2014

Carbonite Announces Fourth Quarter and Full Year 2012 Financial Results Record Fourth Quarter Revenue of $23.7 million; increases 37%

Record Full Year Revenue of $84.0 million; increases 39%

BOSTON, Feb. 4, 2013 /PRNewswire/ -- Carbonite, Inc. (NASDAQ: CARB), a leading provider of cloud backup solutions for consumers and small businesses, today announced financial results for the fourth quarter and year ended December 31, 2012.

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"During the fourth quarter, we achieved record revenue, realized ongoing operating leverage, and generated significant free cash flow, even after accelerating the payment of our annual cash bonuses into the quarter," said David Friend, Chairman and CEO of Carbonite.  "As we enter 2013, the company will further invest in the small business market where our recent acquisition of Zmanda has bolstered our offerings with comprehensive backup and database archiving.  While we continue to enhance our consumer value proposition, our small business offerings are experiencing faster growth, higher margins, and better retention and will be the key drivers of our growth going forward." 

Financial and Operating Metrics for the Fourth Quarter Ended December 31, 2012

  • Bookings for the fourth quarter of 2012 were $27.5 million, an increase of 19% from $23.2 million in the fourth quarter of 2011.
  • Revenue for the fourth quarter of 2012 was $23.7 million, an increase of 37% from $17.3 million in the fourth quarter of 2011. 
  • Gross margin for the fourth quarter of 2012 was 65.9%, compared to 60.9% in the fourth quarter of 2011.
  • Net loss for the fourth quarter of 2012 was ($2.2) million, compared to ($6.1) million in the fourth quarter of 2011.
  • Net loss attributable to common stockholders for the fourth quarter of 2012 was ($0.09) per share (basic and diluted), compared to a net loss of ($0.24) per share (basic and diluted) in the fourth quarter of 2011.
  • Non-GAAP net loss for the fourth quarter of 2012, which excludes amortization expense on intangible assets, stock-based compensation expense, and patent litigation expense was ($0.3) million, compared to ($5.3) million in the fourth quarter of 2011.
  • Non-GAAP net loss per common share for the fourth quarter of 2012 was ($0.01), compared to a non-GAAP net loss per common share of ($0.21) in the fourth quarter of 2011.
  • Cash flow from operations for the fourth quarter of 2012 was $5.3 million, compared to $4.9 million in the fourth quarter of 2011.
  • Non-GAAP free cash flow for the fourth quarter of 2012 was $2.1 million, compared to $0.9 million in the fourth quarter of 2011.  Both cash flow from operations and free cash flow for the fourth quarter of 2012 include $1.7 million in 2012 annual bonus payments historically paid out in the first quarter and CFO transition costs.
  • Cash, cash equivalents, and marketable securities were $55.3 million as of December 31, 2012, compared to $66.3 million as of September 30, 2012. The decline was primarily due to the acquisition of Zmanda Inc. for $13.4 million in net cash which closed on October 31, 2012. 
  • Quarterly retention rate was in the 96% to 97% range, consistent with prior quarters since 2009.

Financial and Operating Metrics for the Full Year 2012

  • Bookings for the full year 2012 were $98.5 million, an increase of 22% from $80.9 million in 2011.
  • Revenue for the full year 2012 was $84.0 million, an increase of 39% from $60.5 million in 2011. 
  • Gross margin for the full year 2012 was 65.4%, compared to 61.7% in 2011.
  • Net loss for the full year 2012 was ($18.9) million, compared to ($23.5) million in 2011.
  • Net loss attributable to common stockholders for the full year 2012 was ($0.74) per share (basic and diluted), compared to a net loss of ($1.84) per share (basic and diluted) in 2011.
  • Non-GAAP net loss for the full year 2012, which excludes amortization expense on intangible assets, stock-based compensation expense, patent litigation expense, and a lease exit charge was ($11.7) million, compared to ($21.0) million in 2011.
  • Non-GAAP net loss per common share for the full year 2012 was ($0.46), compared to a non-GAAP net loss per common share of ($0.84) in 2011.
  • Cash flow from operations for the full year 2012 was $9.2 million, compared to $7.6 million in 2011. Non-GAAP free cash flow for the full year 2012 was ($4.1) million, compared to ($6.0) million in 2011.  Both cash flow from operations and free cash flow for the full year 2012 include $1.7 million in 2012 annual bonus payments historically paid out in the first quarter and CFO transition costs.
  • Cash, cash equivalents, and marketable securities were $55.3 million as of December 31, 2012, compared to $72.5 million as of December 31, 2011.  The decline in cash was primarily due to the acquisition of Zmanda Inc. for $13.4 million in net cash which closed on October 31, 2012.

