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8-K - FORM 8-K - ACME PACKET INCb88651e8vk.htm
Exhibit 99.1
     
 
  (ACME PACKET LOGO)
Investor Relations Contact:
  Media and Analyst Contact:
Brian Norris
  Mike O’Malley
Acme Packet
  Acme Packet
+1.781.328.4790
  +1.781.869.2975
bnorris@acmepacket.com
  momalley@acmepacket.com
Acme Packet Reports Results for Third Quarter of 2011
Company Reaffirms 2011 Revenue and Earnings Estimates —
Bedford, Massachusetts — October 20, 2011 — Acme Packet, Inc. (NASDAQ: APKT), the leader in session delivery network solutions, today announced results for the third quarter ended September 30, 2011 and reaffirmed its business outlook for 2011.
Results for the Third Quarter of 2011
Total revenue in the third quarter of 2011 was $70.6 million, compared to $56.6 million in the third quarter of 2010 and $79.7 million in the second quarter of 2011. Net income in the third quarter of 2011 was $7.9 million, or $0.11 per share, compared to $10.5 million, or $0.15 per share, in the third quarter of 2010 and $14.0 million, or $0.20 per share, in the second quarter of 2011. Net income on a non-GAAP1 basis in the third quarter of 2011 was $14.6 million, or $0.21 per share, compared to $13.7 million, or $0.20 per share, in the third quarter of 2010, and $20.4 million, or $0.29 per share, in the second quarter of 2011. All earnings per share results are on a fully diluted basis.
“The fundamentals of our business remain strong, and we remain well positioned to take advantage of the profound shift to Internet-based voice, video and unified communications,” said Andy Ory, President and CEO of Acme Packet, Inc. “We are excited about the new products and partnerships that we have launched to drive the next stage of our growth. We remain confident in our ability to execute on our full year business outlook.”
Company Reaffirms Business Outlook for 2011
The Company today reaffirmed its business outlook for 2011. The Company’s outlook is based on the current indications for its business, which may change at any time. A reconciliation of the Company’s

 


 

expected GAAP to non-GAAP1 business outlook, and a statement as to the use of non-GAAP1 financial measures, is included at the end of this press release. All earnings per share results are on a fully diluted basis.
         
Business Outlook for Year Ending December 31, 2011
Estimate   Issued October 20, 2011
Total revenue (in millions)
  $ 315-$320  
Total revenue growth rate
  Approximately 36%-38%
Non-GAAP1 EPS
  $ 1.14-$1.18  
Non-GAAP1 EPS growth rate
  Approximately 43%-48%
GAAP EPS
  $ 0.78-$0.82  
GAAP EPS growth rate
  Approximately 24%-30%
Diluted share count (in millions)
    71.5  
 
Company to Host Live Conference Call and Webcast
The Company’s management team will host a live conference call and webcast at 4:30 p.m. eastern time today to discuss the financial results as well as management’s outlook for the business. The conference call may be accessed in the United States by dialing 1.800.230.1093 and using access code “APKT”. The conference call may be accessed outside of the United States by dialing +1.612.288.0329 and using access code “APKT”. The conference call will be simultaneously webcast on the Company’s investor relations website, which can be accessed at www.ir.acmepacket.com. A replay of the conference call will be available approximately two hours after the call by dialing 1.800.475.6701 or +1.320.365.3844 and using access code 219385 or by accessing the webcast replay on the Company’s investor relations website.
 
1   A reconciliation of GAAP to non-GAAP results, and a statement on the use of non-GAAP financial measures, is included at the end of this press release.
About Acme Packet
Acme Packet (NASDAQ: APKT), the leader in session delivery network solutions, enables the trusted, first-class delivery of next-generation voice, data and unified communications services and applications across IP networks. Our Net-Net product family fulfills demanding security, service assurance and regulatory requirements in service provider, enterprise and contact center networks. Based in Bedford, Massachusetts, Acme Packet designs and manufactures its products in the USA, selling them through over 200 reseller partners worldwide. More than 1,525 customers in 107 countries have deployed over 14,000 Acme Packet systems, including 90 of the top 100 service providers and 36 of the Fortune 100. For more information visit www.acmepacket.com.
Acme Packet, Inc. Safe Harbor Statement
Statements contained herein that are not historical fact (including those in the section “Company Reaffirms Business Outlook for 2011”) may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate to, among other things, expected financial and operating results, expected growth rates, future stock-based compensation and amortization expenses, future business prospects and market conditions. Such

