SUNNYVALE, Calif., Aug. 2, 2017 /PRNewswire/ -- ShoreTel
® (NASDAQ: SHOR), a leading provider of communication
solutions that make interactions simple, today announced
financial results for the fourth quarter and fiscal year 2017,
which ended June 30, 2017.
As the Company's strategic shift in revenue mix towards hosted
revenue continues, fourth quarter of fiscal 2017 total revenue was
$95.7 million, compared to
$94.6 million in the fourth quarter
of fiscal 2016 and $87.7 million in
the prior quarter. GAAP net loss was $1.0
million, or $0.01 per share,
in the fourth quarter of fiscal 2017, compared with a GAAP net loss
of $0.7 million, or $0.01 per share, in the fourth quarter of fiscal
2016, and a GAAP net loss of $2.9
million, or $0.04 per share,
in the prior quarter. Non-GAAP net income, which excludes
stock-based compensation charges, amortization of
acquisition-related intangibles, severance costs,
acquisition-related cost, other adjustments and related tax
charges, for the fourth quarter of fiscal year 2017, was
$4.5 million, or $0.06 per diluted share. This compares with a
non-GAAP net income of $3.5 million,
or $0.05 per diluted share, in the
fourth quarter of fiscal 2016 and a non-GAAP net income in the
prior quarter of $0.6 million or
$0.01 per diluted share.
"We ended our fiscal year with strong results in our June
quarter. Our total revenue in the quarter was a record and our
non-GAAP profitability reached its highest level in over a year,"
said Don Joos, president and CEO of
ShoreTel. "While we continue to transform the business, our
Hosted revenue growth was 19% for fiscal year 2017 and we had a
significant sequential increase in premise customers migrating to
our hosted solution."
Fourth Quarter of Fiscal 2017 Financial
Highlights
Hosted revenues of $39.7
million in the fourth quarter of fiscal 2017 were up 17
percent year-over-year and 4 percent sequentially. GAAP hosted
gross margin for the fourth quarter of fiscal year 2017 was 54.0
percent, compared with 50.4 percent in the fourth quarter of fiscal
year 2016. Non-GAAP hosted gross margin increased to 55.0
percent in the fourth quarter of fiscal 2017, representing an
improvement over the 54.3 percent in the fourth quarter of fiscal
2016. The total number of installed customer seats increased 23
percent over the fourth quarter of fiscal 2016 to approximately
283,800. Hosted revenue churn was 5.3 percent annualized in
the fourth quarter of fiscal 2017.
Product revenues of $36.5 million
in the fourth quarter of fiscal 2017 were down 13 percent
year-over-year but up 20 percent sequentially. GAAP product gross
margin for the fourth quarter of fiscal year 2017 was 65.5 percent,
compared with 67.5 percent in the fourth quarter of fiscal year
2016. Non-GAAP product gross margin was 65.5 percent in the
fourth quarter of fiscal 2017, compared with 67.6 percent in the
fourth quarter of fiscal 2016.
Support and services revenues of $19.6
million in the fourth quarter of fiscal 2017 were up 4
percent year-over-year and up 3 percent sequentially. GAAP support
and service gross margin for the fourth quarter of fiscal year 2017
was 77.9 percent, compared with 75.0 percent in the fourth quarter
of fiscal year 2016. Non-GAAP support and service gross
margin was 80.0 percent in the fourth quarter of fiscal 2017,
compared with 75.7 percent in the fourth quarter of fiscal
2016.
GAAP total gross margin for the fourth quarter of fiscal year
2017 was 63.3 percent compared with 62.9 percent in the fourth
quarter of fiscal year 2016. Non-GAAP total gross margin, for
the fourth quarter of fiscal year 2017, was 64.1 percent compared
with 64.4 percent in the fourth quarter of fiscal 2016.
As of June 30, 2017, the Company
had $115.9 million in cash, cash
equivalents and short-term investments and no outstanding
debt. The Company generated $11.7
million in cash flow from operations in the quarter ended
June 30, 2017.
Fiscal Year 2017 Financial Highlights
Hosted revenues
for fiscal 2017 were $150.2 million,
up 19 percent compared to fiscal 2016. GAAP hosted gross
margin for fiscal 2017 was 53.1 percent, compared with 51.5 percent
in fiscal 2016. Non-GAAP hosted gross margin increased to
55.6 percent in fiscal 2017, compared with 55.4 percent in fiscal
2016.
