TIDMSAND
RNS Number : 2231V
Sandvine Corporation
10 January 2013
SANDVINE REPORTS Q4 2012 RESULTS
Waterloo, Canada; January 10, 2013 - Sandvine, (TSX:SVC;
AIM:SAND) a leading provider of intelligent network policy control
solutions for fixed and mobile operators, today reported $27.5
million in revenue for its fourth quarter of 2012, non-IFRS income
of $6.9 million and net income of $6.5 million. During the quarter
the Company recorded a one-time, $3.8 million reduction in
operating expenses for Ontario government funding related to its
ongoing project under the Next Generation of Jobs Fund.
Full year results included revenue of $87.9 million and a
non-IFRS loss of $2.7 million (net loss of $5.0 million). All
results are reported in U.S. dollars under International Financial
Reporting Standards (IFRS), unless otherwise specified.
Q4 2012 highlights:
-- Revenue by access technology market: wireless 48%; DSL 35%; cable 17%
-- Revenue by geography: NA 44%; APAC 26%; EMEA 18%; CALA 12%
-- Revenue by sales channel: reseller 78%; direct 22%
-- Gross margin: 71%
-- Cash, cash equivalents and short-term investments balance: $74.6 million
-- Announced significant initial orders from new Tier 1 customers:
o A converged North American operator deploying service
creation, business intelligence and traffic optimization solutions
in the fixed and mobile networks
o A converged, multinational, Western European operator group
deploying business intelligence and traffic optimization in the
fixed line network of its home country
-- Since its Q3 results announcement, Sandvine has announced
over $18.0 million in expansion orders from major existing
customers
-- Won nine new service provider customers.
"We are pleased with fourth quarter results as they demonstrate
ongoing progress in revenue growth and profitability," said Dave
Caputo, Sandvine's President and CEO. "Total revenue and wireless
market revenue were at record levels, driven by large initial
orders from two new Tier 1 customers and large expansion orders
from major existing customers, which has been a key area of focus
for us in 2012."
FINANCIAL HIGHLIGHTS (All amounts are in U.S. dollars)
Millions of dollars, except Q4 Q3 Q4
per share data and where
otherwise indicated
2012 2012 Change 2011 Change
-------------------------------- ------ -------- -------- -------- --------
Revenue 27.5 21.8 26% 20.9 31%
Gross Margin percent 71% 70% 1pp 72% -1pp
Expenses 12.9 16.8 -23% 17.6 -27%
Net Income (Loss) 6.5 (0.9) (2.1)
Diluted Income (Loss) Per
Share 0.046 (0.006) (0.015)
Non-IFRS Income (Loss)(1) 6.9 (0.4) (1.4)
Non-IFRS Diluted Income (Loss)
Per Share(1) 0.049 (0.003) (0.010)
-------------------------------- ------ -------- -------- -------- --------
(1) See Table 1 below regarding non-IFRS financial measures
CONFERENCE CALL
The Company will discuss the financial results and business
outlook on a conference call at 8:30 a.m. Eastern time (1:30 BST)
today. A webcast will be available on Sandvine's website.
Toll-free North America (888) 771-4371
Toll-free United Kingdom 0808 238 9578
A replay of the call will be available at (888) 843-7419
(passcode 33987244#) from approximately 11:00 a.m. Eastern time
today through January 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 200 networks in over 85 countries, serving hundreds of
millions of data subscribers worldwide, www.sandvine.com.
INVESTOR RELATIONS CONTACT MEDIA CONTACT AIM NOMAD
Rick Wadsworth Sacha DeGroot Andrew Chubb/Simon
Sandvine Sandvine Bridges
+1 519 880 2400 ext. 3503 +1 519 880 2400 Canaccord Genuity
rwadsworth@sandvine.com x 2232 Limited
sdegroot@sandvine.com +44 0207 523 8000
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.
-- The Company's revenues may fluctuate from quarter to quarter
and year to year depending upon sales cycles, customer demand and
the timing of customer purchase decisions;
-- The Company's gross margins may fluctuate from period to
period depending upon a variety of factors including product mix in
the quarter, competitive pricing pressures and the level of sales
generated through indirect channels;
-- The Company is dependent upon and expects to continue to
derive a large percentage of its revenue from both a small number
of key customers and key reseller partners, none of whom are bound
to any fixed purchase commitment or exclusivity obligations and
could change their buying patterns and/or source of supply at any
time, which could have a material impact on the Company's revenues.