 


 

forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated. These include, but are not limited to: the amount of stock-based compensation awarded; the applicable Company stock price used to determine stock-based compensation; the exercise pattern of employee stock options; difficulties expanding the Company’s customer base; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of customers; poor product sales; long sales cycles; difficulties developing new products; difficulties in relationships with vendors and partners; higher risks in international operations; difficulties managing rapid growth; difficulties managing the Company’s financial performance; the ability to hire and retain employees and appropriately staff operations; the Company’s cash needs; the impact of new accounting pronouncements and increased competition. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in the Company’s recent filings with the Securities and Exchange Commission, including those factors discussed under the caption “Risk Factors” in such filings.

 


 

Acme Packet, Inc.
Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2011     2010     2011     2010  
Revenue:
                               
Product
  $ 53,077     $ 45,328     $ 177,507     $ 129,452  
Maintenance, support and service
    17,544       11,286       46,814       31,548  
 
                       
Total revenue
    70,621       56,614       224,321       161,000  
 
                       
 
                               
Cost of revenue:
                               
Product
    8,778       7,903       30,090       22,886  
Maintenance, support and service
    3,042       2,556       8,573       6,964  
 
                       
Total cost of revenue
    11,820       10,459       38,663       29,850  
 
                       
 
                               
Gross profit
    58,801       46,155       185,658       131,150  
 
                       
 
                               
Operating expenses:
                               
Sales and marketing
    27,201       17,012       75,640       50,062  
Research and development
    13,249       8,896       37,262       26,235  
General and administrative
    5,406       3,906       15,771       10,785  
Merger and integration-related costs
    120             300        
 
                       
Total operating expenses
    45,976       29,814       128,973       87,082  
 
                       
 
                               
Income from operations
    12,825       16,341       56,685       44,068  
 
                               
Other (expense) income, net
    (53 )     189       (147 )     354  
 
                       
 
                               
Income before provision for income taxes
    12,772       16,530       56,538       44,422  
 
                               
Provision for income taxes
    4,846       6,065       20,895       15,895  
 
                       
 
                               
Net income
  $ 7,926     $ 10,465     $ 35,643     $ 28,527  
 
                       
 
                               
Net income per share:
                               
Basic
  $ 0.12     $ 0.17     $ 0.54     $ 0.46  
Diluted
  $ 0.11     $ 0.15     $ 0.50     $ 0.43  
 
                               
Weighted average number of common shares used in the calculation of net income per share:
                               
Basic
    66,752,669       62,772,466       66,011,761       61,371,085  
Diluted
    70,908,590       68,426,272       70,887,241       67,114,486  
 
                               
Margin:
                               
Gross margin
    83.3 %     81.5 %     82.8 %     81.5 %
Operating margin
    18.2 %     28.9 %     25.3 %     27.4 %
Net margin
    11.2 %     18.5 %     15.9 %     17.7 %

 


 

Acme Packet, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
                 
    September 30,     December 31,  
    2011     2010  
Assets
               
 
               
Current assets:
               
Cash and cash equivalents
  $ 156,962     $ 91,669  
Short-term investments
    181,660       179,024  
Accounts receivable, net
    51,246       34,797  
Inventory
    11,779       6,662  
Deferred product costs
    1,074       3,572  
Deferred tax asset
    3,814       3,814  
Income taxes receivable
    13,404       9,979  
Other current assets
    6,953       3,231  
 
           
Total current assets
    426,892       332,748  
Long-term investments
          5,030  
Property and equipment, net
    24,514       17,156  
Acquired intangible assets, net
    9,095       9,468  
Goodwill
    3,269        
Deferred tax asset, net
    14,802       14,802  
Other assets
    425       940  
 
