Sphere 3D Reports First Quarter Fiscal Year 2016 Financial Results
May 12 2016 - 4:22PM
Sphere 3D Corp. (NASDAQ:ANY), a containerization,
virtualization, and data management solutions provider, today
reported financial results for its first quarter ended March 31,
2016.
“Sphere 3D is making steady progress toward delivering on its
vision for a complete cloud experience for everyone by deepening
our partnerships with large cloud and virtualization partners,
expanding our certified solutions channel partner program and
continuing to drive innovation across the product portfolio,” said
Eric Kelly, Chairman and CEO of Sphere 3D. “We have increased
the opportunities available to the company, as reflected by the
growth of our sales pipeline, and continue to generate increasing
demand for highly differentiated virtualization, storage, and
hybrid cloud solutions.”
First Quarter 2016 Financial Results:
- Net revenue for the first quarter of 2016 was $19.6 million,
compared to $20.1 million for the first quarter of 2015.
- Product revenue for the first quarter of 2016 was $17.3
million, compared to $17.2 million for the first quarter of 2015.
- Disk systems revenue was $12.2 million, compared to $10.0
million for the first quarter of 2015. Disk systems is
defined as RDX, SnapServer family, V3 virtual desktop
infrastructure, and Glassware derived products.
- Tape archive revenue was $5.1 million, compared to $7.2 million
for the first quarter of 2015.
- Service revenue was $2.3 million, compared to $2.9 million in
the first quarter of 2015.
- Gross margin for the first quarter of 2016 was 30.4%, compared
to 29.6% for the first quarter of 2015. Non-GAAP gross margin
for the first quarter of 2016 was 33.3% compared to 32.7% for the
first quarter of 2015. Our methodology for determining
non-GAAP gross margin, which excludes the effect of intangible
asset amortization from gross profit, is described in the “Use of
GAAP and Non-GAAP Financial Measures” section of this
announcement. See also, “Non-GAAP Reconciliations”
below.
- Operating expenses for the first quarter of 2016 were $13.8
million, compared to $13.6 million for the first quarter of
2015.
- Share-based compensation expense for the first quarter of 2016
was $2.6 million, compared to $0.7 million for the first quarter of
2015. Depreciation and amortization was $1.6 million in the first
quarter of 2016, compared to $2.0 million in the first quarter of
2015.
- Adjusted EBITDA for the first quarter of 2016 was a net loss of
$3.1 million, or a net loss of $0.07 per share, based on 45.7
million weighted average shares outstanding, compared to adjusted
EBITDA net loss of $6.1 million, or net loss of $0.18 per share
based on 35.0 million weighted average shares outstanding for the
first quarter of 2015. Adjusted EBITDA is a non-GAAP measure
presented as net loss before interest expense, income taxes,
depreciation and amortization, share-based compensation and warrant
liability revaluation. For additional information regarding
the non-GAAP financial measures discussed in this release, please
see “Use of GAAP and Non-GAAP Financial Measures” and "Non-GAAP
Reconciliations" below.
- Net loss for the first quarter of 2016 was $8.1 million, or a
net loss of $0.18 per share, compared to a net loss of $9.5
million, or a net loss of $0.27 per share, in the first quarter of
2015.
- Cash and cash equivalents at March 31,
2016 were $5.7 million. At March 31, 2016, the Company
had $15.9 million outstanding under its credit facilities ($10.0
million of which was from a related party) and $19.5 million
outstanding under its convertible note from a related party. In
April 2016, the Company entered into a Credit Agreement with Opus
Bank for a term loan in the amount of $10.0 million and a credit
facility in the amount of $10.0 million. A portion of the
proceeds were used for pay off of the Company’s two credit
facilities in April 2016, which were recorded as current debt at
March 31, 2016, and the remainder of the proceeds will be used for
working capital and general business requirements. These
prior credit facilities were terminated upon repayment of the
outstanding balances. In April 2016, the Company modified its
convertible note with the related party, pursuant to which the
holder made an additional advance of $5.0 million to the Company,
bringing the outstanding balance to $24.5 million.
- The preceding financial results for the first quarter of 2016
include contribution from our purchase of RDX assets from Imation
in August 2015.
The Company also announced today that Mario Biasini has resigned
from the Board of Directors, effective May 11, 2016. Mr.
Biasini has been a Director of Sphere 3D since its incorporation in
2009. The Nominating and Governance Committee of the Board is
actively searching for candidates to replace him on the
Board.
Commenting on the resignation, Mr. Kelly said, “We appreciate
Mario’s contributions over the many years, and wish him well in his
future endeavors."
Use of GAAP and Non-GAAP Financial
Measures:
To supplement Sphere 3D’s consolidated financial statements
presented in accordance with GAAP, the Company uses Adjusted
EBITDA, a non-GAAP financial measure that excludes from the
statement of operations the effects of interest expense, income
taxes, depreciation and amortization, share-based compensation and
warrant liability revaluation. The Company also uses Non-GAAP gross
profit and Non-GAAP gross-margin, non-GAAP financial measures that
exclude the effect of intangible asset amortization. Sphere 3D uses
the above non-GAAP financial measures internally to understand,
manage and evaluate its business. Management believes it is useful
for itself and investors to review, as applicable, both GAAP
information and these non-GAAP measures in order to assess the
performance of continuing operations and for planning and
forecasting in future periods. The presentation of these non-GAAP
measures is intended to provide investors with an understanding of
the Company’s operational results and trends that enables them to
analyze the base financial and operating performance and facilitate
period-to-period comparisons and analysis of operational trends.