Product revenues for fiscal 2017 were $131.2 million, down 17 percent compared to
fiscal 2016. GAAP product gross margin in fiscal 2017 was
66.8 percent compared to 67.2 percent in fiscal 2016. Non-GAAP
product gross margin was 66.9 percent in fiscal 2017, compared with
67.3 percent in fiscal 2016.
Support and services revenues for fiscal 2017 were $76.3 million, up 1 percent compared to fiscal
2016. GAAP support and service gross margin for fiscal year 2017
was 77.5 percent, compared with 74.5 percent in fiscal 2016.
Non-GAAP support and service gross margin was 78.6 percent in
fiscal 2017 compared to 75.3 percent in fiscal 2016.
Total revenues for fiscal 2017 were $357.8 million, down 1 percent compared to fiscal
2016. GAAP total gross margin for fiscal year 2017 was 63.3
percent compared with 63.2 percent in fiscal year 2016. Non-GAAP
total gross margin, for the fiscal year 2017, was 64.6 percent
compared with 64.8 percent in fiscal 2016.
GAAP net loss in fiscal 2017 was $12.4
million, or $0.18 per share,
compared with a GAAP net loss of $4.8
million, or $0.07 per share in
fiscal 2016. Non-GAAP net income for the fiscal year 2017 was
$7.6 million, or $0.11 per diluted share. This compares with
a non-GAAP net income of $12.4
million, or $0.18 per diluted
share in fiscal 2016.
Selected Operational Metrics
|
Quarter
Ended
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
Quarter
Ended
|
|
06/30/17
|
|
03/31/17
|
|
12/31/16
|
|
09/30/16
|
|
06/30/16
|
Recurring Revenue as
a Percent of Total Revenue
|
60%
|
|
63%
|
|
61%
|
|
61%
|
|
54%
|
|
|
|
|
|
|
|
|
|
|
Annual Recurring
Revenue Run Rate (in millions)
|
$
229
|
|
$
223
|
|
$
216
|
|
$
211
|
|
$
203
|
|
|
|
|
|
|
|
|
|
|
Hosted Average
Monthly Recurring Revenue Per Customer
|
$
1,989
|
|
$
1,991
|
|
$
1,998
|
|
$
2,076
|
|
$
2,135
|
|
|
|
|
|
|
|
|
|
|
Hosted Monthly
Average Revenue Per User (ARPU)
|
$
48
|
|
$
48
|
|
$
48
|
|
$
50
|
|
$
51
|
|
|
|
|
|
|
|
|
|
|
Hosted Average # of
Seats per Customer
|
42
|
|
41
|
|
41
|
|
42
|
|
42
|
|
|
|
|
|
|
|
|
|
|
Hosted Revenue Churn
Rate Annualized
|
5.3%
|
|
5.1%
|
|
4.6%
|
|
4.0%
|
|
5.8%
|
|
|
|
|
|
|
|
|
|
|
Total Company
Headcount
|
1,158
|
|
1,166
|
|
1,144
|
|
1,145
|
|
1,194
|
Fourth Quarter of Fiscal 2017 Business Highlights
ShoreTel Connect CLOUD Launched in Australia
ShoreTel announced the
introduction of ShoreTel Connect™ CLOUD and ShoreTel Connect CLOUD
Contact Center solutions in Australia.
Australia marks the latest step
in ShoreTel's continued global expansion of its Connect CLOUD
Unified Communications as-a-Service (UCaaS) solution. Connect CLOUD
services are also available to customers in the United States, Canada and the United Kingdom. Additionally, Connect CLOUD
follows the successful introduction of ShoreTel's first cloud based
voice service in Australia, which
has seen rapid partner uptake and strong customer demand since its
launch last April.
Connect CLOUD services are sold through ShoreTel's Australian
cloud partners who can also offer customers a range of professional
services. The solution will not only be available to new customers
but also for current ShoreTel customers as an opportunity to
upgrade their existing cloud solution or migrate from an onsite
system.
ShoreTel to Offer SMS APIs Through Google Cloud
Platform
ShoreTel announced it has become a Google Cloud
PlatformTM Technology Partner. As part of this
partnership, ShoreTel is offering an SMS API solution through the
Google Cloud Launcher.
Google Cloud Launcher offers ready-to-go development stacks,
solutions, and services to accelerate development. Developers are
able to explore, deploy, and manage solutions with only a few
clicks.
