Carbonite Reports Record Revenue and Profit for the Third Quarter of 2013

  Carbonite Reports Record Revenue and Profit for the Third Quarter of 2013

PR Newswire

BOSTON, Oct. 30, 2013

BOSTON, Oct. 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 September 30, 2013.

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

Highlights:

  oOn July 23, Carbonite announced Enhanced Server Backup, a new product
    designed to bring enterprise-class database server backup capabilities to
    the small business market. Enhanced Server Backup is a fully integrated
    hybrid solution that backs up the Windows System State. A server can be
    restored in its entirety with backup rates reaching approximate speeds in
    excess of one gigabit per second.
  oOn July 29, Carbonite announced the beta release of its business
    continuity appliance which creates complete server backup images on local
    backup for speed, and cloud backup for ultimate safety when primary
    equipment fails.
  oOn August 7, Carbonite signed an agreement with Tech Data, a technology
    wholesaler with more than 120,000 resellers worldwide, to offer
    Carbonite's suite of cloud data protection solutions through Tech Data's
    TDCloud business unit.

"The continued strong performance of our SMB product line, up roughly 80% year
over year in Q3, shows that the investments we are making in this market are
paying off. Furthermore, the success we're seeing with our new server backup
product validates last year's acquisition of Zmanda," said David Friend,
Chairman and Chief Executive Officer of Carbonite. "Our rapidly-growing
network of value-added resellers exerts a strong influence in the purchasing
decisions of many small businesses and this distribution channel is proving to
be an excellent complement to our traditional advertising-driven direct sales
model. We expect SMB to be the dominant driver of our growth in 2014 and
beyond, and we think that our comprehensive solutions that include server
backup, endpoint backup, and business continuity appliances, will allow us to
continue our rapid expansion into the business market."

Financial and Operating Metrics for the Third Quarter Ended September 30, 2013

  oRevenue for the third quarter was $27.7 million, an increase of 28% from
    $21.6 million in the third quarter of last year.
  oBookings for the third quarter were $27.6 million, an increase of 14% from
    $24.3 million in the third quarter of last year.
  oNet loss for the third quarter was ($1.2) million, compared to ($3.4)
    million last year. Non-GAAP net income for the third quarter was $0.2
    million compared to non-GAAP net loss of ($1.9) million in the third
    quarter of last year.[1]
  oNet loss for the third quarter was ($0.05) per share (basic and diluted),
    compared to a net loss of ($0.13) per share (basic and diluted) in the
    third quarter of last year. Non-GAAP EPS was $0.01 for the third quarter,
    compared to non-GAAP EPS ($0.07) in the third quarter of last year. [1]
  oGross margin for the third quarter was 67.9%, compared to 66.6% in the
    third quarter of last year. Non-GAAP gross margin was 68.7% in the third
    quarter, compared to 67.3% in the third quarter of last year. [2]
  oCash, cash equivalents and marketable securities were $62.3 million as of
    September 30, 2013, compared to $58.5 million as of June 30, 2013 and
    $66.3 million as of September 30, 2012.
  oCash flow from operations for the third quarter was $2.4 million, compared
    to $2.4 million in the third quarter of last year. Non-GAAP free cash flow
    for the third quarter of 2013 was $1.4 million, compared to $567,000 in
    the third quarter of last year.[3]
  oQuarterly retention rate was in the 96% to 97% range, consistent with
    prior quarters since 2009.

An explanation of non-GAAP measures is provided under the "Non-GAAP Financial
Measures" below and reconciliation to the most comparable GAAP measure is
provided in the tables at the end of this press release.

Business Outlook
Based on information available as of October 30, 2013, Carbonite is issuing
guidance for the fourth quarter and full year 2013 as follows:

For the fourth quarter of 2013, the Company expects total revenue to be in the
range of $28.3 million to $28.5 million and non-GAAP net loss per diluted
common share to be in the range of ($0.04) to ($0.02).

The Company expects total revenue for 2013 to be in the range of $106.7
million to $106.9 million and non-GAAP net loss per diluted common share to be
in the range of ($0.23) to ($0.21).

Carbonite's expectations of non-GAAP net loss per common share for the full
year and quarter 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 million.