Sphere 3D believes the presentation of these non-GAAP financial
measures is useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision-making.
Non-GAAP financial measures should be considered in addition
to results prepared in accordance with GAAP, but should not be
considered substitutes for, or superior to, GAAP results. In
addition, our non-GAAP financial measures may not be comparable to
similarly titled measures utilized by other companies since such
other companies may not calculate such measures in the same manner
as we do.
Investors are encouraged to review the reconciliation of these
non-GAAP financial measures to the most comparable GAAP measures,
which are provided in the attached table after the text of this
release.
Investor Conference Call:
Sphere 3D will host an investor conference call today at 5:00
p.m. EDT (2:00 p.m. PDT) to discuss the Company’s 2016 first
quarter financial results. To access the call, dial (844)
268-1747 (Toll Free) or (918) 559-5655 (International) and give the
participant pass code 5100291. Participants are asked to call
the assigned number approximately 10 minutes before the conference
call begins. In addition, a live and archived webcast of the
conference call will be available at www.sphere3d.com in the
Investor Relations section. A replay of the conference call
will also be available via telephone by dialing (855) 859-2056
(Toll Free U.S. and Canada) or +1 (404) 537-3406 (International)
and entering replay access code 5100291. The replay will be
available beginning approximately two hours after the call and will
remain available for one week.
About Sphere 3DSphere 3D Corp. (NASDAQ:ANY)
delivers containerization and virtualization technologies along
with data management products that enable workload-optimized
solutions. We achieve this through a combination of containerized
applications, virtual desktops, virtual storage and physical
hyper-converged platforms. Sphere 3D’s value proposition is simple
and direct—we allow organizations to deploy a combination of
public, private or hybrid cloud strategies while backing them up
with state of the art storage solutions. Sphere 3D, along
with its wholly-owned subsidiaries Overland Storage and Tandberg
Data, has a strong portfolio of brands including Glassware 2.0™,
SnapCLOUD™, SnapScale®, SnapServer®, V3®, RDX®, and NEO®. For
more information, visit www.sphere3d.com.
Safe Harbor Statement This
press release contains forward-looking statements that involve
risks, uncertainties, and assumptions that are difficult to
predict. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking
statements as a result of risks and uncertainties including,
without limitation, unforeseen changes in the course of Sphere 3D’s
business or the business of its wholly-owned subsidiaries,
including, without limitation, Overland Storage and Tandberg Data;
our inability to comply with the covenants in our credit facilities
or to obtain additional debt or equity financing; any increase in
our future cash needs; market adoption and performance of our
products; the level of success of our collaborations and business
partnerships; possible actions by customers, partners, suppliers,
competitors or regulatory authorities; and other risks detailed
from time to time in Sphere 3D’s periodic reports contained in our
Annual Information Form and other filings with Canadian securities
regulators (www.sedar.com) and in prior periodic reports filed with
the United States Securities and Exchange Commission (www.sec.gov).
Sphere 3D undertakes no obligation to update any forward-looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise, except as required by law.
SPHERE 3D
CORP. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(In thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
March 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
Net
revenue |
|
$ |
19,619 |
|
|
$ |
20,098 |
|
Cost of
revenue |
|
|
13,663 |
|
|
|
14,157 |
|
Gross
profit |
|
|
5,956 |
|
|
|
5,941 |
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
Sales and marketing |
|
|
6,053 |
|
|
|
5,614 |
|
|
Research and development |
|
|
2,442 |
|
|
|
2,190 |
|
|
General and
administrative |
|
|
5,311 |
|
|
|
5,793 |
|
|
|
|
|
13,806 |
|
|
|
13,597 |
|
Loss from
operations |
|
|
(7,850 |
) |
|
|
(7,656 |
) |
|
Interest expense - related
party |
|
|
(928 |
) |
|
|
(541 |
) |
|
Interest expense |
|
|
(112 |
) |
|
|
(78 |
) |
|
Other income (expense), net |
|
|
959 |
|
|
|
(1,214 |
) |
Loss before
income taxes |
|
|
(7,931 |
) |
|
|
(9,489 |
) |
Provision
for income taxes |
|