           
Total assets
  $ 478,997     $ 380,144  
 
           
 
               
Liabilities and Stockholders’ Equity
               
 
               
Current liabilities:
               
Accounts payable
  $ 7,056     $ 7,161  
Accrued expenses and other current liabilities
    13,494       14,629  
Deferred revenue
    28,838       31,998  
 
           
Total current liabilities
    49,388       53,788  
 
           
 
               
Deferred revenue
    3,471       1,546  
 
           
Deferred rent
    1,820       4,265  
 
           
 
               
Stockholders’ equity:
               
Common stock
    74       71  
Additional paid-in capital
    334,254       266,114  
Treasury stock, at cost
    (37,522 )     (37,522 )
Other comprehensive income
    21       34  
Accumulated retained earnings
    127,491       91,848  
 
           
Total stockholders’ equity
    424,318       320,545  
 
           
Total liabilities and stockholders’ equity
  $ 478,997     $ 380,144  
 
           
Condensed Consolidated Statements of Cash Flow
(in thousands)
(unaudited)
                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30
    2011     2010     2011     2010  
         
Cash provided by operating activities
  $ 16,441     $ 9,715     $ 36,646     $ 32,749  
Cash provided by (used in) investing activities
    10,516       (4,590 )     (14,486 )     (53,772 )
Cash provided by financing activities
    9,434       14,894       43,133       41,194  

 


 

Acme Packet, Inc.
Statement on Use of Non-GAAP Financial Measures and
Reconciliation of Non-GAAP Net Income and Non-GAAP Net Income Per Share
(in thousands, except share and per share data)
(unaudited)
     Statement on Use of Non-GAAP Financial Measures:
     To supplement its condensed consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company discloses certain non-GAAP financial measures, including “non-GAAP net income”, “net income on a non-GAAP basis”, “non-GAAP net income per share”, “non-GAAP EPS”, “net income per share on a non-GAAP basis” and “non-GAAP EPS growth rate”. These non-GAAP financial measures are not presented in accordance with GAAP and are not meant to be a substitute for the most directly comparable GAAP measures of “net income”, “EPS”, “GAAP EPS growth rate” or “net income per share”. Rather, these non-GAAP financial measures should be evaluated in conjunction with its most directly comparable GAAP financial measure and the Company’s financial statements as a whole.
     Management uses these supplemental non-GAAP financial measures to evaluate performance period over period, to analyze the underlying trends in the Company’s business, to assess its performance relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources. Management uses these non-GAAP financial measures because they exclude stock-based compensation expense which is a non-cash charge and related payroll taxes, amortization of acquired intangible assets and merger and integration-related costs associated with the Company’s acquisition activities all of which are non-operational costs and expenses. By excluding stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and integration-related costs, management can compare the Company’s operations to prior periods and to the operations of other companies in its industry who may have materially different unusual, non-operational charges. Management does not consider any of stock-based compensation expense and related payroll taxes, amortization of acquired intangible assets, and merger and integration-related costs to be part of the Company’s operating activities or meaningful in evaluating the Company’s past financial performance or future prospects. Management believes that excluding these items is useful to investors because it is more representative of ongoing costs and therefore more comparable to historical operations.
     Because management uses them, management believes that the disclosure of these non-GAAP financial measures to investors provides greater transparency and useful information to help the investor better understand the Company’s operating performance and to evaluate the methodology used by management to evaluate and measure such performance. Notwithstanding their utility to investors in understanding operational trends, these non-GAAP measures should not be considered measures of the Company’s liquidity. In addition, the Company cautions that its definition of “non-GAAP net income”, “non-GAAP EPS” and “non-GAAP net income per share” may differ from similar measures used by other companies and may differ from period to period. Also, in future periods, management may make other adjustments for expenses and gains that it does not consider reflective of core operating performance in a particular period thereby modifying its definition of “non-GAAP net income”, “non-GAAP EPS” and “non-GAAP net income per share” by excluding these other or additional expenses and gains.

