Vocera Communications Inc. : Vocera Communications Inc. Reports First Quarter 2013 Results

Vocera Communications Inc. : Vocera Communications Inc. Reports First Quarter
                                 2013 Results

  *Revenue for the first quarter was $22.4 million

  *Non-GAAP earnings per share for the first quarter was $(0.07) 

  *GAAP earnings per share for the first quarter was $(0.14) 

  *Non-GAAP Adjusted EBITDA for the first quarter was $(1.2) million 

  *2013 outlook is reduced

SAN JOSE, Calif., May 2, 2013  -- Vocera Communications, Inc. (NYSE: VCRA),  a 
provider of  mobile communication  solutions  focused on  addressing  critical 
communication challenges  facing hospitals,  today announced  results for  its 
first quarter ended March 31, 2013.

Revenue for the  quarter was  $22.4 million, a  decrease of  3.1% compared  to 
$23.1 million in the  first quarter of  2012. For the  first quarter of  2013, 
GAAP net loss was $3.5  million, or $(0.14) per  diluted share, compared to  a 
net loss of $0.8 million, or $(0.23)  per diluted share, in the first  quarter 
of 2012. Non-GAAP net loss was $1.6 million for the first quarter of 2013,  or 
$(0.07) per  diluted share,  which compares  to non-GAAP  net income  of  $1.4 
million or  $0.06  per  diluted  share,  for the  first  quarter  of  2012.  A 
reconciliation of  GAAP to  non-GAAP  financial measures  is provided  in  the 
schedules included below.

"We were disappointed with this quarter's results. Although the first quarter
saw a  very  nice  increase  in new  customer  signings,  several  significant 
expansion deals for U.S.  hospitals that we expected  to sign in the  quarter, 
were not completed. We believe this shortfall was driven by two factors:  (1) 
increased financial scrutiny from our hospital customers as a result of  lower 
utilization and reduced reimbursement rates under reform, and (2) inconsistent
sales execution across market segments. To address our sales execution  issue, 
we are  creating three  new  leadership positions:  EVP -Worldwide  Sales  and 
Service, VP-US Healthcare  Sales, and VP-International  Sales. Based on  these 
results and  market dynamics,  we're  reducing our  full year  2013  outlook." 
commented Bob Zollars, Vocera Chairman and Chief Executive Officer.

First Quarter 2013 Results

  *Total revenue in the first quarter of 2013 of $22.4 million was comprised
    of $13.0 million of product revenue and $9.4 million of service revenue.
    

  *Product revenue decreased 11.5% compared to the first quarter of 2012 and
    was directly impacted by U.S. healthcare expansion contracts that were
    delayed . Product revenue in the first quarter of 2013 was comprised of
    $3.0 million from software sales and $10.0 million of device sales. GAAP
    product gross margin of 64.4% in the quarter increased 150 basis points
    compared to the year ago period. Non-GAAP product gross margin of 65.6% in
    the quarter increased 200 basis points compared to the year ago period. 

  *Service revenue increased 11.4% compared to the first quarter of 2012 and
    was driven by maintaining and supporting existing customers. Service
    revenue in the first quarter of 2013 was comprised of $7.3 million of
    software maintenance and $2.1 million of professional services. GAAP
    services gross margin of 56.8% in the quarter decreased 110 basis points
    compared to the year ago period. Non-GAAP services gross margin of 58.5%
    in the quarter increased 40 basis points compared to the year ago period.
    

  *Non-GAAP net loss was $1.6 million for the first quarter of 2013, or
    $(0.07) per diluted share, which excludes $1.7 million in stock
    compensation expense and $182,000 in amortization of acquired intangibles.
    This compares to non-GAAP net income of $1.4 million, or $0.06 per diluted
    share, for the first quarter of 2012, which excludes $346,000 in stock
    compensation expense, $219,000 in amortization of acquired intangibles and
    $1.7 million of change in the fair value of warrant and option
    liabilities. 

  *Non-GAAP Adjusted EBITDA was $(1.2) million in the first quarter of 2013,
    compared to $2.0 million in the first quarter of 2012. Non-GAAP Adjusted
    EBITDA margins in the first quarter of 2013 were (5.5%) compared to 8.7%
    in the first quarter of 2012.