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

Recent Business Highlights:

  • Completed the acquisition of Zmanda, Inc., a global provider of open source and cloud backup solutions. This acquisition will enhance Carbonite's offerings for small businesses with the ability to backup databases and file systems to the cloud, and will enable small businesses and resellers to obtain the backup solutions they need from one vendor.
  • Announced the appointment of Anthony Folger to the position of Chief Financial Officer and Treasurer. Folger will be responsible for financial strategy and operations. This appointment further strengthens Carbonite's management team as the company moves forward with its strategic growth initiatives.
  • Added new features to the Carbonite Business suite to better meet the backup needs of the higher education market. Based on feedback from current education customers, the new Groups and Search features will provide an institution with easier management for the cloud backups of their users and devices.
  • Ranked No. 51 on Deloitte's Technology Fast 500™, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences, and clean technology companies in North America.

Business Outlook

Based on information available as of February 4, 2013, Carbonite is issuing guidance for the first quarter and full year 2013 as follows:

First Quarter 2013: The Company expects total revenue for the first quarter to be in the range of $24.3 million to $24.6 million and non-GAAP net loss per common share to be in the range of ($0.17) to ($0.19). Carbonite's expectations of non-GAAP net loss per common share for the first quarter excludes amortization expense on intangible assets, stock-based compensation expense, and patent litigation expense and assume a tax rate of 0% and weighted average shares outstanding of approximately 25.8 million.

Full Year 2013: The Company expects 2013 total revenue to be in the range of $104.0 million to $106.0 million and non-GAAP net loss per common share to be in the range of ($0.40) to ($0.44). Carbonite's expectations of non-GAAP net loss per common share for the full year excludes amortization expense on intangible assets, stock-based compensation expense, and patent litigation expense and assumes a tax rate of 0% and weighted average shares outstanding of approximately 25.9 million.

Conference Call and Webcast Information

Carbonite will host a conference call on February 4, 2013 at 5:00 p.m. Eastern Time (ET) to discuss the Company's fourth quarter financial results and its business outlook. To access this call, dial 800-992-7415 (domestic) or +1-913-312-0708 (international). A replay of this conference call will be available until February 11, 2013 at 877-870-5176 (domestic) or +1-858-384-5517 (international). The replay pass code is 7516543. 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 net loss and non-GAAP net loss per common 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 net loss and non-GAAP net loss per common share exclude amortization expenses on intangible assets, stock-based compensation expenses, a lease exit charge associated with our data center relocation, and patent litigation expenses from net loss and give effect to the conversion of preferred stock and issuance of common stock in connection with the Company's initial public offering as if both had happened at the beginning of the period. 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, 2011 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, Inc. (NASDAQ: CARB), is a leading provider of online backup solutions for consumers and small businesses.  Subscribers in more than 100 countries rely on Carbonite to provide easy-to-use, affordable and secure cloud backup solutions with anytime, anywhere data access. Carbonite's backup solution runs on both the Windows and Mac platforms. The company has backed up more than 300 billion files, restored nearly 20 billion files, and currently backs up more than 350 million files each day. For more information, please visit www.carbonite.com, twitter.com/carbonite, twitter.com/carbonitebiz, or facebook.com/CarboniteOnlineBackup.

 

Carbonite, Inc.

