BEDFORD, MA–(Marketwire -07/26/12)- Acme Packet, Inc. (APKT), the leader in session delivery network solutions, today announced results for the second quarter of 2012 and updated its business outlook for 2012. All earnings per share results are on a fully diluted basis.
Results for the Second Quarter of 2012
Total revenue for the second quarter of 2012 was $67.6 million, compared to $79.7 million in the second quarter of 2011 and $70.8 million in the first quarter of 2012. GAAP net loss for the second quarter of 2012 was $0.1 million, or ($0.00) per share, compared to GAAP net income of $14.0 million, or $0.20 per share, in the second quarter of 2011 and GAAP net income of $2.4 million, or $0.03 per share, in the first quarter of 2012. Net income on a non-GAAP(1) basis for the second quarter of 2012 was $9.5 million, or $0.13 per share, compared to $20.4 million, or $0.29 per share, in the second quarter of 2011, and $12.2 million, or $0.17 per share, in the first quarter of 2012.
Updated Business Outlook for 2012
The Company today updated its business outlook for 2012. The Company’s outlook is based on the current indications for its business, which may change at any time. A reconciliation of the Company’s expected GAAP to non-GAAP business outlook, and a statement as to the use of non-GAAP financial measures, is included at the end of this press release.
Business Outlook for Year
Estimate Ending December 31, 2012
----------------------------------------
Total revenue (in millions) $270-$275
GAAP EPS ($0.11)-($0.07)
Non-GAAP(1) EPS $0.43-$0.47
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 1.800.230.1059 and using access code “APKT”. The conference call may be accessed outside of the United States by dialing +1.612.234.9960 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 or +1.320.365.3844 and using access code 253634 or by accessing the webcast replay on the Company’s investor relations website.
(1) A 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 (APKT), the leader in session delivery network solutions, enables the trusted, first-class delivery of next-generation voice, video, 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 250 reseller partners worldwide. More than 1,775 customers in 109 countries have deployed over 19,000 Acme Packet systems, including 89 of the top 100 service providers and 45 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 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 Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
Revenue:
Product $ 49,556 $ 64,688 $ 103,020 $ 124,430
Maintenance, support
and service 18,028 15,045 35,394 29,270
----------- ----------- ----------- -----------
Total revenue 67,584 79,733 138,414 153,700
----------- ----------- ----------- -----------
Cost of revenue:
Product 9,785 11,367 19,763 21,312
Maintenance, support
and service 3,675 2,525 7,633 5,531
----------- ----------- ----------- -----------
Total cost of
revenue 13,460 13,892 27,396 26,843
----------- ----------- ----------- -----------
Gross profit 54,124 65,841 111,018 126,857
----------- ----------- ----------- -----------
Operating expenses:
Sales and marketing 32,138 24,736 63,140 48,439
Research and
development 16,257 12,719 31,354 24,013
General and
administrative 5,849 5,788 12,287 10,365
Merger and related
costs 576 - 613 180
----------- ----------- ----------- -----------
Total operating
expenses 54,820 43,243 107,394 82,997
----------- ----------- ----------- -----------
(Loss) income from
operations (696) 22,598 3,624 43,860
Other (expense) income,
net (19) (196) 75 (94)
----------- ----------- ----------- -----------
(Loss) income before
(benefit from)
provision for income
taxes (715) 22,402 3,699 43,766
(Benefit from) provision
for income taxes (588) 8,394 1,397 16,049
----------- ----------- ----------- -----------
Net (loss) income $ (127) $ 14,008 $ 2,302 $ 27,717
=========== =========== =========== ===========
Net (loss) income per
share:
Basic $ (0.00) $ 0.21 $ 0.03 $ 0.42
Diluted $ (0.00) $ 0.20 $ 0.03 $ 0.39
Weighted average number
of common shares used
in the calculation of
net (loss) income per
share:
Basic 68,507,111 66,141,163 68,230,330 65,623,359
Diluted 68,507,111 71,033,614 70,923,757 70,839,456
Acme Packet, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30, December 31,
2012 2011
----------- ------------
Assets
Current assets:
Cash and cash equivalents $ 61,343 $ 160,403
Short-term investments 305,366 191,672
Accounts receivable, net 49,792 59,739
Inventory 12,004 10,246
Deferred product costs 786 1,515
Deferred tax asset, net 4,809 4,809
Income taxes receivable 4,599 4,341
Other current assets 5,575 4,385
----------- ------------
Total current assets 444,274 437,110
Long-term investments 34,547 20,096
Property and equipment, net 31,469 26,252
Intangible assets, net 21,575 8,569
Goodwill 15,262 3,778
Deferred tax asset, net 18,371 18,371
Other assets 241 230
----------- ------------
Total assets $ 565,739 $ 514,406
=========== ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 8,956 $ 10,318
