Welcome!

News Feed Item

Procera Networks Announces First Quarter 2014 Financial Results

FREMONT, CA -- (Marketwired) -- 05/01/14 -- Procera Networks, Inc. (NASDAQ: PKT), the global Internet intelligence company, today reported financial results for its first quarter 2014 ended on March 31, 2014.

First Quarter 2014 Business and Financial Highlights

  • Reports first quarter revenue of $14.5 million, meets Procera's guidance for the quarter.

  • First quarter bookings of $10.9 million.

  • Recently awarded business at two new Tier 1 service providers in Asia and initial business is valued at approximately $3.5 million (not reflected in bookings and one of the awards was in April).

  • Added 16 new service provider customers, of which 13 are mobile operators; mobile operators contributed 49% of product revenue.

  • Received expansion orders from 12 current Tier 1 customers.

  • Selected by a Tier 1 Mobile operator in the U.S. for a field trial of our analytics and personalized services.

  • Expanded our Network Function Virtualization partnerships by joining Alcatel-Lucent's Cloudband™ Ecosystem as a go-to-market partner.

  • Procera's Network Application Visibility Library (NAVL) was selected by GFI Software™ to enhance GFI WebMonitor™, one of the industry's leading web security solutions for small to mid-size businesses.

Revenue for the first quarter of 2014 was $14.5 million, up 3% from revenue of $14.2 million in the first quarter of 2013. GAAP net loss for the first quarter of 2014 was $6.0 million, or $0.29 per diluted share, compared to GAAP net loss of $6.7 million, or $0.34 per diluted share, for the first quarter of 2013. Non-GAAP net loss for the first quarter of 2014 was $3.9 million, or $0.19 per diluted share, compared to non-GAAP net loss of $3.1 million, or $0.16 per diluted share, for the first quarter of 2013. Bookings for the first quarter of 2014 were $10.9 million.

A description of the non-GAAP financial measures and a reconciliation to comparable GAAP measures is provided in the accompanying table entitled "Use of Non-GAAP Financial Information" below.

"Procera continues a rapid pace of innovation and development in Virtualization and customer experience solutions. Our advances are attracting new trials and partnerships with industry leaders that position us well for competitive differentiation," stated James Brear, President and CEO of Procera Networks. "We will continue to invest in broadband and mobile solutions for long-term growth."

Guidance

Procera is reiterating guidance of annual revenue growth of 15% for 2014. We expect a return to non-GAAP profitability in the second half of 2014.

This guidance is an estimate only and actual performance could differ. Procera's financial results historically have been volatile, and a number of uncertainties and other factors may cause Procera's future results, performance or achievements to be materially different from prior results.

Conference Call Information

Procera Networks, Inc. is hosting a conference call for analysts and investors to discuss its first quarter 2014 results at 1:30 p.m. Pacific time (4:30 p.m. Eastern time) today, May 1, 2014. A live audio webcast of the conference call along with supplemental financial information will also be accessible from the "Investors Relations" section of Procera's website at http://proceranetworks.com/investors. A replay will be available following the call on Procera's Investor Relations website and for one week at the following numbers: (855) 859-2056 (domestic), (404) 537-3406 (international) using ID# 22247157.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements related to Procera Networks, Inc., including statements about Procera's expectations for 2014 revenue growth and product solution investments, a return to non-GAAP profitability in the second half of 2014, long-term growth and the market opportunity, the estimated future value of Procera's recently awarded business, as well as Procera's general outlook. Statements in this release that are not historical or current facts are forward-looking statements. All forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause Procera's actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These risks and uncertainties include, without limitation, risks and uncertainties related to the acceptance and adoption of Procera's products; Procera's ability to service and upgrade its products; lengthy sales cycles and lab and field trial delays by service providers; its ability to obtain any follow-on orders from major customers; its customers canceling orders or awards; its ability to achieve revenue recognition on awarded business; its dependence on a limited product line and key customers; its dependence on key employees; its ability to compete in our industry with companies that are significantly larger and have greater resources than us; its ability to manage costs effectively; its ability to protect its intellectual property rights in a global market; its ability to manufacture product quickly enough to meet potential demand; its ability to continue to integrate Vineyard Networks and realize anticipated benefits from the acquisition; and other risks and uncertainties described more fully in Procera's 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 described in the "Risk Factors" sections of its Form 10-K filed for the year ended December 31, 2013 and other reports filed with the SEC, which are available free of charge on the SEC's website at http://www.sec.gov and on Procera's website at http://www.proceranetworks.com. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements in this press release are based on information available to Procera as of the date hereof, and Procera undertakes no obligation to update, amend or clarify any forward-looking statement for any reason.

Use of Non-GAAP Financial Information
In addition to the financial results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures. Our management regularly uses these supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods and believes that these non-GAAP financial measures, when taken together with the corresponding GAAP measures, provide incremental insight into the underlying factors and trends affecting both Procera's performance and its cash-generating potential.