Conference Call and Webcast Information
Carbonite will host a conference call on October 30, 2013, at 5:00 p.m.
Eastern Time (ET) to discuss the Company's third quarter financial results and
its business outlook. To access this call, dial 866-675-4790 (domestic) or
+1-913-312-0640 (international). The conference ID is 1993808. A replay of
this conference call will be available until November 6, 2013 at 877-870-5176
(domestic) or +1-858-384-5517 (international). The replay pass code is
1993808. 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.comunder "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,
non-GAAP net earnings and non-GAAP net earnings 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
non-GAAP net earnings and non-GAAP net earnings 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-usecloud backup solutionsand award-winning U.S.-based customer
support. For more information, please visitCarbonite.com, connect with us on
Twitter@carboniteor visit ourFacebook page.

Investor Relations Contacts:
Emily Walt
Carbonite
617-927-1972
investor.relations@carbonite.com

Media Contact:
Megan Wittenberger
Carbonite
617-421-5687
media@carbonite.com

[1] Non-GAAP net earnings and earnings per share, net loss and operating loss
per share excludes amortization expense on intangible assets, stock-based
compensation expense, patent litigation expense, and a lease exit charge
associated with our data center relocation.
[2] Non-GAAP gross margin excludes amortization expense on intangible assets,
stock-based compensation expense, patent litigation expense, and a lease exit
charge associated with our data center relocation.
[3] 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.



Carbonite, Inc.
Condensed Consolidated Statement of Operations (unaudited)
(In thousands, except per share data)
                          Three Months Ended          Nine Months Ended
                          September 30,               September 30,
                          2013           2012         2013         2012
Revenue                   $        $        $       $    
                          27,683        21,573       78,407       60,367
Cost of revenue           8,899          7,205        26,192       20,984
Gross profit              18,784         14,368       52,215       39,383
Operating expenses:
Research and development  5,220          4,890        15,597       14,759
General and               2,988          2,658        11,293       7,271
administrative
Sales and marketing       11,742         10,179       35,935       32,864
Restructuring charges     11             -            283          1,174
Total operating expenses  19,961         17,727       63,108       56,068
Loss from operations      (1,177)        (3,359)      (10,893)     (16,685)
Interest and other        -              (1)          -            (2)
income (expense), net
Loss before income taxes  (1,177)        (3,360)      (10,893)     (16,687)
Provision for income      (10)           (10)         (30)         (30)
taxes
Net loss                  $        $        $        $   
                           (1,187)      (3,370)      (10,923)     (16,717)
Basic and diluted net     $        $       $       $     
loss per share              (0.05)     (0.13)        (0.42)     (0.66)
Weighted-average number
of common shares used in
                          26,260,962     25,626,654   26,055,441   25,434,690
computing basic and
diluted net loss per
share



Carbonite, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
                                       September 30,      December 31,
                                       2013               2012
Assets
Current assets
Cash and cash equivalents              $     47,298   $      40,341
Marketable securities                  14,990             14,990
Accounts receivable, net of allowance  2,267              1,549
Prepaid expenses and other current     1,711              2,369
assets
Restricted cash                        -                  500
 Total current assets              66,266             59,749
Property and equipment, net            22,847             24,622
Other assets                           244                147
Acquired intangible assets, net        4,179              4,871
Goodwill                               11,536             11,536
Total assets                           $    105,072    $     100,925
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable                      $      2,715  $       6,247
Accrued expenses                       10,096             5,068
Current portion of deferred revenue    66,659             60,119
 Total current liabilities        79,470             71,434
Deferred revenue, net of current       14,530             15,087
portion
Other long-term liabilities            509                473
Total liabilities                      94,509             86,994
Stockholders' equity
Common stock                           264                258
Additional paid-in capital             140,622            133,059
Treasury stock, at cost               (22)               (22)
Accumulated other comprehensive        (5)                9
income (loss)
Accumulated deficit                    (130,296)          (119,373)
 Total stockholders' equity       10,563             13,931
Total liabilities and stockholders'    $    105,072    $     100,925
equity



Carbonite, Inc.
Condensed Consolidated Statement of Cash Flows (unaudited)
(In thousands)
                                             Nine Months Ended
                                             September 30,
                                             2013         2012
Operating activities
Net loss                                     $        $    (16,717)
                                             (10,923)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization                9,461        7,877
Amortization (accretion) of premium          (11)         152
(discount) on marketable securities
Stock-based compensation expense             3,658        2,974
Provision for reserves on accounts           (40)         53
receivable
Non-cash restructuring charge                114          1,022
Changes in assets and liabilities, net
of acquisition:
 Accounts receivable                     (678)        (563)
 Prepaid expenses and other current      658          (124)
assets
 Other assets                            (97)         38
 Accounts payable                        (3,534)      (3,181)
 Accrued expenses                        4,916        1,771
 Other long-term liabilities             36           43
 Deferred revenue                       5,983        10,587
 Net cash provided by operating           9,543        3,932
activities
Investing activities
Purchases of property and equipment          (6,994)      (10,238)
Proceeds from maturities of marketable       10,000       6,204
securities
Purchases of marketable securities           (10,000)     (1,210)
Decrease (Increase) in restricted cash       500          (500)
 Net cash used in investing         (6,494)      (5,744)
activities
Financing activities
Proceeds from exercise of stock options      3,911        761
 Net cash provided by financing     3,911        761
activities
Effect of currency exchange rate changes     (3)          6
on cash
Net increase (decrease) in cash and cash     6,957        (1,045)
equivalents
Cash and cash equivalents, beginning of      40,341       59,842
period
Cash and cash equivalents, end of period     $       $     58,797
                                             47,298