Through the Google Cloud Launcher, ShoreTel will offer
developers the ability to integrate inbound and outbound SMS
capabilities into new or existing applications using the SMS REST
APIs of ShoreTel SummitTM. A Communications Platform as
a Service (CPaaS) solution, Summit's rich developer toolkits
and API frameworks make it easy to embed SMS capabilities
into system workflows or build custom apps for activities such as
customer notifications, appointment reminders, marketing
promotions, emergency alerts and more.
ShoreTel Introduces Global Numbers Service in Four
Countries
ShoreTel announced it has expanded its ShoreTel
Connect™ CLOUD unified communications solution with the addition of
Global Numbers service.
Global Numbers allows multi-national organizations to create a
local presence in the countries they serve by establishing unique
Direct Inward Dial (DID) or International Toll-free Service (ITFS)
numbers in each country. Global inbound calls can be routed to
auto-attendants, IVRs or contact center queues and handled by teams
at a central location, such as corporate headquarters. The service
is available to Connect CLOUD customers in the U.S., Canada, U.K. and Australia.
ShoreTel's Global Numbers footprint covers countries where there
has been strong demand. The service offers simple pricing with flat
monthly rates for local DIDs and affordable per minute charges for
inbound toll-free service.
ShoreTel and Its Leadership Recognized for Six Industry
Awards
ShoreTel was honored with six awards that recognize the
Company's senior leadership and commitment to innovation.
ShoreTel was awarded a Silver Stevie award for Most Innovative
Tech Company – up to 2,500 employees, for its overall company
growth, increased total revenue and elevated size of customer
base.
At the Midsize Enterprise Summit TM ShoreTel chief
marketing officer, Mark Roberts, was
awarded the Best Vendor Spotlight which honors the event's top
performing technology solution providers based on IT decision
makers' perceptions during MES. Additionally, ShoreTel
Teamwork was awarded Best Midmarket Solution: Services. ShoreTel
Teamwork is a real-time collaboration application that allows teams
to increase productivity on the go with features such as pervasive
chat, task management, file sharing and more.
Eugenia Corrales, SVP of
Solutions Group at ShoreTel, has been recognized by the Silicon
Valley Business Journal with a Women of Influence 2017 award at a
ceremony held on May 18th in
San Jose, CA. This award
recognizes professional accomplishments combined with impactful
community involvement.
CRN TM named Heather
Tenuto, vice president channels, to both the Women of the
Channel 2017 and the Power 100 for her leadership at ShoreTel,
including supporting market demand and empowering channel adoption
around cloud technologies.
Business Outlook
Given the announcement made on
July 27, 2017 regarding the Company's
entry into a definitive agreement to be acquired by Mitel we will
not be providing a business outlook.
Conference Call Information
Given the announcement
made on July 27, 2017 regarding the
Company's entry into a definitive agreement to be acquired by Mitel
there will be no conference call in conjunction with this
release.
Use of Non-GAAP Financial Measures
ShoreTel reports
all required financial information in accordance with generally
accepted accounting principles in the
United States ("GAAP"), but it believes that evaluating its
ongoing operating results may be difficult to understand if limited
to reviewing only GAAP financial measures. Many investors have
requested that ShoreTel disclose this non-GAAP information because
it is useful in understanding the Company's performance as it
excludes non-cash charges, other non-recurring adjustments and
related tax changes, that many investors feel may obscure the
Company's true operating performance. Likewise, management uses
these non-GAAP measures to manage and assess the profitability of
its business. ShoreTel has provided a reconciliation of non-GAAP
financial measures following the text of this press release.
Investors are encouraged to review the related GAAP financial
measures and the reconciliation of these non-GAAP financial
measures to their most directly comparable GAAP financial
measure.
Legal Notice Regarding Forward-Looking
Statements
ShoreTel assumes no obligation to update the
forward-looking statements included in this release. This release
contains forward-looking statements within the meaning of the "safe
harbor" provisions of the federal securities laws, including,
without limitation, statements by Don
Joos, statements regarding future growth and market
opportunities. The forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ
materially from those projected. The risks and uncertainties
include the intense competition in our industry, the impact of the
announcement of the proposed acquisition by Mitel on ShoreTel's
business; the ability of ShoreTel and Mitel to complete the
proposed transaction; our reliance on third parties to sell and
support our products, our ability to continue to grow our
cloud-based solutions, our ability to grow or maintain our premises
products, supply and manufacturing risks, the impact of service
disruptions or security breaches, uncertainties related to global
operations, our ability to control costs as we expand our business
and seek to maintain the minimum cash closing condition from the
proposed merger with Mitel; difficulties in managing more dispersed
business operations, our ability to attract, retain and ramp new
personnel, potentially longer sales cycles, uncertainties inherent
in the product development cycle, our ability to identify and
execute on strategic opportunities, uncertainty as to market
acceptance of new products and services, the potential for
litigation in our industry, the impact of mergers and
consolidations in our industry, the uncertain impact of global
economic conditions and foreign exchange rates, including impact on
customers' purchasing decisions, and other risk factors set forth
in ShoreTel's Form 10-K for the year ended June 30, 2016 and most recent Quarterly Report on
Form 10-Q.
