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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Procera Networks, Inc. | AMEX:PKT | AMEX | Ordinary Share |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
From Jan 2020 to Jan 2025
Q310 Highlights
-- Third quarter revenue of $4.75 million, up 3 percent year-over-year -- Tenth consecutive quarter of year-over-year revenue growth -- Received an initial order from new North American Tier-1 service provider and won two new Tier-2 service providers -- Over $15 million of GENBAND revenue funnel generated in less than 60 days -- Support revenue of $1.2 million, up 56 percent year-over-year -- Increased software development headcount to support increased trial levels -- Gross margins improved to 57.3 percent from 32.5 percent in the third quarter of 2009 -- Signed 32 new higher education customers during the third quarter of 2010
"During the third quarter we further positioned Procera for growth with the significant increase in Tier-1 trial opportunities to 23 from 14 last quarter, demonstrating the potential of the recent OEM partnership with GENBAND. We have scaled up our R&D department to support the increase in Tier-1 trial activities," said James Brear, president and CEO of Procera Networks, Inc. "Our new service provider and university wins, and continued product innovation, underscore our commitment to prevailing in customer trials.
"Customers have responded favorably to the cost and performance of our recently launched PacketLogic PL8720 solution, which delivers a more economical 10GB port DPI solution and sales of the product have exceeded our expectations. Sales from this DPI appliance represented over 60 percent of our total product revenue for the third quarter, benefiting margins.
"We believe the progress we have made so far in 2010 is setting the stage for Procera to deliver significant growth in 2011 as we achieve trial wins and receive follow-on orders from our 13 new service provider customers in 2010, and benefit from our OEM partnership with GENBAND and their over 200 salespeople."
Q310 Financial Results
Our GAAP net loss for the third quarter of 2010 was $739,000, or a net loss of $0.01 per share, compared to a net loss of $1.6 million, or a net loss of $0.02 per share, in the third quarter of 2009. Our GAAP net loss for the nine-month period of 2010 was $3.1 million, or a net loss of $0.03 per share, compared to our net loss of $8.3 million, or a net loss of $0.09 per share, in the nine-month period of 2009.
Our non-GAAP net loss for the third quarter of 2010 was $382,000, compared to non-GAAP net loss of $870,000 in the third quarter of 2009. Our non-GAAP net loss for the nine-month period of 2010 was $2.1 million, compared to $4.0 million for the nine-month period of 2009. For an explanation of non-GAAP financial measures used in this release, and reconciliation to comparable GAAP measures, please refer to the Use of Non-GAAP Financial Information below.
Conference Call Information
Procera Networks, Inc. will host a conference call at 4:30 p.m. ET today to discuss its financial results for the third quarter ended September 30, 2010. Interested parties can access the live call by dialing 877-941-2069 or 480-629-9713 (International) and request the "Procera" call. An archive of the conference call will be available on the Quarterly Results and Events section of the Procera Networks' Investor Relations Web site at www.proceranetworks.com/investors.
Safe Harbor Statement
This press release contains forward-looking statements, including statements relating to expectations for revenue growth in 2011, our ability to support customer trials, the potential for new Tier 1 customers to become significant customers, potential benefits from the OEM agreement with GENBAND, obtaining follow-on orders from new and existing customers, the prospects for the recently launched PacketLogic PL8720 product, and the expected demand for Procera Networks' products and services. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements, including risks related to our ability to raise capital; the acceptance and adoption of our products; our ability to service and upgrade our products; lengthy sales cycles and lab and field trial delays by service providers; our dependence on a limited product line; our dependence on key employees; our ability to compete in our industry with companies that are significantly larger and have greater resources; our ability to protect our intellectual property rights in a global market; our ability to manufacture product quickly enough to meet potential demand; and other risks and uncertainties described more fully in our 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 set forth in our Form 10-K filed for the year ended December 31, 2009 and subsequent quarterly report on Form 10-Q. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements.
Use of Non-GAAP Financial Information
Procera's management believes that certain non-GAAP financial measures, when taken together with the corresponding consolidated GAAP measures and related segment information, provide incremental insight into the underlying factors and trends affecting both Procera's performance and its cash generating potential. Management believes these non-GAAP measures increase the transparency of the company's current results and enable investors to more fully understand trends in its current and future performance.
