Carbonite Reports Record Revenue and Free Cash Flow Results for First Quarter of 2014

Carbonite Reports Record Revenue and Free Cash Flow Results for First Quarter of 2014  BOSTON, April 29, 2014 (GLOBE NEWSWIRE) -- 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 first quarter March 31, 2014.  First Quarter 2014 Results:    *Revenue for the first quarter was $29.1 million, an increase of 19% from     $24.5 million in the first quarter of 2013.        *Bookings for the first quarter were $32.5 million, an increase of 11% from     $29.3 million in the first quarter of 2013.        *Net loss for the first quarter was ($1.0) million, compared to a net loss     of ($7.4) million in the first quarter of 2013. Non-GAAP net income for     the first quarter was $0.5 million, compared to non-GAAP net loss of     ($4.7) million in the first quarter of 2013.^1    *Net loss for the first quarter was ($0.04) per share (basic and diluted),     compared to a net loss of ($0.29) per share (basic and diluted) in the     first quarter of 2013. Non-GAAP net earnings were $0.02 per share (basic     and diluted) for the first quarter, compared to non-GAAP net loss of     ($0.18) per share (basic and diluted), in the first quarter of 2013.        *Gross margin for the first quarter was 68.2%, compared to 63.9% in the     first quarter of 2013.Non-GAAP gross margin was 69.0% in the first     quarter, compared to 65.0% in the first quarter of 2013.^2    *Total cash and investments were $70.0 million as of March 31, 2014,     compared to $56.5 million as of March 31, 2013.        *Cash flow from operations for the first quarter was $7.3 million, compared     to $3.8 million in the first quarter of 2013. Non-GAAP free cash flow for     the first quarter was $4.2 million, compared to $0.7 million in the first     quarter of 2013.^3  "I am pleased to announce another record-setting quarter of revenue and free cash flow," said David Friend, Chairman and Chief Executive Officer of Carbonite. "The success of our new Server Backup product announced in the first quarter reinforces that the hybrid approach to backup is resonating with customers and partners. Carbonite's products are purposefully designed for ease-of-use, efficiency and affordability, all attributes which a hybrid solution of local and cloud back up can provide. Along with our best-in-class customer service, we believe Carbonite provides solutions that bring tremendous value to the SMB marketplace."  _____________________________________ ^1 Non-GAAP net earnings and earnings per share, net loss and net loss per share excludes amortization expense on intangible assets, stock-based compensation expense and patent litigation expense. ^2 Non-GAAP gross margin excludes amortization expense on intangible assets and stock-based compensation expense. ^3 Non-GAAP free cash flow is calculated by adding the cash portion of our planned corporate headquarters relocation and subtracting cash paid for the purchase of property and equipment from net cash provided by operating activities.  An explanation of non-GAAP measures is provided under the heading "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  For the second quarter of 2014, revenues are expected to be in the range of $30.0-$30.2 million and non-GAAP net loss per share to be in the range of ($0.05)-($0.03).  For the full year of 2014, revenues are expected to be in the range of $121.7-$123.4 million and non-GAAP net loss per share to be in the range of ($0.10)-($0.04).  Carbonite's expectations of non-GAAP net loss per share for the quarter and full year excludes stock-based compensation expense, patent litigation expense, amortization expense on intangible assets and assumes a tax rate of 0% and weighted average shares outstanding of approximately 26.6 million.  Conference Call and Webcast Information  Carbonite will host a conference call on Tuesday, April 29, 2014 at 8:30 a.m. Eastern Daylight Time to review the results of business operations. This call will be webcast live in the investor relations section of the Company's website at http://investor.carbonite.com. The conference call can also be accessed by dialing (877) 303-1393 in the United States or (315) 625-3228 internationally with the passcode 24938613.  Following the completion of the call, a recorded replay will be available on the company's website, http://investor.carbonite.com, under "Events & Presentations" through December 31, 2014.  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 and patent litigation expenses. Non-GAAP free cash flow is calculated by adding the cash portion of our planned corporate headquarters relocation and subtracting cash paid for the purchase of property and equipment from net cash provided by operating activities.  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, 2013 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.  Carbonite, Inc. Condensed Consolidated Statement of Operations (unaudited) (In thousands, except per share data)                                                                                                                                                 Three Months Ended                                         March 31,                                         2014        2013                                                     Revenue                                  $29,137   $24,508 Cost of revenue                          9,260      8,838 Gross profit                             19,877     15,670                                                     Operating expenses:                                  Research and development                 5,422      5,476 General and administrative               3,520      4,777 Sales and marketing                      11,873     12,682 Restructuring charges                    4          146 Total operating expenses                 20,819     23,081                                                     Loss from operations                     (942)      (7,411)                                                     Interest and other income (expense), net (30)       2                                                     Loss before income taxes                 (972)      (7,409)                                                     Provision for income taxes               (10)       (10)                                                     Net loss                                 $(982)    $(7,419)                                                                                                         Net loss per share:                                  Basic and diluted                        $(0.04)   $(0.29)                                                     Weighted-average shares outstanding:                 Basic and diluted                        26,583,158 25,888,694   Carbonite, Inc. Condensed Consolidated Balance Sheets (unaudited) (In thousands)                                                                                                      March 31,  December 31,                                              2014       2013                                                         Assets                                                   Current assets                                           Cash and cash equivalents                     $55,292  $50,392 Marketable securities                         14,746    14,994 Accounts receivable, net of allowance         2,145     1,876 Prepaid expenses and other current assets     3,154     3,122 Total current assets                          75,337     70,384                                                         Property and equipment, net                   20,959     22,111 Other assets                                  1,179      1,177 Acquired intangible assets, net               3,720      3,953 Goodwill                                      11,536     11,536 Total assets                                  $112,731 $109,161                                                         Liabilities and Stockholders' Equity                     Current liabilities                                      Accounts payable                              $2,320   $3,810 Accrued expenses                              9,174     8,156 Current portion of deferred revenue           72,967    69,498 Total current liabilities                     84,461     81,464                                                         Deferred revenue, net of current portion      14,381     14,502 Other long-term liabilities                   329        374 Total liabilities                             99,171     96,340                                                         Stockholders' equity                                     Common stock                                  267        265 Additional paid-in capital                    144,302    142,557 Treasury stock, at cost                       (22)       (22) Accumulated other comprehensive income (loss) (27)       (1) Accumulated deficit                           (130,960)  (129,978) Total