Our non-GAAP financial measures include adjustments for stock-based compensation expenses; business development expenses; cost reduction efforts; and acquisition-related intangible asset and deferred compensation amortization and tax effects. We have excluded the effect of stock-based compensation; the cost of outside professional services for negotiating and performing legal, accounting and tax due diligence for potential mergers and acquisitions; expenses connected with cost reduction efforts; and acquisition-related intangible asset and deferred compensation amortization, and tax effects, from our non-GAAP gross profit, operating expenses and net income measures. Stock-based compensation, which represents the estimated fair value of stock options, restricted stock and restricted stock units granted to employees, is excluded since grant activities vary significantly from quarter to quarter in both quantity and fair value. In addition, although stock-based compensation will recur in future periods, excluding this expense allows us to better compare core operating results with those of our competitors who also generally exclude stock-based compensation from their core operating results, and who may have different granting patterns and types of equity awards and who may use different option valuation assumptions than we do. Business development expenses are necessary as part of certain growth strategies, such as through mergers and acquisitions, and will occur when such transactions are pursued. We have excluded these expenses because they can vary materially from period-to-period and transaction-to-transaction and expenses associated with these business development activities are not considered a key measure of Procera's operating performance. Cost reduction efforts occur with shifts in objectives and evolving requirements of the business and can result in fluctuating expenses connected with reducing employment in certain areas. We have excluded these expenses because they can vary significantly from period-to-period and are not considered a key measure of Procera's operating performance. Acquisition-related intangible asset and deferred compensation amortization and tax effects represent non-cash charges and benefits that result from the accounting for acquisitions. We have excluded these items because, in any period, they may not directly correlate to the underlying performance of Procera's business and these items can vary materially from period-to-period and transaction-to-transaction. In addition, we exclude these acquisition-related costs and benefits when evaluating our current operating performance.

Our non-GAAP financial measures may not reflect the full economic impact of Procera's activities. 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, including Procera's competitors. As such, this presentation of non-GAAP financial measures may not enhance the comparability of Procera's results to the results of other companies. Therefore, these non-GAAP financial measures are limited in their usefulness and investors are cautioned not to place undue reliance on our non-GAAP financial measures. In addition, investors are cautioned that these non-GAAP financial measures are not intended to be considered in isolation and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP.

For a reconciliation 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."

About Procera Networks Inc.
Procera Networks Inc. (NASDAQ: PKT) delivers Internet Intelligence solutions to service providers and network equipment manufacturers for analytics and enforcement of broadband traffic worldwide. Procera's solutions provide actionable intelligence and policy enforcement to ensure a high quality experience for any Internet and network connected devices. For more information, visit www.proceranetworks.com or follow Procera on twitter at @ProceraNetworks.



Procera Networks, Inc.
Condensed Consolidated Statements of Operations
Unaudited
(in thousands, except per share data)

                                                     Three Months Ended
                                                          March 31,
                                                 --------------------------
                                                     2014          2013
                                                 ------------  ------------
Sales:
  Product sales                                  $      9,504  $     10,411
  Support sales                                         5,037         3,760
                                                 ------------  ------------
    Total sales                                        14,541        14,171
Cost of sales:
  Product cost of sales                                 5,091         6,087
  Support cost of sales                                 1,066           715
                                                 ------------  ------------
    Total cost of sales                                 6,157         6,802
                                                 ------------  ------------

    Gross profit                                        8,384         7,369
                                                 ------------  ------------
                                                         57.7%         52.0%
Operating expenses:
  Research and development                              4,548         4,401
  Sales and marketing                                   6,877         6,621
  General and administrative                            3,110         3,637
                                                 ------------  ------------
    Total operating expenses                           14,535        14,659
                                                 ------------  ------------

Loss from operations                                   (6,151)       (7,290)
                                                 ------------  ------------

Interest and other income (expense), net                   28           (50)
                                                 ------------  ------------

  Loss before income taxes                             (6,123)       (7,340)
Income tax provision (benefit)                           (147)         (623)
                                                 ------------  ------------
  Net loss                                       $     (5,976) $     (6,717)
                                                 ============  ============

Net loss per share - basic and diluted           $      (0.29) $      (0.34)
                                                 ============  ============

Shares used in computing net loss per share:
  Basic and diluted                                    20,329        19,931



Procera Networks, Inc.
Condensed Consolidated Balance Sheets
(in thousands)

                                                   March 31,   December 31,
                                                     2014          2013
                                                 ------------  ------------
ASSETS
Current Assets:
  Cash and cash equivalents                      $     32,877  $     90,774
  Short-term investments                               73,435        15,789
  Accounts receivable, net of allowance                12,965        25,008
  Inventories, net                                     20,229        18,836
  Prepaid expenses and other                            2,086         2,128
                                                 ------------  ------------
Total current assets                                  141,592       152,535