  *As of March 31, 2013, the company had cash and short term investments of
    $126.4 millionand no debt.  

2013 Guidance

For the  full year  2013, we  are lowering  revenue guidance  to between  $100 
million and $110 million. We expect a  GAAP earnings per share between a  loss 
of $(0.47) and $(0.22), non-GAAP earnings per share between a loss of  $(0.05) 
and a profit of $0.18, and  non-GAAP Adjusted EBITDA between $1.2 million  and 
$7.9 million. Our full  year 2013 non-GAAP  guidance excludes estimated  stock 
compensation  expense  of  $9.5  million   to  $10.0  million  and   estimated 
amortization of intangibles of  approximately $0.7 million. Non-GAAP  earnings 
per share guidance is based on a  fully diluted share count for the full  year 
2013 of 25.0 million shares in the event of a loss and 27.3 million shares  in 
the event of a profit and expected income tax of $0.3 million to $0.6 million.

For the second quarter  of 2013, Vocera expects  revenues between $23  million 
and $25 million, a GAAP loss  per share between $(0.17) and $(0.12),  non-GAAP 
earnings between  a  loss  of  $(1.6) million  and  $(0.4)  million,  non-GAAP 
earnings per  share  between a  loss  of  $(0.06) and  $(0.02),  and  non-GAAP 
Adjusted EBITDA between a loss of $(1.0)  million and a gain of $0.3  million. 
Our second quarter 2013 non-GAAP guidance excludes stock compensation  expense 
of approximately $2.4 million and amortization of intangibles of $0.2 million.
Non-GAAP earnings per share guidance is  based on a fully diluted share  count 
of 24.8 million shares, for the second quarter 2013. Income tax for the second
quarter of 2013 is expected to be $100,000 to $200,000.

Conference Call Information

The Company will  conduct a conference  call at 2:00  p.m. (Pacific), or  5:00 
p.m. (Eastern), today,  May 2,  2013. To  participate in  the Company's  live 
conference call, please dial 866-953-6858 or for international callers  please 
dial 617-399-3482.  The  conference  passcode  is  86091618.  You  may  also 
participate in  the live  webcast by  visiting the  Investors section  of  the 
Company's  web  site  atwww.vocera.com.  A  replay  will  be  available  from 
Thursday, May 2^nd through Thursday  May 9^th at 888-286-8010 or  617-801-6888 
for international callers, by using the access code 77367042. A webcast replay
will also be archived on the Company's website.

About Vocera Communications

Vocera is the leading provider of mobile communication solutions that  address 
critical productivity and  safety challenges  facing healthcare,  hospitality, 
retail and other mobile work environments.  One of the fastest growing  mobile 
technology companies, Vocera is widely recognized for developing smarter  ways 
to communicate  that improve  patient and  customer satisfaction.  Exclusively 
endorsed by  the American  Hospital Association,  Vocera Voice  Communication, 
Secure Messaging, and Patient Experience solutions are installed in more  than 
1,000 organizations worldwide.  Vocera is headquartered  in San Jose,  Calif., 
with  offices  in  Tennessee,  Canada,  and  the  United  Kingdom.  For   more 
information, visit www.vocera.com and @voceracom on Twitter.

Vocera and the Vocera logo are registered trademarks of Vocera Communications,
Inc. All other product, trademark, company or service names mentioned in this
press release are the property of their respective owners.

