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Carbonite Reports Strong Second Quarter 2013 Financial Results



        Carbonite Reports Strong Second Quarter 2013 Financial Results

Revenue of $26.2 million, Up 30% Year Over Year

Bookings of $27.4 million, Up 24% Year Over Year

Raises Full Year Guidance

PR Newswire

BOSTON, July 30, 2013

BOSTON, July 30, 2013 /PRNewswire/ -- Carbonite, Inc. (NASDAQ: CARB), a
leading provider of cloud solutions that keep small businesses and home
offices running smoothly, today announced financial results for the quarter
ended June 30, 2013.

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

"Carbonite delivered a strong quarter, highlighted by accelerating bookings
growth, continued robust performance in the small business market and our
fourth consecutive quarter of positive free cash flow," said David Friend,
Chairman and Chief Executive Officer of Carbonite. "We made significant
progress strengthening our product portfolio, especially as it relates to our
increasing focus on the small business market, and in expanding our indirect
distribution channels. The steps that we're taking to transform the business,
combined with the investments we've already made in our brand, infrastructure
and support, position us well to deliver solutions that keep the world's small
businesses running."

Financial and Operating Metrics for the Second Quarter Ended June 30, 2013

  o Bookings for the second quarter of 2013 were $27.4 million, an increase of
    24% from $22.1 million in the second quarter 2012.
  o Revenue for the second quarter of 2013 was $26.2 million, an increase of
    30% from $20.2 million in the second quarter of 2012. 
  o Gross margin for the second quarter of 2013 was 67.7%, compared to 65.5%
    in the second quarter of 2012.
  o Net loss for the second quarter of 2013 was ($2.3) million, compared to
    ($4.2) million in the second quarter of 2012.
  o Net loss for the second quarter of 2013 was ($0.09) per share (basic and
    diluted), compared to a net loss of ($0.17) per share (basic and diluted)
    in the second quarter of 2012.
  o Non-GAAP gross margin, which excludes amortization expense on intangible
    assets and stock-based compensation expense, was 68.8% in the second
    quarter of 2013, compared to 66.2% in the second quarter of 2012. 
  o Non-GAAP net loss, which excludes amortization expense on intangible
    assets, stock-based compensation expense, patent litigation expense, and a
    lease exit charge associated with our data center relocation was ($0.4)
    million or ($0.02) per share for the second quarter of 2013 compared to
    ($2.9) million or ($0.11) per share in the second quarter of 2012.
  o Cash flow from operations for the second quarter of 2013 was $3.4 million,
    compared to $1.4 million in the second quarter of 2012.
  o Non-GAAP free cash flow for the second quarter of 2013 was $1.2 million,
    compared to ($2.1) million in the second quarter of 2012.
  o Cash, cash equivalents and marketable securities were $58.5 million as of
    June 30, 2013, compared to $56.5 million as of March 31, 2013 and $65.7
    million as of June 30, 2012. 
  o Quarterly 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 measure is
provided in the tables at the end of this press release.

Recent Business Highlights:

  o Announced that it is bringing enterprise-class server backup capabilities
    to the small business market with the introduction of Enhanced Server
    Backup.  Enhanced Server Backup delivers the best of both worlds – the
    speed of local backup plus the ultimate safety of cloud backup. 
  o Announced a beta program for its new line of all-in-one business
    continuity appliances. Carbonite's appliances will be tuned for optimal
    speed for backup and restore operations, and will include virtual machine
    failover and will offer the speed benefits of local backups along with the
    ultimate safety of cloud storage.
  o Named best cloud backup and disaster recovery vendor (Gold winner) in
    ChannelPro-SMB's 2013 Readers' Choice Awards. More than 1,000 VARs, MSPs,
    systems integrators, custom builders and IT consultants in the channel
    cast their votes for the most SMB and partner-friendly products,
    technologies, services, programs, and professional organizations in the
    channel today.
  o Expanded the executive team with the appointment of Randy Bogue as Vice
    President of Talent. Bogue, who joins the Carbonite team with nearly two
    decades of experience in recruiting and talent management, will be
    responsible for talent acquisition, retention, development and enhancing
    our high performance culture.
  o Named one of the Best Places to Work by the Boston Business Journal for
    the fourth consecutive year. The honor recognizes Carbonite's achievements
    in creating an environment that attracts and retains talented people
    through a combination of great opportunities, dedicated peers and a unique
    company culture.
  o Expanded the content available on its Small Business Hub, with "Friends
    with Friend," a video series hosted by Carbonite CEO, David Friend. The
    series will appear on Carbonite's Small Business Hub, which features
    information and resources on how small businesses can increase
    productivity and streamline operations.

Business Outlook

Based on information available as of July 30, 2013, Carbonite is issuing
guidance for the third quarter and full year 2013 as follows:

Third Quarter 2013: The Company expects total revenue for the third quarter to
be in the range of $26.9 million to $27.1 million and non-GAAP net loss per
common share to be in the range of ($0.07) to ($0.08). Carbonite's
expectations of non-GAAP net loss per diluted common share for the third
quarter exclude stock-based compensation expense, patent litigation expense
and amortization expense on intangible assets, and assume a tax rate of 0% and
weighted average shares outstanding of approximately 26.2 million.