Property and equipment, net                             7,658         7,121
Intangible assets, net                                  5,665         6,270
Goodwill                                               11,911        12,326
Deferred tax asset                                      1,210         1,101
Other non-current assets                                   91            83
                                                 ------------  ------------
Total assets                                     $    168,127  $    179,436
                                                 ============  ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                               $      3,651  $      7,305
  Deferred revenue                                     10,458        11,633
  Accrued liabilities                                   5,919         6,721
                                                 ------------  ------------
Total current liabilities                              20,028        25,659

Non-current liabilities:
  Deferred revenue                                      2,957         3,273
  Deferred tax liability                                1,599         1,690
  Other long-term liabilities                             136           143
                                                 ------------  ------------
Total liabilities                                      24,720        30,765

Commitments and contingencies                               -             -

Stockholders' equity:
  Common stock                                             21            21
  Additional paid-in capital                          221,145       219,763
  Accumulated other comprehensive loss                 (2,567)       (1,897)
  Accumulated deficit                                 (75,192)      (69,216)
                                                 ------------  ------------
Total stockholders' equity                            143,407       148,671
                                                 ------------  ------------

Total liabilities and stockholders' equity       $    168,127  $    179,436
                                                 ============  ============



Procera Networks, Inc.
GAAP to Non-GAAP Reconciliation; and Supplemental Financial Information
Unaudited
(in thousands, except per share data)
                                               Three Months Ended
                                     --------------------------------------
                                      March 31,   December 31,   March 31,
                                         2014         2013          2013
                                     -----------  ------------  -----------
Sales:
  Product sales                      $     9,504  $     16,191  $    10,411
  Support sales                            5,037         5,139        3,760
                                     -----------  ------------  -----------
    Total sales                           14,541        21,330       14,171
Cost of sales:
  Product cost of sales, GAAP              5,091         8,011        6,087

    Non-GAAP adjustments:
      Stock-based compensation (1)           (15)          (26)         (19)
      Amortization of intangibles
       (2)                                  (262)         (275)        (260)
      Cost reduction efforts (3)            (237)            -            -
                                     -----------  ------------  -----------
    Product cost of sales, non-GAAP        4,577         7,710        5,808

  Support cost of sales, GAAP              1,066           957          715
    Non-GAAP adjustments:
      Stock-based compensation (1)           (82)          (79)         (93)
                                     -----------  ------------  -----------
    Support cost of sales, non-GAAP          984           878          622
                                     -----------  ------------  -----------
    Total cost of sales, non-GAAP          5,561         8,588        6,430
                                     -----------  ------------  -----------
    Gross profit, non-GAAP                 8,980        12,742        7,741
                                     -----------  ------------  -----------
                                            61.8%         59.7%        54.6%
Operating expenses:
  Research and development                 4,548         5,016        4,401
    Non-GAAP adjustments:
      Stock-based compensation (1)          (388)         (292)        (500)
      Cost reduction efforts (3)            (206)            -            -
      Deferred compensation (4)              (65)         (753)        (688)
                                     -----------  ------------  -----------
    Research and development, non-
     GAAP                                  3,889         3,971        3,213


  Sales and marketing                      6,877         7,959        6,621
    Non-GAAP adjustments:
      Stock-based compensation (1)          (408)         (334)        (587)
      Amortization of intangibles
       (2)                                  (113)         (119)        (112)
      Cost reduction efforts (3)             (74)            -            -
      Deferred compensation (4)                -          (777)        (654)
                                     -----------  ------------  -----------
    Sales and marketing, non-GAAP          6,282         6,729        5,268

  General and administrative               3,110         2,537        3,637
    Non-GAAP adjustments:
      Stock-based compensation (1)          (420)         (512)        (399)
      Cost reduction efforts (3)             (27)            -            -
      Business development expenses
       (5)                                     -             -       (1,002)
                                     -----------  ------------  -----------
    General and administrative, non-
     GAAP                                  2,663         2,025        2,236
                                     -----------  ------------  -----------
    Total operating expenses, non-
     GAAP                                 12,834        12,725       10,717
                                     -----------  ------------  -----------

Income (loss) from operations, non-
 GAAP                                     (3,854)           17       (2,976)
                                     -----------  ------------  -----------

Interest and other income (expense),
 net                                          28           359          (50)
                                     -----------  ------------  -----------

  Income (loss) before income taxes,
   non-GAAP                               (3,826)          376       (3,026)

Income tax provision (benefit)              (147)          511         (623)
    Non-GAAP adjustments (6)                 179          (142)         726
                                     -----------  ------------  -----------
  Income tax provision (benefit),
   non-GAAP                                   32           369          103
                                     -----------  ------------  -----------
  Net income (loss), non-GAAP        $    (3,858) $          7  $    (3,129)
                                     ===========  ============  ===========

