WESTFORD, Mass., April 26, 2017 /PRNewswire/ -- Sonus
Networks, Inc. (Nasdaq: SONS), a global leader in secure and
intelligent cloud communications, today announced results for the
first quarter ended March 31,
2017.
"We are pleased with our first quarter 2017 financial results,
which were slightly better than our previously provided guidance,"
said Ray Dolan, president and chief
executive officer. "We continue to make good progress on our
technology investments, with many new products released this past
quarter coupled with several strategic customer wins."
"Unlike many of our competitors, Sonus Networks is investing in
the real-time communications security market, catering to both
service providers and enterprises. We believe that this focus
will result in a unique security offering, which leverages our deep
experience in SIP," continued Dolan.
Financial Highlights
The following table summarizes
the consolidated first quarter financial results (in millions,
except per share amounts):
|
Quarter
Ended
|
|
March 31,
2017
|
March 31,
2016
|
Product
revenue
|
$25.4
|
$34.8
|
Service
revenue
|
$28.0
|
$24.4
|
Total
revenue
|
$53.4
|
$59.2
|
GAAP gross
margin
|
63.2%
|
64.9%
|
Non-GAAP gross
margin1
|
67.0%
|
68.4%
|
GAAP loss from
operations as a % of revenue
|
(20.2)%
|
(6.6)%
|
Non-GAAP (loss)
income from operations as a % of revenue1
|
(8.7)%
|
4.2%
|
GAAP loss per
share
|
$(0.22)
|
$(0.09)
|
Non-GAAP (loss) per
share or diluted income per share1
|
$(0.09)
|
$0.03
|
- Cash and investments were $128.8
million at the end of the first quarter 2017, compared to
$126.1 million at the end of the
fourth quarter of 2016.
1 Please
see the reconciliation of non-GAAP and GAAP financial measures in
the press release appendix.
|
Technology and Customer Highlights
- Introduced Sonus Session Border Controller Software edition
Lite (SBC SWe Lite). Sonus' newest SBC is optimized for small
and mid-sized businesses (SMBs), providing a virtual Customer
Premise Equipment (vCPE) option for security and interworking of
Skype for Business and other Unified Communications (UC)
deployments that require an optimized, small resource
footprint.
- Introduced a cloud-native version of its Diameter Signaling
Controller Software edition (DSC SWe). The cloud-native DSC
SWe provides signaling for both Diameter and SS7 STP deployments,
enabling an easy transition from hardware-based signaling equipment
to modernized network function virtualization (NFV)
architectures.
- Introduced a new addition to its mobility suite: LTE Calling.
This new capability is offered in conjunction with Sonus' Mobile
Client, Virtual Mobile Core and SBC SWe, allowing Mobile Network
Operators (MNOs) and Mobile Virtual Network Operators (MVNOs) to
decrease costs and increase subscriber satisfaction.
- Telegate, a leading telecom solutions provider in
Asia-Pacific region, selected the
Sonus SBC SWe to secure and control its peering network.
- Korea Telecom, the largest tier one service provider in
South Korea, selected the DSC 8000
as the foundation for its signaling network.
Partnership Highlights
- Sonus and Palo Alto Networks teamed together to deliver
advanced mobile network protections from cyber threats targeting
rich communication services. The new architecture is designed to
mitigate the impacts of rogue endpoint devices and erroneous IP
traffic crossing 4G-LTE mobile networks.
- Sonus is now partnering with Substentio to offer a cloud based
Lawful Intercept Solution.
Management Comments and Outlook
"We had the third
consecutive quarter of a book-to-bill ratio of greater than one,
and maintain a healthy revenue backlog. We expect our first
half 2017 revenue will be approximately $107
million, with approximately $54
million in our second quarter. We expect a GAAP loss
per share of $0.25 and a non-GAAP
loss per share of $0.101
in our second quarter," said Dolan.
