Carbonite Announces Third Quarter 2012 Financial Results Record Revenue of $21.6 million; increases 35% PR Newswire BOSTON, Oct. 25, 2012 BOSTON, Oct.25, 2012 /PRNewswire/ -- Carbonite, Inc. (NASDAQ: CARB), a leading provider of online backup solutions for consumers and small and medium sized businesses, today announced financial results for the third quarter ended September 30, 2012. (Logo: http://photos.prnewswire.com/prnh/20120124/NE40289LOGO ) "During the third quarter, we achieved record revenue. We also continued to realize leverage in our model, which is benefiting from better returns on marketing initiatives and increasing scale in the business enabling us to exceed our non-GAAP loss per share expectations," said David Friend, Chairman and CEO of Carbonite. "We are having success increasing website conversions and are now experiencing double digit site yield improvements over our former website. Furthermore, we continue to strengthen our SMB initiatives, including an increased contribution from our resellers. We have also announced a definitive agreement to acquire Zmanda, which will enable us to expand our market opportunity and enhance our ability to more fully address the unique backup needs of small businesses by adding cloud server and database backup." Financial and Operating Metrics for the Third Quarter Ended September 30, 2012 oBookings for the third quarter of 2012 were $24.3 million, an increase of 19% from $20.5 million in the third quarter of 2011. oRevenue for the third quarter of 2012 was $21.6 million, an increase of 35% from $15.9 million in the third quarter of 2011. oGross margin for the third quarter of 2012 was 66.6%, compared to 61.6% in the third quarter of 2011. oNet loss for the third quarter of 2012 was ($3.4) million, compared to ($7.4) million in the third quarter of 2011. oNet loss attributable to common stockholders for the third quarter of 2012 was ($0.13) per share (basic and diluted), compared to a net loss of ($0.47) per share (basic and diluted) in the third quarter of 2011. oNon-GAAP net loss for the third quarter of 2012, which excludes amortization expense on intangible assets, stock-based compensation expense, and patent litigation expense was ($1.9) million, compared to ($6.6) million in the third quarter of 2011. oNon-GAAP net loss per common share for the third quarter of 2012 was ($0.07), compared to a non-GAAP net loss per common share of ($0.26) in the third quarter of 2011. oCash flow from operations for the third quarter of 2012 was $2.4 million, compared to $1.9 million in the third quarter of 2011. oNon-GAAP free cash flow for the third quarter of 2012 was $567,000, compared to ($489,000) in the third quarter of 2011. oCash, cash equivalents, and marketable securities were $66.3 million as of September 30, 2012, compared to $65.7 million as of June 30, 2012. oQuarterly retention rate was in the 96% to 97% range, consistent with prior quarters since 2009. An explanation of non-GAAP measures is provided under the "Non-GAAP Financial Measures" below and reconciliation to the most comparable GAAP measures is provided in the tables at the end of this press release. Recent Business Highlights: oAnnounced Carbonite has signed a definitive agreement to acquire Zmanda, Inc., a leading global provider of open source and cloud backup solutions. This acquisition will enhance Carbonite's offerings for small to medium businesses (SMBs) with the ability to backup databases and file systems to the cloud, and will enable SMBs and resellers to obtain the backup solutions they need from one vendor. oReleased a new mobile app that extends Carbonite's signature data protection capabilities to mobile devices. Carbonite Mobile allows users to back up the photos and videos on their mobile devices to the cloud, and also includes features that protect a user's mobile device and personal data in the event of loss or theft. oAnnounced added features to Carbonite Business to help SMBs with HIPAA compliance. A critical aspect of HIPAA regulations is data protection, requiring compliant backup methods to ensure the security and confidentiality of stored data. Carbonite Business solutions deliver an easy to install and use service, and backs up an unlimited number of computers, external hard drives, NAS devices and Windows servers for a low flat fee. Business Outlook