About ShoreTel, Inc.
ShoreTel (NASDAQ: SHOR) provides
businesses worldwide with communication solutions that make
interactions simple. From business phone systems, unified
communications
https://www.shoretel.com/solutions/solution-tech-unified-communications and
contact center solutions to a fully hosted voice and SMS
development platform, ShoreTel delivers unmatched flexibility and
ease for companies looking to increase productivity and drive
innovation. ShoreTel offers solutions in the cloud, onsite or a
hybrid of both, giving customers the freedom to choose the best fit
for their business needs now and in the future. Headquartered in
Sunnyvale, Calif., ShoreTel has
offices and partners worldwide. For more information, visit
shoretel.com.
ShoreTel, ShoreTel Connect, ShoreTel Summit and the ShoreTel
logo are trademarks or registered trademarks of ShoreTel, Inc. in
the United States and/or other
countries. Google Cloud Platform is a trademark of Google
Inc. Midsize Enterprise Summit and CRN are registered
trademarks of The Channel Company in the
United States and/or other countries. All other
trademarks, trade names and service marks herein are the property
of their respective owners.
Investor Contact:
Barry
Hutton
Investor Relations Officer
408-962-2573
bhutton@shoretel.com
(Tables follow)
|
|
|
|
|
|
|
|
SHORETEL,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
|
As of
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
67,223
|
|
$
61,726
|
|
Short-term
investments
|
48,665
|
|
46,433
|
|
Accounts receivable -
net
|
31,393
|
|
32,902
|
|
Inventories
|
|
11,624
|
|
12,488
|
|
Prepaid expenses and
other current assets
|
13,019
|
|
13,420
|
|
|
|
Total current
assets
|
171,924
|
|
166,969
|
|
|
|
|
|
|
|
|
Property and
equipment - net
|
19,066
|
|
21,551
|
Goodwill
|
|
|
129,449
|
|
129,449
|
Intangible
assets
|
|
12,087
|
|
18,788
|
Other
assets
|
|
6,926
|
|
5,581
|
|
|
|
Total
assets
|
$ 339,452
|
|
$ 342,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
14,011
|
|
$
14,932
|
|
Accrued liabilities
and other
|
15,633
|
|
20,397
|
|
Accrued employee
compensation
|
16,740
|
|
18,925
|
|
Accrued taxes and
surcharges
|
3,614
|
|
3,917
|
|
Deferred
revenue
|
61,524
|
|
56,765
|
|
|
|
Total current
liabilities
|
111,522
|
|
114,936
|
|
|
|
|
|
|
|
|
|
Long-term deferred
revenue
|
21,245
|
|
20,940
|
|
Other long-term
liabilities
|
4,492
|
|
3,733
|
|
|
|
Total
liabilities
|
137,259
|
|
139,609
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
390,995
|
|
379,088
|
|
Accumulated
deficit
|
(188,802)
|
|
(176,359)
|
|
|
|
Total stockholders'
equity
|
202,193
|
|
202,729
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$ 339,452
|
|
