: | ||||||||||||||||
| Depreciation and amortization | $ | 2,358 | $ | 2,177 | $ | 1,853 | ||||||||||
| Capital expenditures | 4,644 | 2,770 | 2,767 | |||||||||||||
| Acme Packet, Inc.
Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
|||||||||||||||
| March 31,2011 | December 31,2010 | ||||||||||||||
| Assets | |||||||||||||||
| Current assets: | |||||||||||||||
| Cash and cash equivalents | $ | 118,924 | $ | 91,669 | |||||||||||
| Short-term investments | 169,907 | 179,024 | |||||||||||||
| Accounts receivable, net | 43,275 | 34,797 | |||||||||||||
| Inventory | 7,069 | 6,662 | |||||||||||||
| Deferred product costs | 1,690 | 3,572 | |||||||||||||
| Deferred tax asset | 3,814 | 3,814 | |||||||||||||
| Income taxes receivable | 13,787 | 9,979 | |||||||||||||
| Other current assets | 4,873 | 3,231 | |||||||||||||
| Total current assets | 363,339 | 332,748 | |||||||||||||
| Long-term investments | 9,238 | 5,030 | |||||||||||||
| Property and equipment, net | 19,891 | 17,156 | |||||||||||||
| Acquired intangible assets, net | 10,279 | 9,468 | |||||||||||||
| Goodwill | 3,259 | – | |||||||||||||
| Deferred tax asset, net | 14,802 | 14,802 | |||||||||||||
| Other assets | 888 | 940 | |||||||||||||
| Total assets | $ | 421,696 | $ | 380,144 | |||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||
| Current liabilities: | |||||||||||||||
| Accounts payable | $ | 8,625 | $ | 7,161 | |||||||||||
| Accrued expenses and other current liabilities | 7,920 | 14,629 | |||||||||||||
| Deferred revenue | 37,850 | 31,998 | |||||||||||||
| Total current liabilities | 54,395 | 53,788 | |||||||||||||
| Deferred revenue | 2,213 | 1,546 | |||||||||||||
| Deferred rent | 4,053 | 4,265 | |||||||||||||
| Stockholders’ equity: | |||||||||||||||
| Common stock | 72 | 71 | |||||||||||||
| Treasury stock, at cost | (37,522 | ) | (37,522 | ) | |||||||||||
| Additional paid-in capital | 292,886 | 266,114 | |||||||||||||
| Other comprehensive income | 42 | 34 | |||||||||||||
| Retained earnings | 105,557 | 91,848 | |||||||||||||
| Total stockholders’ equity | 361,035 | 320,545 | |||||||||||||
| Total liabilities and stockholders’ equity | $ | 421,696 | $ | 380,144 | |||||||||||
| Condensed Consolidated Statements of Cash Flow
(in thousands) (unaudited) |
||||||||||
| Three Months Ended March 31, | ||||||||||
| 2011 | 2010 | |||||||||
| Cash provided by operating activities | $ | 11,541 | $ | 7,973 | ||||||
| Cash used in investing activities | 4,273 | 26,641 | ||||||||
| Cash provided by financing activities | 19,987 | 8,767 | ||||||||
SOURCE: Acme Packet, Inc.
Investor Relations:
Acme Packet
Brian Norris, +1-781-328-4790
bnorris@acmepacket.com
or
Media and Analyst Contact:
CHEN PR
Chris Carleton, +1-781-672-3115
ccarleton@chenpr.com
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