BEDFORD, MA -- (Marketwire) -- 02/04/13 -- Acme Packet, Inc. (NASDAQ: APKT), the leader in session delivery network solutions, today announced results for the fourth quarter of 2012.
Results for the Fourth Quarter of 2012
Total revenue for the fourth quarter of 2012 was $70.7 million, compared to $83.0 million in the fourth quarter of 2011 and $65.3 million in the third quarter of 2012. GAAP net loss for the fourth quarter of 2012 was $2.0 million, or $(0.03) per share, compared to GAAP net income of $8.7 million, or $0.12 per share, in the fourth quarter of 2011 and GAAP net loss of $5.5 million, or $(0.08) per share, in the third quarter of 2012. Net income on a non-GAAP(1) basis for the fourth quarter of 2012 was $6.5 million, or $0.09 per share, compared to $18.3 million, or $0.26 per share, in the fourth quarter of 2011, and $4.7 million, or $0.07 per share, in the third quarter of 2012. All earnings per share results, referenced above, are on a fully diluted basis.
Quarterly Conference Call Cancelled
As a result of the earlier announcement, Oracle to Buy Acme Packet, Acme Packet is cancelling its financial results conference call previously scheduled for today.
(1)A reconciliation of GAAP to non-GAAP results, and a statement on the use of non-GAAP financial measures, is included at the end of this press release.
About Acme Packet
Acme Packet (NASDAQ: APKT), the leader in session delivery network solutions, enables the trusted, first-class delivery of next-generation voice, video, data and unified communications services and applications across IP networks. Our Net-Net product family fulfills demanding security, service assurance and regulatory requirements in service provider, enterprise and contact center networks. Based in Bedford, Massachusetts, Acme Packet designs and manufactures its products primarily in the USA, selling them through over 330 reseller partners worldwide. More than 1,925 customers in 109 countries have deployed over 21,000 Acme Packet systems, including 89 of the top 100 service providers and 51 of the Fortune 100. For more information visit www.acmepacket.com.
Acme Packet, Inc. Safe Harbor Statement
Statements contained herein that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate to, among other things, expected financial and operating results, expected growth rates, future stock-based compensation and amortization expenses, future business prospects and market conditions. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated. These include, but are not limited to: the amount of stock-based compensation awarded; the applicable Company stock price used to determine stock-based compensation; the exercise pattern of employee stock options; difficulties expanding the Company's customer base; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of customers; poor product sales; long sales cycles; difficulties developing new products; difficulties in relationships with vendors and partners; higher risks in international operations; difficulties managing rapid growth; difficulties managing the Company's financial performance; the ability to hire and retain employees and appropriately staff operations; the Company's cash needs; the impact of new accounting pronouncements and increased competition. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in the Company's recent filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings.
Acme Packet, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
----------- ----------- ----------- -----------
Revenue:
Product $ 51,307 $ 64,276 $ 201,098 $ 241,783
Maintenance, support
and service 19,395 18,720 73,339 65,534
----------- ----------- ----------- -----------
Total revenue 70,702 82,996 274,437 307,317
----------- ----------- ----------- -----------
Cost of revenue:
Product 10,145 12,155 39,492 42,245
Maintenance, support
and service 3,464 3,118 15,358 11,691
----------- ----------- ----------- -----------
Total cost of
revenue 13,609 15,273 54,850 53,936
----------- ----------- ----------- -----------
Gross profit 57,093 67,723 219,587 253,381
----------- ----------- ----------- -----------
Operating expenses:
Sales and marketing 38,406 29,940 136,636 105,580
Research and
development 16,528 14,221 64,780 51,483
General and
administrative 5,211 6,073 23,652 21,844
Merger related costs - - 643 300
----------- ----------- ----------- -----------
Total operating
expenses 60,145 50,234 225,711 179,207
----------- ----------- ----------- -----------
(Loss) income from
operations (3,052) 17,489 (6,124) 74,174
Other expense, net (159) (91) (32) (238)
----------- ----------- ----------- -----------
(Loss) income before
income taxes (3,211) 17,398 (6,156) 73,936
(Benefit from) provision
for income taxes (1,182) 8,681 (914) 29,576