Thus, in addition to the financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain certain non-GAAP financial measures that we believe are helpful in understanding our financial performance. For reconciliations 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." Management regularly uses these supplemental non-GAAP financial measures internally to understand and manage our business and forecast future periods. Our non-GAAP financial measures include adjustments based on the following items, as well as the related income tax benefits, if any:
Amortization of intangible assets: We have excluded the effect of amortization of intangible assets from our non-GAAP net income. Amortization of intangible assets is a non-cash expense, and it is not part of our core operations that requires cash. Investors should note that our intangible assets were essential for generating revenues during the periods presented and will contribute to future period revenues as well.
Stock-based compensation expenses: We have excluded the effect of stock-based compensation from our non-GAAP gross profit, operating expenses and net income measures. Although stock-based compensation is a key incentive offered to our employees and consultants, we continue to evaluate our business performance excluding stock-based compensation expenses. Stock-based compensation expenses will recur in future periods.
Non-cash interest expense: We have excluded the effect of a non-cash charge to interest expense for the amortization of debt discounts related to convertible promissory notes that were issued and converted within the second quarter of 2009.
These non-GAAP financial measures are not consistent with GAAP because they do not fully reflect non-cash expenses. The above-mentioned non-GAAP measures are generated by adjusting the related GAAP measures solely to reverse the effect of the above mentioned non-cash expenses. The Company uses these financial measures to provide additional insight into current operating and business trends not readily apparent from the GAAP results.
Management believes users of Procera's financial statements will benefit from greater transparency in referring to these non-GAAP financial measures when assessing the Company's operating results, as well as when forecasting and analyzing future periods. However, management recognizes that:
-- these non-GAAP financial measures are limited in their usefulness and should be considered only as a supplement to the Company's GAAP financial measures; -- these non-GAAP financial measures should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP; -- these non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the Company's GAAP financial measures; -- these non-GAAP financial measures should not be considered to be superior to the Company's GAAP financial measures; -- these non-GAAP financial measures were not prepared in accordance with GAAP and investors should not assume that the non-GAAP financial measures presented in this earnings release were prepared under a comprehensive set of rules or principles; and -- management intends to continue to track and present these non-GAAP financial measures for future periods.
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. As such, this presentation of non-GAAP financial measures may not enhance the comparability of the Company's results to the results of other companies.
A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure or measures appears at the end of this press release.
About Procera Networks, Inc.
Procera Networks Inc. delivers Evolved DPI solutions that give service providers awareness, control and protection of their applications and networks. Its core product suite, the PacketLogic line of platforms, leverages the company's advanced identification engine, DRDL™ (Datastream Recognition Definition Language), to provide accurate identification of network traffic in real-time. PacketLogic is deployed at more than 600 broadband service providers, telcos, governments and higher education campuses worldwide. Founded in 2002, Procera (NYSE Amex: PKT) is based in Silicon Valley and has offices in Europe and Australia. More information is available at www.proceranetworks.com.
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Procera Networks, Inc.
Condensed Consolidated Statements of Operations
Unaudited
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
2010 2009 2010 2009
------------- ------------- ------------- -------------
Sales
Product sales $ 3,491,821 $ 3,787,205 $ 9,588,376 $ 8,509,093
Support sales 1,242,956 796,279 3,216,768 2,255,444
------------- ------------- ------------- -------------
Total sales 4,734,777 4,583,484 12,805,144 10,764,537
Cost of sales
Product cost
of sales 1,891,090 2,969,853 5,266,405 6,909,181
Support cost
of sales 131,884 125,699 392,809 330,188
------------- ------------- ------------- -------------
Total cost
of sales 2,022,974 3,095,552 5,659,214 7,239,369
------------- ------------- ------------- -------------
Gross profit 2,711,803 1,487,932 7,145,930 3,525,168
------------- ------------- ------------- -------------
57.3% 32.5% 55.8% 32.7%
Operating
expenses:
Research and
development 859,987 583,738 2,271,108 1,903,187
Sales and
marketing 1,614,384 1,622,291 4,831,885 4,961,082
General and
administrative 934,243 1,088,302 3,000,102 3,807,342
------------- ------------- ------------- -------------
Total
operating
expenses 3,408,614 3,294,331 10,103,095 10,671,611
------------- ------------- ------------- -------------
Loss from
operations (696,811) (1,806,399) (2,957,165) (7,146,443)
------------- ------------- ------------- -------------
Interest and
other income
(expense), net (40,438) (64,518) (115,889) (1,806,702)
------------- ------------- ------------- -------------
Loss before
income taxes (737,249) (1,870,917) (3,073,054) (8,953,145)
Income tax
provision
(benefit) 1,723 (275,870) 2,979 (691,450)
------------- ------------- ------------- -------------
Net loss $ (738,972) $ (1,595,047) $ (3,076,033) $ (8,261,695)
============= ============= ============= =============
Net loss per
share - basic
and diluted $ (0.01) $ (0.02) $ (0.03) $ (0.09)
============= ============= ============= =============
Shares used in
computing net
loss per share
- basic and
diluted 112,082,724 94,082,724 107,928,878 88,516,837
Procera Networks, Inc.