Dolan continued, "Looking forward to fiscal 2017, we maintain
our previously provided guidance of flat to low single digit
revenue growth as compared to fiscal 2016. We expect a GAAP
loss per share of $0.25 and maintain
our outlook for non-GAAP diluted earnings per share of $0.261 for fiscal 2017."
Susan Villare, interim chief
financial officer, commented, "In our first quarter of 2017, we
exceeded our February 2017 guidance
for both revenue and EPS. Our flagship SBC 7000 and SBC 5000
both performed well, and product revenue from these products was
$12.9 million in the first quarter of
2017, compared to $12.5 million in
our fourth quarter of 2016. We generated $3.6 million of cash from operating activities in
our first quarter of 2017 and ended the quarter with cash and
investments of $128.8 million."
1 Please
see the reconciliation of non-GAAP and GAAP financial measures in
the press release appendix.
|
Stock Buyback Program
Since the inception of the stock
buyback program in July 2013, the
Company has repurchased a total of 6.6 million shares at an average
price of $14.32, for a total of
$94.6 million as of March 31, 2017. As of March 31, 2017, there were 49.3 million shares of
the Company's common stock outstanding. Under the current
stock buyback program, the Company is authorized to repurchase up
to an additional $5.4 million of the
Company's common stock. The Company did not repurchase any shares
in the first quarter of 2017.
Conference Call Details
Date: April 26, 2017
Time: 8:30 a.m. (ET)
Dial-in number: 800-677-8143
International Callers: +1-303-223-4389
The Company will offer a live, listen-only webcast of the
conference call via the Sonus Networks Investor website at
http://investors.sonusnet.com/events.cfm where supporting
materials, including a presentation and supplemental financial and
operational data, have been posted.
Replay Information
An archived version of the
broadcast will be available on the Sonus Networks Investor website
shortly after the conclusion of the live event. A telephone
playback of the call will be available following the conference
call until May 10, 2017 and can be
accessed by calling 800-633-8284 or +1-402-977-9140 for
international callers. The reservation number for the replay is
21848629.
About Sonus Networks
Sonus brings intelligence and
security to real-time communications. By helping the world
embrace the next generation of cloud-based SIP and 4G/LTE
solutions, Sonus enables and secures latency-sensitive, mission
critical traffic for VoIP, video, instant messaging and online
collaboration. With Sonus, enterprises can give priority to
real-time communications based on smart business rules while
service providers can offer reliable, comprehensive and secure
on-demand network services to their customers. With solutions
deployed in more than 100 countries and nearly two decades of
experience, Sonus offers a complete portfolio of hardware-based and
virtualized session border controllers (SBCs), diameter signaling
controllers (DSCs), policy/routing servers, network intelligence
applications, media and signaling gateways and network analytics
tools. For more information, visit www.sonus.net or call
1-855-GO-SONUS.
Important Information Regarding Forward-Looking
Statements
This press release contains "forward-looking
statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995, which are subject to a number of
risks and uncertainties. All statements other than statements
of historical facts contained in this release, including statements
made by our executive officers in the introductory paragraph and
the section "Management Comments and Outlook", statements in the
sections "Technology and Customer Highlights" and "Partnership
Highlights" and statements regarding our future results of
operations and financial position, business strategy, strategic
position, plans and objectives of management for future operations
and plans for future product development and manufacturing are
forward-looking statements. Without limiting the foregoing,
the words "anticipates", "believes", "could", "estimates",
"expects", "expectations", "intends", "may", "plans", "seeks",
"projects" and other similar language, whether in the negative or
affirmative, are intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words.
Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other
future conditions. Because forward-looking statements relate
to the future, they are subject to inherent uncertainties, risks
and changes in circumstances that are difficult to predict.
Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of various factors,
including, but not limited to, the timing of customer purchasing
decisions and our recognition of revenues; economic conditions; our
ability to recruit and retain key personnel; difficulties
supporting our strategic focus on channel sales; difficulties
retaining and expanding our customer base; difficulties leveraging
market opportunities; the impact of restructuring and
cost-containment activities; our ability to realize benefits from
the acquisitions that we have completed; the effects of disruption
from the acquisitions that we have completed, making it more
difficult to maintain relationships with employees, customers,
business partners or government entities; the success implementing
the integration strategies with respect to the acquisitions that we
have completed; litigation; actions taken by significant
stockholders; difficulties providing solutions that meet the needs
of customers; market acceptance of our products and services; rapid
technological and market change; our ability to protect our
intellectual property rights; our ability to maintain partner,
reseller, distribution and vendor support and supply relationships;
higher risks in international operations and markets; the impact of
increased competition; currency fluctuations; changes in the market
price of our common stock; and/or failure or circumvention of our
controls and procedures. These statements involve known and
unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. We
therefore caution you against relying on any of these
forward-looking statements. Important factors that could
cause actual results to differ materially from those in these
forward-looking statements are discussed in Part I, Item 1A. "Risk
Factors", Part II, Item 7. "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Part II, Item 7A
"Quantitative and Qualitative Disclosures About Market Risk" in the
Company's most recent Annual Report on Form 10-K. Any
forward-looking statement made by us in this release speaks only as
of the date of this release. Factors or events that could
cause our actual results to differ may emerge from time to time,
and it is not possible for us to predict all of them. We
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as may be required by law.
Sonus is a registered trademark of Sonus Networks, Inc.
All other Company and product names may be trademarks of the
respective companies with which they are associated.
Discussion of Non-GAAP Financial Measures
Sonus
management uses several different financial measures, both GAAP and
non-GAAP, in analyzing and assessing the overall performance of the
business, making operating decisions, planning and forecasting
future periods, and determining payments under compensation
programs. Our annual financial plan is prepared both on a
GAAP and non-GAAP basis, and the non-GAAP annual financial plan is
approved by our board of directors. Continuous budgeting and
forecasting for revenue and expenses are conducted on a non-GAAP
basis (in addition to GAAP) and actual results on a non-GAAP basis
are assessed against the annual financial plan. We consider
the use of non-GAAP financial measures helpful in assessing the
core performance of our continuing operations and liquidity, and
when planning and forecasting future periods. By continuing
operations, we mean the ongoing results of the business excluding
certain expenses and credits, including, but not limited to:
stock-based compensation, amortization of intangible assets,
acquisition-related expense, restructuring, certain gains and
losses included in other income (expense) and deferred income tax
adjustments. We consider the use of non-GAAP earnings (loss)
per share helpful in assessing the performance of the continuing
operations of our business. While our management uses
non-GAAP financial measures as a tool to enhance their
understanding of certain aspects of our financial performance, our
management does not consider these measures to be a substitute for,
or superior to, GAAP measures. In addition, our presentations
of these measures may not be comparable to similarly titled
measures used by other companies. These non-GAAP financial
measures should not be considered alternatives for, or in isolation
from, the financial information prepared and presented in
accordance with GAAP.
Investors are cautioned that there are material limitations
associated with the use of non-GAAP financial measures as an
analytical tool. In particular, many of the adjustments to
Sonus' financial measures reflect the exclusion of items that are
recurring and will be reflected in our financial results for the
foreseeable future.
Stock-based compensation is different from other forms of
compensation, as it is a non-cash expense. For example, a
cash salary generally has a fixed and unvarying cash cost. In
contrast, the expense associated with an equity-based award is
generally unrelated to the amount of cash ultimately received by
the employee, and the cost to us is based on a stock-based
compensation valuation methodology and underlying assumptions that
may vary over time. We believe that excluding non-cash
stock-based compensation expense from our operating results
facilitates the comparison of our financial statements to our
historical operating results and to other companies in our
industry.