Accrued expenses and other current liabilities 10,548 12,715
Deferred revenue 29,636 22,261
----------- ------------
Total current liabilities 49,140 45,294
----------- ------------
Deferred revenue, net of current portion 2,283 2,049
----------- ------------
Deferred rent 6,597 4,533
----------- ------------
Deferred tax liability 4,733 -
----------- ------------
Stockholders' equity:
Common stock 75 74
Additional paid-in capital 401,931 363,769
Treasury stock, at cost (37,522) (37,522)
Accumulated other comprehensive income (8) 1
Retained earnings 138,510 136,208
----------- ------------
Total stockholders' equity 502,986 462,530
----------- ------------
Total liabilities and stockholders' equity $ 565,739 $ 514,406
=========== ============
Condensed Consolidated Statements of Cash Flow Data
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Cash provided by operating
activities $ 23,624 $ 8,664 $ 50,319 $ 20,205
Cash used in investing
activities (94,869) (20,729) (160,341) (25,002)
Cash provided by financing
activities 4,437 13,712 10,962 33,699
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 share and per share data)
(unaudited)
Statement on Use of Non-GAAP Financial Measures:
To supplement its condensed consolidated statements of operations presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company discloses certain non-GAAP financial measures, including “non-GAAP net (loss) income”, “net (loss) income on a non-GAAP basis”, “non-GAAP EPS”, and “net (loss) income per share on a non-GAAP basis”. These non-GAAP financial measures are not presented in accordance with GAAP and are not meant to be a substitute for the most directly comparable GAAP measures of “net (loss) income”, “EPS” or “net (loss) income per share”. Rather, these non-GAAP financial measures should be evaluated in conjunction with its most directly comparable GAAP financial measure and the Company’s financial statements as a whole.
Management uses these supplemental non-GAAP financial measures to evaluate performance period over period, to analyze the underlying trends in the Company’s business, to assess its performance relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources. Management uses these non-GAAP financial measures because they exclude stock-based compensation expense which is a non-cash charge and related payroll taxes, amortization of acquired intangible assets, and merger and related costs associated with the Company’s acquisition activities all of which are non-operational costs and expenses. By excluding stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and 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, non-operational charges. Management does not consider any of stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and 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.
Because management uses them, management believes that the disclosure of these non-GAAP financial measures to investors provides greater transparency and useful information to help the investor better understand the Company’s operating performance and to evaluate the methodology used by management to evaluate and measure such performance. Notwithstanding their utility to investors in understanding operational trends, these non-GAAP measures should not be considered measures of the Company’s liquidity. In addition, the Company cautions that its definition of “non-GAAP net (loss) income”, “net (loss) income on a non-GAAP basis”, “non-GAAP EPS” and “net (loss) income per share on a non-GAAP basis” may differ from similar measures used by other companies and may differ from period to period. Also, in future periods, management may make other adjustments for expenses and gains that it does not consider reflective of core operating performance in a particular period thereby modifying its definition of “non-GAAP net (loss) income”, “non-GAAP EPS” and “non-GAAP net (loss) income per share” by excluding these other or additional expenses and gains.
Reconciliation of GAAP to Non-GAAP Financial Measures for the Three Months Ended June 30, 2012, June 30, 2011 and March 31, 2012 and for the Six Months Ended June 30, 2012 and June 30, 2011:
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended June 30, 2012
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense Amortization
and of
related acquired Merger
payroll intangible and related
GAAP taxes assets costs Non-GAAP(1)
----------- ----------- ----------- ----------- -----------
Cost of
revenue:
Product $ 9,785 $ (442) $ (583) $ - $ 8,760
Maintenance,
support
and
service 3,675 (717) - - 2,958
Operating
expenses:
Sales and
marketing 32,138 (6,570) (238) - 25,330
Research
and
development 16,257 (4,354) (34) - 11,869
General
and
administrative 5,849 (1,502) - - 4,347
Merger and
related
costs 576 - - (576) -
(Benefit
from)
provision
for income
taxes (588) 5,072 319 - 4,803
Net (loss)
income (127) 8,513 536 576 9,498
Net (loss)
income per
share:
Basic $ (0.00) $ 0.12 $ 0.01 $ 0.01 $ 0.14