Condensed Consolidated Statement of Operations (unaudited)

(In thousands, except per share data)





















Three Months Ended


Twelve Months Ended



December 31,


December 31,



2012


2011


2012


2011










Revenue


$              23,676


$         17,344


$           84,043


$          60,512

Cost of revenue


8,076


6,782


29,060


$          23,202

Gross profit


15,600


10,562


54,983


37,310










Operating expenses:









Research and development


5,166


4,465


19,925


16,511

General and administrative


2,657


1,912


9,928


6,631

Sales and marketing


9,855


10,286


42,719


37,722

Restructuring charge


171


-


1,345


-

Total operating expenses


17,849


16,663


73,917


60,864










Loss from operations


(2,249)


(6,101)


(18,934)


(23,554)










Interest and other income (expense), net


40


(7)


38


41










Loss before income taxes


(2,209)


(6,108)


(18,896)


(23,513)










Provision for income taxes


(10)


(23)


(40)


(23)










Net loss


$               (2,219)


$         (6,131)


$         (18,936)


$        (23,536)










Accretion of redeemable convertible preferred stock


-


-


-


(128)










Net loss attributable to common stockholders


$               (2,219)


$         (6,131)


$         (18,936)


$        (23,664)



















Basic and diluted net loss per share attributable to common stockholders


$                 (0.09)


$           (0.24)


$             (0.74)


$            (1.84)










Weighted-average number of common shares used in
computing basic and diluted net loss per share


25,706,715


25,106,551


25,503,068


12,841,233

 

Carbonite, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(In thousands)














December 31,


December 31,







2012


2011












Assets









Current assets









Cash and cash equivalents




$         40,341


$           59,842



Marketable securities




14,990


12,684



Accounts receivable, net




1,549


944



Prepaid expenses and other current assets




2,369


1,730



Restricted cash




500


-



     Total current assets




59,749


75,200












Property and equipment, net




24,622


21,648



Other assets




147


189



Acquired intangible assets, net




4,871


1,055



Goodwill




11,536


1,514



Total assets




$       100,925


$           99,606












Liabilities and Stockholders' Equity









Current liabilities 









Accounts payable 




$           6,247


$             6,858



Accrued expenses




5,068


4,999



Current portion of deferred revenue




60,119


44,505



     Total current liabilities 




71,434


56,362












Deferred revenue, net of current portion




15,087


15,191



Other long-term liabilities




473


451



Total liabilities




86,994


72,004












Stockholders' equity









Common stock




258


251



Additional paid-in capital




133,059


127,807



Accumulated deficit




(119,373)


(100,437)



Treasury stock, at cost 




(22)


(22)



Accumulated other comprehensive income




9


3



     Total stockholders' equity 




13,931


27,602



Total liabilities and stockholders' equity 




$       100,925


$           99,606












 

Carbonite, Inc.

Condensed Consolidated Statement of Cash Flows (unaudited)

(In thousands)
















Twelve Months Ended







December 31,







2012


2011










Operating activities









Net loss






$         (18,936)


$        (23,536)

Adjustments to reconcile net loss to net cash provided by operating activities:





Depreciation and amortization






10,799


7,870

Gain on disposal of equipment






(41)


-

Amortization of premium on marketable securities






158


40

Stock-based compensation expense






4,131


1,445

Provision for (reduction of) reserves on accounts receivable




73


(2)

Non-cash restructuring charge






1,145


-

Warrant re-measurement






-


(8)

Changes in assets and liabilities, net of acquisition:









     Accounts receivable






(332)


(298)

     Prepaid expenses and other current assets






(575)


(1,186)

     Other assets






42


(112)

     Accounts payable






(611)


1,935

     Accrued expenses






(1,151)


833

 Other long-term liabilities






48


203

     Deferred revenue 






14,445


20,388

    Net cash provided by operating activities






9,195


7,572










Investing activities 









Purchases of property and equipment






(13,417)


(13,544)

Proceeds from maturities of marketable securities






13,704


10,000

Purchases of marketable securities






(16,197)


(12,694)

Net increase in restricted cash






(500)


-

Payment for acquisition, net of cash acquired






(13,392)


(1,949)

          Net cash (used in) investing activities






(29,802)


(18,187)










Financing activities









Proceeds from exercise of stock options






1,102


990

Proceeds from the issuance of common stock






-


55,632

Repurchase of common stock






-


(22)

          Net cash provided by financing activities






1,102


56,600










Effect of currency exchange rate changes on cash






4


2

Net increase (decrease) in cash and cash equivalents






(19,501)


45,987

Cash and cash equivalents, beginning of period






59,842


13,855

Cash and cash equivalents, end of period






$           40,341


$          59,842

 

Carbonite, Inc.