$ 342,338
|
SHORETEL,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Amounts in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
Hosted and related
services
|
$39,654
|
|
$
38,272
|
|
$34,016
|
|
$150,242
|
|
$126,670
|
|
Product
|
36,510
|
|
30,535
|
|
41,732
|
|
131,174
|
|
158,232
|
|
Support and
services
|
19,557
|
|
18,923
|
|
18,844
|
|
76,343
|
|
75,382
|
|
|
Total
revenue
|
95,721
|
|
87,730
|
|
94,592
|
|
357,759
|
|
360,284
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
|
|
Hosted and related
services
|
18,233
|
|
17,381
|
|
16,856
|
|
70,406
|
|
61,384
|
|
Product
|
12,593
|
|
9,958
|
|
13,544
|
|
43,543
|
|
51,881
|
|
Support and
services
|
4,328
|
|
4,169
|
|
4,705
|
|
17,194
|
|
19,199
|
|
|
Total cost of
revenue
|
35,154
|
|
31,508
|
|
35,105
|
|
131,143
|
|
132,464
|
Gross
profit
|
60,567
|
|
56,222
|
|
59,487
|
|
226,616
|
|
227,820
|
|
Gross profit
%
|
63.3%
|
|
64.1%
|
|
62.9%
|
|
63.3%
|
|
63.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
17,173
|
|
17,122
|
|
16,375
|
|
67,068
|
|
60,509
|
|
Sales and
marketing
|
32,902
|
|
31,598
|
|
32,471
|
|
127,637
|
|
126,123
|
|
General and
administrative
|
10,890
|
|
11,080
|
|
10,683
|
|
43,532
|
|
41,778
|
|
Acquisition related
costs
|
-
|
|
-
|
|
133
|
|
-
|
|
1,489
|
|
Settlements and
defense fees
|
-
|
|
(19)
|
|
56
|
|
(30)
|
|
56
|
|
|
Total operating
expenses
|
60,965
|
|
59,781
|
|
59,718
|
|
238,207
|
|
229,955
|
Loss from
operations
|
(398)
|
|
(3,559)
|
|
(231)
|
|
(11,591)
|
|
(2,135)
|
Other income
(expense), net
|
(138)
|
|
778
|
|
(446)
|
|
86
|
|
(2,097)
|
Loss before provision
for income tax
|
(536)
|
|
(2,781)
|
|
(677)
|
|
(11,505)
|
|
(4,232)
|
Provision for income
tax
|
420
|
|
159
|
|
67
|
|
938
|
|
560
|
Net loss
|
|
$
(956)
|
|
$
(2,940)
|
|
$
(744)
|
|
$ (12,443)
|
|
$
(4,792)
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
(0.01)
|
|
$
(0.04)
|
|
$
(0.01)
|
|
$
(0.18)
|
|
$
(0.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing net loss per share:
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
68,518
|
|
68,235
|
|
67,300
|
|
68,100
|
|
66,405
|
|
|
|
|
|
|
|
|
|
|
|
|
SHORETEL,
INC.
|
GAAP TO NON-GAAP
RECONCILIATION
|
(Amounts in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
GAAP Hosted and
related services gross profit
|
$ 21,421
|
|
|
|
$
20,891
|
|
|
|
$ 17,160
|
|
|
|
$
79,836
|
|
|
|
$
65,286
|
|
|
|
Stock-based
compensation charges
|
61
|
|
(a)
|
|
63
|
|
(a)
|
|
317
|
|
(a)
|
|
261
|
|
(a)
|
|
1,272
|
|
(a)
|
|
Amortization of
acquisition-related intangibles
|
327
|
|
(b)
|
|
921
|
|
(b)
|
|
977
|
|
(b)
|
|
3,202
|
|
(b)
|
|
3,613
|
|
(b)
|
|
Severance
costs
|
-
|
|
(d)
|
|
50
|
|
(d)
|
|
-
|
|
(d)
|
|
