Sandvine, (TSX:SVC.TO ) a leading provider of intelligent network policy control solutions for fixed and mobile operators, today reported record revenue of $31.5 million for its first quarter of 2014, net income of $7.5 million and non-IFRS income of $8.0 million. All results are reported in U.S. dollars under International Financial Reporting Standards (IFRS), unless otherwise specified.
Other Q1 2014 highlights:
FINANCIAL HIGHLIGHTS (All amounts are in U.S. dollars)
Millions of dollars, except per share data and where otherwise indicated |
Q1 |
Q1 |
Change |
Revenue |
31.5 |
25.0 |
26% |
Gross Margin percent |
78% |
72% |
6pp |
Expenses |
16.9 |
16.1 |
5% |
Net Income |
7.5 |
1.7 |
341% |
Diluted Earnings Per Share |
0.051 |
0.012 |
325% |
Non-IFRS Income1 |
8.0 |
2.2 |
259% |
Non-IFRS Diluted Earnings Per Share1 |
0.055 |
0.016 |
244% |
1 See Table 1 below regarding non-IFRS financial measures
"We are pleased to have had a good start to the year. We reported record quarterly revenue, record wireless market revenue and strong net income, all while introducing four significant product innovations. Our ongoing commitment to product innovation contributed to the strong financial performance in fiscal 2013 and the first quarter of this year. We will continue to innovate in 2014, while remaining focused on revenue growth and profitability," said Dave Caputo, Sandvine's President and CEO.
CONFERENCE CALL
The Company will discuss the financial results and business outlook on a conference call at 8:30 a.m. Eastern time today.
Toll-free North America |
(866)-215-5508 | Confirmation Number: 36985539 |
Webcast |
A replay of the call will be available at (888)-843-7419 (passcode 36985539 #) from approximately 11:00 a.m. Eastern time today through April 20.
ABOUT SANDVINE
Sandvine's network policy control solutions add intelligence to fixed, mobile and converged communications service provider networks to enable services that can increase revenue and reduce network costs. Powered by Sandvine's Policy Engine and SandScript policy language, Sandvine's networking equipment provides end-to-end policy control functions including traffic classification, and policy decision and enforcement across the data, control and business planes. Sandvine's products provide actionable business insight, the ability to deploy new subscriber services and tools to optimize traffic while enhancing subscriber Internet quality of experience.
Sandvine's network policy control solutions are deployed in more than 250 networks in over 90 countries, serving hundreds of millions of data subscribers worldwide, www.sandvine.com.
CAUTION REGARDING FORWARD LOOKING INFORMATION
Certain statements in this press release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Statements related to Sandvine's projected revenues, earnings, growth rates, revenue mix and product plans are forward-looking statements as are any statements relating to future events, conditions or circumstances. The use of terms such as "may", "anticipated", "expected", "projected", "targeting", "estimate", "intend" and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance, achievements or developments of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.
Many factors could cause the actual results of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements, including, without limitation, each of the following factors, and those factors which are further discussed in the Company's Annual Information Form ("AIF"), a copy of which is available on SEDAR at www.sedar.com.
Table 1
1. Non-IFRS Financial Measures
The following table provides a reconciliation of net income (loss) and related per share amounts to non-IFRS net income (loss) and the related per share amounts for the periods indicated. These non-IFRS financial measures, which are used internally by management to evaluate the Company's ongoing performance, exclude the impact of stock based compensation and amortization of intangible assets acquired through business acquisitions (collectively referred to as "Non-IFRS Expenses"). The Company provides these non-IFRS financial measures as it is the Company's view that the Non-IFRS Expenses either (i) affect the comparability of results from period to period as the Non-IFRS Expenses are not part of its normal day-to-day operations or only impact the current or comparable period and/or (ii) represent a "non-cash" accounting charge that does not deplete its cash resources. Accordingly, the Company believes that such financial measures may also be useful to investors in enhancing their understanding of the Company's operating performance. These non-IFRS measures are not recognized under IFRS and do not have standardized meanings prescribed by IFRS. Therefore it is unlikely to be comparable to similarly titled measures reported by other issuers. Non-IFRS financial measures should be considered in the context of the Company's IFRS results.
