Procera Networks Inc. (NYSE Amex: PKT), a developer of Evolved Deep
Packet Inspection (DPI) solutions providing traffic awareness,
control and protection for complex networks, today reported
financial results for its fourth quarter and fiscal year ended
December 31, 2009.
Q4'09 Key Highlights:
-- Record revenue of $9.4 million; increased 108% year-over-year and 104%
sequentially
-- Seventh consecutive quarter of year-over-year revenue growth
-- Achieved profitability for the first time in Company's history
-- Closed two new major carrier contracts
FY'09 Key Highlights:
-- Grew full year revenue by 75% year over year to $20.1 million
-- Announced one of the largest DPI installations industry wide with a Tier
1 service provider for $10 million
-- Added over 160 new customers, including 6 new Tier 1 service providers
-- Selected by over 100 universities in 2009
"Fiscal year 2009 was a transformational year for Procera
Networks as we established ourselves as a credible Tier 1
supplier," said James Brear, president and CEO of Procera. "Our
record revenue for the year was driven by the increasing demand for
our PacketLogic systems, while our disciplined approach to expense
management allowed us to achieve profitability for the first time
in Company history. As we enter 2010, we believe the momentum we
are experiencing with Tier 1 service providers will lead to another
year of revenue growth."
Total revenue for the fourth quarter of 2009 was $9.4 million,
an increase of 108% from $4.5 million in the fourth quarter of
2008. For the fiscal year 2009, total revenue was $20.1 million, an
increase of 75% from $11.5 million in fiscal year 2008.
The GAAP net income for the fourth quarter of 2009 was $877,000,
or a net income of $0.01 per diluted share. This compares to a GAAP
net loss of $2.7 million, or a net loss of $0.03 per diluted share,
in the fourth quarter of 2008. The GAAP net loss for fiscal year
2009 was $7.4 million, or a net loss of $0.08 per diluted share.
This compares to a GAAP net loss of $13.9 million, or a net loss of
$0.18 per diluted share, in fiscal year 2008.
Non-GAAP net income for the fourth quarter of 2009 was $1.1
million, as compared to non-GAAP net loss of $1.6 million in the
fourth quarter of 2008. Non-GAAP net loss for fiscal year 2009 was
$2.8 million, as compared to non-GAAP net loss of $9.5 million in
fiscal year 2008. For an explanation of Non-GAAP financial measures
used in this release, and a reconciliation to comparable GAAP
measures, please refer to Use of Non-GAAP Financial Information
below.
Conference Call Information
Procera Networks will host a conference call at 4:30 p.m.
eastern time today to discuss its financial results for the fourth
quarter and fiscal year ended December 31, 2009. Interested parties
can access the live call by dialing 877-718-5101 or 719-325-4757
and entering passcode 9324040. An archive of the conference call
will be available on the Quarterly Results and Events section of
the Procera Networks' Investor Relations Web site at
www.proceranetworks.com/investors, on or before March 12, 2010.
Forward Looking Statements
Safe Harbor Statement: this press release contains
forward-looking statements, including statements relating to
Procera Networks' potential for revenue growth and sales to Tier 1
service providers. These forward-looking statements involve risks
and uncertainties, as well as assumptions that, if they do not
fully materialize or prove incorrect, could cause our results to
differ materially from those expressed or implied by such
forward-looking statements, including risks related to our ability
to raise capital; the acceptance and adoption of our products; our
ability to service and upgrade our products; lengthy sales cycles
and lab and field trial delays by service providers; our dependence
on a limited product line; our dependence on key employees; our
ability to compete in our industry with companies that are
significantly larger and have greater resources; our ability to
protect our intellectual property rights in a global market; our
ability to manufacture product quickly enough to meet potential
demand; and other risks and uncertainties described more fully in
our documents filed with or furnished to the Securities and
Exchange Commission. More information about these and other risks
that may impact Procera Networks' business are set forth in our
Forms 10-Qs filed in 2009 and our Form 10-K filed for the year
ended December 31, 2008. All forward-looking statements in this
press release are based on information available to us as of the
date hereof, and we assume no obligation to update these
forward-looking statements.