Forward Looking Statements

Statements in this press release that are not strictly historical in nature
are forward-looking statements within the meaning of the U.S. federal
securities laws, including statements regarding future events such as our
expected operating results for the full year and second quarter of 2013 and
the future financial performance of our company. These forward-looking
statements are based on limited information currently available to Vocera and
our management's expectations that are inherently subject to change and
involve a number of risks and uncertainties. Actual events or results may
differ materially from those in any forward-looking statement due to various
factors, including but not limited to the effects of recently enacted U.S.
healthcare reform, the effects on government hospital customers of the
sequester and budgetary uncertainty, our ability to maintain profitability;
the demand for our Voice Communication solution in the healthcare market; our
lengthy and unpredictable sales cycle; our ability to offer high-quality
services and support for our solutions, to acquire the sole and limited source
hardware and software components of our solutions, to obtain the required
capacity and product quality from our contract manufacturer, to develop and
introduce new solutions and features to existing solutions and to manage our
growth; and the other factors described in Vocera's Annual Report on Form 10-K
for 2012 and Vocera's other filings with the SEC. Vocera's filings with the
Securities and Exchange Commission ("SEC") are available on the Investors
section of our company's web site at www.vocera.com. The financial and other
information contained in this press release should be read in conjunction with
the financial statements and notes thereto included in Vocera's filings with
the SEC. Vocera's operating results for the first quarter of 2013 are not
necessarily indicative of Vocera's operating results for any future periods.
This press release speaks only as of its date. Vocera assumes no obligation
to update the information in this press release, to revise any forward-looking
statements or to update the reasons actual events or results could differ
materially from those anticipated in forward-looking statements.

Use of Non-GAAP Financial Information

This press release contains financial measures that are not calculated in
accordance with U.S. generally accepted accounting principles ("GAAP"). Our
management evaluates our company's results and makes operating decisions using
various GAAP and non-GAAP measures. In addition to Vocera's GAAP results, we
also consider non-GAAP gross margin for products and for services, non-GAAP
net income/(loss), and non-GAAP earnings per diluted share. We also present
Adjusted EBITDA, a non-GAAP measure that we reconcile to net income. These
non-GAAP measures should not be considered as a substitute for the
corresponding financial measure derived in accordance with GAAP. We present
the non-GAAP measures because we consider them to be important supplemental
information for our investors for analyzing Vocera's performance, core
operating results and trends. Investors are encouraged to review the
reconciliation of non-GAAP financial measures to their most directly
comparable GAAP measures included with this press release.

Our non-GAAP gross margin, non-GAAP net income/(loss), and non-GAAP earnings
per diluted share as well as Adjusted EBITDA are exclusive of certain items to
facilitate management's review of the comparability of Vocera's core operating
results on a period to period basis because such items are not related to
Vocera's ongoing core operating results as viewed by management. We define our
"core operating results" as those revenues recorded in a particular period and
the expenses incurred within that period that directly drive operating income
in that period. Management uses these non-GAAP financial measures in making
operating decisions because, in addition to meaningful supplemental
information regarding operating performance, the measures give us a better
understanding of how we should invest in research and development, fund
infrastructure growth and evaluate the effectiveness of marketing strategies.
In calculating the above non-GAAP results, management specifically adjusted
for the following excluded items:

a) Stock-based compensation expense impact. We recognize equity plan-related
compensation expenses, which represent the fair value of all share-based
payments to employees, including grants of employee stock options as non-GAAP
adjustments in each period.

b) Amortization of acquired intangibles. We acquired certain companies in 2010
and booked intangible assets related to these acquisitions. The amortization
of these acquisition related costs is excluded from non-GAAP net income
because it is not related to ongoing controllable management decisions and
because it is non-cash in nature.

c) Stock warrant revaluation expenses. This is a non-cash expense as a result
of preferred warrants outstanding that were revalued each quarter prior to our
IPO. We believe the comparisons of ongoing operations should exclude effects
of such revaluations.

Management adjusts for the above items because management believes that, in
general, these items possess one or more of the following characteristics:
their magnitude and timing is largely outside of Vocera's control; they are
unrelated to the ongoing operation of the business in the ordinary course;
they are unusual and we do not expect them to occur in the ordinary course of
business; or they are non-operational, or non-cash expenses involving stock
option grants.

We believe that the presentation of these non-GAAP financial measures is
warranted for several reasons:

1) Such non-GAAP financial measures provide an additional analytical tool for
understanding Vocera's financial performance by excluding the impact of items
which may obscure trends in the core operating results of the business;

2) These non-GAAP financial measures facilitate comparisons to the operating
results of other companies commonly compared to Vocera, which use similar
financial measures to supplement their GAAP results, thus enhancing the
perspective of investors who wish to utilize such comparisons in their
analysis of our performance; and

3) These non-GAAP financial measures are employed by Vocera's management in
its own evaluation of performance and are utilized in financial and
operational decision making processes, such as budget planning and
forecasting.