We exclude the amortization of acquired intangible assets from
non-GAAP expense and income measures. These amortization
amounts are inconsistent in frequency and amount and are
significantly impacted by the timing and size of
acquisitions. Although we exclude amortization of acquired
intangible assets from our non-GAAP expenses, we believe that it is
important for investors to understand that intangible assets
contribute to revenue generation. We believe that excluding
the non-cash amortization of intangible assets facilitates the
comparison of our financial results to our historical operating
results and to other companies in our industry as if the acquired
intangible assets had been developed internally rather than
acquired.
We consider certain transition, integration and other
acquisition-related costs to be unpredictable and dependent on a
significant number of factors that may be outside of our
control. We do not consider these acquisition-related costs
to be related to the continuing operations of the acquired business
or the Company. In addition, the size, complexity and/or
volume of an acquisition, which often drives the magnitude of
acquisition-related costs, may not be indicative of such future
costs. We believe that excluding acquisition-related costs
facilitates the comparison of our financial results to our
historical operating results and to other companies in our
industry.
We have recorded restructuring expense to streamline operations
and reduce operating costs by closing and consolidating certain
facilities and reducing our worldwide workforce.
Additionally, as previously announced, we expect to record
restructuring expense in connection with new restructuring
initiatives over the next twelve months. We review our
restructuring accruals regularly and record adjustments (both
expense and credits) to these estimates as required. We
believe that excluding restructuring expense and credits
facilitates the comparison of our financial results to our
historical operating results and to other companies in our
industry, as there are no future revenue streams or other benefits
associated with these costs.
In December 2016, we sold a block
of IP addresses that we had acquired in connection with our
acquisition of Performance Technologies, Incorporated and
recognized a gain, net of commission and fees, of $0.5 million. This amount is included as a
component of Other income, net, in the three months ended
December 31, 2016. We expect to
complete the sale of IP address blocks in the second half of 2017
and, accordingly, have included a gain of $0.6 million in our outlook for the full year
2017. We believe that such gains are not part of our core
business or ongoing operations. Accordingly, we believe that
excluding the other income arising from these sales facilitates the
comparison of our financial results to our historical results and
to other companies in our industry.
We anticipate that we will reverse $0.7
million of deferred tax assets related to net operating loss
carryforwards for our subsidiary in Canada based on positive earnings evidence in
the subsidiary over a consecutive three-year period. This
adjustment will result in an income tax credit and reduce our
provision in the reversal period. We believe that such
adjustments are not part of our core business or ongoing
operations. Accordingly, we believe that excluding the income
tax credit arising from the reversal of the deferred tax assets
facilitates the comparison of our financial results to our
historical results and to other companies in our industry.
We believe that providing non-GAAP information to investors, in
addition to the GAAP presentation, will allow investors to view the
financial results in the way management views the operating
results. We further believe that providing this information
helps investors to better understand our financial performance and
evaluate the efficacy of the methodology and information used by
our management to evaluate and measure such performance.
For more information
Sara
Leggat
(978) 614-8841
sleggat@sonusnet.com
SONUS NETWORKS,
INC.