50
|
|
(d)
|
|
-
|
|
(d)
|
|
Lease termination
fee
|
-
|
|
(g)
|
|
-
|
|
(g)
|
|
-
|
|
(g)
|
|
155
|
|
(g)
|
|
-
|
|
(g)
|
Non-GAAP Hosted and
related services gross profit
|
$ 21,809
|
|
|
|
$
21,925
|
|
|
|
$ 18,454
|
|
|
|
$
83,504
|
|
|
|
$
70,171
|
|
|
Non-GAAP Hosted and
related services gross margin
|
55.0%
|
|
|
|
57.3%
|
|
|
|
54.3%
|
|
|
|
55.6%
|
|
|
|
55.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Product gross
profit
|
$ 23,917
|
|
|
|
$
20,577
|
|
|
|
$ 28,188
|
|
|
|
$
87,631
|
|
|
|
$ 106,351
|
|
|
|
Stock-based
compensation charges
|
9
|
|
(a)
|
|
10
|
|
(a)
|
|
11
|
|
(a)
|
|
53
|
|
(a)
|
|
64
|
|
(a)
|
|
Amortization of
acquisition-related intangibles
|
-
|
|
(b)
|
|
-
|
|
(b)
|
|
-
|
|
(b)
|
|
-
|
|
(b)
|
|
19
|
|
(b)
|
|
Severance
costs
|
-
|
|
(d)
|
|
-
|
|
(d)
|
|
-
|
|
(d)
|
|
9
|
|
(d)
|
|
-
|
|
(d)
|
Non-GAAP Product
gross profit
|
$ 23,926
|
|
|
|
$
20,587
|
|
|
|
$ 28,199
|
|
|
|
$
87,693
|
|
|
|
$ 106,434
|
|
|
Non-GAAP Product
gross margin
|
65.5%
|
|
|
|
67.4%
|
|
|
|
67.6%
|
|
|
|
66.9%
|
|
|
|
67.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Support and
services gross profit
|
$ 15,229
|
|
|
|
$
14,754
|
|
|
|
$ 14,139
|
|
|
|
$
59,149
|
|
|
|
$
56,183
|
|
|
|
Stock-based
compensation charges
|
76
|
|
(a)
|
|
80
|
|
(a)
|
|
122
|
|
(a)
|
|
370
|
|
(a)
|
|
590
|
|
(a)
|
|
Severance
costs
|
341
|
|
(d)
|
|
-
|
|
(d)
|
|
-
|
|
(d)
|
|
454
|
|
(d)
|
|
10
|
|
(d)
|
Non-GAAP Support and
services gross profit
|
$ 15,646
|
|
|
|
$
14,834
|
|
|
|
$ 14,261
|
|
|
|
$
59,973
|
|
|
|
$
56,783
|
|
|
Non-GAAP Support and
services gross margin
|
80.0%
|
|
|
|
78.4%
|
|
|
|
75.7%
|
|
|
|
78.6%
|
|
|
|
75.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP total gross
profit
|
$ 60,567
|
|
|
|
$
56,222
|
|
|
|
$ 59,487
|
|
|
|
$ 226,616
|
|
|
|
$ 227,820
|
|
|
|
Stock-based
compensation charges
|
146
|
|
(a)
|
|
153
|
|
(a)
|
|
450
|
|
(a)
|
|
684
|
|
(a)
|
|
1,926
|
|
(a)
|
|
Amortization of
acquisition-related intangibles
|
327
|
|
(b)
|
|
921
|
|
(b)
|
|
977
|
|
(b)
|
|
3,202
|
|
(b)
|
|
3,632
|
|
(b)
|
|
Severance
costs
|
341
|
|
(d)
|
|
50
|
|
(d)
|
|
-
|
|
(d)
|
|
513
|
|
(d)
|
|
10
|
|
(d)
|
|
Lease termination
fee
|
-
|
|
(g)
|
|
-
|
|
(g)
|
|
-
|
|
(g)
|
|
155
|
|
(g)
|
|
-
|
|
(g)
|
Non-GAAP total gross
profit
|
$ 61,381
|
|
|
|
$
57,346
|
|
|
|
$ 60,914
|
|
|
|
$ 231,170
|
|
|
|
$ 233,388
|
|
|
Non-GAAP total gross
margin
|
64.1%
|
|
|
|
65.4%
|
|
|
|
64.4%
|
|
|
|
64.6%
|
|
|
|
64.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP loss from
operations
|
$
(398)
|
|
|
|
$
(3,559)
|
|
|
|
$
(231)
|
|
|
|
$ (11,591)
|
|
|
|
$
(2,135)
|
|
|
|
Stock-based
compensation charges
|
2,102
|
|
(a)
|
|
2,194