In addition, the Company extends credit to its customers and
resellers by virtue of agreed upon payment terms and could be
exposed to collection risk on its receivables particularly if any
key customer or key reseller were to face financial challenges. The
Company's reseller partners may also offer their own products which
are competitive with the Company's products;
-- The Company faces intense competition in markets where there
are typically several different competing technologies and rapid
technological changes. The Company faces the risk of emergence of
new technologies that may be either competitive to those of the
Company or that change the requirements of the Company's customers
for solutions such as those offered by the Company;
-- The Company's growth is dependent on the development of the
market for network policy control solutions and the decisions of
the Company's target customers to deploy and further invest in
those technologies, which decisions may be impacted upon by
changing requirements in the area of broadband network management
policies and/or changes in the regulatory framework to which the
Company's customers may be subject. In particular, numerous
telecommunications legislators and regulators in various
jurisdictions have considered or are considering what, if any,
regulations might be appropriate with respect to how internet
service providers manage the impact of different types of traffic
on their networks. These ongoing processes may cause uncertainty in
the network investment decisions of the Company's target customers,
and any new rules or regulations that result from these
considerations may impact the demand for the Company's products
within various markets, including markets that may not be
considering any new regulation but where the Company's customers
may look to other markets for future guidance or trends;
-- The Company has increased its dependence on certain third
party sub-assembly manufacturers and any disruption in the
operations or quality of those suppliers or any increase in
expected lead times from those suppliers could result in lost or
delayed revenue and/or reduced profits;
-- The majority of the Company's operating expenses are
denominated in Canadian dollars, U.S. dollars, New Israeli Shekels
and Indian rupees. The Company's earnings are impacted by
fluctuations in the exchange rates between the U.S. dollar and
these currencies.
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.
Twelve month period
Three month period ended ended
-------------------------------- ------------------------------- ----------------------
November August November November November
30 31 2012 30 30 30
2012 $ 2011 2012 2011
$ $ $ $
Amounts in US$ thousands
Net income (loss) 6,466 (851) (2,111) (5,038) (1,429)
Adjustment for
Stock based compensation
expense 433 437 489 1,909 2,096
Amortization of intangible
assets acquired through
business acquisitions - 61 185 431 754
Non-IFRS Net income (loss) 6,899 (353) (1,437) (2,698) 1,421
-------------------------------- --------- --------- --------- ---------- ----------
Twelve month period
Three month period ended ended
------------------------------- ------------------------------- ----------------------
November August November November November
30 31 2012 30 30 30
2012 $ 2011 2012 2011
$ $ $ $
Diluted earnings (loss)
per share 0.046 (0.006) (0.015) (0.036) (0.010)
Impact on diluted earnings
(loss) per share of Non-IFRS
measures 0.003 0.003 0.005 0.016 0.020
------------------------------- --------- --------- --------- ---------- ----------
Non-IFRS Diluted earnings
(loss) per share 0.049 (0.003) (0.010) (0.020) 0.010
------------------------------- --------- --------- --------- ---------- ----------
Sandvine Corporation
Consolidated Statements of Financial Position
(in thousands of United States dollars, except share and per
share data)
As at
November 30, November 30, December 1,
2012 2011 2010
$ $ $
Assets
Current assets
Cash and cash equivalents 3,957 2,952 87,949
Short term investments 70,679 71,030 -
Accounts receivable 32,169 28,194 25,485
Inventory 6,378 18,230 11,268
Other current assets 2,868 3,586 3,201
------------ ------------ -----------
116,051 123,992 127,903
------------ ------------ -----------
Non current assets
Plant and equipment 10,654 11,560 11,866
Intangible assets 4,443 5,813 5,516
Grant receivable 4,343 - -
Deferred tax asset 212 - -
Other assets 511 511 511
------------ ------------ -----------
20,163 17,884 17,893
------------ ------------ -----------
136,214 141,876 145,796
------------ ------------ -----------
Liabilities
Current liabilities
Trade and other payables 10,453 10,787 12,208
Current portion of deferred
revenue 9,350 9,123 10,136
------------
19,803 19,910 22,344