----------- ----------- ----------- -----------
Net (loss) income $ (2,029) $ 8,717 $ (5,242) $ 44,360
=========== =========== =========== ===========
Net (loss) income per
share:
Basic $ (0.03) $ 0.13 $ (0.08) $ 0.67
Diluted $ (0.03) $ 0.12 $ (0.08) $ 0.63
Weighted average number
of common shares used
in the calculation of
net (loss) income per
share:
Basic 67,627,896 67,314,606 68,084,305 66,346,008
Diluted 67,627,896 70,679,690 68,084,305 70,902,293
Acme Packet, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, December 31,
2012 2011
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 55,381 $ 160,403
Short-term investments 302,865 191,672
Accounts receivable, net 58,610 59,739
Inventory, net 10,539 10,246
Deferred product costs 1,006 1,515
Deferred tax asset, net 9,423 4,809
Income taxes receivable - 4,341
Other current assets 7,190 4,385
------------- -------------
Total current assets 445,014 437,110
Long-term investments 27,220 20,096
Property and equipment, net 44,264 26,252
Intangible assets, net 19,331 8,569
Goodwill 15,263 3,778
Deferred tax asset, net 27,758 18,371
Other assets 362 230
------------- -------------
Total assets $ 579,212 $ 514,406
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 12,845 $ 10,318
Accrued expenses and other current
liabilities 18,964 12,715
Deferred revenue 23,482 22,261
------------- -------------
Total current liabilities 55,291 45,294
------------- -------------
Deferred revenue, net of current portion 3,663 2,049
------------- -------------
Deferred rent, net of current portion 9,620 4,533
------------- -------------
Deferred tax liability 2,914 -
------------- -------------
Stockholders' equity:
Common stock 76 74
Additional paid-in capital 442,990 363,769
Treasury stock, at cost (66,311) (37,522)
Accumulated other comprehensive income 3 1
Retained earnings 130,966 136,208
------------- -------------
Total stockholders' equity 507,724 462,530
------------- -------------
Total liabilities and stockholders' equity $ 579,212 $ 514,406
============= =============
Condensed Consolidated Statements of Cash Flow Data
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
---------- ---------- ---------- ----------
Cash provided by operating
activities $ 3,856 $ 18,695 $ 63,357 $ 55,341
Cash used in investing
activities (19,738) (34,550) (166,039) (49,036)
Cash provided by (used in)
financing activities 15,096 19,296 (2,340) 62,429
Acme Packet, Inc.
Statement on Use of Non-GAAP Financial Measures and
Reconciliation of Non-GAAP Net (Loss) Income and Non-GAAP Net (Loss) Income Per Share
(in thousands, except share and per share data)
(unaudited)
Statement on Use of Non-GAAP Financial Measures:
To supplement its condensed consolidated statements of operations presented in accordance with accounting principles generally accepted in the United States ("GAAP"), the Company discloses certain non-GAAP financial measures, including "non-GAAP net (loss) income", "net (loss) income on a non-GAAP basis", "non-GAAP EPS", and "net (loss) income per share on a non-GAAP basis". These non-GAAP financial measures are not presented in accordance with GAAP and are not meant to be a substitute for the most directly comparable GAAP measures of "net (loss) income", "EPS" or "net (loss) income per share". Rather, these non-GAAP financial measures should be evaluated in conjunction with its most directly comparable GAAP financial measure and the Company's financial statements as a whole.
Management uses these supplemental non-GAAP financial measures to evaluate performance period over period, to analyze the underlying trends in the Company's business, to assess its performance relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources. Management uses these non-GAAP financial measures because they exclude stock-based compensation expense which is a non-cash charge and related payroll taxes, amortization of acquired intangible assets, and merger and related costs associated with the Company's acquisition activities all of which are non-operational costs and expenses. By excluding stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and related costs, management can compare the Company's operations to prior periods and to the operations of other companies in its industry who may have materially different unusual, non-operational charges. Management does not consider any of stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and related costs to be part of the Company's operating activities or meaningful in evaluating the Company's past financial performance or future prospects. Management believes that excluding these items is useful to investors because it is more representative of ongoing costs and therefore more comparable to historical operations.
