Carbonite Announces Third Quarter 2012 Financial Results

           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
chudson@carbonite.com 

Staci Mortenson
ICR
617-587-1102
investor.relations@carbonite.com

Media Contact:
Erin Delaney
Carbonite
617-421-5637
media@carbonite.com

SOURCE Carbonite, Inc.

Website: http://www.carbonite.com