Three month period ended |
||
February 28 2014 $ |
February 28, 2013 $ |
|
Amounts in US$ thousands |
||
Net income |
7,481 |
1,698 |
Adjustment for |
||
Stock based compensation expense |
489 |
519 |
Non-IFRS net income |
7,970 |
2,217 |
Three month period ended |
||
February 28, 2014 $ |
February 28, 2013 $ |
|
Diluted earnings per share |
0.051 |
0.012 |
Impact on diluted earnings per share of Non-IFRS measures |
0.004 |
0.004 |
Non-IFRS diluted earnings per share |
0.055 |
0.016 |
Sandvine Corporation
Consolidated Statements of Financial Position
(in thousands of United States dollars, except share and per share data) (unaudited)
As at |
||
February 28, 2014 $ |
November 30, 2013 $ |
|
Assets |
||
Current assets |
||
Cash and cash equivalents |
8,122 |
5,454 |
Short term investments |
112,905 |
83,856 |
Accounts receivable |
37,972 |
36,662 |
Inventory |
6,901 |
7,481 |
Grant receivable |
7,051 |
6,853 |
Other current assets |
2,690 |
3,171 |
175,641 |
143,477 |
|
Non current assets |
||
Plant and equipment |
10,047 |
10,405 |
Intangible assets |
3,705 |
3,477 |
Deferred tax asset |
212 |
212 |
Other assets |
511 |
511 |
14,475 |
14,605 |
|
190,116 |
158,082 |
|
Liabilities |
||
Current liabilities |
||
Trade and other payables |
8,350 |
16,566 |
Current portion of deferred revenue |
18,190 |
14,214 |
26,540 |
30,780 |
|
Non current liabilities |
||
Deferred revenue |
1,056 |
1,571 |
27,596 |
32,351 |
|
Shareholders' equity |
||
Share capital |
151,315 |
121,509 |
Contributed surplus |
15,608 |
15,784 |
Accumulated comprehensive income (loss) |
(807) |
(485) |
Retained deficit |
(3,596) |
(11,077) |
162,520 |
125,731 |
|
190,116 |
158,082 |
Sandvine Corporation
Consolidated Statements of Income
(in thousands of United States dollars, except share and per share data) (unaudited)
For the three month period ended
|
|||||
February 28, 2014 $ |
February 28, 2013 $ |
||||
Revenue |
|||||
Product |
22,219 |
18,049 |
|||
Service |
9,328 |
6,980 |
|||
31,547 |
25,029 |
||||
Cost of sales |
|||||
Product |
3,864 |
4,524 |
|||
Service |
2,970 |
2,523 |
|||
6,834 |
7,047 |
||||
Gross margin |
24,713 |
17,982 |
|||
Expenses |
|||||
Sales and marketing |
7,873 |
7,163 |
|||
Research and development |
6,044 |
6,065 |
|||
General and administrative |
2,994 |
2,778 |
|||
Other losses, net |
18 |
44 |
|||
16,929 |
16,050 |
||||
Income from operations |
7,784 |
1,932 |
|||
Finance income (costs), net |
|||||
Finance income |
45 |
39 |
|||
Finance costs |
- |
(111) |
|||
Foreign exchange losses |
(220) |
(63) |
|||
Finance costs, net |
(175) |
(135) |
|||
Income before provision for income taxes |
7,609 |
1,797 |
|||
Current provision for income taxes |
128 |
99 |
|||
Net income for the period |
7,481 |
1,698 |
|||
Earnings per share |
|||||
Basic earnings per share |
0.053 |
0.012 |
|||
Diluted earnings per share |
0.051 |
0.012 |
Sandvine Corporation
Consolidated Statements of Cash Flows
(in thousands of United States dollars, except share and per share data) (unaudited)
For the three month period ended |
|||||
February 28, 2014 $ |
February 28, 2013 $ |
||||
Cash provided by (used in) |
|||||
Operating activities |
|||||
Net income for the period |
7,481 |
1,698 |
|||
Items not affecting cash |
|||||
Amortization of intangible assets |
274 |
277 |
|||
Depreciation of plant and equipment |
1,180 |
1,071 |
|||
Unrealized foreign exchange (gains) losses |
177 |
(96) |
|||
Finance costs |
- |
111 |
|||
Stock-based compensation |
489 |
519 |
|||
Other |
11 |
61 |
|||
9,612 |
3,641 |
||||
Changes in non-cash working capital balances |
(890) |
7,848 |
|||
8,722 |
11,489 |
||||
Investing activities |
|||||
Purchase of plant, equipment and intangible software assets |
(1,981) |
(850) |
|||
Purchase of short term investments |
(29,049) |
(3,540) |
|||
(31,030) |
(4,390) |
||||
Financing activities |
|||||
Repayment of government grants |
(4,153) |
(2,204) |
|||
Proceeds from the issuance of shares under the employee stock option plan |
915 |
194 |
|||
Common shares issued for cash |
28,269 |
- |
|||
Common share repurchase |
- |
(365) |
|||
25,031 |
(2,375) |
||||
Effect of foreign exchange on cash and cash equivalents |
(55) |
(14) |
|||
Net increase in cash during period |
2,668 |
4,710 |
|||
Cash and cash equivalents – Beginning of period |
5,454 |
3,957 |
|||
Cash and cash equivalents – End of period |
8,122 |
8,667 |
|||
Cash and cash equivalents are represented by |
|||||
Balances with banks |
8,122 |
8,667 |
SOURCE Sandvine