|
Condensed
Consolidated Statements of Operations
|
(in thousands, except
percentages and per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
March 31,
|
|
December
31,
|
|
March 31,
|
|
|
|
|
2017
|
|
2016
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
Product
|
$
25,395
|
|
$
37,662
|
|
$
34,769
|
|
Service
|
27,973
|
|
29,910
|
|
24,382
|
|
|
Total
revenue
|
53,368
|
|
67,572
|
|
59,151
|
|
|
|
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
|
|
Product
|
9,753
|
|
12,137
|
|
11,536
|
|
Service
|
9,867
|
|
10,041
|
|
9,212
|
|
|
Total cost of
revenue
|
19,620
|
|
22,178
|
|
20,748
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
33,748
|
|
45,394
|
|
38,403
|
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
Product
|
61.6%
|
|
67.8%
|
|
66.8%
|
|
Service
|
64.7%
|
|
66.4%
|
|
62.2%
|
|
|
Total gross
margin
|
63.2%
|
|
67.2%
|
|
64.9%
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Research and
development
|
20,209
|
|
19,836
|
|
17,318
|
|
Sales and
marketing
|
14,676
|
|
17,649
|
|
16,595
|
|
General and
administrative
|
9,019
|
|
9,292
|
|
8,371
|
|
Acquisition-related
|
56
|
|
201
|
|
-
|
|
Restructuring
|
570
|
|
1,120
|
|
-
|
|
|
Total operating
expenses
|
44,530
|
|
48,098
|
|
42,284
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(10,782)
|
|
(2,704)
|
|
(3,881)
|
Interest income,
net
|
258
|
|
179
|
|
164
|
Other income,
net
|
1
|
|
508
|
|
103
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(10,523)
|
|
(2,017)
|
|
(3,614)
|
Income tax
provision
|
(123)
|
|
(614)
|
|
(1,040)
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
(10,646)
|
|
$
(2,631)
|
|
$
(4,654)
|
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
Basic
|
|
$
(0.22)
|
|
$
(0.05)
|
|
$
(0.09)
|
|
Diluted
|
$
(0.22)
|
|
$
(0.05)
|
|
$
(0.09)
|
|
|
|
|
|
|
|
|
|
Shares used to
compute loss per share:
|
|
|
|
|
|
|
Basic
|
|
49,114
|
|
49,232
|
|
49,484
|
|
Diluted
|
49,114
|
|
49,232
|
|
49,484
|
SONUS NETWORKS,
INC.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
|
2017
|
|
2016
|
Assets
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
31,931
|
|
$
31,923
|
|
Short-term
investments
|
59,680
|
|
61,836
|
|
Accounts receivable,
net
|
39,616
|
|
53,862
|
|
Inventory
|
17,671
|
|
18,283
|
|
Other current
assets
|
12,988
|
|
12,010
|
|
|
Total current
assets
|
161,886
|
|
177,914
|
|
|
|
|
|
|
|
Property and
equipment, net
|
10,954
|
|
11,741
|
Intangible assets,
net
|
27,938
|
|
30,197
|
Goodwill
|
|
49,891
|
|
49,393
|
Investments
|
37,193
|
|
32,371
|
Deferred income
taxes
|
1,578
|
|
1,542
|
Other
assets
|
4,914
|
|
4,901
|
|
|
|
|
$
294,354
|
|
$
308,059
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
5,988
|
|
$
6,525
|
|
Accrued
expenses
|
15,786
|
|
25,886
|
|
Current portion of
deferred revenue
|
46,430
|
|
43,504
|
|
Current portion of
long-term liabilities
|
1,172
|
|
1,154
|
|
|
Total current
liabilities
|
69,376
|
|
77,069
|
|
|
|
|
|
|
|
Deferred
revenue
|
8,142
|
|
7,188
|
Deferred income
taxes
|
3,255
|
|
3,047
|
Other long-term
liabilities
|
1,566
|
|
1,633
|
|
|
|
Total
liabilities
|
82,339
|
|
88,937
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
Stockholders
equity
|
|
|
|
|
Common
stock
|
49
|
|
49
|
|
Additional paid-in
capital
|
1,254,155
|
|
1,250,744
|
|
Accumulated
deficit
|
(1,047,820)
|
|
(1,037,174)
|
|
Accumulated other
comprehensive income
|
5,631
|
|
5,503
|
|
|
|
Total stockholders'
equity
|
212,015
|
|
219,122
|
|
|
|
|
$
294,354
|
|
$
308,059
|
SONUS NETWORKS,
INC.
