Carbonite Announces Fourth Quarter and Full Year 2012 Financial Results

   Carbonite Announces Fourth Quarter and Full Year 2012 Financial Results

Record Fourth Quarter Revenue of $23.7 million; increases 37%

Record Full Year Revenue of $84.0 million; increases 39%

PR Newswire

BOSTON, Feb. 4, 2013

BOSTON, Feb. 4, 2013 /PRNewswire/ --Carbonite, Inc. (NASDAQ: CARB), a leading
provider of cloud backup solutions for consumers and small businesses, today
announced financial results for the fourth quarter and year ended December 31,
2012.

(Logo: http://photos.prnewswire.com/prnh/20120124/NE40289LOGO )

"During the fourth quarter, we achieved record revenue, realized ongoing
operating leverage, and generated significant free cash flow, even after
accelerating the payment of our annual cash bonuses into the quarter," said
David Friend, Chairman and CEO of Carbonite. "As we enter 2013, the company
will further invest in the small business market where our recent acquisition
of Zmanda has bolstered our offerings with comprehensive backup and database
archiving. While we continue to enhance our consumer value proposition, our
small business offerings are experiencing faster growth, higher margins, and
better retention and will be the key drivers of our growth going forward."

Financial and Operating Metrics for the Fourth Quarter Ended December 31, 2012

  oBookings for the fourth quarter of 2012 were $27.5 million, an increase of
    19% from $23.2 million in the fourth quarter of 2011.
  oRevenue for the fourth quarter of 2012 was $23.7 million, an increase of
    37% from $17.3 million in the fourth quarter of 2011.
  oGross margin for the fourth quarter of 2012 was 65.9%, compared to 60.9%
    in the fourth quarter of 2011.
  oNet loss for the fourth quarter of 2012 was ($2.2) million, compared to
    ($6.1) million in the fourth quarter of 2011.
  oNet loss attributable to common stockholders for the fourth quarter of
    2012 was ($0.09) per share (basic and diluted), compared to a net loss of
    ($0.24) per share (basic and diluted) in the fourth quarter of 2011.
  oNon-GAAP net loss for the fourth quarter of 2012, which excludes
    amortization expense on intangible assets, stock-based compensation
    expense, and patent litigation expense was ($0.3) million, compared to
    ($5.3) million in the fourth quarter of 2011.
  oNon-GAAP net loss per common share for the fourth quarter of 2012 was
    ($0.01), compared to a non-GAAP net loss per common share of ($0.21) in
    the fourth quarter of 2011.
  oCash flow from operations for the fourth quarter of 2012 was $5.3 million,
    compared to $4.9 million in the fourth quarter of 2011.
  oNon-GAAP free cash flow for the fourth quarter of 2012 was $2.1 million,
    compared to $0.9 million in the fourth quarter of 2011. Both cash flow
    from operations and free cash flow for the fourth quarter of 2012 include
    $1.7 million in 2012 annual bonus payments historically paid out in the
    first quarter and CFO transition costs.
  oCash, cash equivalents, and marketable securities were $55.3 million as of
    December 31, 2012, compared to $66.3 million as of September 30, 2012. The
    decline was primarily due to the acquisition of Zmanda Inc. for $13.4
    million in net cash which closed on October 31, 2012.
  oQuarterly retention rate was in the 96% to 97% range, consistent with
    prior quarters since 2009.