Because management uses them, management believes that the disclosure of these non-GAAP financial measures to investors provides greater transparency and useful information to help the investor better understand the Company's operating performance and to evaluate the methodology used by management to evaluate and measure such performance. Notwithstanding their utility to investors in understanding operational trends, these non-GAAP measures should not be considered measures of the Company's liquidity. In addition, the Company cautions that its definition of "non-GAAP net (loss) income", "net (loss) income on a non-GAAP basis", "non-GAAP EPS" and "net (loss) income per share on a non-GAAP basis" may differ from similar measures used by other companies and may differ from period to period. Also, in future periods, management may make other adjustments for expenses and gains that it does not consider reflective of core operating performance in a particular period thereby modifying its definition of "non-GAAP net (loss) income", "non-GAAP EPS" and "non-GAAP net (loss) income per share" by excluding these other or additional expenses and gains.
Reconciliation of GAAP to Non-GAAP Financial Measures for the Three Months Ended December 31, 2012, September 30, 2012, and December 31, 2011 and for the Twelve Months Ended December 31, 2012 and December 31, 2011:
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended December 31, 2012
(in thousands, except per share data)
(unaudited)
Stock-based
compensation Amortization
expense and of acquired
related intangible
GAAP payroll taxes assets Non-GAAP(1)
----------- ------------- ------------ -----------
Cost of revenue:
Product $ 10,145 $ (379) $ (657) $ 9,109
Maintenance, support
and service 3,464 (522) - 2,942
Operating expenses:
Sales and marketing 38,406 (6,991) (288) 31,127
Research and
development 16,528 (3,201) (51) 13,276
General and
administrative 5,211 (1,088) - 4,123
(Benefit from)
provision for income
taxes (1,182) 4,305 369 3,492
Net (loss) income (2,029) 7,876 627 6,474
Net (loss) income per
share:
Basic $ (0.03) $ 0.12 $ 0.01 $ 0.10
Diluted $ (0.03) $ 0.11 $ 0.01 $ 0.09
Weighted average
number of shares used
in the calculation of
net (loss) income per
share:
Basic 67,627,896 67,627,896 67,627,896 67,627,896
Diluted 67,627,896 69,611,815 69,611,815 69,611,815
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended September 30, 2012
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense and Amortization
related of acquired Merger
payroll intangible related
GAAP taxes assets costs Non-GAAP(1)
----------- ------------ ------------ ----------- -----------
Cost of
revenue:
Product $ 9,584 $ (438)$ (658)$ - $ 8,488
Maintenance,
support and
service 4,261 (702) - - 3,559
Operating
expenses:
Sales and
marketing 35,090 (6,794) (261) - 28,035
Research and
development 16,898 (4,181) (51) - 12,666
General and
administrative 6,154 (1,336) - - 4,818
Merger
related
costs 30 - - (30) -
(Benefit from)
provision for
income taxes (1,129) 3,844 359 - 3,074
Net (loss)
income (5,515) 9,607 611 30 4,733
Net (loss)
income per
share:
Basic $ (0.08)$ 0.14 $ 0.01 $ 0.00 $ 0.07
Diluted $ (0.08)$ 0.14 $ 0.01 $ 0.00 $ 0.07
Weighted
average number
of shares used
in the
calculation of
net (loss)
income per
share:
Basic 68,246,091 68,246,091 68,246,091 68,246,091 68,246,091
Diluted 68,246,091 70,102,125 70,102,125 70,102,125 70,102,125
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Three Months Ended December 31, 2011
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense and Amortization
related of acquired
payroll intangible
GAAP taxes assets Non-GAAP(1)
----------- ------------ ------------ -----------
Cost of revenue:
Product $ 12,155 $ (314) $ (385) $ 11,456
Maintenance, support
and service 3,118 (577) - 2,541
Operating expenses:
Sales and marketing 29,940 (4,857) (100) 24,983
Research and
development 14,221 (3,063) (11) 11,147
General and
administrative 6,073 (1,574) - 4,499