Net income (loss) per share -
 diluted, non-GAAP                   $     (0.19) $       0.00  $     (0.16)
                                     ===========  ============  ===========

Shares used in computing diluted net
 income (loss) per share                  20,329        20,144       19,931

Reconciliation of Net Income (Loss):
  U.S. GAAP as reported              $    (5,976) $     (3,302) $    (6,717)
    Non-GAAP adjustments:
      Stock-based compensation (1)         1,313         1,243        1,598
      Amortization of intangibles
       (2)                                   375           394          372
      Cost reduction efforts (3)             544             -            -
      Deferred compensation (4)               65         1,530        1,342
      Business development expenses
       (5)                                     -             -        1,002
      Income tax adjustment (6)             (179)          142         (726)
                                     -----------  ------------  -----------
  As Adjusted                        $    (3,858) $          7  $    (3,129)
                                     ===========  ============  ===========

Reconciliation of Diluted Net Income
 (Loss) Per Share:
  U.S. GAAP as reported              $     (0.29) $      (0.16) $     (0.34)
                                     ===========  ============  ===========
    Non-GAAP adjustments:
      Stock-based compensation (1)          0.06          0.06         0.08
      Amortization of intangibles
       (2)                                  0.02          0.02         0.02
      Cost reduction efforts (3)            0.03             -            -
      Deferred compensation (4)             0.00          0.08         0.07
      Business development expenses
       (5)                                     -             -         0.05
      Income tax adjustment (6)            (0.01)         0.01        (0.04)
                                     -----------  ------------  -----------
  As Adjusted                        $     (0.19) $       0.00  $     (0.16)
                                     ===========  ============  ===========

Shares used in computing diluted net
 income (loss) per share                  20,329        20,144       19,931

(1) Stock-based compensation expense is calculated in accordance with the
    fair value recognition provisions of ASC 718.
(2) Amortization expense associated with intangible assets acquired in the
    Vineyard Networks acquisition.
(3) Severance and other employee-related costs in connection with the
    Company's cost-reduction efforts.
(4) Deferred compensation includes amortization of amounts paid under
    retention agreements with Vineyard's three founders; these were paid
    during Q1 2014, after one year of continuous employment with the
    Company.
(5) Business development expenses include the cost of outside professional
    services for negotiating and performing legal, accounting and tax due
    diligence for potential mergers, acquisitions and other significant
    partnership arrangements.
(6) Income tax benefit associated with the following Vineyard acquisition
    related items:
    - reversal of Vineyard's pre-existing income tax valuation allowance
    upon acquisition; and
    - amortization of acquired intangible assets and book/tax differences on
    deferred revenue.

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Tintri VM-aware storage is the simplest for virtualized applications and cloud. Organizations including GE, Toyota, United Healthcare, NASA and 6 of the Fortune 15 have said "No to LUNs." With Tintri they manage only virtual machines, in a fraction of the footprint and at far lower cost than conventional storage. Tintri offers the choice of all-flash or hybrid-flash platform, converged or stand-alone structure and any hypervisor. Rather than obsess with storage, leaders focus on the business app...
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed ...
Column Technologies exhibited at SYS-CON's @DevOpsSummit at Cloud Expo, which took place at the Javits Center in New York City, NY, in June 2016. Established in 1998, Column Technologies is a global technology solutions provider with over 400 employees, headquartered in the United States with offices in Canada, India, and the United Kingdom. Column Technologies provides “Best of Breed” technology solutions that automate the key DevOps principals and help our customers meet today’s DevOps and Dig...
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
Ayehu provides IT Process Automation & Orchestration solutions for IT and Security professionals to identify and resolve critical incidents and enable rapid containment, eradication, and recovery from cyber security breaches. Ayehu provides customers greater control over IT infrastructure through automation. Ayehu solutions have been deployed by major enterprises worldwide, and currently, support thousands of IT processes across the globe. The company has offices in New York, California, and Isr...
LogMeIn has completed its previously disclosed merger with Citrix Systems, Inc.’s GetGo, Inc. subsidiary, a wholly owned subsidiary consisting of Citrix’s GoTo family of service offerings. The merger officially closed after market hours on January 31, 2017. Effected through a Reverse Morris Trust transaction, the merger brings together two of the preeminent players in cloud connectivity to instantly create one of the world’s top 10 public SaaS companies, and a market leader with the scale, resou...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
Addteq is one of the top 10 Platinum Atlassian Experts who specialize in DevOps, custom and continuous integration, automation, plugin development, and consulting for midsize and global firms. Addteq firmly believes that automation is essential for successful software releases. Addteq centers its products and services around this fundamentally unique approach to delivering complete software release management solutions. With a combination of Addteq's services and our extensive list of partners,...