Set forth below are additional reasons why share-based compensation expense is
excluded from our non-GAAP financial measures:

i) While share-based compensation constitutes an ongoing and recurring expense
of Vocera, it is not an expense that requires cash settlement by Vocera. We
therefore exclude these charges for purposes of evaluating core operating
results. Thus, our non-GAAP measurements are presented exclusive of
stock-based compensation expense to assist management and investors in
evaluating our core operating results.

ii) We present share-based payment compensation expense in our reconciliation
of non-GAAP financial measures on a pre-tax basis because the exact tax
differences related to the timing and deductibility of share-based
compensation are dependent upon the trading price of Vocera's common stock and
the timing and exercise by employees of their stock options. As a result of
these timing and market uncertainties the tax effect related to share-based
compensation expense would be inconsistent in amount and frequency and is
therefore excluded from our non-GAAP results.

As stated above, we present non-GAAP financial measures because we consider
them to be important supplemental measures of performance. However, non-GAAP
financial measures have limitations as an analytical tool and should not be
considered in isolation or as a substitute for Vocera's GAAP results. In the
future, we expect to incur expenses similar to certain of the non-GAAP
adjustments described above and expect to continue reporting non-GAAP
financial measures excluding such items. Some of the limitations in relying on
non-GAAP financial measures are:

  *Vocera's stock option and stock purchase plans are important components of
    incentive compensation arrangements and will be reflected as expenses in
    Vocera's GAAP results for the foreseeable future; and

  *Other companies may calculate non-GAAP financial measures differently than
    Vocera, limiting their usefulness as a comparative measure.

Pursuant to the requirements of SEC Regulation G, a detailed reconciliation
between Vocera's non-GAAP and GAAP financial results is set forth in the
financial tables at the end of this press release. Investors are advised to
carefully review and consider this information strictly as a supplement to the
GAAP results that are contained in this press release and in Vocera's SEC
filings.

Contact:
Bob East
Westwicke Partners
443-213-0502
bob.east@westwicke.com

                         Vocera Communications, Inc.
               Condensed consolidated statements of operations
                                 (Unaudited)
                                                  Three months ended March 31
(in thousands, except per share amounts)              2013            2012
Revenue
      Product                                         $12,960       $14,637
      Service                                            9,453          8,482
               Total revenue                            22,413         23,119
Cost of revenue
      Product                                            4,610          5,429
      Service                                            4,084          3,569
               Total cost of revenue                     8,694          8,998
Gross profit                                            13,719         14,121
Operating expenses
      Research and development                           3,614          2,511
      Sales and marketing                               10,232          7,530
      General and administrative                         3,298          3,087
      Total operating expenses                          17,144         13,128
Income (loss) from operations                          (3,425)            993
Interest income                                             24             12
Interest expense and other finance charges                   -           (71)
Other expense, net                                        (47)        (1,597)
Loss before income taxes                               (3,448)          (663)
Provision for income taxes                                (51)          (173)
Net loss                                             $(3,499)       $ (836)
Net loss per common share - basic and diluted          ($0.14)        ($0.23)
Weighted average common shares outstanding- basic
and diluted                                             24,282          3,661

                         Vocera Communications, Inc.
                    Condensed consolidated balance sheets
                                 (Unaudited)
                                                               As of
                                                      March 31,  December 31,
(in thousands)                                          2013         2012
Assets
Current assets
    Cash and cash equivalents                          $116,407       $92,521
    Short term investments                               10,000        34,989
    Accounts receivable, net                             14,886        21,697
    Other receivables                                       333           550
    Inventories                                           4,565         2,772
    Restricted cash                                         304           304
    Prepaid expenses and other current assets             3,415         2,504
            Total current assets                        149,910       155,337
Property and equipment, net                               4,713         3,631
Other long-term assets                                      515           495
Intangible assets, net                                    2,087         2,267
Goodwill                                                  5,575         5,575
            Total assets                               $162,800      $167,305
Liabilities and stockholders' equity
Current liabilities
    Accounts payable                                     $3,021        $2,854
    Product warranty                                        207           297
    Accrued payroll and other accruals                    7,365        11,457
    Deferred revenue, current                            21,748        22,451
            Total current liabilities                    32,341        37,059
Deferred revenue, long-term                               5,410         5,882
Other long-term liabilities                               1,269         1,239
            Total liabilities                            39,020        44,180
Stockholders' equity                                    123,780       123,125
            Total liabilities and stockholders'
            equity                                    $162,800     $167,305