Full Year 2013: The Company expects 2013 total revenue to be in the range of
$105.0 million to $106.0 million and non-GAAP net loss per diluted common
share to be in the range of ($0.34) to ($0.36). Carbonite's expectations of
non-GAAP net loss per common share for the full year excludes stock-based
compensation expense, patent litigation expense, a lease exit charge and
amortization expense on intangible assets, and assumes a tax rate of 0% and
weighted average shares outstanding of approximately 26.0 million.

Conference Call and Webcast Information

Carbonite will host a conference call on July 30, 2013, at 5:00 p.m. Eastern
Time (ET) to discuss the Company's second quarter financial results and its
business outlook. To access this call, dial 888-797-2998 (domestic) or
+1-913-312-9306 (international). The conference ID is 1730191. A replay of
this conference call will be available until August 6, 2013 at 877-870-5176
(domestic) or +1-858-384-5517 (international). The replay pass code is
1730191. 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 gross margin, non-GAAP net loss and non-GAAP net loss per 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 gross margin, non-GAAP net loss and non-GAAP net
loss per share exclude amortization expenses on intangible assets, stock-based
compensation expenses, patent litigation expenses and a lease exit charge
associated with our data center relocation from net loss. 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, 2012 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 (NASDAQ: CARB) keeps small businesses and home offices running
smoothly. Carbonite offers a comprehensive suite of affordable services for
data protection, recovery and anywhere, anytime access. More than 1.5 million
customers, including 50,000 small businesses, trust Carbonite's secure,
easy-to-use cloud backup solutions and award-winning U.S.-based customer
support. For more information, please visit Carbonite.com, connect with us on
Twitter @carbonite and @carbonitebiz, or visit our Facebook page.

 

Carbonite, Inc.
Condensed Consolidated Statement of Operations (unaudited)
(In thousands, except per share data)
                          Three Months Ended          Six Months Ended
                          June 30,                    June 30,
                          2013           2012         2013         2012
Revenue                   $              $            $            $        
                           26,216        20,247       50,724        38,794
Cost of revenue           8,455          6,994        17,293       13,779
Gross profit              17,761         13,253       33,431       25,015
Operating expenses:
Research and development  4,901          5,029        10,377       9,869
General and               3,528          2,377        8,305        4,613
administrative
Sales and marketing       11,511         10,070       24,193       22,685
Restructuring charges     126            -            272          1,174
Total operating expenses  20,066         17,476       43,147       38,341
Loss from operations      (2,305)        (4,223)      (9,716)      (13,326)
Interest and other        (2)            2            -            (1)
income (expense), net
Loss before income taxes  (2,307)        (4,221)      (9,716)      (13,327)
Provision for income      (10)           (10)         (20)         (20)
taxes
Net loss                  $              $            $            $      
                            (2,317)      (4,231)      (9,736)       (13,347)
Basic and diluted net     $              $            $            $          
loss per share                (0.09)     (0.17)         (0.38)      (0.53)
Weighted-average number
of common shares used in
                          26,014,409     25,448,791   25,951,899   25,337,653
computing basic and
diluted net loss per
share

 

Carbonite, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
                                      June 30,           December 31,
                                      2013               2012
Assets
Current assets
Cash and cash equivalents             $         43,550   $           40,341
Marketable securities                 14,986             14,990
Accounts receivable, net              2,133              1,549
Prepaid expenses and other current    2,301              2,369
assets
Restricted cash                       500                500
     Total current assets             63,470             59,749
Property and equipment, net           24,126             24,622
Other assets                          241                147
Acquired intangible assets, net       4,393              4,871
Goodwill                              11,536             11,536
Total assets                          $       103,766    $         100,925
Liabilities and Stockholders'
Equity
Current liabilities 
Accounts payable                      $           4,536  $             6,247
Accrued expenses                      9,444              5,068
Current portion of deferred           66,491             60,119
revenue
     Total current liabilities        80,471             71,434
Deferred revenue, net of current      14,741             15,087
portion
Other long-term liabilities           523                473
Total liabilities                     95,735             86,994
Stockholders' equity
Common stock                          261                258
Additional paid-in capital            136,908            133,059
Accumulated deficit                   (129,109)          (119,373)
Treasury stock, at cost               (22)               (22)
Accumulated other comprehensive       (7)                9
income
     Total stockholders' equity       8,031              13,931
Total liabilities and                 $       103,766    $         100,925
stockholders' equity 

 