|
Condensed
Consolidated Statements of Cash Flows
|
(in
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
|
$
(10,646)
|
|
$
(4,654)
|
|
Adjustments to
reconcile net loss to cash flows provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization of property and equipment
|
1,823
|
|
1,981
|
|
|
Amortization of
intangible assets
|
2,259
|
|
1,946
|
|
|
Stock-based
compensation
|
3,263
|
|
4,415
|
|
|
Loss on disposal of
property and equipment
|
-
|
|
14
|
|
|
Deferred income
taxes
|
238
|
|
418
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
14,324
|
|
17,267
|
|
|
|
Inventory
|
315
|
|
(1,237)
|
|
|
|
Other operating
assets
|
(405)
|
|
(3,531)
|
|
|
|
Accounts
payable
|
(651)
|
|
(1,592)
|
|
|
|
Accrued expenses and
other long-term liabilities
|
(10,530)
|
|
(13,855)
|
|
|
|
Deferred
revenue
|
3,614
|
|
2,142
|
|
|
|
|
Net cash provided by
operating activities
|
3,604
|
|
3,314
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of property
and equipment
|
(998)
|
|
(952)
|
|
Business
acquisitions, net of cash acquired
|
-
|
|
(750)
|
|
Purchases of
marketable securities
|
(18,632)
|
|
(29,574)
|
|
Sale/maturities of
marketable securities
|
15,693
|
|
21,867
|
|
|
|
|
Net cash used in
investing activities
|
(3,937)
|
|
(9,409)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from sale of
common stock in connection with employee stock purchase
plan
|
593
|
|
632
|
|
Proceeds from
exercise of stock options
|
51
|
|
5
|
|
Payment of tax
withholding obligations related to net share settlements of
restricted stock awards
|
(496)
|
|
(786)
|
|
Repurchase of common
stock
|
-
|
|
(1,456)
|
|
Principal payments of
capital lease obligations
|
(10)
|
|
(14)
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
138
|
|
(1,619)
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
203
|
|
252
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
8
|
|
(7,462)
|
Cash and cash
equivalents, beginning of year
|
31,923
|
|
50,111
|
Cash and cash
equivalents, end of year
|
$
31,931
|
|
$
42,649
|
SONUS NETWORKS,
INC.
|
Supplemental
Information
|
(In
thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables
provide the details of stock-based compensation, amortization of
intangible assets, and the gain on the sale of IP address blocks
included in the Company's Statements of Operations and the line
items in which these amounts are reported.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
March 31,
|
|
December
31,
|
|
March 31,
|
|
|
|
|
2017
|
|
2016
|
|
2016
|
Stock-based
compensation
|
|
|
|
|
|
|
Cost of revenue -
product
|
$
99
|
|
$
100
|
|
$
71
|
|
Cost of revenue -
service
|
317
|
|
329
|
|
332
|
|
|
Cost of
revenue
|
416
|
|
429
|
|
403
|
|
|
|
|
|
|
|
|
|
|
Research and
development expense
|
1,317
|
|
1,327
|
|
1,179
|
|
Sales and marketing
expense
|
(88)
|
|
917
|
|
1,020
|
|
General and
administrative expense
|
1,618
|
|
1,631
|
|
1,813
|
|
|
Operating
expense
|
2,847
|
|
3,875
|
|
4,012
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based
compensation
|
$
3,263
|
|
$
4,304
|
|
$
4,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
|
|
|
|
|
|
Cost of revenue -
product
|
$
1,566
|
|
$
1,501
|
|
$
1,627
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expense
|
693
|
|
506
|
|
319
|
|
|
Operating
expense
|
693
|
|
506
|
|
319
|
|
|
|
|
|
|
|
|
|
|
|
|
Total amortization of
intangible assets
|
$
2,259
|
|
$
2,007
|
|
$
1,946
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of IP
address blocks
|
|
|
|
|
|
|
Other income,
net
|
$
-
|
|
$
498
|
|
$
-
|
SONUS NETWORKS,
INC.