 


 

Acme Packet, Inc.
Non-GAAP Condensed Consolidated Statements of Income
(in thousands, except share and per share data)
(unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2011     2010     2011     2010  
Revenue:
                               
Product
  $ 53,077     $ 45,328     $ 177,507     $ 129,452  
Maintenance, support and service
    17,544       11,286       46,814       31,548  
 
                       
Total revenue
    70,621       56,614       224,321       161,000  
 
                       
 
                               
Cost of revenue:
                               
Product
    8,066       7,311       27,882       21,172  
Maintenance, support and service
    2,474       2,268       7,055       6,201  
 
                       
Total cost of revenue
    10,540       9,579       34,937       27,373  
 
                       
 
                               
Gross profit
    60,081       47,035       189,384       133,627  
 
                       
 
                               
Operating expenses:
                               
Sales and marketing
    22,316       14,898       62,549       44,448  
Research and development
    10,309       7,536       29,405       22,459  
General and administrative
    3,791       3,040       11,873       8,970  
 
                       
Total operating expenses
    36,416       25,474       103,827       75,877  
 
                       
 
                               
Income from operations
    23,665       21,561       85,557       57,750  
 
                               
Other (expense) income, net
    (53 )     189       (147 )     354  
 
                       
 
                               
Income before provision for income taxes
    23,612       21,750       85,410       58,104  
 
                               
Provision for income taxes
    8,964       8,061       31,393       21,232  
 
                       
 
                               
Net income
  $ 14,648     $ 13,689     $ 54,017     $ 36,872  
 
                       
 
                               
Net income per share:
                               
Basic
  $ 0.22     $ 0.22     $ 0.82     $ 0.60  
Diluted
  $ 0.21     $ 0.20     $ 0.76     $ 0.55  
 
                               
Weighted average number of common shares used in the calculation of net income per share:
                               
Basic
    66,752,669       62,772,466       66,011,761       61,371,085  
Diluted
    70,908,590       68,426,272       70,887,241       67,114,486  
 
                               
Margin:
                               
Gross margin
    85.1 %     83.1 %     84.4 %     83.0 %
Operating margin
    33.5 %     38.1 %     38.1 %     35.9 %
Net margin
    20.7 %     24.2 %     24.1 %     22.9 %

 


 

Reconciliation of Non-GAAP Net Income and Non-GAAP Net Income Per Share for the Three and Nine Months Ended September 30, 2011 and September 30, 2010 and the Three Months Ended June 30, 2011:
Acme Packet, Inc.
GAAP to Non-GAAP Reconciliation
Three Months Ended September 30, 2011
(in thousands, except share and per share data)
(unaudited)
                                         
            Stock-based                    
            compensation     Amortization of     Merger and        
            expense and related     acquired intangible     integration-related        
    GAAP     payroll taxes     assets     costs     Non-GAAP1  
     
Revenue:
                                       
Product
  $ 53,077     $     $     $     $ 53,077  
Maintenance, support and service
    17,544                         17,544  
 
                             
Total revenue
    70,621                         70,621  
 
                             
 
                                       
Cost of revenue:
                                       
Product
    8,778       (327 )     (385 )           8,066  
Maintenance, support and service
    3,042       (568 )                 2,474  
 
                             
Total cost of revenue
    11,820       (895 )     (385 )           10,540  
 
                             
 
                                       
Gross profit
    58,801       895       385             60,081  
 
                             
 
                                       
Operating expenses:
                                       
Sales and marketing
    27,201       (4,784 )     (101 )           22,316  
Research and development
    13,249       (2,929 )     (11 )           10,309  
General and administrative
    5,406       (1,615 )                 3,791  
Merger and integration-related costs
    120                   (120 )      
 
                             
Total operating expenses
    45,976       (9,328 )     (112 )     (120 )     36,416  
 
                             
 
                                       
Income from operations
    12,825       10,223       497       120       23,665  
 
                                       
Other income, net
    (53 )                       (53 )
 
                             
 
                                       
Income before provision for income taxes
    12,772       10,223       497       120       23,612  
 