Based on information available as of October 25, 2012, Carbonite is issuing guidance for the fourth quarter and full year 2012 as follows: Fourth Quarter 2012: The Company expects total revenue for the fourth quarter to be in the range of $23.1 million to $23.3 million and non-GAAP net loss per common share to be in the range of ($0.06) to ($0.07). Carbonite's expectations of non-GAAP net loss per common share for the fourth quarter excludes amortization expense on intangible assets, stock-based compensation expense, and patent litigation expense and assume a tax rate of 0% and weighted average shares outstanding of approximately 25.7 million. Full Year 2012: The Company expects 2012 total revenue to be in the range of $83.5 million to $83.7 million and non-GAAP net loss per common share to be in the range of ($0.51) to ($0.52). Carbonite's expectations of non-GAAP net loss per common share for the full year excludes amortization expense on intangible assets, stock-based compensation expense, patent litigation expense, and a lease exit charge and assumes a tax rate of 0% and weighted average shares outstanding of approximately 25.7 million. Conference Call and Webcast Information Carbonite will host a conference call on October 25, 2012, at 5:00 p.m. Eastern Time (ET) to discuss the Company's third quarter financial results and its business outlook. To access this call, dial 888-427-9415 (domestic) or +1-719-457-2660 (international). A replay of this conference call will be available until November 6, 2012 at 877-870-5176 (domestic) or +1-858-384-5517 (international). The replay pass code is 2043452. A live web cast of this conference call will also be available in the investor relations section on the Company's website at http://investor.carbonite.com under "Events and Presentations" and a replay will be archived on the website as well. Non-GAAP Financial Measures This press release contains non-GAAP financial measures including bookings, non-GAAP net loss and non-GAAP net loss per common share, and free cash flow. Bookings represent the aggregate dollar value of customer subscriptions received during a period and are calculated as revenue recognized during the period plus the change in total deferred revenue during the same period. Non-GAAP net loss and non-GAAP net loss per common share exclude amortization expenses on intangible assets, stock-based compensation expenses, a lease exit charge associated with our data center relocation, and patent litigation expenses from net loss and give effect to the conversion of preferred stock and issuance of common stock in connection with the Company's initial public offering as if both had happened at the beginning of the period. Non-GAAP free cash flow is calculated by adding the cash portion of the lease exit charge and subtracting cash paid for the purchase of property and equipment from net cash provided by operating activities. Quarterly retention rate is defined as the percentage of customers on the last day of the prior quarter who remain customers on the last day of the current quarter. The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations.The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods and uses these measures in financial reports prepared for management and the Company's board of directors.The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors. The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP.The principal limitation of these non-GAAP financial measures is that they exclude significant items that are required by GAAP to be recorded in the Company's financial statements.In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management.In order to compensate for these limitations, management presents its non-GAAP financial measures in connection with its GAAP results.The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company's business. Cautionary Language Concerning Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company's views as of the date of this press release based on the current intent, belief or expectations, estimates, forecasts, assumptions and projections of the Company and members of our management team. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Those statements include, but are not limited to, statements regarding guidance on our future financial results and other projections or measures of future performance, and our expectations concerning market opportunities and our ability to capitalize on them. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control. The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, the Company's ability to profitably attract new customers and retain existing customers, the Company's dependence on the market for online computer backup services, the Company's ability to manage growth, and changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry. These and other important risk factors are discussed or referenced in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the Securities and Exchange Commission, which is available on www.sec.gov, under the heading "Risk Factors" and elsewhere, and any subsequent periodic or current reports filed by us with the SEC. The Company anticipates that subsequent events and developments will cause its views to change. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances. About Carbonite Carbonite, Inc. (NASDAQ: CARB), is a leading provider of online backup solutions for consumers and small and medium sized businesses. Subscribers in more than 100 countries rely on Carbonite to provide easy-to-use, affordable and secure online backup solutions with anytime, anywhere data access. Carbonite's online backup solution runs on both the Windows and Mac platforms. The company has backed up nearly 200 billion files, restored more than 7 billion files and currently backs up more than 300 million files each day. For more information, please visit www.carbonite.com, twitter.com/carbonite, twitter.com/carbonitebiz, or facebook.com/CarboniteOnlineBackup Carbonite, Inc. Condensed Consolidated Statement of Operations (unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Revenue $ 21,573 $ 15,926 $ $ 60,367 43,168 Cost of revenue 7,205 6,109 20,984 16,420 Gross profit 14,368 9,817 39,383 26,748 Operating expenses: Research and development 4,890 4,336 14,759 12,046 General and administrative 2,658 1,841 7,271 4,719 Sales and marketing 10,179 11,078 32,864 27,436 Lease exit charge - - 1,174 - Total operating expenses 17,727 17,255 56,068 44,201 Loss from operations (3,359) (7,438) (16,685) (17,453) Interest and other income, (1) 22 (2) 48 net Loss before income taxes (3,360) (7,416) (16,687) (17,405) Provision for income taxes (10) - (30) - Net loss $ $ (7,416) $ $ (3,370) (16,717) (17,405) Accretion of redeemable - (23) - (128) convertible preferred stock Net loss attributable to $ $ (7,439) $ $ common stockholders (3,370) (16,717) (17,533) Basic and diluted net loss $ $ $ $ per share attributable to (0.13) (0.47) (0.66) (2.01) common stockholders Weighted-average number of common shares used in 25,626,654 15,955,532 25,434,690 8,707,865 computing basic and diluted net loss per share Carbonite, Inc. Condensed Consolidated Balance Sheets (unaudited) (In thousands) September 30, December 31, 2012 2011 Assets Current assets: Cash and cash equivalents $ 58,797 $ 59,842 Marketable securities 7,508 12,684 Accounts receivable, net 1,454 944 Prepaid expenses and other current assets 1,887 1,730 Total current assets 69,646 75,200 Property and equipment, net 24,209 21,648 Other assets 151 189 Restricted cash 500 - Acquired intangible assets, net 855 1,055 Goodwill 1,514 1,514 Total assets $ 96,875 $ 99,606 Liabilities, Preferred Stock, and Stockholders' Equity Current liabilities: Accounts payable $ $ 3,677 6,858 Accrued expenses 7,792 4,999 Current portion of deferred revenue 55,210 44,505 Total current liabilities 66,679 56,362 Deferred revenue, net of current portion 15,073 15,191 Other long-term liabilities 468 451 Total liabilities 82,220 72,004 Stockholders' equity: Common stock 256 251 Additional paid-in capital 131,563 127,807 Accumulated deficit (117,154) (100,437) Treasury stock, at cost (22) (22) Accumulated other comprehensive income 12 3 Total stockholders' equity 14,655 27,602 Total liabilities and stockholders' $ 96,875 $ 99,606 equity Carbonite, Inc. Condensed Consolidated Statement of Cash Flows (unaudited) (In thousands) Nine Months Ended September 30, 2012 2011 Operating activities Net loss $ $ (16,717) (17,405) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 7,877 5,651 Amortization of premium on marketable 152 - securities Stock-based compensation expense 2,974 963 Provision for bad debt 