BOSTON, MA – May 02, 2019 — /BackupReview.info/ — Carbonite, Inc. (NASDAQ: CARB), a global leader in data protection, today announced financial results for the first quarter ended March 31, 2019.

First Quarter 2019 Highlights:

  • Revenue of $81.2 million increased 27% year-over-year.
  • Non-GAAP revenue of $83.0 million increased 28% year-over-year.(1)
  • Net income was $2.0 million, compared to net income of $11.9 million in 2018.
  • Net income per share was $0.06 (basic and diluted), as compared to $0.42 (basic) and $0.40 (diluted) in 2018.
  • Non-GAAP net income per share was $0.45 (basic) and $0.44 (diluted), as compared to $0.29 (basic) and $0.27 (diluted) in 2018.(2)
  • Adjusted EBITDA of $24.9 million, or 30% of non-GAAP revenue, compared to $12.3 million, or 19% of non-GAAP revenue in 2018.(3)

“We had a good first quarter and a strong start to 2019, with first quarter revenue and adjusted EBITDA above the high-end of our guidance,” said Mohamad Ali, CEO of Carbonite. “We are excited to have closed the Webroot acquisition as planned and started the integration process. Together, these leading solutions will provide robust protection of data, devices and networks for our partners and customers.”

The Company uses a variety of operational and financial metrics, including non-GAAP financial measures, to evaluate its performance and financial condition. The accompanying financial data includes additional information regarding these metrics and a reconciliation of non-GAAP financial information to GAAP. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

First Quarter 2019 Results:

  • Revenue for the first quarter was $81.2 million, an increase of 27% from $64.0 million in the first quarter of 2018. Non-GAAP revenue for the first quarter was $83.0 million, an increase of 28% from $64.9 million in the first quarter of 2018.(1)
  • Net income for the first quarter was $2.0 million, compared to net income of $11.9 million in the first quarter of 2018. Non-GAAP net income for the first quarter was $15.4 million, compared to non-GAAP net income of $8.1 million in the first quarter of 2018.(2)
  • Net income per share for the first quarter was $0.06 (basic and diluted), compared to net income per share of $0.42 (basic) and $0.40 (diluted) in the first quarter of 2018. Non-GAAP net income per share was $0.45 (basic) and $0.44 (diluted) for the first quarter, compared to non-GAAP net income per share of $0.29 (basic) and $0.27 (diluted) in the first quarter of 2018.(2)
  • Adjusted EBITDA for the first quarter was $24.9 million, compared to $12.3 million in the first quarter of 2018.(3)
  • Gross margin for the first quarter was 74.4%, compared to 71.4% in the first quarter of 2018. Non-GAAP gross margin was 79.5% in the first quarter, compared to 76.1% in the first quarter of 2018.(4)
  • Cash flow from operations for the first quarter was $18.7 million, compared to $3.3 million in the first quarter of 2018. Adjusted free cash flow for the first quarter was $19.7 million, compared to $2.4 million in the first quarter of 2018.(5)

(1) - Non-GAAP revenue excludes the impact of purchase accounting adjustments for acquisitions.

(2) - Non-GAAP net income and non-GAAP net income per share excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, litigation-related expense, restructuring-related expense, acquisition-related expense, non-cash convertible debt interest expense and the income tax effect of non-GAAP adjustments.

(3) - Adjusted EBITDA is calculated by excluding the impact of interest expense, net, income taxes, depreciation, amortization, purchase accounting adjustments on acquired deferred revenue, stock-based compensation expense, litigation-related expense, restructuring-related expense, and acquisition-related expense from net income (loss).

(4) - Non-GAAP gross margin excludes the impact of purchase accounting adjustments on acquired deferred revenue, amortization expense on intangible assets, stock-based compensation expense, and acquisition-related expense.

(5) - Adjusted free cash flow is calculated by subtracting the cash paid for the purchase of property and equipment and adding the payments related to acquisitions, restructuring, and litigation to net cash provided by operating activities.