Carbonite, Inc.
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(In thousands, except share and per share amounts)
Calculation of Bookings
                        Three Months Ended            Nine Months Ended
                        September 30,                 September 30,
                        2013           2012           2013         2012
Revenue                 $        $          $       $    
                        27,683        21,573         78,407       60,367
Add :
 Deferred revenue    81,189         70,283         81,189       70,283
ending balance
Less :
 Deferred revenue    81,232         67,527         75,206       59,696
beginning balance
Change in deferred      (43)           2,756          5,983        10,587
revenue balance
Bookings                $        $          $       $    
                        27,640        24,329         84,390       70,954
Calculation of Non-GAAP Net Loss and Non-GAAP Net Loss per Share
                        Three Months Ended            Nine Months Ended
                        September 30,                 September 30,
                        2013           2012           2013         2012
Net loss                $        $          $        $   
                         (1,187)      (3,370)        (10,923)     (16,717)
Add:
Amortization of         214            67             692          200
intangibles
Stock-based             1,174          1,015          3,658        2,974
compensation expense
Patent litigation       37             430            1,620        948
expense
Lease exit charge       -              -              107          1,174
Non-GAAP net loss       $        $          $       $   
                           238      (1,858)        (4,846)      (11,421)
Weighted average
shares outstanding      26,260,962     25,626,654     26,055,441   25,434,690
(basic)
Non-GAAP net loss per   $        $         $       $     
share                     0.01      (0.07)          (0.19)     (0.45)
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
                        Three Months Ended            Nine Months Ended
                        September 30,                 September 30,
                        2013           2012           2013         2012
Gross profit            $        $          $       $    
                        18,784        14,368         52,215       39,383
Add:
Amortization of         110            44             338          132
intangibles
Stock-based             115            113            411          314
compensation expense
Non-GAAP gross profit   $        $          $       $    
                        19,009        14,525         52,964       39,829
Non-GAAP gross margin   68.7%          67.3%          67.6%        66.0%
Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense
                        Three Months Ended            Nine Months Ended
                        September 30,                 September 30,
                        2013           2012           2013         2012
Research and            $        $         $       $    
development              5,220       4,890          15,597       14,759
Less:
Stock-based             280            259            678          825
compensation expense
Non-GAAP research and   $        $         $       $    
development              4,940       4,631          14,919       13,934
General and             $        $         $       $     
administrative           2,988       2,658          11,293       7,271
Less:
Amortization of         39             8              126          23
intangibles
Stock-based             530            413            1,694        1,178
compensation expense
Patent litigation       37             430            1,620        948
expense
Non-GAAP general and    $        $         $       $     
administrative           2,382       1,807           7,853      5,122
Sales and marketing     $        $          $       $    
                        11,742        10,179         35,935       32,864
Less:
Amortization of         65             15             228          45
intangibles
Stock-based             249            230            875          657
compensation expense
Non-GAAP sales and      $        $         $       $    
marketing               11,428        9,934          34,832       32,162
Restructuring charges   $        $        $       $     
                            11       -            283     1,174
Less:
Lease exit charge       -              -              107          1,174
Non-GAAP restructuring  $        $        $       $     
charges                     11       -            176        -
Calculation of Free Cash Flow
                        Three Months Ended            Nine Months Ended
                        September 30,                 September 30,
                        2013           2012           2013         2012
Net cash provided by    $        $         $       $     
operating activities     2,353       2,388           9,543      3,932
Add
Cash portion of lease   650            -              650          157
exit charge
Subtract:
Purchases of property   1,649          1,821          6,994        10,238
and equipment
Free cash flow          $        $        $       $    
                         1,354       567            3,199      (6,149)



SOURCE Carbonite, Inc.

Website: http://www.carbonite.com
 
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