|
Reconciliation of
Non-GAAP and GAAP Financial Measures - Historical
|
(in thousands, except
percentages and per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
Three months
ended
|
|
March 31,
|
|
December
31,
|
|
March 31,
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
|
|
|
GAAP gross margin
- product
|
61.6%
|
|
67.8%
|
|
66.8%
|
Stock-based
compensation expense
|
0.4%
|
|
0.3%
|
|
0.2%
|
Amortization of
intangible assets
|
6.2%
|
|
3.9%
|
|
4.7%
|
Non-GAAP gross
margin - product
|
68.2%
|
|
72.0%
|
|
71.7%
|
|
|
|
|
|
|
GAAP gross margin
- service
|
64.7%
|
|
66.4%
|
|
62.2%
|
Stock-based
compensation expense
|
1.2%
|
|
1.1%
|
|
1.4%
|
Non-GAAP gross
margin - service
|
65.9%
|
|
67.5%
|
|
63.6%
|
|
|
|
|
|
|
GAAP total gross
margin
|
63.2%
|
|
67.2%
|
|
64.9%
|
Stock-based
compensation expense
|
0.8%
|
|
0.6%
|
|
0.7%
|
Amortization of
intangible assets
|
3.0%
|
|
2.2%
|
|
2.8%
|
Non-GAAP total
gross margin
|
67.0%
|
|
70.0%
|
|
68.4%
|
|
|
|
|
|
|
GAAP total gross
profit
|
$
33,748
|
|
$
45,394
|
|
$
38,403
|
Stock-based
compensation expense
|
416
|
|
429
|
|
403
|
Amortization of
intangible assets
|
1,566
|
|
1,501
|
|
1,627
|
Non-GAAP total
gross profit
|
$
35,730
|
|
$
47,324
|
|
$
40,433
|
|
|
|
|
|
|
GAAP research and
development expense
|
$
20,209
|
|
$
19,836
|
|
$
17,318
|
Stock-based
compensation expense
|
(1,317)
|
|
(1,327)
|
|
(1,179)
|
Non-GAAP research
and development expense
|
$
18,892
|
|
$
18,509
|
|
$
16,139
|
|
|
|
|
|
|
GAAP sales and
marketing expense
|
$
14,676
|
|
$
17,649
|
|
$
16,595
|
Stock-based
compensation expense
|
88
|
|
(917)
|
|
(1,020)
|
Amortization of
intangible assets
|
(693)
|
|
(506)
|
|
(319)
|
Non-GAAP sales and
marketing expense
|
$
14,071
|
|
$
16,226
|
|
$
15,256
|
|
|
|
|
|
|
GAAP general and
administrative expense
|
$
9,019
|
|
$
9,292
|
|
$
8,371
|
Stock-based
compensation expense
|
(1,618)
|
|
(1,631)
|
|
(1,813)
|
Non-GAAP general
and administrative expense
|
$
7,401
|
|
$
7,661
|
|
$
6,558
|
|
|
|
|
|
|
GAAP operating
expenses
|
$
44,530
|
|
$
48,098
|
|
$
42,284
|
Stock-based
compensation expense
|
(2,847)
|
|
(3,875)
|
|
(4,012)
|
Amortization of
intangible assets
|
(693)
|
|
(506)
|
|
(319)
|
Acquisition-related
expense
|
(56)
|
|
(201)
|
|
-
|
Restructuring
|
(570)
|
|
(1,120)
|
|
-
|
Non-GAAP operating
expenses
|
$
40,364
|
|
$
42,396
|
|
$
37,953
|
|
|
|
|
|
|
GAAP loss from
operations
|
$
(10,782)
|
|
$
(2,704)
|
|
$
(3,881)
|
Stock-based
compensation expense
|
3,263
|
|
4,304
|
|
4,415
|
Amortization of
intangible assets
|
2,259
|
|
2,007
|
|
1,946
|
Acquisition-related
expense
|
56
|
|
201
|
|
-
|
Restructuring
|
570
|
|
1,120
|
|
-
|
Non-GAAP income
(loss) from operations
|
$