|
138 |
|
|
|
53 |
|
Net
loss |
|
$ |
(8,069 |
) |
|
$ |
(9,542 |
) |
|
|
|
|
|
|
Net loss
per share: |
|
|
|
|
|
Basic and diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.27 |
) |
|
|
|
|
|
|
Shares used
in computing |
|
|
|
|
net loss per
share: |
|
|
|
|
|
Basic and diluted |
|
|
45,748 |
|
|
|
35,003 |
|
|
|
|
|
|
|
SPHERE 3D
CORP. |
SELECTED BALANCE SHEETS
INFORMATION |
(In
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
ASSETS |
|
|
|
|
Cash and
cash equivalents |
|
$ |
5,679 |
|
|
$ |
8,661 |
|
Accounts
receivable |
|
|
12,342 |
|
|
|
13,401 |
|
Inventories |
|
|
11,430 |
|
|
|
11,326 |
|
Other
current assets |
|
|
3,025 |
|
|
|
3,155 |
|
|
Total current
assets |
|
|
32,476 |
|
|
|
36,543 |
|
Property
and equipment, net |
|
|
3,919 |
|
|
|
3,972 |
|
Intangible
assets, net |
|
|
52,996 |
|
|
|
54,019 |
|
Goodwill |
|
|
44,132 |
|
|
|
44,132 |
|
Other
assets |
|
|
429 |
|
|
|
445 |
|
|
Total assets |
|
$ |
133,952 |
|
|
$ |
139,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Current
liabilities |
|
$ |
43,018 |
|
|
$ |
46,397 |
|
Long-term
debt — related party, net |
|
|
19,036 |
|
|
|
19,500 |
|
Long-term
deferred tax liabilities |
|
|
2,759 |
|
|
|
2,755 |
|
Other
long-term liabilities |
|
|
2,159 |
|
|
|
2,319 |
|
Shareholders' equity |
|
|
66,980 |
|
|
|
68,140 |
|
|
Total liabilities and
equity |
|
$ |
133,952 |
|
|
$ |
139,111 |
|
|
|
|
|
|
|
SPHERE 3D
CORP. |
NON-GAAP
RECONCILIATIONS |
(In thousands except per
share data) |
|
|
|
|
|
|
|
Three Months
Ended |
|
|
March 31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
Revenue |
|
$ |
19,619 |
|
|
$ |
20,098 |
|
|
|
|
|
|
Gross Profit -
GAAP |
|
$ |
5,956 |
|
|
$ |
5,941 |
|
Intangible asset
amortization |
|
|
584 |
|
|
|
632 |
|
Gross Profit -
Non-GAAP |
|
$ |
6,540 |
|
|
$ |
6,573 |
|
|
|
|
|
|
Gross Margin
Percentages |
|
|
|
|
GAAP |
|
|
30.4 |
% |
|
|
29.6 |
% |
Non-GAAP |
|
|
33.3 |
% |
|
|
32.7 |
% |
|
|
|
|
|
Net loss |
|
$ |
(8,069 |
) |
|
$ |
(9,542 |
) |
Less: |
|
|
|
|
Interest |
|
|
1,040 |
|
|
|
619 |
|
Tax |
|
|
138 |
|
|
|
53 |
|
Depreciation and
amortization |
|
|
1,576 |
|
|
|
1,992 |
|
Share-based compensation |
|
|
2,562 |
|
|
|
735 |
|
Warrant revaluation gain |
|
|
(326 |
) |
|
|
- |
|
Adjusted EBITDA |
|
$ |
(3,079 |
) |
|
$ |
(6,143 |
) |
|
|
|
|
|
Net loss per share: |
|
|
|
|
Basic and diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.27 |
) |
|
|
|
|
|
Adjusted EBITDA per share: |
|
|
|
|
Basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.18 |
) |
|
|
|
|
|
Shares used in computing |
|
|
|
|
net loss and adjusted EBITDA per
share: |
|
|
|
|
Basic and diluted |
|
|
45,748 |
|
|
|
35,003 |
|
|
Non-GAAP Financial Measures: To
supplement Sphere 3D’s consolidated financial statements presented
in accordance with GAAP, the Company uses non-GAAP financial
measures that exclude from the statement of operations the effects
of interest expense, income taxes, depreciation and amortization,
share-based compensation, and warrant revaluation gain. These
non-GAAP financial measures are non-GAAP gross margin, non-GAAP
gross profit and adjusted EBITDA. Sphere 3D uses the above non-GAAP
financial measures internally to understand, manage and evaluate
the business. Management believes it is useful for itself and
investors to review, as applicable, both GAAP information and the
non-GAAP measures in order to assess the performance of continuing
operations and for planning and forecasting in future periods. The
presentation of these non-GAAP measures is intended to provide
investors with an understanding of the Company’s operational
results and trends that enables them to analyze the base financial
and operating performance and facilitate period-to-period
comparisons and analysis of operational trends. Sphere 3D believes
the presentation of these non-GAAP financial measures is useful to
investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and
operational decision-making. Non-GAAP financial measures should be
considered in addition to results prepared in accordance with GAAP,
but should not be considered substitutes for or superior to GAAP
results. In addition, our non-GAAP financial measures may not be
comparable to similarly titled measures utilized by other companies
since such other companies may not calculate such measures in the
same manner as we do.
Investor Contact:
The Blueshirt Group
Mike Bishop
Tel: +1 415-217-4968
mike@blueshirtgroup.com
Sphere 3D (NASDAQ:ANY)
Historical Stock Chart
From Mar 2024 to Apr 2024
Sphere 3D (NASDAQ:ANY)
Historical Stock Chart
From Apr 2023 to Apr 2024