Business Outlook
Based on the information available as of May 2, 2019, Carbonite expects the following for the second quarter and full year of 2019:

Second Quarter 2019:
Current Guidance(5/2/2019)
GAAP Revenue $119 – $123 million
Non-GAAP Revenue $133 – $137 million
Adjusted EBITDA $34 – $36 million
Full Year 2019:
Prior Guidance(2/7/2019) Current Guidance(5/2/2019)
GAAP Revenue $468 – $482 million $457 – $471 million
Non-GAAP Revenue $488 – $502 million $491 – $505 million
Non-GAAP Gross Margin 80.5% – 81.5% 80.5% – 81.5%
Adjusted EBITDA $129 – $134 million $132 – $137 million

Carbonite’s expectations of adjusted EBITDA for the second quarter and full year of 2019 excludes the impact of interest expense, net, income taxes, depreciation, amortization, purchase accounting adjustments on acquired deferred revenue, stock-based compensation expense, litigation-related expense, restructuring-related expense and acquisition-related expense from net income (loss).

The Company is assuming an effective annual tax rate of 22% and 35.8 million shares outstanding for the full year of 2019.

Conference Call and Webcast Information
Carbonite will host a conference call on Thursday, May 2, 2019 at 5:30 p.m. ET to review these results. This call will be webcast live and can be found in the investor relations section of the Company’s website at http://investor.carbonite.com. The conference call can also be accessed by dialing (877) 303-1393 in the United States or (315) 625-3228 internationally with the passcode: 5474657.

Following the completion of the call, a recorded replay will be available on the Company’s website, http://investor.carbonite.com, under “Events & Presentations”.

Non-GAAP Financial Measures
To supplement our consolidated financial statements presented in accordance with GAAP, this press release contains non-GAAP financial measures, including non-GAAP revenue, non-GAAP gross margin, non-GAAP net income and non-GAAP net income per share, non-GAAP operating expense, adjusted EBITDA and adjusted free cash flow.

The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and ordinary results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods and uses these measures in financial reports prepared for management and the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors.

The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant items that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures provided in the tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company’s business.

With respect to our expectations under “Business Outlook” above, the Company has not reconciled non-GAAP gross margin to gross margin or adjusted EBITDA to net income (loss) in this press release because we do not provide guidance for amortization expense on intangible assets, depreciation expense, stock-based compensation expense, litigation-related expense, income tax expense, restructuring-related expense, interest expense, and acquisition-related expense as we are unable to quantify certain of these amounts that would be required to be included in the GAAP measure without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

Cautionary Language Concerning Forward-Looking Statements
Certain matters discussed in this press release, including under “Business Outlook,” have “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements will include words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or words of similar import. Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, our ability to integrate the Webroot acquisition and other acquisitions into our operations and achieve the expected operational and financial benefits of such acquisitions and the timing of such benefits, our ability to profitably attract new customers and retain existing customers, our dependence on the market for cloud backup services, our ability to manage growth, changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry, and those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission (the “SEC”), which is available on www.sec.gov, and elsewhere in any subsequent periodic or current reports filed by us with the SEC. Except as required by applicable law, we do not undertake any obligation to update our forward-looking statements to reflect future events, new information or circumstances.

About Carbonite
Carbonite provides a robust Data Protection Platform for businesses, including backup, disaster recovery, high availability and workload migration technology. The Carbonite Data Protection Platform supports businesses on a global scale with secure cloud infrastructure. To learn more, visit www.carbonite.com and follow us on Twitter at @Carbonite.

Carbonite, Inc. serves customers through three brands: Carbonite data protection, Webroot cybersecurity, and MailStore email archiving.