|
|
(a)
|
|
2,010
|
|
(a)
|
|
9,789
|
|
(a)
|
|
8,871
|
|
(a)
|
|
Amortization of
acquisition-related intangibles
|
1,229
|
|
(b)
|
|
1,824
|
|
(b)
|
|
1,881
|
|
(b)
|
|
6,811
|
|
(b)
|
|
7,112
|
|
(b)
|
|
Litigation,
settlements and defense fees
|
-
|
|
(c)
|
|
(19)
|
|
(c)
|
|
56
|
|
(c)
|
|
(30)
|
|
(c)
|
|
56
|
|
(c)
|
|
Severance
costs
|
2,053
|
|
(d)
|
|
523
|
|
(d)
|
|
336
|
|
(d)
|
|
3,734
|
|
(d)
|
|
493
|
|
(d)
|
|
Acquisition related
costs
|
-
|
|
(e)
|
|
-
|
|
(e)
|
|
133
|
|
(e)
|
|
-
|
|
(e)
|
|
1,489
|
|
(e)
|
|
Strategic
alternatives review costs
|
52
|
|
(f)
|
|
42
|
|
(f)
|
|
-
|
|
(f)
|
|
557
|
|
(f)
|
|
-
|
|
(f)
|
|
Lease termination
fee
|
-
|
|
(g)
|
|
-
|
|
(g)
|
|
54
|
|
(g)
|
|
155
|
|
(g)
|
|
54
|
|
(g)
|
Non-GAAP income from
operations
|
$
5,038
|
|
|
|
$
1,005
|
|
|
|
$
4,239
|
|
|
|
$
9,425
|
|
|
|
$
15,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
$
(956)
|
|
|
|
$
(2,940)
|
|
|
|
$
(744)
|
|
|
|
$ (12,443)
|
|
|
|
$
(4,792)
|
|
|
|
Stock-based
compensation charges
|
2,102
|
|
(a)
|
|
2,194
|
|
(a)
|
|
2,010
|
|
(a)
|
|
9,789
|
|
(a)
|
|
8,871
|
|
(a)
|
|
Amortization of
acquisition-related intangibles
|
1,229
|
|
(b)
|
|
1,824
|
|
(b)
|
|
1,881
|
|
(b)
|
|
6,811
|
|
(b)
|
|
7,112
|
|
(b)
|
|
Litigation,
settlements and defense fees
|
-
|
|
(c)
|
|
(19)
|
|
(c)
|
|
56
|
|
(c)
|
|
(30)
|
|
(c)
|
|
56
|
|
(c)
|
|
Severance
costs
|
2,053
|
|
(d)
|
|
523
|
|
(d)
|
|
336
|
|
(d)
|
|
3,734
|
|
(d)
|
|
493
|
|
(d)
|
|
Acquisition related
costs
|
-
|
|
(e)
|
|
-
|
|
(e)
|
|
133
|
|
(e)
|
|
-
|
|
(e)
|
|
1,489
|
|
(e)
|
|
Strategic
alternatives review costs
|
52
|
|
(f)
|
|
42
|
|
(f)
|
|
-
|
|
(f)
|
|
557
|
|
(f)
|
|
-
|
|
(f)
|
|
Lease termination
fee
|
-
|
|
(g)
|
|
-
|
|
(g)
|
|
54
|
|
(g)
|
|
155
|
|
(g)
|
|
54
|
|
(g)
|
|
Gain on sale of
non-marketable investments
|
-
|
|
(h)
|
|
(920)
|
|
(h)
|
|
-
|
|
(h)
|
|
(920)
|
|
(h)
|
|
-
|
|
(h)
|
|
Deferred tax benefit
(provision) arising from tax impact of above items
|
29
|
|
(i)
|
|
(154)
|
|
(i)
|
|
(238)
|
|
(i)
|
|
(34)
|
|
(i)
|
|
(871)
|
|
(i)
|
Non-GAAP net
income
|
$
4,509
|
|
|
|
$
550
|
|
|
|
$
3,488
|
|
|
|
$
7,619
|
|
|
|
$
12,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.07
|
|
|
|
$
0.01
|
|
|
|
$
0.05
|
|
|
|
$
0.11
|
|
|
|
$
0.19
|
|
|
|
Diluted
|
$
0.06
|
|
|
|
$
0.01
|
|
|
|
$
0.05
|
|
|
|
$
0.11
|
|
|
|
$
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in
computing net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
68,518
|
|
|
|
68,235
|
|
|
|
67,300
|
|
|
|
68,100
|
|
|
|
66,405
|
|
|
|
Diluted
|
69,534
|
|
|
|
69,344
|
|
|
|
68,487
|
|
|
|
69,397
|
|
|
|
67,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHORETEL,
INC.