                             Vocera Communications, Inc.
                          Reconciliation of GAAP to Non-GAAP
                   (In thousands, except per share data, unaudited)
                                  Three months ended March 31,
                              2013                                 2012
                                                     Net
             Net income  Diluted   Earnings        income    Diluted    Earnings
               (loss)    shares   (loss) per       (loss)    shares    (loss) per
                                 share-diluted                       share-diluted
GAAP         $ (3,499)  24,282   $  ($0.14)       $   (836)  3,661       $  (0.23)
Non-GAAP
Adjustments:
Add dilutive
shares for
EPS (a)                                                       2,665
Add
preferred
shares
conversion
(b)                                                         12,938
Add IPO
shares (c)                                                    5,000
Stock
compensation
adjustment
(d)
Gross Margin       222                                  21
Operating
Expenses         1,482                                 325
Intangible
amortization
(e)
Gross Margin        92                                  97
Operating
Expenses            90                                 122
Change in
fair value
of warrant
and option
liabilities
(f)                                                  1,706
Total
adjustments
(g)              1,886       -        0.07           2,271   20,603           0.29
Non-GAAP      $(1,613)  24,282     $(0.07)         $1,435    24,264          $0.06
(a) Dilutive shares added to reflect change to share count calculation from loss to
profit, i.e., from "basic" to "fully diluted" weighted average shares.
(b) Preferred shares as if converted
and outstanding for the full quarter.
(c) Newly issued IPO shares on April 2, 2012 as if they had
been outstanding for the entire prior quarter.
(d) This adjustment reflects the accounting impact of
non-cash stock-based compensation expense
(e) This adjustment reflects the accounting impact of
acquisitions in 2010 in non-cash expense.
(f) This adjustment reflects the accounting impact of revaluing preferred stock
warrants and the option liability in non-cash expense.
(g) Non-GAAP earnings are not reserved for payment to participating securities,
allowing EPS to be calculated as earnings divided by diluted shares

                                           Vocera Communications, Inc.
                                         Non-GAAP income adjusting items
                                            (In thousands, unaudited)
                                                   Three months ended March 31,
                                     2013                                                     2012
                                          Change in                                            Change in
                                         fair value                                         fair value
               Stock based   Intangible      of         Total     Stock based   Intangible      of         Total
               compensation amortization warrant and adjustments  compensation amortization warrant and adjustments
                                           option                                             option
                                         liabilities                                        liabilities
Gross margin:
Product        $         64    $      92               $     156       $     8     $     97                 $   105
Services                158                                  158            13                                   13
Operating
expenses:
Research and
development             209                                  209            26                                   26
Sales and
marketing               579           87                     666            66          110                     176
General and
administrative          694            3                     697           233           12         -          245
Other (income)
expense                                                      -                                   1,706       1,706
Non-GAAP
income
adjustments      $    1,704    $     182       $   -   $   1,886       $   346     $    219   $   1,706     $ 2,271

                         Vocera Communications, Inc.
                               Adjusted EBITDA
                          (In thousands, unaudited)
                                                  Three months ended March 31
                                                      2013            2012
GAAP net income (loss)                               $(3,499)       $ (836)
Add back:
  Stock compensation expense                             1,704            346
  Change in fair value of warrant and option
  liabilities                                             -           1,706
  Interest (income) expense, net                         (24)             59
  Depreciation and amortization                            538            553
  Income tax expense                                       51            173
Non-GAAP adjusted EBITDA                              $(1,230)         $2,001

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