Financial and Operating Metrics for the Full Year 2012

  oBookings for the full year 2012 were $98.5 million, an increase of 22%
    from $80.9 million in 2011.
  oRevenue for the full year 2012 was $84.0 million, an increase of 39% from
    $60.5 million in 2011.
  oGross margin for the full year 2012 was 65.4%, compared to 61.7% in 2011.
  oNet loss for the full year 2012 was ($18.9) million, compared to ($23.5)
    million in 2011.
  oNet loss attributable to common stockholders for the full year 2012 was
    ($0.74) per share (basic and diluted), compared to a net loss of ($1.84)
    per share (basic and diluted) in 2011.
  oNon-GAAP net loss for the full year 2012, which excludes amortization
    expense on intangible assets, stock-based compensation expense, patent
    litigation expense, and a lease exit charge was ($11.7) million, compared
    to ($21.0) million in 2011.
  oNon-GAAP net loss per common share for the full year 2012 was ($0.46),
    compared to a non-GAAP net loss per common share of ($0.84) in 2011.
  oCash flow from operations for the full year 2012 was $9.2 million,
    compared to $7.6 million in 2011. Non-GAAP free cash flow for the full
    year 2012 was ($4.1) million, compared to ($6.0) million in 2011. Both
    cash flow from operations and free cash flow for the full year 2012
    include $1.7 million in 2012 annual bonus payments historically paid out
    in the first quarter and CFO transition costs.
  oCash, cash equivalents, and marketable securities were $55.3 million as of
    December 31, 2012, compared to $72.5 million as of December 31, 2011. The
    decline in cash was primarily due to the acquisition of Zmanda Inc. for
    $13.4 million in net cash which closed on October 31, 2012.

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:

  oCompleted the acquisition of Zmanda, Inc., a global provider of open
    source and cloud backup solutions. This acquisition will enhance
    Carbonite's offerings for small businesses with the ability to backup
    databases and file systems to the cloud, and will enable small businesses
    and resellers to obtain the backup solutions they need from one vendor.
  oAnnounced the appointment of Anthony Folger to the position of Chief
    Financial Officer and Treasurer. Folger will be responsible for financial
    strategy and operations. This appointment further strengthens Carbonite's
    management team as the company moves forward with its strategic growth
    initiatives.
  oAdded new features to the Carbonite Business suite to better meet the
    backup needs of the higher education market. Based on feedback from
    current education customers, the new Groups and Search features will
    provide an institution with easier management for the cloud backups of
    their users and devices.
  oRanked No. 51 on Deloitte's Technology Fast 500™, a ranking of the 500
    fastest growing technology, media, telecommunications, life sciences, and
    clean technology companies in North America.

Business Outlook

Based on information available as of February 4, 2013, Carbonite is issuing
guidance for the first quarter and full year 2013 as follows:

First Quarter 2013: The Company expects total revenue for the first quarter to
be in the range of $24.3 million to $24.6 million and non-GAAP net loss per
common share to be in the range of ($0.17) to ($0.19). Carbonite's
expectations of non-GAAP net loss per common share for the first 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 25.8 million.

Full Year 2013: The Company expects 2013 total revenue to be in the range of
$104.0 million to $106.0 million and non-GAAP net loss per common share to be
in the range of ($0.40) to ($0.44). 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, and patent litigation
expense and assumes a tax rate of 0% and weighted average shares outstanding
of approximately 25.9 million.

Conference Call and Webcast Information

Carbonite will host a conference call on February 4, 2013 at 5:00 p.m. Eastern
Time (ET) to discuss the Company's fourth quarter financial results and its
business outlook. To access this call, dial 800-992-7415 (domestic) or
+1-913-312-0708 (international). A replay of this conference call will be
available until February 11, 2013 at 877-870-5176 (domestic) or
+1-858-384-5517 (international). The replay pass code is 7516543. 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 businesses. Subscribers in more than 100
countries rely on Carbonite to provide easy-to-use, affordable and secure
cloud backup solutions with anytime, anywhere data access. Carbonite's backup
solution runs on both the Windows and Mac platforms. The company has backed up
more than 300 billion files, restored nearly 20 billion files, and currently
backs up more than 350 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          Twelve Months Ended
                          December 31,                December 31,
                          2012           2011         2012         2011
Revenue                   $        $        $       $    
                          23,676        17,344       84,043       60,512
Cost of revenue           8,076          6,782        29,060       $    
                                                                   23,202
Gross profit              15,600         10,562       54,983       37,310
Operating expenses:
Research and development  5,166          4,465        19,925       16,511
General and               2,657          1,912        9,928        6,631
administrative
Sales and marketing       9,855          10,286       42,719       37,722
Restructuring charge      171            -            1,345        -
Total operating expenses  17,849         16,663       73,917       60,864
Loss from operations      (2,249)        (6,101)      (18,934)     (23,554)
Interest and other        40             (7)          38           41
income (expense), net
Loss before income taxes  (2,209)        (6,108)      (18,896)     (23,513)
Provision for income      (10)           (23)         (40)         (23)
taxes
Net loss                  $        $        $        $   
                           (2,219)      (6,131)      (18,936)     (23,536)
Accretion of redeemable
convertible preferred     -              -            -            (128)
stock
Net loss attributable to  $        $        $        $   
common stockholders        (2,219)      (6,131)      (18,936)     (23,664)
Basic and diluted net
loss per share            $        $       $       $     
attributable to common      (0.09)     (0.24)        (0.74)     (1.84)
stockholders
Weighted-average number
of common shares used in
computing basic and       25,706,715     25,106,551   25,503,068   12,841,233
diluted net loss per
share