53 3 Non-cash lease exit charge 1,022 - Re-measurement of preferred stock warrant - (8) liability Changes in assets and liabilities, net of acquisition: Accounts receivable (563) (227) Prepaid expenses and other current assets (124) (1,194) Other assets 38 (150) Accounts payable (3,181) (3,082) Accrued expenses 1,771 3,562 Other long-term liabilities 43 51 Deferred revenue 10,587 14,546 Net cash provided by (used in) operating 3,932 2,710 activities Investing activities Purchases of property and equipment (10,238) (9,568) Proceeds from maturities of marketable 6,204 10,000 securities Purchases of marketable securities (1,210) - Net increase in restricted cash (500) - Payment for acquisition, net of cash acquired - (1,949) Net cash provided by (used in) (5,744) (1,517) investing activities Financing activities Proceeds from exercise of stock options 761 925 Proceeds from the issuance of common stock - 55,709 Repurchase of common stock - (22) Net cash provided by (used in) 761 56,612 financing activities Effect of currency exchange rate changes on 6 2 cash Net increase (decrease) in cash and cash (1,045) 57,807 equivalents Cash and cash equivalents, beginning of period 59,842 13,855 Cash and cash equivalents, end of period $ $ 58,797 71,662 Carbonite, Inc. Reconciliation of GAAP to Non-GAAP Measures (unaudited) (In thousands, except share and per share amounts) Calculation of Bookings Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Revenue $ 21,573 $ 15,926 $ $ 60,367 43,168 Add : Deferred revenue ending 70,283 53,854 70,283 53,854 balance Less : Beginning total deferred - - - 586 revenue from acquisitions Deferred revenue 67,527 49,312 59,696 38,722 beginning balance Change in deferred revenue 2,756 4,542 10,587 14,546 balance Bookings $ 24,329 $ 20,468 $ $ 70,954 57,714 Calculation of Non-GAAP Net Loss and Non-GAAP Net Loss per Share Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Net loss $ $ (7,416) $ $ (3,370) (16,717) (17,405) Add: Amortization of intangibles 67 69 200 89 Stock-based compensation 1,015 411 2,974 963 expense Patent litigation expense 430 352 948 664 Lease exit charge - - 1,174 - Non-GAAP net loss (1,858) (6,584) (11,421) (15,689) Weighted average shares 25,626,654 15,955,532 25,434,690 8,707,865 outstanding (basic) Add : Additional weighted average shares giving effect to initial public offering and - 9,033,399 - 16,152,339 conversion of preferred stock at the beginning of the period Weighted average shares outstanding used in 25,626,654 24,988,931 25,434,690 24,860,204 computing non-GAAP per share amounts Non-GAAP net loss per share $ $ $ $ (0.07) (0.26) (0.45) (0.63) Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Gross Profit $ 14,368 $ 9,817 $ 39,383 $ 26,748 Add: Amortization of intangibles 44 44 132 59 Stock-based compensation 113 55 314 142 expense Non-GAAP gross profit 14,525 9,916 39,829 26,949 Non-GAAP gross margin 67.3% 62.3% 66.0% 62.4% Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Research and development $ 4,890 $ 4,336 $ $ 14,759 12,046 Less: Stock-based compensation 259 163 825 358 expense Non-GAAP research and 4,631 4,173 13,934 11,688 development General and administrative $ 2,658 $ 1,841 $ $ 7,271 4,719 Less: Amortization of intangibles 8 8 23 10 Stock-based compensation 413 91 1,178 202 expense Patent litigation expense 430 352 948 664 Non-GAAP general and 1,807 1,390 5,122 3,843 administrative Sales and marketing $ 10,179 $ 11,078 $ $ 32,864 27,436 Less: Amortization of intangibles 15 17 45 20 Stock-based compensation 230 102 657 261 expense Non-GAAP sales and marketing 9,934 10,959 32,162 27,155 Calculation of Free Cash Flow Three Months Ended Nine Months Ended September 30, September 30, 2012 2011 2012 2011 Net cash provided by (used in) $ 2,388 $ 1,889 $ 3,932 $ 2,710 operating activities Add Cash portion of lease exit - - 157 - charge Subtract: Purchase of property and 1,821 2,378 10,238 9,568 equipment Free cash flow $ 567 $ (489) $ (6,149) $ (6,858) Investor Relations Contact: Cassandra Hudson Carbonite 617-587-1144 email@example.com Staci Mortenson ICR 617-587-1102 firstname.lastname@example.org Media Contact: Erin Delaney Carbonite 617-421-5637 email@example.com SOURCE Carbonite, Inc. Website: http://www.carbonite.com
Carbonite Announces Third Quarter 2012 Financial Results
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