Carbonite, Inc.
Consolidated Statement of Operations (unaudited)
(In thousands, except share and per share amounts)
Three Months EndedMarch 31,
2019 2018
Revenue:
Services $ 71,503 $ 54,574
Product 9,712 9,452
Total revenue 81,215 64,026
Cost of revenue:
Services 17,102 15,330
Product 383 557
Amortization of intangible assets 3,294 2,425
Total cost of revenue 20,779 18,312
Gross profit 60,436 45,714
Operating expenses:
Research and development 15,807 12,519
General and administrative 20,989 14,460
Sales and marketing 21,765 19,860
Amortization of intangible assets 4,300 939
Restructuring charges 862
Total operating expenses 62,861 48,640
Loss from operations (2,425 ) (2,926 )
Interest expense (4,011 ) (2,601 )
Interest income 965 244
Other income (expense), net 212 12
Loss before income taxes (5,259 ) (5,271 )
Benefit for income taxes (7,262 ) (17,215 )
Net income $ 2,003 $ 11,944
Net income per share:
Basic $ 0.06 $ 0.42
Diluted $ 0.06 $ 0.40
Weighted-average shares outstanding:
Basic 34,164,957 28,341,633
Diluted 35,294,015 30,043,783
Carbonite, Inc.
Consolidated Balance Sheets (unaudited)
(In thousands)
March 31, 2019 December 31, 2018
Assets
Current assets
Cash and cash equivalents $ 252,602 $ 198,087
Trade accounts receivable, net 50,501 31,569
Prepaid expenses and other current assets 30,742 10,409
Total current assets 333,845 240,065
Property and equipment, net 45,446 34,101
Right-of-use lease assets 55,204
Other assets 26,273 13,876
Acquired intangible assets, net 430,297 117,963
Goodwill 541,230 155,086
Total assets $ 1,432,295 $ 561,091
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $ 4,942 $ 2,114
Accrued compensation 154,145 11,620
Accrued expenses and other current liabilities 47,583 15,844
Current portion of deferred revenue 172,432 121,553
Total current liabilities 379,102 151,131
Long-term debt 645,371 118,305
Long-term lease liabilities 51,798
Deferred revenue, net of current portion 42,418 29,151
Other long-term liabilities 50,423 5,294
Total liabilities 1,169,112 303,881
Stockholders’ equity
Common stock 372 366
Additional paid-in capital 455,971 451,618
Treasury stock, at cost (49,276 ) (48,522 )
Accumulated other comprehensive income 2,015 1,650
Accumulated deficit (145,899 ) (147,902 )
Total stockholders’ equity 263,183 257,210
Total liabilities and stockholders’ equity $ 1,432,295 $ 561,091
Carbonite, Inc.
Consolidated Statement of Cash Flows (unaudited)
(In thousands)
Three Months EndedMarch 31,
2019 2018
Operating activities
Net income $ 2,003 $ 11,944
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 11,149 6,077
Amortization of right-of-use lease assets 1,291
Amortization of deferred costs 647 424
(Gain) loss on disposal of equipment (36 ) 58
Impairment of capitalized software 653
Stock-based compensation expense 4,205 3,737
Benefit for deferred income taxes (7,318 ) (17,662 )
Non-cash interest expense related to amortization of debt discount 1,712 1,543
Other non-cash items, net 1 66
Changes in assets and liabilities, net of acquisition:
Accounts receivable (356 ) (4,616 )
Prepaid expenses and other current assets (5,430 ) 86
Other assets 123 (2,211 )
Accounts payable (870 ) (4,214 )
Accrued expenses and other current liabilities 7,349 3,016
Other long-term liabilities (1,388 ) 252
Deferred revenue 5,662 4,138
Net cash provided by operating activities 18,744 3,291
Investing activities
Purchases of property and equipment (2,758 ) (3,288 )
Proceeds from sale of property and equipment and businesses 51 330
Proceeds from maturities of derivatives 6
Purchases of derivatives (6 ) (1,403 )
Payment for intangibles (1,250 )
Payment for acquisition, net of cash acquired1 (489,640 ) (144,603 )
Net cash used in investing activities (492,347 ) (150,214 )
Financing activities
Proceeds from exercise of stock options 130 726
Payments of withholding taxes in connection with restricted stock unit vesting (754 ) (550 )
Proceeds from long-term borrowings, net of debt issuance costs 531,893 88,984
Net cash provided by financing activities 531,269 89,160
Effect of currency exchange rate changes on cash (463 ) 541
Net increase (decrease) in cash, cash equivalents and restricted cash 57,203 (57,222 )
Cash, cash equivalents and restricted cash, beginning of period 198,087 128,231
Cash, cash equivalents and restricted cash, end of period1 $ 255,290 $ 71,009

(1) The payment for acquisition is net of $126.9 million of cash acquired, which includes $2.7 million of restricted cash that is included in the other assets section of the consolidated balance sheet.