                                       
Provision for income taxes
    4,846       3,896       179       43       8,964  
 
                             
 
                                       
Net income
  $ 7,926     $ 6,327     $ 318     $ 77     $ 14,648  
 
                             
 
                                       
Net income per share:
                                       
Basic
  $ 0.12     $ 0.09     $ 0.01     $ 0.00     $ 0.22  
Diluted
  $ 0.11     $ 0.09     $ 0.01     $ 0.00     $ 0.21  
 
                                       
Weighted average number of common shares used in the calculation of net income per share:
                                       
Basic
    66,752,669       66,752,669       66,752,669       66,752,669       66,752,669  
Diluted
    70,908,590       70,908,590       70,908,590       70,908,590       70,908,591  
 
                                       
Margin:
                                       
Gross margin
    83.3 %                             85.1 %
Operating margin
    18.2 %                             33.5 %
Net margin
    11.2 %                             20.7 %

 


 

Acme Packet, Inc.
GAAP to Non-GAAP Reconciliation
Nine Months Ended September 30, 2011
(in thousands, except share and per share data)
(unaudited)
                                         
            Stock-based                    
            compensation     Amortization of     Merger and        
            expense and related     acquired intangible     integration-related        
    GAAP     payroll taxes     assets     costs     Non-GAAP1  
     
Revenue:
                                       
Product
  $ 177,507     $     $     $     $ 177,507  
Maintenance, support and service
    46,814                         46,814  
 
                             
Total revenue
    224,321                         224,321  
 
                             
 
                                       
Cost of revenue:
                                       
Product
    30,090       (916 )     (1,292 )           27,882  
Maintenance, support and service
    8,573       (1,518 )                 7,055  
 
                             
Total cost of revenue
    38,663       (2,434 )     (1,292 )           34,937  
 
                             
 
                                       
Gross profit
    185,658       2,434       1,292             189,384  
 
                             
 
                                       
Operating expenses:
                                       
Sales and marketing
    75,640       (12,804 )     (287 )           62,549  
Research and development
    37,262       (7,823 )     (34 )           29,405  
General and administrative
    15,771       (3,898 )                 11,873  
Merger and integration-related costs
    300                   (300 )      
 
                             
 
                                       
Total operating expenses
    128,973       (24,525 )     (321 )     (300 )     103,827  
 
                             
 
                                       
Income from operations
    56,685       26,959       1,613       300       85,557  
 
                                       
Other (expense), net
    (147 )                       (147 )
 
                             
 
                                       
Income before provision for income taxes
    56,538       26,959       1,613       300       85,410  
 
                                       
Provision for income taxes
    20,895       9,874       581       43       31,393  
 
                             
 
                                       
Net income
  $ 35,643     $ 17,085     $ 1,032     $ 257     $ 54,017  
 
                             
 
                                       
Net income per share:
                                       
Basic
  $ 0.54     $ 0.26     $ 0.02     $ 0.00     $ 0.82  
Diluted
  $ 0.50     $ 0.24     $ 0.02     $ 0.00     $ 0.76  
 
                                       
Weighted average number of common shares used in the calculation of net income per share:
                                       
Basic
    66,011,761       66,011,761       66,011,761       66,011,761       66,011,761  
Diluted
    70,887,241       70,887,241       70,887,241       70,887,241       70,887,241  
 
                                       
Margin:
                                       
Gross margin
    82.8 %                             84.4 %
Operating margin
    25.3 %                             38.1 %
Net margin
    15.9 %                             24.1 %

 


 

Acme Packet, Inc.
GAAP to Non-GAAP Reconciliation
Three Months Ended September 30, 2010
(in thousands, except share and per share data)
(unaudited)
                                 
            Stock-based              
            compensation     Amortization of        
            expense and related     acquired intangible        
    GAAP     payroll taxes     assets     Non-GAAP1  
     
Revenue:
                               
Product
  $ 45,328     $     $     $ 45,328  
Maintenance, support and service
    11,286                   11,286  
 
                       
Total revenue
    56,614                   56,614  
 
                       
 