Carbonite, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
                                      December 31,       December 31,
                                      2012               2011
Assets
Current assets
Cash and cash equivalents             $     40,341   $      59,842
Marketable securities                 14,990             12,684
Accounts receivable, net              1,549              944
Prepaid expenses and other current    2,369              1,730
assets
Restricted cash                       500                -
 Total current assets             59,749             75,200
Property and equipment, net           24,622             21,648
Other assets                          147                189
Acquired intangible assets, net       4,871              1,055
Goodwill                              11,536             1,514
Total assets                          $    100,925    $      99,606
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable                     $      6,247  $       6,858
Accrued expenses                      5,068              4,999
Current portion of deferred           60,119             44,505
revenue
 Total current liabilities       71,434             56,362
Deferred revenue, net of current      15,087             15,191
portion
Other long-term liabilities           473                451
Total liabilities                     86,994             72,004
Stockholders' equity
Common stock                          258                251
Additional paid-in capital            133,059            127,807
Accumulated deficit                   (119,373)          (100,437)
Treasury stock, at cost              (22)               (22)
Accumulated other comprehensive       9                  3
income
 Total stockholders' equity      13,931             27,602
Total liabilities and                 $    100,925    $      99,606
stockholders' equity



Carbonite, Inc.
Condensed Consolidated Statement of Cash Flows (unaudited)
(In thousands)
                                                        Twelve Months Ended
                                                        December 31,
                                                        2012         2011
Operating activities
Net loss                                                $        $   
                                                        (18,936)     (23,536)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization                           10,799       7,870
Gain on disposal of equipment                           (41)         -
Amortization of premium on marketable                   158          40
securities
Stock-based compensation expense                        4,131        1,445
Provision for (reduction of) reserves on accounts       73           (2)
receivable
Non-cash restructuring charge                           1,145        -
Warrant re-measurement                                  -            (8)
Changes in assets and liabilities, net of
acquisition:
 Accounts receivable                                (332)        (298)
 Prepaid expenses and other current                 (575)        (1,186)
assets
 Other assets                                       42           (112)
 Accounts payable                                   (611)        1,935
 Accrued expenses                                   (1,151)      833
Other long-term liabilities                            48           203
 Deferred revenue                                  14,445       20,388
 Net cash provided by operating                      9,195        7,572
activities
Investing activities
Purchases of property and equipment                     (13,417)     (13,544)
Proceeds from maturities of marketable                  13,704       10,000
securities
Purchases of marketable securities                      (16,197)     (12,694)
Net increase in restricted cash                         (500)        -
Payment for acquisition, net of cash                    (13,392)     (1,949)
acquired
 Net cash (used in) investing                  (29,802)     (18,187)
activities
Financing activities
Proceeds from exercise of stock options                 1,102        990
Proceeds from the issuance of common stock              -            55,632
Repurchase of common stock                              -            (22)
 Net cash provided by financing                1,102        56,600
activities
Effect of currency exchange rate changes on             4            2
cash
Net increase (decrease) in cash and cash                (19,501)     45,987
equivalents
Cash and cash equivalents, beginning of                 59,842       13,855
period
Cash and cash equivalents, end of period                $       $    
                                                        40,341       59,842