Use of Non-GAAP Financial Information
Procera's management believes that these non-GAAP financial
measures, when taken together with the corresponding consolidated
GAAP measures and related segment information, provide incremental
insight into the underlying factors and trends affecting both the
Company's performance and its cash generating potential. Management
believes these non-GAAP measures increase the transparency of the
Company's current results and enable investors to more fully
understand trends in its current and future performance.
Thus, in addition to the financial results presented in
accordance with Generally Accepted Accounting Principles (GAAP),
this press release and the accompanying tables and the related
earnings conference call contain certain non-GAAP financial
measures that we believe are helpful in understanding our past
financial performance and future results. For reconciliations of
these non-GAAP financial measures to the most directly comparable
GAAP financial measures, please see the section of the accompanying
tables titled, "GAAP to Non-GAAP Reconciliations." Management
regularly uses these supplemental non-GAAP financial measures
internally to understand and manage our business and forecast
future periods. Our non-GAAP financial measures include adjustments
based on the following items, as well as the related income tax
benefits, if any:
Amortization of intangible assets: We have excluded the effect
of amortization of intangible assets from our non-GAAP net income.
Amortization of intangible assets is a non-cash expense, and it is
not part of our core operations that requires cash. Investors
should note that our intangible assets were essential for
generating revenues during the periods presented and will
contribute to future period revenues as well.
Stock-based compensation expenses: We have excluded the effect
of stock-based compensation from our non-GAAP gross profit,
operating expenses and net income measures. Although stock-based
compensation is a key incentive offered to our employees and
consultants, we continue to evaluate our business performance
excluding stock-based compensation expenses. Stock-based
compensation expenses will recur in future periods.
Non-cash interest expense: We have excluded the effect of a
non-cash charge to interest expense for the amortization of debt
discounts related to convertible promissory notes that were issued
and converted within the second quarter of 2009.
These non-GAAP financial measures are not consistent with GAAP
because they do not fully reflect non-cash expenses. The
above-mentioned non-GAAP measures are generated by adjusting the
related GAAP measures solely to reverse the effect of the above
mentioned non-cash expenses. The Company uses these financial
measures to provide additional insight into current operating and
business trends not readily apparent from the GAAP results.
Management believes users of Procera's financial statements will
benefit from greater transparency in referring to these non-GAAP
financial measures when assessing the Company's operating results,
as well as when forecasting and analyzing future periods. However,
management recognizes that:
-- these non-GAAP financial measures are limited in their usefulness and
should be considered only as a supplement to the Company's GAAP
financial measures;
-- these non-GAAP financial measures should be read in conjunction with
our consolidated financial statements prepared in accordance with GAAP
-- these non-GAAP financial measures should not be considered in isolation
from, or as a substitute for, the Company's GAAP financial measures;
-- these non-GAAP financial measures should not be considered to be
superior to the Company's GAAP financial measures;
-- these non-GAAP financial measures were not prepared in accordance with
GAAP and investors should not assume that the non-GAAP financial
measures presented in this earnings release were prepared under a
comprehensive set of rules or principles; and
-- management intends to continue to track and present these non-GAAP
financial measures for future periods.
Further, these non-GAAP financial measures may be unique to
Procera, as they may be different from non-GAAP financial measures
used by other companies. As such, this presentation of non-GAAP
financial measures may not enhance the comparability of the
Company's results to the results of other companies.
A reconciliation of each non-GAAP financial measure to the most
directly comparable GAAP financial measure or measures appears at
the end of this press release.
About Procera Networks Inc.