Carbonite, Inc.
Condensed Consolidated Statement of Cash Flows (unaudited)
(In thousands)
                                                        Six Months Ended
                                                        June 30,
                                                        2013         2012
Operating activities
Net loss                                                $            $      
                                                        (9,736)       (13,347)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization                           6,319        5,090
Amortization (accretion) of premium (discount) on       (8)          120
marketable securities
Stock-based compensation expense                        2,484        1,959
Provision for reserves on accounts                      10           42
receivable
Non-cash restructuring charge                           173          1,017
Changes in assets and liabilities, net
of acquisition:
     Accounts receivable                                (594)        (96)
     Prepaid expenses and other current                 68           47
assets
     Other assets                                       (94)         9
     Accounts payable                                   (1,714)      (1,395)
     Accrued expenses                                   4,206        241
     Other long-term liabilities                        50           26
     Deferred revenue                                   6,026        7,831
          Net cash provided by operating                7,190        1,544
activities
Investing activities 
Purchases of property and equipment                     (5,345)      (8,417)
Proceeds from maturities of marketable                  5,000        5,000
securities
Purchases of marketable securities                      (5,000)      (1,210)
Increase in restricted cash                             -            (500)
          Net cash used in investing                    (5,345)      (5,127)
activities
Financing activities
Proceeds from exercise of stock options                 1,368        717
          Net cash provided by financing                1,368        717
activities
Effect of currency exchange rate changes                (4)          5
on cash
Net increase (decrease) in cash and cash                3,209        (2,861)
equivalents
Cash and cash equivalents, beginning of                 40,341       59,842
period
Cash and cash equivalents, end of period                $            $        
                                                        43,550        56,981

 

Carbonite, Inc.
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(In thousands, except share and per share amounts)
Calculation of Bookings
                        Three Months Ended            Six Months Ended
                        June 30,                      June 30,
                        2013           2012           2013         2012
Revenue                 $              $              $            $        
                         26,216        20,247         50,724        38,794
Add :
    Deferred revenue    81,232         67,527         81,232       67,527
ending balance
Less :
    Deferred revenue    80,025         65,643         75,206       59,696
beginning balance
Change in deferred      1,207          1,884          6,026        7,831
revenue balance
Bookings                $              $              $            $        
                         27,423        22,131         56,750        46,625
Calculation of Non-GAAP Net Loss and Non-GAAP Net Loss per Share
                        Three Months Ended            Six Months Ended
                        June 30,                      June 30,
                        2013           2012           2013         2012
Net loss                $              $              $            $      
                          (2,317)      (4,231)        (9,736)       (13,347)
Add:
Amortization of         214            66             478          133
intangibles
Stock-based             1,165          1,003          2,484        1,959
compensation expense
Patent litigation       400            311            1,583        518
expense
Lease exit charge       107            -              107          1,174
Non-GAAP net loss       $              $              $            $        
                             (431)     (2,851)        (5,084)       (9,563)
Weighted average
shares outstanding      26,014,409     25,448,791     25,951,899   25,337,653
(basic)
Non-GAAP net loss per   $              $              $            $          
share                       (0.02)     (0.11)           (0.20)      (0.38)
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
                        Three Months Ended            Six Months Ended
                        June 30,                      June 30,
                        2013           2012           2013         2012
Gross profit            $              $              $            $        
                         17,761        13,253         33,431        25,015
Add:
Amortization of         110            44             228          88
intangibles
Stock-based             164            106            296          201
compensation expense
Non-GAAP gross profit   $              $              $            $        
                         18,035        13,403         33,955        25,304
Non-GAAP gross margin   68.8%          66.2%          66.9%        65.2%
Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense
                        Three Months Ended            Six Months Ended
                        June 30,                      June 30,
                        2013           2012           2013         2012
Research and            $              $              $            $          
development                4,901       5,029          10,377        9,869
Less: 
Stock-based             162            274            398          566
compensation expense
Non-GAAP research and   $              $              $            $          
development                4,739       4,755            9,979       9,303
General and             $              $              $            $          
administrative             3,528       2,377            8,305       4,613
Less: 
Amortization of         39             7              87           15
intangibles
Stock-based             514            399            1,164        765
compensation expense
Patent litigation       400            311            1,583        518
expense
Non-GAAP general and    $              $              $            $          
administrative             2,575       1,660            5,471       3,315
Sales and marketing     $              $              $            $        
                         11,511        10,070         24,193        22,685
Less: 
Amortization of         65             15             163          30
intangibles
Stock-based             325            224            626          427
compensation expense
Non-GAAP sales and      $              $              $            $        
marketing                11,121        9,831          23,404        22,228
Restructuring charges   $              $              $            $          
                              126          -               272      1,174
Less: 
Lease exit charge       107            -              107          1,174
Non-GAAP restructuring  $              $              $            $          
charges                         19         -               165           -
Calculation of Free Cash Flow
                        Three Months Ended            Six Months Ended
                        June 30,                      June 30,
                        2013           2012           2013         2012
Net cash provided by    $              $              $            $          
operating activities       3,405       1,399            7,190       1,544
Add
Cash portion of lease   -              -              -            157
exit charge
Subtract:
Purchases of property   2,214          3,491          5,345        8,417
and equipment
Free cash flow          $              $              $            $        
                           1,191       (2,092)          1,845       (6,716)

 

Investor Relations Contacts:
Emily Walt
Carbonite
617-927-1972   
ewalt@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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