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 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 Fourth Quarter and Full Year 2012 Financial Results
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