------------ ------------ -----------
Non current liabilities
Deferred revenue 503 789 598
Other non current liabilities 3,808 6,819 9,280
4,311 7,608 9,878
------------ ------------ -----------
24,114 27,518 32,222
------------ ------------ -----------
Shareholders' equity
Share capital 120,626 120,472 119,399
Contributed surplus 14,652 12,754 10,999
Accumulated other comprehensive
income (loss) 113 (615) -
Deficit (23,291) (18,253) (16,824)
------------ ------------ -----------
112,100 114,358 113,574
------------ ------------ -----------
136,214 141,876 145,796
------------ ------------ -----------
Sandvine Corporation
Consolidated Statements of Income
(in thousands of United States dollars, except share and per
share data)
Three month period Twelve month period
ended ended
November November November November
30, 2012 30, 2011 30, 2012 30, 2011
$ $ $ $
Revenue
Product 19,958 13,972 58,590 65,581
Service 7,510 6,959 29,343 24,802
---------- ---------- ---------- ----------
27,468 20,931 87,933 90,383
---------- ---------- ---------- ----------
Cost of Sales
Product 5,110 3,985 19,102 16,520
Service 2,773 1,914 9,510 6,699
---------- ---------- ---------- ----------
7,883 5,899 28,612 23,219
---------- ---------- ---------- ----------
Gross margin 19,585 15,032 59,321 67,164
---------- ---------- ---------- ----------
Expenses
Sales and marketing 6,151 6,591 26,159 24,701
Research and development 4,816 8,043 27,214 31,594
General and administrative 1,891 3,004 10,843 12,871
Other losses, net 39 - 606 -
---------- ---------- ---------- ----------
12,897 17,638 64,822 69,166
---------- ---------- ---------- ----------
Income (loss) from operations 6,688 (2,606) (5,501) (2,002)
---------- ---------- ---------- ----------
Finance income 41 35 147 129
Finance costs (104) (144) (484) (697)
Foreign exchange gains (losses) 60 338 (247) 355
Other finance gains, net - 332 1,229 976
---------- ---------- ---------- ----------
Finance income (costs), net (3) 561 645 763
---------- ---------- ---------- ----------
Income (loss) before income
taxes 6,685 (2,045) (4,856) (1,239)
---------- ---------- ---------- ----------
Current provision for income
taxes 219 66 394 190
Deferred recovery of income
taxes - - (212) -
---------- ---------- ---------- ----------
219 66 182 190
---------- ---------- ---------- ----------
Net income (loss) for the
period 6,466 (2,111) (5,038) (1,429)
---------- ---------- ---------- ----------
Net income (loss) per share
Basic income (loss) per share 0.047 (0.015) (0.036) (0.010)
Diluted income (loss) per
share 0.046 (0.015) (0.036) (0.010)
---------- ---------- ---------- ----------
Sandvine Corporation
Consolidated Statements of Cash Flows
(in thousands of United States dollars, except share and per
share data)
For the three month For the twelve month
period ended period ended
November November November November 30,
30, 2012 30, 2011 30, 2012 2011
$ $ $ $
Cash provided by (used in)
Operating activities
Net income (loss) for the period 6,466 (2,111) (5,038) (1,429)
Items not affecting cash
Amortization of intangible
assets 307 541 1,721 2,027
Depreciation of plant and equipment 1,120 1,319 4,601 4,585
Unrealized foreign exchange
(gains) losses (21) (37) (39) 274
Finance costs 104 144 484 697
Other finance (gains) - (332) (1,229) (976)
Stock-based compensation 433 489 1,909 2,096
Deferred tax recovery - - (212) -
Other 18 (27) 572 (90)
8,427 (14) 2,769 7,184
Changes in non-cash working
capital balances (6,515) (366) 4,391 (12,836)
---------- --------- --------- ------------
1,912 (380) 7,160 (5,652)
---------- --------- --------- ------------
Investing activities
Purchase of plant, equipment
and intangible software assets (487) (774) (4,272) (6,603)
Purchase of short term investments (6) (8,245) (5,885) (243,913)
Sale of short term investments 962 10,502 6,237 172,864
---------- --------- --------- ------------
469 1,483 (3,920) (77,652)
---------- --------- --------- ------------
Financing activities
Repayment of government grants (103) - (2,427) (2,477)
Proceeds from the issuance of
share capital 86 183 344 833
Payment to cancel warrant - - (80) -
(17) 183 (2,163) (1,644)
---------- --------- --------- ------------
Effect of foreign exchange on
cash and cash equivalents 27 (130) (72) (49)
---------- --------- --------- ------------
Net increase (decrease) in cash
during period 2,391 1,156 1,005 (84,997)
Cash and cash equivalents -
Beginning of period 1,566 1,796 2,952 87,949
---------- --------- --------- ------------
Cash and cash equivalents -
End of period 3,957 2,952 3,957 2,952
---------- --------- --------- ------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Sandvine Corp. (LSE:SAND)
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