Fusion-io Reports 59% Year-Over-Year Revenue Growth in Fiscal First Quarter 2013 PR Newswire SALT LAKE CITY, Oct. 24, 2012 SALT LAKE CITY, Oct. 24, 2012 /PRNewswire/ -- Fusion-io, Inc. (NYSE: FIO) today announced its financial results for its fiscal first quarter ended September 30, 2012. oRevenue: $118.1 million oGAAP Gross Margin of 59.4% and Non-GAAP Gross Margin of 59.5% oGAAP Net Earnings per Diluted Share: 4 cents oNon-GAAP Net Earnings per Diluted Share: 14 cents oOperating Cash Flow: $28.7 million Fiscal First Quarter 2013 GAAP Financial Results Fusion-io reported record revenue of $118.1 million for the fiscal first quarter 2013, up 59% from $74.4 million for the same quarter of 2012 and up 11% from $106.6 million for the preceding quarter. Net income for the fiscal first quarter of 2013 was $3.9 million, or $0.04 per diluted share, compared to net income of $7.2 million, or $0.07 per diluted share, in thefiscal firstquarter of 2012. Gross margin for the fiscal first quarter 2013 was 59.4%. Operating margin for the fiscal first quarter 2013 was 7.2%. Fiscal First Quarter 2013 Non-GAAP Financial Results Non-GAAP net income for the fiscal first quarter of 2013 was $14.9 million, or $0.14 per diluted share, compared to non-GAAP net income of $15.1 million, or $0.15 per diluted share in the same quarter of 2012. Non-GAAP gross margin for the fiscal first quarter 2013 was 59.5%. Non-GAAP operating margin for the fiscal first quarter 2013 was 19.5%. A complete reconciliation of GAAP to non-GAAP results is set forth in the attachment to this press release. "We are pleased with our execution in the first quarter and our ability to continue to capture market share," said David Flynn, Fusion-io chairman and chief executive officer. "Our innovative use of flash memory technology in our portfolio of software defined data acceleration solutions is yielding significant performance and efficiency improvements for our customers' data centers. We believe the economic benefits enabled by flash technology and Fusion-io software become only more compelling over time." Dennis Wolf, Fusion-io chief financial officer, added: "Our 59% year-over-year revenue growth, approximately $29 million in operating cash flow, and approximately $350 million in cash and cash equivalents as of the end of the quarter put us in a healthy financial position to be able to continue to invest in growth." Other Financial Highlights oCash and cash equivalents totaled $353.9 million at the end of fiscal first quarter 2013, an increase of $32.7 millioncompared tothe prior quarter-end. oDeferred revenue at the end of fiscal first quarter 2013 was $34.5 million, an increase of $5.6 million compared to the prior quarter-end. oInventory was $67.2 million at the end of fiscal first quarter 2013, an increase of $7.7 million compared to the prior quarter-end. oCapital expenditures were $5.2 million in fiscal first quarter 2013. Recent Business Highlights oOn August 27, Fusion-io announced that its Fusion ioTurbine virtualization caching software now offers intelligent application caching for the Linux guest operating system, in addition to supporting the Microsoft Windows guest operating system. oOn August 21, Fusion-io and NetApp announced that the companies had entered into a resale agreement whereby NetApp will resell Fusion-io ioMemory platform products and server caching software products, Fusion ioTurbine, for virtualized environments, and Fusion-io directCache for non-virtualized environments. Business Outlook The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements supersede all prior statements regarding fiscal 2013 financial results. Second quarter of fiscal year 2013: oRevenue is expected to be essentially flat sequentially. oNon-GAAP gross margin is expected to be in the range of 56 to 58%. oNon-GAAP operating margin is expected to be approximately 10%. oDiluted shares outstandingare expected to be approximately 112 million shares. Fiscal Year 2013 guidance remains unchanged, as follows: oRevenue growth is expected to be in the range of 45 to 50%. oNon-GAAP gross margin is expected to be in the range of 56 to 58%. oNon-GAAP operating margin is expected to be approximately 12%. oDiluted shares outstandingare expected to be approximately 114 million shares. Non-GAAP Financial Measures Fusion-io uses certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. Reconciliation between non-GAAP and GAAP measures can be found in the accompanying tables and on the investor relations page of our website at www.fusionio.com. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. Fusion-io's management uses the non-GAAP financial measures in the accompanying schedules to gain an understanding of Fusion-io's comparative operating performance and future prospects, and utilizes these measures in its internal financial statements for purposes of its internal budgets and financial goals. Management also believes that the exclusion of the items described below provides an additional measure of the company's operating results and facilitates comparisons of Fusion-io's core operating performance against prior periods and business model objectives. Management believes that investors should have access to the same set of tools that management uses to analyze Fusion-io's results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP. Fusion-io endeavors to compensate for the limitation of the non-GAAP measures presented by also providing the most directly comparable GAAP measures and descriptions of the reconciling items and adjustments to derive the non-GAAP measures. For all periods presented: oNon-GAAP gross margin is calculated as non-GAAP gross profit divided by GAAP revenue. Non-GAAP gross profit consists of GAAP gross profit excluding the effects of stock-based compensation expense. oNon-GAAP operating margin is calculated as non-GAAP income from operations divided by GAAP revenue. Non-GAAP income from operations consists of GAAP income from operations excluding the effects of stock-based compensation expense, amortization of intangible assets, and acquisition related costs. oNon-GAAP net income is calculated as GAAP net income excluding the effects of stock-based compensation expense, changes in the fair value of a common stock repurchase derivative liability, amortization of intangible assets, acquisition related costs, a tax benefit for the reversal of valuation allowance as a result of the IO Turbine acquisition, and tax provision adjustments related to stock-based awards. oNon-GAAP net income per diluted share is calculated as non-GAAP net income divided by GAAP weighted-average diluted shares outstanding. The accompanying tables provide more details on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures described above and the related reconciliations between these financial measures. With respect to our expectations under "Business Outlook" above, reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available without unreasonable efforts on a forward-looking basis due to the high variability and low visibility with respect to the charges which are excluded from these non-GAAP measures. The effects of stock-based compensation expense specific to non-employee common stock options are directly impacted by unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant impact on our GAAP financial results. Today's Conference Call Fusion-io will host an investor conference call and live webcast today, Wednesday, October 24, 2012, at 5:00 p.m. EDT to discuss these financial results. To access the conference call, dial 1.800.446.2782 or 1.847.413.3235 for international callers. The access code is 3348 6319. A listen-only live webcast will be accessible on the investor relations page of our website at www.fusionio.com and will be archived and available on this site for at least three months. A telephone replay of the conference call will be available through Wednesday, October 31, 2012. To access the replay, please dial 1.888.843.7419 or 1.630.652.3042 for international callers. The access code is 3348 6319.This press release and the financial information discussed on today's conference call are available on the investor relations page of our website at www.fusionio.com. About Fusion-io Fusion-io delivers the world's data faster. Our Fusion ioMemory platform and software defined storage solutions accelerate virtualization, databases, cloud computing, big data and performance applications. From e-commerce retailers to the world's social media leaders and Fortune Global 500 companies, our customers are improving the performance and efficiency of their data centers with Fusion-io technology to accelerate the critical applications of the information economy. Note on Forward-looking Statements Certain statements in this release may constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the Securities Act of 1933, including, but are not limited to, statements concerning financial guidance for our second fiscal quarter of 2013 and our full fiscal year 2013, assumptions underlying the expected benefits and value of our products and solutions to our customers and end users, our continued focus and investment on innovation, expanding our customer and reseller base and investing in our growth, our expectations concerning our technologies, products and solutions, including our ioMemory platform and software products, our expectations concerning our recently announced collaboration