Carbonite, Inc.
Reconciliation of GAAP to Non-GAAP Measures (unaudited)
(In thousands, except share and per share amounts)
Reconciliation of GAAP Revenue to Non-GAAP Revenue
Three Months EndedMarch 31,
2019 2018
GAAP revenue $ 81,215 $ 64,026
Add:
Fair value adjustment of acquired deferred revenue 1,753 882
Non-GAAP revenue $ 82,968 $ 64,908
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
Three Months EndedMarch 31,
2019 2018
Gross profit $ 60,436 $ 45,714
Gross margin 74.4 % 71.4 %
Add:
Fair value adjustment of acquired deferred revenue 1,753 882
Amortization of intangibles 3,294 2,425
Stock-based compensation expense 424 325
Acquisition-related expense 14 54
Non-GAAP gross profit $ 65,921 $ 49,400
Non-GAAP gross margin 79.5 % 76.1 %
Reconciliation of GAAP Net Income and Net Income per Share to Non-GAAP Net Income and Net Income per Share
Three Months EndedMarch 31,
2019 2018
GAAP net income $ 2,003 $ 11,944
Add:
Fair value adjustment of acquired deferred revenue 1,753 882
Amortization of intangibles 7,594 3,364
Stock-based compensation expense 4,205 3,737
Litigation-related expense 98 17
Restructuring-related expense 862
Acquisition-related expense 9,863 3,620
Non-cash debt interest expense 1,712 1,543
Less:
Income tax effect of non-GAAP adjustments 11,791 17,845
Non-GAAP net income $ 15,437 $ 8,124
GAAP net income per share:
Basic $ 0.06 $ 0.42
Diluted $ 0.06 $ 0.40
Non-GAAP net income per share:
Basic $ 0.45 $ 0.29
Diluted $ 0.44 $ 0.27
GAAP weighted-average shares outstanding:
Basic 34,164,957 28,341,633
Diluted 35,294,015 30,043,783
Non-GAAP weighted-average shares outstanding:
Basic 34,164,957 28,341,633
Diluted 35,294,015 30,043,783
Reconciliation of GAAP Operating Expense to Non-GAAP Operating Expense
Three Months EndedMarch 31,
2019 2018
Research and development $ 15,807 $ 12,519
Less:
Stock-based compensation expense 946 687
Acquisition-related expense 83 35
Non-GAAP research and development $ 14,778 $ 11,797
General and administrative $ 20,989 $ 14,460
Less:
Stock-based compensation expense 1,958 2,124
Litigation-related expense 98 17
Acquisition-related expense 9,478 3,490
Non-GAAP general and administrative $ 9,455 $ 8,829
Sales and marketing $ 21,765 $ 19,860
Less:
Stock-based compensation expense 877 601
Acquisition-related expense 288 41
Non-GAAP sales and marketing $ 20,600 $ 19,218
Amortization of intangible assets $ 4,300 $ 939
Less:
Amortization of intangible assets 4,300 939
Non-GAAP amortization of intangible assets $ $
Restructuring charges $ $ 862
Less:
Restructuring-related expense 862
Non-GAAP restructuring charges $ $
Calculation of Adjusted Free Cash Flow
Three Months EndedMarch 31,
2019 2018
Net cash provided by operating activities $ 18,744 $ 3,291
Subtract:
Purchases of property and equipment 2,758 3,288
Free cash flow 15,986 3
Add:
Acquisition-related payments 3,685 1,647
Restructuring-related payments 665
Litigation-related payments 127
Adjusted free cash flow $ 19,671 $ 2,442
Reconciliation of EBITDA and Adjusted EBITDA to Net Income
Three Months EndedMarch 31,
2019 2018
Net income $ 2,003 $ 11,944
Adjustments:
Interest expense, net 3,046 2,357
Income tax benefit (7,262 ) (17,215 )
Depreciation and amortization 11,149 6,077
EBITDA 8,936 3,163
Adjustments to EBITDA:
Fair value adjustment of acquired deferred revenue 1,753 882
Stock-based compensation expense 4,205 3,737
Litigation-related expense 98 17
Restructuring-related expense 862
Acquisition-related expense 9,863 3,620
Adjusted EBITDA $ 24,855 $ 12,281

Investor Relations Contact:
Jeremiah Sisitsky
Carbonite
781-928-0713
investor.relations@carbonite.com

Media Contact:
Sarah King
Carbonite
617-421-5601
media@carbonite.com

Source: Carbonite

 

 

 

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