Procera Networks Inc. delivers Evolved DPI solutions that give
service providers awareness, control and protection of their
applications and networks. Its core product suite, the PacketLogic
line of platforms, leverages the company's advanced identification
engine, DRDL™ (Datastream Recognition Definition Language), to
provide accurate identification of network traffic in real-time.
PacketLogic is deployed at more than 600 broadband service
providers, telcos, governments and higher education campuses
worldwide. Founded in 2002, Procera (NYSE Amex: PKT) is based in
Silicon Valley and has offices around the globe. More information
is available at www.proceranetworks.com.
Procera Networks, Inc.
Condensed Consolidated Statements of Operations
Unaudited
Three Months Ended Year Ended
December 31, December 31,
------------------------ -------------------------
2009 2008 2009 2008
----------- ----------- ----------- ------------
Sales
Product sales $ 8,500,330 $ 4,122,813 $17,009,423 $ 9,871,185
Support sales 863,977 380,895 3,119,421 1,652,769
----------- ----------- ----------- ------------
Total sales 9,364,307 4,503,708 20,128,844 11,523,954
Cost of sales
Product cost of
sales 4,521,168 2,573,432 11,430,349 6,782,877
Support cost of
sales 184,314 103,169 514,503 526,966
----------- ----------- ----------- ------------
Total cost of
sales 4,705,482 2,676,601 11,944,852 7,309,843
----------- ----------- ----------- ------------
Gross profit 4,658,825 1,827,107 8,183,992 4,214,111
----------- ----------- ----------- ------------
49.8% 40.6% 40.7% 36.6%
Operating expenses:
Research and
development 704,664 840,626 2,607,851 3,338,360
Sales and marketing 1,859,461 2,428,010 6,820,543 8,863,511
General and
administrative 1,185,196 1,603,163 4,992,538 6,996,151
----------- ----------- ----------- ------------
Total operating
expenses 3,749,321 4,871,799 14,420,932 19,198,022
----------- ----------- ----------- ------------
Income (loss) from
operations 909,504 (3,044,692) (6,236,940) (14,983,911)
----------- ----------- ----------- ------------
Interest and other
income (expense), net (32,088) 35,656 (1,838,790) 39,537
----------- ----------- ----------- ------------
Income (loss) before
income taxes 877,416 (3,009,036) (8,075,730) (14,944,374)
Income tax benefit - 259,974 691,450 1,042,269
----------- ----------- ----------- ------------
Net income (loss) $ 877,416 $(2,749,062) $(7,384,280) $(13,902,105)
=========== =========== =========== ============
Net income (loss) per
share - basic $ 0.01 $ (0.03) $ (0.08) $ (0.18)
=========== =========== =========== ============
Net income (loss) per
share - diluted $ 0.01 $ (0.03) $ (0.08) $ (0.18)
=========== =========== =========== ============
Shares used in
computing net income
(loss) per share-basic 94,082,724 84,292,223 89,886,338 79,144,479
Shares used in
computing net income
(loss) per
share-diluted 94,367,346 84,292,223 89,886,338 79,144,479
Procera Networks, Inc.
Condensed Consolidated Balance Sheets
December 31, December 31,
2009 2008
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 3,191,896 $ 1,721,225
Accounts receivable, net of allowance 8,908,620 5,454,745
Inventories, net 1,877,264 3,445,802
Prepaid expenses and other 692,007 824,340
------------ ------------
Total current assets 14,669,787 11,446,112
Property and equipment, net 589,717 2,573,045
Purchased intangible assets, net - 964,405
Goodwill 960,209 960,209
Other non-current assets 103,307 47,294
------------ ------------
Total assets $ 16,323,020 $ 15,991,065
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ 1,917,088 $ -
Accounts payable 1,003,225 2,457,430
Deferred revenue 2,103,060 1,313,092
Accrued liabilities 2,255,039 1,841,442
Notes payable 500,000 550,000
Capital leases payable - 11,543
------------ ------------
Total current liabilities 7,778,412 6,173,507
Non-current liabilities
Deferred rent 29,371 24,234
Deferred tax liability - 695,239
Capital leases payable - 39,584
------------ ------------
Total liabilities 7,807,783 6,932,564
Commitments and contingencies - -
Stockholders' equity:
Common stock 94,083 84,498
Additional paid-in capital 67,814,203 61,142,430
Accumulated other comprehensive loss (268,449) (428,107)
Accumulated deficit (59,124,600) (51,740,320)
------------ ------------
Total stockholders' equity 8,515,237 9,058,501
------------ ------------
Total liabilities and stockholders' equity $ 16,323,020 $ 15,991,065
============ ============
Procera Networks, Inc.