Provision for income
taxes 8,681 1,148 174 10,003
Net income $ 8,717 $ 9,237 $ 322 $ 18,276
Net income per share:
Basic $ 0.13 $ 0.14 $ 0.00 $ 0.27
Diluted $ 0.12 $ 0.13 $ 0.00 $ 0.26
Weighted average number
of shares used in the
calculation of net
(loss) income per
share:
Basic 67,314,606 67,314,606 67,314,606 67,314,606
=========== ============ ============ ===========
Diluted 70,679,690 70,679,690 70,679,690 70,679,690
=========== ============ ============ ===========
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Twelve Months Ended December 31, 2012
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense and
related
GAAP payroll taxes
------------- -------------
Cost of revenue:
Product $ 39,492 $ (1,687)
Maintenance, support and
service 15,358 (2,642)
Operating expenses:
Sales and marketing 136,636 (26,769)
Research and development 64,780 (16,031)
General and administrative 23,652 (6,003)
Merger related costs 643 -
(Benefit from) provision for
income taxes (914) 17,694
Net (loss) income (5,242) 35,439
Net (loss) income per share:
Basic $ (0.08) $ 0.52
Diluted $ (0.08) $ 0.50
Weighted average number of
common shares used in the
calculation of net income per
share:
Basic 68,084,305 68,084,305
Diluted 68,084,305 70,445,310
Amortization
of acquired Merger
intangible related
assets costs Non-GAAP(1)
------------- ------------- -------------
Cost of revenue:
Product $ (2,332) $ - $ 35,473
Maintenance, support and
service - - 12,716
Operating expenses:
Sales and marketing (844) - 109,023
Research and development (136) - 48,613
General and administrative - - 17,649
Merger related costs - (643) -
(Benefit from) provision for
income taxes 1,235 - 18,015
Net (loss) income 2,077 643 32,917
Net (loss) income per share:
Basic $ 0.03 $ 0.01 $ 0.48
Diluted $ 0.03 $ 0.01 $ 0.47
Weighted average number of
common shares used in the
calculation of net income per
share:
Basic 68,084,305 68,084,305 68,084,305
Diluted 70,445,310 70,445,310 70,445,310
Acme Packet, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Twelve Months Ended December 31, 2011
(in thousands, except per share data)
(unaudited)
Stock-based
compensation
expense and
related
GAAP payroll taxes
------------- -------------
Cost of revenue:
Product $ 42,245 $ (1,230)
Maintenance, support and
service 11,691 (2,095)
Operating expenses:
Sales and marketing 105,580 (17,661)
Research and development 51,483 (10,886)
General and administrative 21,844 (5,472)
Merger related costs 300 -
Provision for income taxes 29,576 11,022
Net income $ 44,360 $ 26,322
Net income per share:
Basic $ 0.67 $ 0.40
Diluted $ 0.63 $ 0.37
Weighted average number of
common shares used in the
calculation of net income per
share:
Basic 66,346,008 66,346,008
Diluted 70,902,293 70,902,293
Amortization
of acquired Merger
intangible related
assets costs Non-GAAP(1)
------------- ------------- -------------
Cost of revenue:
Product $ (1,677) $ - $ 39,338
Maintenance, support and
service - - 9,596
Operating expenses:
Sales and marketing (387) - 87,532
Research and development (45) - 40,552
General and administrative - - 16,372
Merger related costs - (300) -
Provision for income taxes 755 43 41,396
Net income $ 1,354 $ 257 $ 72,293
Net income per share:
Basic $ 0.02 $ 0.00 $ 1.09
Diluted $ 0.02 $ 0.00 $ 1.02
Weighted average number of
common shares used in the
calculation of net income per
share:
Basic 66,346,008 66,346,008 66,346,008
Diluted 70,902,293 70,902,293 70,902,293
Acme Packet, Inc.
Other Operational Data
(unaudited)
Three Months Ended
-----------------------------------------
December 31, September 30, December 31,
2012 2012 2011
------------- ------------- -------------
Other operational data:
Depreciation and amortization (in
thousands) $ 4,013 $ 3,991 $ 2,944
Capital expenditures (in
thousands) 8,902 5,151 4,186
Days sales outstanding 75 79 65
Total headcount 880 863 752
Quarterly inventory turnover -
annualized 3.71 3.28 4.41
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