                               
Cost of revenue:
                               
Product
    7,903       (213 )     (379 )     7,311  
Maintenance, support and service
    2,556       (288 )           2,268  
 
                       
Total cost of revenue
    10,459       (501 )     (379 )     9,579  
 
                       
 
                               
Gross profit
    46,155       501       379       47,035  
 
                       
 
                               
Operating expenses:
                               
Sales and marketing
    17,012       (2,069 )     (45 )     14,898  
Research and development
    8,896       (1,349 )     (11 )     7,536  
General and administrative
    3,906       (866 )           3,040  
 
                       
Total operating expenses
    29,814       (4,284 )     (56 )     25,474  
 
                       
 
                               
Income from operations
    16,341       4,785       435       21,561  
 
                               
Other income, net
    189                   189  
 
                       
 
                               
Income before provision for income taxes
    16,530       4,785       435       21,750  
 
                               
Provision for income taxes
    6,065       1,835       161       8,061  
 
                       
 
                               
Net income
  $ 10,465     $ 2,950     $ 274     $ 13,689  
 
                       
 
                               
Net income per share:
                               
Basic
  $ 0.17     $ 0.04     $ 0.01     $ 0.22  
Diluted
  $ 0.15     $ 0.04     $ 0.01     $ 0.20  
 
                               
Weighted average number of common shares used in the calculation of net income per share:
                               
Basic
    62,772,466       62,772,466       62,772,466       62,772,466  
Diluted
    68,426,272       68,426,272       68,426,272       68,426,272  
 
                               
Margin:
                               
Gross margin
    81.5 %                     83.1 %
Operating margin
    28.9 %                     38.1 %
Net margin
    18.5 %                     24.2 %

 


 

Acme Packet, Inc.
GAAP to Non-GAAP Reconciliation
Nine Months Ended September 30, 2010
(in thousands, except share and per share data)
(unaudited)
                                 
            Stock-based              
            compensation     Amortization of        
            expense and related     acquired intangible        
    GAAP     payroll taxes     assets     Non-GAAP1  
     
Revenue:
                               
Product
  $ 129,452     $     $     $ 129,452  
Maintenance, support and service
    31,548                   31,548  
 
                       
Total revenue
    161,000                   161,000  
 
                       
 
                               
Cost of revenue:
                               
Product
    22,886       (577 )     (1,137 )     21,172  
Maintenance, support and service
    6,964       (763 )           6,201  
 
                       
Total cost of revenue
    29,850       (1,340 )     (1,137 )     27,373  
 
                       
 
                               
Gross profit
    131,150       1,340       1,137       133,627  
 
                       
 
                               
Operating expenses:
                               
Sales and marketing
    50,062       (5,479 )     (135 )     44,448  
Research and development
    26,235       (3,743 )     (33 )     22,459  
General and administrative
    10,785       (1,815 )           8,970  
 
                       
Total operating expenses
    87,082       (11,037 )     (168 )     75,877  
 
                       
 
                               
Income from operations
    44,068       12,377       1,305       57,750  
 
                               
Other income, net
    354                   354  
 
                       
 
                               
Income before provision for income taxes
    44,422       12,377       1,305       58,104  
 
                               
Provision for income taxes
    15,895       4,870       467       21,232  
 
                       
 
                               
Net income
  $ 28,527     $ 7,507     $ 838     $ 36,872  
 
                       
 
                               
Net income per share:
                               
Basic
  $ 0.46     $ 0.12     $ 0.01     $ 0.60  
Diluted
  $ 0.43     $ 0.11     $ 0.01     $ 0.55  
 
                               
Weighted average number of common shares used in the calculation of net income per share:
                               
Basic
    61,371,085       61,371,085       61,371,085       61,371,085  
Diluted
    67,114,486       67,114,486       67,114,486       67,114,486  
 
                               
Margin:
                               
Gross margin
    81.5 %                     83.0 %
Operating margin
    27.4 %                     35.9 %
Net margin
    17.7 %                     22.9 %

 


 