GAAP to Non-GAAP Reconciliation; and Supplemental Financial Information
Unaudited
Three Months Ended Year Ended
----------------------------------- -------------------------
December September December December December
31, 2009 30, 2009 31, 2008 31, 2009 31, 2008
--------- ----------- ----------- ----------- ------------
Sales -
U.S. GAAP
as
reported 9,364,307 4,583,484 4,503,708 20,128,844 11,523,954
Reconciliation
of Gross
Profit:
U.S. GAAP
as
reported 4,658,825 1,487,932 1,827,107 8,183,992 4,214,111
As a
percentage
of sales 50% 32% 41% 41% 37%
Adjustment:
Amortization
on intangibles
(1) - 254,333 381,500 1,017,333 1,526,000
Stock-based
Compensation
(2) 20,362 15,943 18,193 70,759 51,069
--------- ----------- ----------- ----------- ------------
As
Adjusted 4,679,187 1,758,208 2,226,800 9,272,084 5,791,180
As a
percentage
of
sales 50% 38% 49% 46% 50%
Reconciliation
of
Operating
Expense:
U.S. GAAP
as
reported 3,749,321 3,294,331 4,871,799 14,420,932 19,198,022
Adjustment:
Amortization
on intangibles
(1) - 371,074 545,083 1,461,240 2,180,333
Stock-based
compensation
(2) 250,643 259,901 447,317 1,086,198 1,643,834
--------- ----------- ----------- ----------- ------------
As
Adjusted 3,498,678 2,663,356 3,879,399 11,873,494 15,373,856
Reconciliation
of
Net Loss:
U.S. GAAP
as
reported 877,416 (1,595,047) (2,749,062) (7,384,280) (13,902,105)
Adjustment:
Amortization
on
intangibles
(1) - 625,407 926,583 2,478,573 3,706,333
Stock-based
Compensation
(2) 271,005 275,844 465,510 1,156,957 1,694,903
Interest
related
to
beneficial
conversion
feature
(3) - - - 1,644,756 -
Income
tax
adjustment
(4) - (176,687) (259,904) (696,495) (1,039,616)
--------- ----------- ----------- ----------- ------------
As
Adjusted 1,148,421 (870,483) (1,616,872) (2,800,489) (9,540,486)
========= =========== =========== =========== ============
(1) The intangible assets recorded at fair value as a result of our
acquisitions are amortized over the estimated useful life of the
respective asset.
(2) Stock-based compensation expense is calculated in accordance with the
fair value recognition provisions of Statements of Financial Accounting
Standards No. 123 (R).
(3) Interest expense related to beneficial conversion feature of
convertible promissory notes.
(4) Income tax benefit from the amortization of intangible assets.
Press Contact Diana Loredo Procera Networks 1-408-890-7039
diana.loredo@proceranetworks.com Investor Relations Contact Cynthia
Hiponia The Blueshirt Group 1-415-217-4966
ir@proceranetworks.com
Procera Networks, Inc. (AMEX:PKT)
Historical Stock Chart
From May 2024 to Jun 2024
Procera Networks, Inc. (AMEX:PKT)
Historical Stock Chart
From Jun 2023 to Jun 2024