Diluted $ (0.00) $ 0.12 $ 0.01 $ 0.01 $ 0.13
Weighted
average
number of
shares used
in the
calculation
of net
(loss)
income per
share:
Basic 68,507,111 68,507,111 68,507,111 68,507,111 68,507,111
Diluted 68,507,111 70,927,009 70,927,009 70,927,009 70,927,009
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended June 30, 2011
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense and Amortization
related of acquired
payroll intangible Non-
GAAP taxes assets GAAP(1)
------- ------------ ------------ -------
Cost of revenue:
Product $11,367 $ (327) $ (536) $10,504
Maintenance, support and
service 2,525 (499) - 2,026
Operating expenses:
Sales and marketing 24,736 (4,441) (140) 20,155
Research and development 12,719 (2,652) (11) 10,056
General and administrative 5,788 (1,303) - 4,485
Provision for income taxes 8,394 3,241 246 11,881
Net income 14,008 5,981 441 20,430
Net income per share:
Basic $ 0.21 $ 0.09 $ 0.01 $ 0.31
Diluted $ 0.20 $ 0.08 $ 0.01 $ 0.29
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended March 31, 2012
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense and Amortization Merger
related of acquired and
payroll intangible related Non-
GAAP taxes assets costs GAAP(1)
------- ------------ ------------ -------- -------
Cost of revenue:
Product $ 9,978 $ (428) $ (434) $ - $ 9,116
Maintenance,
support and
service 3,958 (702) - - 3,256
Operating expenses:
Sales and
marketing 31,002 (6,414) (57) - 24,531
Research and
development 15,097 (4,295) - - 10,802
General and
administrative 6,438 (2,077) - - 4,361
Merger and related
costs 37 - - (37) -
Provision for income
taxes 1,985 4,473 188 - 6,646
Net income 2,429 9,443 303 37 12,212
Net income per share:
Basic $ 0.04 $ 0.14 $ 0.00 $ 0.00 $ 0.18
Diluted $ 0.03 $ 0.13 $ 0.00 $ 0.00 $ 0.17
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Six Months Ended June 30, 2012
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense and Amortization Merger
related of acquired and
payroll intangible related Non-
GAAP taxes assets costs GAAP(1)
------- ------------ ------------ -------- -------
Cost of revenue:
Product $19,763 $ (870) $ (1,017) $ - $17,876
Maintenance,
support and
service 7,633 (1,419) - - 6,214
Operating expenses:
Sales and
marketing 63,140 (12,984) (295) - 49,861
Research and
development 31,354 (8,649) (34) - 22,671
General and
administrative 12,287 (3,579) - - 8,708
Merger and related
costs 613 - - (613) -
Provision for income
taxes 1,397 9,545 507 - 11,449
Net income 2,302 17,956 839 613 21,710
Net income per share:
Basic $ 0.03 $ 0.26 $ 0.01 $ 0.01 $ 0.32
Diluted $ 0.03 $ 0.25 $ 0.01 $ 0.01 $ 0.31
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Six Months Ended June 30, 2011
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense and Amortization Merger
related of acquired and
payroll intangible related Non-
GAAP taxes assets costs GAAP(1)
------- ------------ ------------ -------- -------
Cost of revenue:
Product $21,312 $ (589) $ (907) $ - $19,816
Maintenance,
support and
service 5,531 (950) - - 4,581
Operating expenses:
Sales and
marketing 48,439 (8,020) (186) - 40,233
Research and
development 24,013 (4,894) (23) - 19,096
General and
administrative 10,365 (2,283) - - 8,082
Merger and related
costs 180 - - (180) -
Provision for income
taxes 16,049 5,978 402 - 22,429
Net income 27,717 10,758 714 180 39,369
Net income per share:
Basic $ 0.42 $ 0.16 $ 0.01 $ 0.00 $ 0.60
Diluted $ 0.39 $ 0.15 $ 0.01 $ 0.00 $ 0.56
Reconciliation of Expected Non-GAAP Net Income and Non-GAAP Net Income Per Share for the Year Ending December 31, 2012 (unaudited):
Twelve Months Ending
December 31, 2012
(unaudited)
(in thousands, except per
share data)
----------------------------
Low High
------------- -------------
Revenue $ 270,000 $ 275,000
Reconciliation of non-GAAP net income:
GAAP net loss $ (8,013) $ (4,713)
Adjustments:
Stock-based compensation expense and related
payroll taxes, net of taxes 35,600 35,600
Amortization of acquired intangible assets,
net of taxes 2,300 2,300
Merger and related costs 613 613
------------- -------------
Non-GAAP net income $ 30,500 $ 33,800
============= =============
Reconciliation of diluted non-GAAP net income
per share:
GAAP net loss per share $ (0.11) $ (0.07)
Adjustments:
Stock-based compensation expense and related
payroll taxes, net of taxes 0.50 0.50
Amortization of acquired intangible assets,
net of taxes 0.03 0.03
Merger and related costs 0.01 0.01
------------- -------------
Non-GAAP net income per share $ 0.43 $ 0.47
============= =============
Acme Packet, Inc.
Other Operational Data
(unaudited)
Three Months Ended
-----------------------------------
June 30, March 31, June 30,
2012 2012 2011
----------- ----------- -----------
Other operational data:
Depreciation and amortization (in
thousands) $ 3,591 $ 2,958 $ 1,894
Capital expenditures (in thousands) 6,576 3,745 2,598
Days sales outstanding 66 77 60
Total headcount 831 764 710
Quarterly inventory turnover -
annualized 3.40 3.76 5.42
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