Gigamon Reports First Quarter 2017 Financial Results

SANTA CLARA, Calif., April 27, 2017 /PRNewswire/ -- Gigamon Inc. (NYSE:GIMO), the leader in traffic visibility solutions, today released financial results for its first quarter ended April 1, 2017.

First Quarter 2017 Financial Highlights:

• Revenue of $69.6 million, up 4% year-over-year.
• GAAP gross margin was 81%, compared to 81% in the first quarter of fiscal 2016. 
• Non-GAAP gross margin was 82%, compared to 82% in the first quarter of fiscal 2016.
• GAAP net loss was $(2.2) million, or $(0.06) per basic and diluted share, compared to GAAP net income of $3.0 million, or $0.08 per diluted share, in the first quarter of fiscal 2016.
• Non-GAAP net income was $4.6 million, or $0.12 per diluted share, compared to non-GAAP net income of $8.2 million, or $0.22 per diluted share, in the first quarter of fiscal 2016. 
• Cash and short-term investments were $265 million, up $7 million from the fourth quarter of 2016 and up $57 million from the first quarter of fiscal 2016.

"We continue to make progress as we focus on a recovery to sustained and strong growth with results this quarter ahead of our expectations, including a healthy bottom line," said Paul Hooper, Chief Executive Officer of Gigamon. "As we enter Q2, we are implementing a number of changes in our business that we expect will drive growth during the second half of the year, including the appointment of our new CMO, Kim DeCarlis, the announcement of our GigaVUE-HC3--the highest performance system in the market--and the introduction of our in-line SSL solution offering new levels of visibility, control and scale to the industry."

Recent Business Highlights:

• Introduced GigaVUE-HC3, the highest-performance appliance in our HC family to enable pervasive visibility and security intelligence at scale across 10, 40 and 100Gb networks.
• Gigamon Visibility Platform on Amazon Web Services (AWS) gained momentum with availability in the AWS marketplace and achieved elevated Amazon Partner Network (APN) and Public Sector Program Partner statuses.
• Announced a significant expansion to Gigamon's GigaSECURE® SSL/TLS decryption solution, with new inline capabilities, bringing enhanced visibility into encrypted data-in-motion.
• Appointed longtime security veteran Arthur W. Coviello Jr. to its Board of Directors to help guide the company's security strategy and growth.
• Named industry marketing leader Kim DeCarlis as Chief Marketing Officer to drive increased market opportunities, brand awareness and industry leadership for Gigamon.

Conference Call Information:

Gigamon will host a conference call and live webcast for analysts and investors at 5:00 p.m. Eastern time on April 27, 2017. This news release and a supplemental financial presentation will be available on the company's website prior to the conference call.  Parties in the United States and Canada can access the call by dialing +1 (877)-329-7568, using conference code 6085965.  International parties can access the call by dialing +1 (719)-457-2695, using conference code 6085965.

The webcast will be accessible on Gigamon's investor relations website at http://investor.gigamon.com for a period of one year. A telephonic replay of the conference call will be available through Thursday, May 4, 2017. To access the replay, parties in the United States and Canada should call +1 (866)-375-1919 and enter conference code 6085965. International parties should call +1 (719)-457-0820 and enter conference code 6085965.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and accompanying tables contain certain non-GAAP financial measures that exclude stock-based compensation and related payroll taxes, and income tax effects of stock-based compensation expense. Non-GAAP financial measures do not have any standardized meaning and our non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies.  Gigamon considers these non-GAAP financial measures important because they provide useful measures of the operating performance of the company, exclusive of unusual events or factors that do not directly affect what we consider core to our operating performance, and are used by the company's management for that purpose. In addition, investors often use similar measures to evaluate the operating performance of a company.  We present non-GAAP financial measures for supplemental informational purposes only to provide additional information in understanding the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP.  Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures attached to this release.

During the conference call to discuss these financial results, Gigamon expects to give guidance for the second quarter of fiscal 2017 on a non-GAAP basis.   Gigamon does not provide reconciliations of its forward-looking non-GAAP financial measures to the corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections with respect to stock-based compensation and related payroll taxes, and income tax effect of stock-based compensation expense, which are excluded from these non-GAAP measures.  In particular, stock-based compensation and related taxes are impacted by future hiring and retention needs, as well as the future fair market value of Gigamon's common stock, all of which is difficult to predict and subject to constant change. The actual amounts of these excluded items will have a significant impact on Gigamon's GAAP net income (loss) per diluted share and GAAP tax provision. Accordingly, reconciliations of Gigamon's forward-looking non-GAAP financial measures to the corresponding GAAP measures are not available without unreasonable effort.

Legal Notice Regarding Forward Looking Statements

This press release contains 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. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, our expectations regarding the future growth of our business and the impact of changes we are making to enable growth. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to deliver and improve our products and successfully develop new products; customer acceptance and purchase of our existing products and new products; our ability to retain existing customers and generate new customers; the market for network traffic visibility solutions not continuing to develop; competition from other products and services; and general market, political, economic and business conditions.  The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the period ended December 31, 2016. The forward-looking statements in this press release are based on information available to Gigamon as of the date hereof, and Gigamon disclaims any obligation to update any forward-looking statements, except as required by law.

Gigamon

Gigamon (NYSE: GIMO) provides active visibility into physical and virtual network traffic, enabling stronger security and superior performance. Gigamon's Visibility Fabric and GigaSECURE®, the industry's first Security Delivery Platform, deliver advanced intelligence so that security, network and application performance management solutions in enterprise, government and service provider networks operate more efficiently and effectively. See more at www.gigamon.com, the Gigamon Blog, or follow Gigamon on Twitter, LinkedIn, or Facebook.

SOURCE Gigamon Inc.