|
GAAP TO NON-GAAP
RECONCILIATION FOOTNOTES
|
(Amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
June 30,
|
|
June 30,
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
(a)
|
Stock-based
compensation included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of hosted and
related services revenue
|
$
61
|
|
|
|
$
63
|
|
|
|
$
317
|
|
|
|
$
261
|
|
|
|
$
1,272
|
|
|
|
|
Cost of product
revenue
|
9
|
|
|
|
10
|
|
|
|
11
|
|
|
|
53
|
|
|
|
64
|
|
|
|
|
Cost of support and
services revenue
|
76
|
|
|
|
80
|
|
|
|
122
|
|
|
|
370
|
|
|
|
590
|
|
|
|
|
Research and
development
|
518
|
|
|
|
550
|
|
|
|
495
|
|
|
|
2,256
|
|
|
|
1,854
|
|
|
|
|
Sales and
marketing
|
637
|
|
|
|
650
|
|
|
|
566
|
|
|
|
2,909
|
|
|
|
2,569
|
|
|
|
|
General and
administrative
|
801
|
|
|
|
841
|
|
|
|
499
|
|
|
|
3,940
|
|
|
|
2,522
|
|
|
|
|
|
$
2,102
|
|
|
|
$
2,194
|
|
|
|
$
2,010
|
|
|
|
$
9,789
|
|
|
|
$
8,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
Amortization of
acquisition-related intangibles included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of hosted and
related services
|
$
327
|
|
|
|
$
921
|
|
|
|
$
977
|
|
|
|
$
3,202
|
|
|
|
$
3,613
|
|
|
|
|
Cost of product
revenue
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
19
|
|
|
|
|
Sales and
marketing
|
895
|
|
|
|
895
|
|
|
|
896
|
|
|
|
3,579
|
|
|
|
3,465
|
|
|
|
|
General and
administrative
|
7
|
|
|
|
8
|
|
|
|
8
|
|
|
|
30
|
|
|
|
15
|
|
|
|
|
|
$
1,229
|
|
|
|
$
1,824
|
|
|
|
$
1,881
|
|
|
|
$
6,811
|
|
|
|
$
7,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
Litigation,
settlements and defense fees included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlements and
defense fees
|
$
-
|
|
|
|
$
(19)
|
|
|
|
$
56
|
|
|
|
$
(30)
|
|
|
|
$
56
|
|
|
|
|
|
$
-
|
|
|
|
$
(19)
|
|
|
|
$
56
|
|
|
|
$
(30)
|
|
|
|
$
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
Severance costs
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of hosted and
related services
|
$
-
|
|
|
|
$
50
|
|
|
|
$
-
|
|
|
|
$
50
|
|
|
|
$
-
|
|
|
|
|
Cost of product
revenue
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9
|
|
|
|
-
|
|
|
|
|
Cost of support and
services
|
341
|
|
|
|
-
|
|
|
|
-
|
|
|
|
454
|
|
|
|
10
|
|
|
|
|
Research and
development
|
242
|
|
|
|
107
|
|
|
|
277
|
|
|
|
412
|
|
|
|
402
|
|
|
|
|
Sales and
marketing
|
1,406
|
|
|
|
366
|
|
|
|
59
|
|
|
|
2,738
|
|
|
|
78
|
|
|
|
|
General and
administrative
|
64
|
|
|
|
-
|
|
|
|
-
|
|
|
|
71
|
|
|
|
3
|
|
|
|
|
|
$
2,053
|
|
|
|
$
523
|
|
|
|
$
336
|
|
|
|
$
3,734
|
|
|
|
$
493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
Direct acquisition
costs included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related costs
|
$
-
|
|
|
|
$
-
|
|
|
|
$
133
|
|
|
|
$
-
|
|
|
|
$
1,489
|
|
|
|
|
|
$
-
|
|
|
|
$
-
|
|
|
|
$
133
|
|
|
|
$
-
|
|
|
|
$
1,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f)
|
Strategic
alternatives review costs included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
$
52
|
|
|
|
$
42
|
|
|
|
$
-
|
|
|
|
$
557
|
|
|
|
$
-
|
|
|
|
|
|
$
52
|
|
|
|
$
42
|
|
|
|
$
-
|
|
|
|
$
557
|
|
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g)
|
Lease termination fee
included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of hosted and
related services
|
$
-
|
|
|
|
$
-
|
|
|
|
$
-
|
|
|
|
$
155
|
|
|
|
$
-
|
|
|
|
|
General and
administrative
|
-
|
|
|
|
-
|
|
|
|
54
|
|
|
|
-
|
|
|
|
54
|
|
|
|
|
|
$
-
|
|
|
|
$
-
|
|
|
|
$
54
|
|
|
|
$
155
|
|
|
|
$
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h)
|
Gain on sale of
non-marketable investments included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense), net
|
$
-
|
|
|
|
$
(920)
|
|
|
|
$
-
|
|
|
|
$
(920)
|
|
|
|
$
-
|
|
|
|
|
|
$
-
|
|
|
|
$
(920)
|
|
|
|
$
-
|
|
|
|
$
(920)
|
|
|
|
$
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
The deferred tax
benefit (provision) arising from acquisition and tax impact of the
items which are excluded in (a) to (h) above.
|
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SOURCE ShoreTel