Reconciliation of GAAP to Non-GAAP Measures (unaudited)

(In thousands, except share and per share amounts)










Calculation of Bookings












Three Months Ended


Twelve Months Ended



December 31,


December 31,



2012


2011


2012


2011










Revenue


$              23,676


$         17,344


$           84,043


$          60,512










Add :









    Deferred revenue ending balance


75,206


59,696


75,206


59,696

Less :









    Beginning total deferred revenue from acquisitions

1,065


-


1,065


586

    Deferred revenue beginning balance


70,283


53,854


59,696


38,722

Change in deferred revenue balance


3,858


5,842


14,445


20,388










Bookings


$              27,534


$         23,186


$           98,488


$          80,900




























Calculation of Non-GAAP Net Loss and Non-GAAP Net Loss per Share












Three Months Ended


Twelve Months Ended



December 31,


December 31,



2012


2011


2012


2011










Net loss


$               (2,219)


$         (6,131)


$         (18,936)


$        (23,536)










Add:









Amortization of intangibles


114


66


314


155

Stock-based compensation expense


1,157


482


4,131


1,445

Patent litigation expense


670


302


1,618


966

Lease exit charge


-


-


1,174


-










Non-GAAP net loss


(278)


(5,281)


(11,699)


(20,970)










Weighted average shares outstanding (basic)


25,706,715


25,106,551


25,503,068


12,841,233

Add :









Additional weighted average shares giving effect to initial public offering and conversion of preferred stock at the beginning of the period


-


-


-


12,081,064










Weighted average shares outstanding used in computing non-GAAP per share amounts


25,706,715


25,106,551


25,503,068


24,922,297










Non-GAAP net loss per share


$                 (0.01)


$           (0.21)


$             (0.46)


$            (0.84)










 

Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit












Three Months Ended


Twelve Months Ended



December 31,


December 31,



2012


2011


2012


2011










Gross profit


$              15,600


$         10,562


$           54,983


$          37,310

Add:









Amortization of intangibles


79


44


211


103

Stock-based compensation expense


126


65


440


207

Non-GAAP gross profit


15,805


10,671


55,634


37,620

Non-GAAP gross margin


66.8%


61.5%


66.2%


62.2%




























Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense












Three Months Ended


Twelve Months Ended



December 31,


December 31,



2012


2011


2012


2011










Research and development


$                5,166


$           4,465


$           19,925


$          16,511

Less: 









Stock-based compensation expense


374


153


1,199


511

Non-GAAP research and development


4,792


4,312


18,726


16,000










General and administrative


$                2,657


$           1,912


$             9,928


$            6,631

Less: 









Amortization of intangibles


20


7


43


17

Stock-based compensation expense


401


144


1,579


346

Patent litigation expense


670


302


1,618


966

Non-GAAP general and administrative


1,566


1,459


6,688


5,302










Sales and marketing


$                9,855


$         10,286


$           42,719


$          37,722

Less: 









Amortization of intangibles


15


15


60


35

Stock-based compensation expense


256


120


913


381

Non-GAAP sales and marketing


9,584


10,151


41,746


37,306










Restructuring charge


$                   171


$                 -


$             1,345


$                 -

Less: 









Lease exit charge


-


-


1,174


-

Non-GAAP restructuring charge


171


0


171


0










 

Calculation of Free Cash Flow












Three Months Ended


Twelve Months Ended



December 31,


December 31,



2012


2011


2012


2011










Net cash provided by operating activities


$                5,263


$           4,862


$             9,195


$            7,572










Add









Cash portion of lease exit charge


-


-


157


-

Subtract:









Purchase of property and equipment


3,179


3,976


13,417


13,544










Free cash flow


$                2,084


$              886


$           (4,065)


$          (5,972)

 

Investor Relations Contact:  
Cassandra Hudson  
Carbonite  
617-587-1144    
chudson@carbonite.com   

Staci Mortenson  
ICR      
617-587-1102  
investor.relations@carbonite.com

Media Contact:  
Erin Delaney  
Carbonite  
617-421-5637  
media@carbonite.com

SOURCE Carbonite, Inc.



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