Acme Packet, Inc.
GAAP to Non-GAAP Reconciliation
Three Months Ended June 30, 2011
(in thousands, except share and per share data)
(unaudited)
                                 
            Stock-based              
            compensation     Amortization of        
            expense and related     acquired intangible        
    GAAP     payroll taxes     assets     Non-GAAP1  
     
Revenue:
                               
Product
  $ 64,688     $     $     $ 64,688  
Maintenance, support and service
    15,045                   15,045  
 
                       
Total revenue
    79,733                   79,733  
 
                       
 
                               
Cost of revenue:
                               
Product
    11,367       (327 )     (536 )     10,504  
Maintenance, support and service
    2,525       (499 )           2,026  
 
                       
Total cost of revenue
    13,892       (826 )     (536 )     12,530  
 
                       
 
                               
Gross profit
    65,841       826       536       67,203  
 
                       
 
                               
Operating expenses:
                               
Sales and marketing
    24,736       (4,441 )     (140 )     20,155  
Research and development
    12,719       (2,652 )     (11 )     10,056  
General and administrative
    5,788       (1,303 )           4,485  
 
                       
Total operating expenses
    43,243       (8,396 )     (151 )     34,696  
 
                       
 
                               
Income from operations
    22,598       9,222       687       32,507  
 
                               
Other (expense), net
    (196 )                 (196 )
 
                       
 
                               
Income before provision for income taxes
    22,402       9,222       687       32,311  
 
                               
Provision for income taxes
    8,394       3,241       246       11,881  
 
                       
 
                               
Net income
  $ 14,008     $ 5,981     $ 441     $ 20,430  
 
                       
 
                               
Net income per share:
                               
Basic
  $ 0.21     $ 0.09     $ 0.01     $ 0.31  
Diluted
  $ 0.20     $ 0.08     $ 0.01     $ 0.29  
 
                               
Weighted average number of common shares used in the calculation of net income per share:
                               
Basic
    66,141,163       66,141,163       66,141,163       66,141,163  
Diluted
    71,033,614       71,033,614       71,033,614       71,033,614  
 
                               
Margin:
                               
Gross margin
    82.6 %                     84.3 %
Operating margin
    28.3 %                     40.8 %
Net margin
    17.6 %                     25.6 %

 


 

     Reconciliation of Expected Non-GAAP Net Income and Non-GAAP Net Income Per Share for the Year Ending December 31, 2011 (unaudited):
                 
    Twelve Months Ending
    December 31, 2011
    (unaudited)
    (in thousands, except per share data)
    Low     High  
     
Revenue
  $ 315,000     $ 320,000  
 
               
Reconciliation of non-GAAP net income:
               
Net income
  $ 55,800     $ 58,700  
Adjustments:
               
Stock-based compensation expense and related payroll taxes, net of taxes
    24,100       24,100  
Amortization of acquired intangible assets, net of taxes
    1,200       1,200  
Merger and integration-related costs
    200       200  
 
           
Non-GAAP net income
  $ 81,300     $ 84,200  
 
           
 
               
Reconciliation of diluted non-GAAP net income per share:
               
Net income per share
  $ 0.78     $ 0.82  
Adjustments:
               
Stock-based compensation expense and related payroll taxes, net of taxes
    0.34       0.34  
Amortization of acquired intangible assets, net of taxes
    0.02       0.02  
Merger and integration-related costs
           
 
           
Non-GAAP net income per share
  $ 1.14     $ 1.18  
 
           
Acme Packet, Inc.
Other Operational Data
(unaudited)
                                         
    Three Months Ended   Nine Months Ended
    September 30,     June 30,     September 30,     September 30,     September 30,  
    2011     2011     2010     2011     2010  
         
Other operational data:
                                       
Depreciation and amortization (in thousands)
  $ 2,835     $ 1,894     $ 2,065     $ 7,087     $ 5,826  
Capital expenditures (in thousands)
    5,570       2,598       4,479       12,812       10,546  
Days sales outstanding
    65       60       48              
Total headcount
    741       710       529              
Quarterly inventory turnover — annualized
    3.27       5.42       5.21