stockholders' equity                    13,560     12,821 Total liabilities and stockholders' equity    $112,731 $109,161   Carbonite, Inc. Condensed Consolidated Statement of Cash Flows (unaudited) (In thousands)                                                                                                                          Three Months Ended                                                        March 31,                                                        2014       2013                                                                   Operating activities                                               Net loss                                                $(982)   $(7,419) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization                           3,155     3,158 Amortization (accretion) of premium (discount) on       (5)       (4) marketable securities Stock-based compensation expense                        1,257     1,319 Provision for reserves on accounts receivable           30        7 Non-cash restructuring charge                           --        92 Changes in assets and liabilities, net of acquisition:             Accounts receivable                                     (299)     (475) Prepaid expenses and other current assets               (32)      26 Other assets                                            (2)       (34) Accounts payable                                        (779)     (1,176) Accrued expenses                                        1,677     3,435 Other long-term liabilities                             (45)      37 Deferred revenue                                        3,349     4,819 Net cash provided by operating activities               7,324     3,785                                                                   Investing activities                                               Purchases of property and equipment                     (3,145)   (3,131) Proceeds from maturities of marketable securities       (2,750)   -- Purchases of marketable securities                      3,000     -- Net cash used in investing activities                   (2,895)   (3,131)                                                                   Financing activities                                               Proceeds from exercise of stock options                 490       512 Net cash provided by financing activities               490       512                                                                   Effect of currency exchange rate changes on cash        (19)      (3) Net increase in cash and cash equivalents               4,900     1,163 Cash and cash equivalents, beginning of period          50,392    40,341 Cash and cash equivalents, end of period                $55,292  $41,504   Carbonite, Inc. Reconciliation of GAAP to Non-GAAP Measures (unaudited) (In thousands, except share and per share amounts)  Calculation of Bookings                                                                                                                Three Months Ended                                                 March 31,                                                 2014           2013                                                                Revenue                                          $29,137      $24,508                                                                Add :                                                           Deferred revenue ending balance                  87,349        80,025 Less :                                                          Deferred revenue beginning balance               84,000        75,206 Change in deferred revenue balance               3,349         4,819                                                                Bookings                                         $32,486      $29,327                                                                 Calculation of Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per Share                                                                                                                Three Months Ended                                                 March 31,                                                 2014           2013                                                                Net loss                                         $(982)       $(7,419)                                                                Add:                                                            Amortization of intangibles                      233           264 Stock-based compensation expense                 1,257         1,319 Patent litigation expense                        17            1,183                                                                Non-GAAP net income (loss)                       $525         $(4,653)                                                                Weighted-average shares outstanding:                            Basic and diluted                                26,583,158    25,888,694                                                                Net income (loss) per share:                                    Basic and diluted                                $0.02        $(0.18)  Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit                                                                                                                Three Months Ended                                                 March 31,                                                 2014           2013                                                                Gross profit                                     $19,877      $15,670 Add:                                                            Amortization of intangibles                      110            118 Stock-based compensation expense                 117            132 Non-GAAP gross profit                            $20,104      $15,920 Non-GAAP gross margin                            69.0%          65.0%                                                                                                                                Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense                                                                                                                Three Months Ended                                                 March 31,                                                 2014           2013                                                                Research and development                         $5,422       $5,476 Less:                                                           Stock-based compensation expense                 260            236 Non-GAAP research and development                $5,162       $5,240                                                                General and administrative                       $3,520       $4,777 Less:                                                           Amortization of intangibles                      40             48 Stock-based compensation expense                 652            650 Patent litigation expense                        17             1,183 Non-GAAP general and administrative              $2,811       $2,896                                                                Sales and marketing                              $11,873      $12,682 Less:                                                           Amortization of intangibles                      83             98 Stock-based compensation expense                 228            301 Non-GAAP sales and marketing                     $11,562      $12,283                                                                Non-GAAP restructuring charges                   $4           $146                                                                 Calculation of Free Cash Flow                                                                                                                Three Months Ended                                                 March 31,                                                 2014           2013                                                                Net cash provided by operating activities        $7,324       $3,785                                                                Add                                                             Payments related to corporate headquarter        64            -- relocation Subtract:                                                       Purchases of property and equipment              3,145          3,131                                                                Free cash flow                                   $4,243       $654  CONTACT: Investor Relations Contacts:          Emily Walt          Carbonite          617-927-1972          investor.relations@carbonite.com                   Media Contact:          Megan Wittenberger          Carbonite          617-421-5687          media@carbonite.com  Carbonite, Inc. logo  
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