Carbonite, Inc.
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(In thousands, except share and per share amounts)
Calculation of Bookings
                        Three Months Ended          Twelve Months Ended
                        December 31,                December 31,
                        2012           2011         2012           2011
Revenue                 $        $        $         $    
                        23,676        17,344       84,043         60,512
Add :
 Deferred revenue    75,206         59,696       75,206         59,696
ending balance
Less :
 Beginning total
deferred revenue from   1,065          -            1,065          586
acquisitions
 Deferred revenue    70,283         53,854       59,696         38,722
beginning balance
Change in deferred      3,858          5,842        14,445         20,388
revenue balance
Bookings                $        $        $         $    
                        27,534        23,186       98,488         80,900
Calculation of Non-GAAP Net Loss and Non-GAAP Net Loss per Share
                        Three Months Ended          Twelve Months Ended
                        December 31,                December 31,
                        2012           2011         2012           2011
Net loss                $        $        $          $   
                         (2,219)      (6,131)      (18,936)       (23,536)
Add:
Amortization of         114            66           314            155
intangibles
Stock-based             1,157          482          4,131          1,445
compensation expense
Patent litigation       670            302          1,618          966
expense
Lease exit charge       -              -            1,174          -
Non-GAAP net loss       (278)          (5,281)      (11,699)       (20,970)
Weighted average
shares outstanding      25,706,715     25,106,551   25,503,068     12,841,233
(basic)
Add :
Additional weighted
average shares giving
effect to initial
public offering and     -              -            -              12,081,064
conversion of
preferred stock at the
beginning of the
period
Weighted average
shares outstanding
used in computing       25,706,715     25,106,551   25,503,068     24,922,297
non-GAAP per share
amounts
Non-GAAP net loss per   $        $       $        $     
share                     (0.01)     (0.21)       (0.46)         (0.84)



Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
                          Three Months Ended          Twelve Months Ended
                          December 31,                December 31,
                          2012           2011         2012         2011
Gross profit              $        $        $       $    
                          15,600        10,562       54,983       37,310
Add:
Amortization of           79             44           211          103
intangibles
Stock-based compensation  126            65           440          207
expense
Non-GAAP gross profit     15,805         10,671       55,634       37,620
Non-GAAP gross margin     66.8%          61.5%        66.2%        62.2%
Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense
                          Three Months Ended          Twelve Months Ended
                          December 31,                December 31,
                          2012           2011         2012         2011
Research and development  $        $       $       $    
                           5,166       4,465        19,925       16,511
Less:
Stock-based compensation  374            153          1,199        511
expense
Non-GAAP research and     4,792          4,312        18,726       16,000
development
General and               $        $       $       $     
administrative             2,657       1,912         9,928      6,631
Less:
Amortization of           20             7            43           17
intangibles
Stock-based compensation  401            144          1,579        346
expense
Patent litigation         670            302          1,618        966
expense
Non-GAAP general and      1,566          1,459        6,688        5,302
administrative
Sales and marketing       $        $        $       $    
                           9,855       10,286       42,719       37,722
Less:
Amortization of           15             15           60           35
intangibles
Stock-based compensation  256            120          913          381
expense
Non-GAAP sales and        9,584          10,151       41,746       37,306
marketing
Restructuring charge      $        $       $       $     
                             171         -       1,345         -
Less:
Lease exit charge         -              -            1,174        -
Non-GAAP restructuring    171            0            171          0
charge



Calculation of Free Cash Flow
                        Three Months Ended          Twelve Months Ended
                        December 31,                December 31,
                        2012           2011         2012           2011
Net cash provided by    $        $       $        $     
operating activities     5,263       4,862        9,195          7,572
Add
Cash portion of lease   -              -            157            -
exit charge
Subtract:
Purchase of property    3,179          3,976        13,417         13,544
and equipment
Free cash flow          $        $       $         $    
                         2,084        886       (4,065)        (5,972)



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
 
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