(4,634)
|
|
$
4,928
|
|
$
2,480
|
|
|
|
|
|
|
GAAP loss from
operations as a percentage of revenue
|
-20.2%
|
|
-4.0%
|
|
-6.6%
|
Stock-based
compensation expense
|
6.1%
|
|
6.3%
|
|
7.5%
|
Amortization of
intangible assets
|
4.2%
|
|
3.0%
|
|
3.3%
|
Acquisition-related
expense
|
0.1%
|
|
0.3%
|
|
0.0%
|
Restructuring
|
1.1%
|
|
1.7%
|
|
0.0%
|
Non-GAAP income
(loss) from operations as a percentage of revenue
|
-8.7%
|
|
7.3%
|
|
4.2%
|
|
|
|
|
|
|
GAAP net
loss
|
$
(10,646)
|
|
$
(2,631)
|
|
$
(4,654)
|
Stock-based
compensation expense
|
3,263
|
|
4,304
|
|
4,415
|
Amortization of
intangible assets
|
2,259
|
|
2,007
|
|
1,946
|
Acquisition-related
expense
|
56
|
|
201
|
|
-
|
Restructuring
|
570
|
|
1,120
|
|
-
|
Gain on sale of IP
address blocks
|
-
|
|
(498)
|
|
-
|
Non-GAAP net
income (loss)
|
$
(4,498)
|
|
$
4,503
|
|
$
1,707
|
|
|
|
|
|
|
Diluted earnings
per share or (loss) per share
|
|
|
|
|
|
GAAP loss per
share
|
$
(0.22)
|
|
$
(0.05)
|
|
$
(0.09)
|
Stock-based
compensation expense
|
0.07
|
|
0.09
|
|
0.08
|
Amortization of
intangible assets
|
0.05
|
|
0.04
|
|
0.04
|
Acquisition-related
expense
|
*
|
|
*
|
|
-
|
Restructuring
|
0.01
|
|
0.02
|
|
-
|
Gain on sale of IP
address blocks
|
-
|
|
(0.01)
|
|
-
|
Non-GAAP diluted
earnings (loss) per share
|
$
(0.09)
|
|
$
0.09
|
|
$
0.03
|
|
|
|
|
|
|
Shares used to
compute diluted earnings per share or (loss) per
share
|
|
|
|
|
|
GAAP
shares used to compute loss per share
|
49,114
|
|
49,232
|
|
49,484
|
Non-GAAP shares used to compute diluted earnings per share or
(loss) per share
|
49,114
|
|
49,522
|
|
49,685
|
|
|
|
|
|
|
* Less than
$0.1 impact on earnings (loss) per share
|
|
|
|
|
|
SONUS NETWORKS,
INC.
|
Reconciliation
of Non-GAAP and GAAP Financial Measures
|
Outlook - Q2
and FY 2017
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ending
|
|
|
June 30,
2017
|
Earnings (loss)
per share
|
|
|
GAAP loss per
share
|
$
(0.25)
|
|
Stock-based
compensation expense
|
0.08
|
|
Amortization of
intangible assets
|
0.05
|
|
Restructuring
|
0.03
|
|
Sale of IP address
blocks
|
(0.01)
|
|
Non-GAAP
outlook
|
$
(0.10)
|
|
|
|
|
|
|
|
|
Year
ending
|
|
|
December 31,
2017
|
Earnings (loss)
per share
|
|
|
GAAP loss per
share
|
$
(0.25)
|
|
Stock-based
compensation expense
|
0.30
|
|
Amortization of
intangible assets
|
0.19
|
|
Acquisition-related
expense
|
*
|
|
Restructuring
|
0.04
|
|
Sale of IP address
blocks
|
(0.01)
|
|
Deferred tax asset
adjustment
|
(0.01)
|
|
Non-GAAP
outlook
|
$
0.26
|
|
|
|
|
|
|
*
|
Less than $0.01
impact on earnings (loss) per share
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sonus-networks-reports-2017-first-quarter-results-300445776.html
SOURCE Sonus Networks, Inc.