Condensed Consolidated Balance Sheets
September 30, December 31,
2010 2009
------------- -------------
ASSETS
Current Assets:
Cash and cash equivalents $ 8,286,808 $ 3,191,896
Accounts receivable, net of allowance 6,769,185 8,908,620
Inventories, net 2,987,768 1,877,264
Prepaid expenses and other 682,833 692,007
------------- -------------
Total current assets 18,726,594 14,669,787
Property and equipment, net 879,529 589,717
Goodwill 960,209 960,209
Other non-current assets 36,212 103,307
------------- -------------
Total assets $ 20,602,544 $ 16,323,020
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ 1,022,386 $ 1,917,088
Accounts payable 1,123,890 1,003,225
Deferred revenue 3,401,622 2,103,060
Accrued liabilities 2,164,756 2,255,039
Notes payable - 500,000
------------- -------------
Total current liabilities 7,712,654 7,778,412
Non-current liabilities
Deferred rent - 29,371
------------- -------------
Total liabilities 7,712,654 7,807,783
Commitments and contingencies - -
Stockholders' equity:
Common stock 112,083 94,083
Additional paid-in capital 75,309,183 67,814,203
Accumulated other comprehensive loss (330,743) (268,449)
Accumulated deficit (62,200,633) (59,124,600)
------------- -------------
Total stockholders' equity 12,889,890 8,515,237
------------- -------------
Total liabilities and stockholders' equity $ 20,602,544 $ 16,323,020
============= =============
Procera Networks, Inc.
GAAP to Non-GAAP Reconciliation; and Supplemental Financial Information
Unaudited
Three Months Ended Nine Months Ended
--------------------------------- ------------------------
September September September September
30, June 30, 30, 30, 30,
2010 2010 2009 2010 2009
--------- --------- ----------- ----------- -----------
Sales - U.S.
GAAP as
reported 4,734,777 4,776,758 4,583,484 12,805,144 10,764,537
Reconciliation
of Gross
Profit:
U.S. GAAP as
reported 2,711,803 2,719,937 1,487,932 7,145,930 3,525,168
As a
percentage
of sales 57% 57% 32% 56% 33%
Adjustment:
Amortization
on intangibles
(1) - - 254,333 - 1,017,333
Stock-based
compensation
(2) 19,948 22,123 15,943 63,799 50,397
--------- --------- ----------- ----------- -----------
As Adjusted 2,731,751 2,742,060 1,758,208 7,209,729 4,592,898
As a
percentage
of sales 58% 57% 38% 56% 43%
Reconciliation
of Operating
Expense:
U.S. GAAP as
reported 3,408,614 3,509,115 3,294,331 10,103,095 10,671,611
Adjustment:
Amortization
on intangibles
(1) - - 371,074 - 1,461,240
Stock-based
compensation
(2) 336,676 313,161 259,901 932,712 835,555
--------- --------- ----------- ----------- -----------
As Adjusted 3,071,938 3,195,954 2,663,356 9,170,383 8,374,816
Reconciliation
of Net Income
(Loss):
U.S. GAAP as
reported (738,972) (821,657) (1,595,047) (3,076,033) (8,261,695)
Adjustment:
Amortization
on intangibles
(1) - - 625,407 - 2,478,573
Stock-based
compensation
(2) 356,624 335,284 275,844 996,511 885,952
Interest
related to
beneficial
conversion
feature (3) - - - - 1,644,756
Income tax
adjustment
(4) - - (176,687) - (696,495)
--------- --------- ----------- ----------- -----------
As Adjusted (382,348) (486,373) (870,483) (2,079,522) (3,948,909)
========= ========= =========== =========== ===========
(1) The intangible assets recorded at fair value as a result of our
acquisitions are amortized over the estimated useful life of the
respective asset.
(2) Stock-based compensation expense is calculated in accordance with
the fair value recognition provisions of Statements of Financial
Accounting Standards No. 123 (R).
(3) Interest expense related to beneficial conversion feature of
convertible promissory notes.
(4) Income tax benefit from the amortization of intangible assets.
Press Contact Jon Linden Procera Networks, Inc. 1-408-890-7039 jon.linden@proceranetworks.com Investor Relations Contact Charles Messman or Todd Kehrli MKR Group Inc. 323-468-2300 pkt@mkr-group.com
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