with NetApp, and our beliefs concerning the market for and benefits of our products and solutions. These statements are based on current expectations and assumptions regarding future events and business performance and involve certain risks and uncertainties that could cause actual results to differ materially from those contained, anticipated, or implied in any forward-looking statement, including, but not limited to, risks associated with changes in the demand for our products, our expectation that large and concentrated purchases by a limited number of customers will continue to represent a substantial majority of our revenue and our ability to sustain or increase our revenue from our large customers or offset the discontinuation of concentrated purchases by our larger customers with purchases by new or existing customers, the continued adoption by customers of our ioMemory platform products, growing our sales through OEMs, resellers and channel partners and maintaining our relationships with OEMs, resellers and channel partners, including the timely qualification of our products for promotion and sale by our OEMs, long and unpredictable sales cycles, changes in the competitive dynamics of our markets, including the potential for increased pressure on the pricing of our products, reduced gross margins, increased sales and marketing expenses, the potential that we or our customers may not realize the benefits we currently expect from our acquisition of IO Turbine, our ability to develop or acquire new products to meet customer needs and expectations, including additional software solutions to be integrated with our storage memory products, our acquisition and strategic partner strategy and disruptions in our business, operations and financial results as a result of acquisitions and strategic partner relationships, as well as the risks inherent in the integration and combination of complex products and technologies from acquisitions, undetected errors, defects or security vulnerabilities in our products, worldwide economic conditions and the impact these conditions have on levels of spending on datacenter technology like ours, and such other risks set forth in the registration statements and reports that Fusion-io files with the U.S. Securities and Exchange Commission, which are available on the Investor Relations section of our website at www.fusionio.com. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or will occur. Fusion-io undertakes no obligation to update publicly any forward-looking statement for any reason after the date of this press release. Contacts: Investor Relations: Nancy Fazioli, email@example.com, 408-416-5779 Media Relations: Robert Brumfield, firstname.lastname@example.org, 917-224-7769 Fusion-io, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited) Three Months Ended September 30, 2011 2012 Revenue $ 74,385 $ 118,115 Cost of revenue (1) 27,354 47,994 Gross profit 47,031 70,121 Operating expenses: Sales and marketing (1) 17,477 25,020 Research and development (1), (3) 11,152 21,568 General and administrative (1), (4) 13,737 15,084 Total operating expenses 42,366 61,672 Income from operations 4,665 8,449 Other income (expense): Interest income 49 114 Interest expense (46) (30) Other income (expense) (2) 795 (29) Income before income taxes 5,463 8,504 Income tax benefit (expense) (5), (6) 1,726 (4,571) Net income $ 7,189 $ 3,933 Net income per share: Basic $ 0.09 $ 0.04 Diluted $ 0.07 $ 0.04 Weighted-average number of shares used in per share amounts: Basic 82,008 94,221 Diluted 103,454 108,425 (1) Includes stock-based compensation expenses, as follows: Cost of revenue $ 27 $ 109 Sales and marketing 1,103 2,134 Research and development 1,619 4,427 General and administrative 7,027 7,219 Total stock-based compensation expenses $ 9,776 $ 13,889 (2) Includes other income related to changes in the fair value of a common stock repurchase $ (761) $ - derivative liability (3) Includes amortization of intangible assets $ 365 $ 656 (4) Includes acquisition related costs $ 1,320 $ - (5) Includes tax benefit for reversal of valuation allowance as a result of the IO $ (2,782) $ - Turbine acquisition (6) Includes tax provision adjustments related $ - $ (3,563) to stock-based awards Fusion-io, Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited) June 30, September 30, 2012 2012 Assets Current assets: Cash and cash equivalents $ 321,239 $ 353,893 Accounts receivable, net 56,720 65,671 Inventories 59,457 67,203 Prepaid expenses and other current assets 9,224 8,597 Total current assets 446,640 495,364 Property and equipment, net 31,245 33,892 Intangible assets, net 8,164 7,508 Goodwill 54,777 54,777 Other assets 194 370 Total assets $ 541,020 $ 591,911 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 9,765 $ 23,779 Accrued and other current liabilities 29,187 31,633 Deferred revenue 20,715 25,427 Total current liabilities 59,667 80,839 Deferred revenue, less current portion 8,154 9,052 Other liabilities 12,276 12,782 Commitments and contingencies Stockholders' equity: Common stock 19 19 Additional paid-in capital 531,478 555,836 Accumulated other comprehensive (loss) income (15) 8 Accumulated deficit (70,559) (66,625) Total stockholders' equity 460,923 489,238 Total liabilities and stockholders' equity $ 541,020 $ 591,911 Fusion-io, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (unaudited) Three Months Ended September 30, 2011 2012 Operating activities: Net income $ 7,189 $ 3,933 Adjustments to reconcile net income from operating activities: Depreciation and amortization 1,592 3,188 Stock-based compensation 8,983 13,889 Excess tax benefit from stock-based awards - (4,385) Deferred taxes (2,782) - Other non-cash items (762) - Changes in operating assets and liabilities: Accounts receivable, net 10,645 (8,951) Inventories (35,920) (7,746) Prepaid expenses and other assets 526 457 Accounts payable 14,104 14,014 Accrued and other liabilities 220 8,658 Deferred revenue (701) 5,610 Net cash provided by operating activities 3,094 28,667 Investing activities: Business acquisition, net of cash acquired (17,578) - Proceeds from the sale of property and equipment 1 - Purchases of property and equipment (4,222) (5,175) Net cash used in investing activities (21,799) (5,175) Financing activities: Repayment of capital lease obligations (79) - Proceeds from exercises of stock options 69 4,279 Issuance of restricted stock awards and restricted stock - (1,055) units, net of repurchases Proceeds from issuance of common stock under employee 1,052 1,459 stock purchase plan Excess tax benefit from stock option exercises - 4,385 Net cash provided by financing activities 1,042 9,068 Effect of exchange rate changes on cash and cash (66) 94 equivalents Net (decrease) increase in cash and cash equivalents (17,729) 32,654 Cash and cash equivalents at beginning of period 219,604 321,239 Cash and cash equivalents at end of period $ 201,875 $ 353,893 Fusion-io, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands, except per share data) (unaudited) Three Months Ended September 30, 2011 2012 Reconciliation of Gross Profit and Gross Margin on a GAAP Basis to Gross Profit and Gross Margin on a Non-GAAP Basis: Gross profit on a GAAP basis $ 47,031 $ 70,121 Stock-based compensation 27 109 Gross profit on a non-GAAP basis $ 47,058 $ 70,230 Revenue $ 74,385 $ 118,115 Gross margin on a GAAP basis 63.2% 59.4% Gross margin on a non-GAAP basis 63.3% 59.5% Reconciliation of Operating Income and Operating Margin on a GAAP Basis to Operating Income and Operating Margin on a Non-GAAP Basis: Operating income on a GAAP basis $ 4,665 $ 8,449 Stock-based compensation 9,776 13,889 Amortization of intangible assets 365 656 Acquisition related costs 1,320 - Operating income on a non-GAAP basis $ 16,126 $ 22,994 Revenue $ 74,385 $ 118,115 Operating margin on a GAAP basis 6.3% 7.2% Operating margin on a non-GAAP basis 21.7% 19.5% Reconciliation of Net Income on a GAAP Basis to Net Income on a Non-GAAP Basis: Net income on a GAAP basis $ 7,189 $ 3,933 Stock-based compensation 9,776 13,889 Other income related to changes in the fair value of a common stock repurchase derivative liability (761) - Amortization of intangible assets 365 656 Acquisition related costs 1,320 - Tax benefit for reversal of valuation allowance as a result of the IO Turbine acquisition (2,782) - Tax provision adjustments related to stock-based - (3,563) awards Net income on a non-GAAP basis $ 15,107 $ 14,915 Fusion-io, Inc. Reconciliation of Non-GAAP Financial Measures (continued) (in thousands, except per share data) (unaudited) Three Months Ended September 30, 2011 2012 Reconciliation of Diluted Net Income per Share on a GAAP Basis to Diluted Net Income per Share on a Non-GAAP Basis: Diluted net income per share on a GAAP basis $ 0.07 $ 0.04 Stock-based compensation 0.10 0.12 Other income related to changes in the fair value of a common stock repurchase derivative liability (0.01) - Amortization of intangible assets 0.01 0.01 Acquisition related costs 0.01 - Tax benefit for reversal of valuation allowance as a result of the IO Turbine acquisition (0.03) - Tax provision adjustments related to stock-based - (0.03) awards Diluted net income per share on a non-GAAP basis $ 0.15 $ 0.14 SOURCE Fusion-io, Inc. Website: http://www.fusionio.com
Fusion-io Reports 59% Year-Over-Year Revenue Growth in Fiscal First Quarter 2013
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