News Release Details
Casa Systems Announces Preliminary Fourth Quarter and Full Year 2018 Financial Results
“Our fourth quarter results were impacted by lower than expected spending in hardware by certain MSO customers as they begin to transition from Integrated CCAP to Distributed Access Architecture (DAA). As a result, we saw higher than anticipated software-based capacity sales during the quarter and lower than expected hardware volumes. To a lesser extent we also experienced wireless product certification delays, which has affected the timing of our wireless revenue recognition,” said
Fourth Quarter 2018 Preliminary Financial Highlights
- Revenue between
$63 million and $69 million - Gross Margin in a range of 70% to 73%
- Adjusted EBITDA between
$17.5 million and $21.5 million - GAAP net income between
$9.5 million and $13.5 million and Non-GAAP net income between$11.5 million and $15.5 million - GAAP diluted net income per share between
$0.11 and $0.15 and Non-GAAP diluted net income per share between$0.13 and $0.17
Full Year 2018 Preliminary Financial Highlights
- Revenue between
$292 million and $298 million , compared to the prior outlook of$330 million and$350 million - Gross Margin in a range of 70% to 73%, compared to the prior outlook of high 60s % to low 70s %
- Adjusted EBITDA between
$94 million and $98 million - GAAP net income between
$67.5 million and $71.5 million - Non-GAAP net income between
$76 million and $80 million , compared to the prior outlook of$76 million and$83 million - GAAP diluted net income per share between
$0.73 and $0.78 - Non-GAAP diluted net income per share between
$0.82 and $0.87 , compared to the prior outlook of$0.80 and$0.88
These preliminary, unaudited financial estimates are based on information available to management as of the date of this press release, remain subject to the completion of normal quarter-end accounting procedures and adjustments, and are subject to change. Casa’s independent registered public accounting firm has not completed its review of our results for the quarter ended
Casa Systems plans to release its financial results for the fourth quarter and full year 2018 on
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this press release, including statements regarding the projected results of operations of Casa Systems, Inc. (“Casa” or the “Company”), including financial targets, business strategy, and plans and objectives for future operations, are forward-looking statements. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “potential”, “predict”, “project”, “target”, “should”, “would”, and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We have based these forward-looking statements on our estimates and assumptions of our financial results and our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs as of the date of this press release. A number of important risk factors could cause actual results to differ materially from the results described, implied or projected in these forward-looking statements. These factors include, without limitation: (1) revenue and/or expense adjustments identified in the course of the audit of our results for the year ended
Non-GAAP Financial Measures
We are presenting forward-looking estimates of three non-GAAP financial measures in this press release: adjusted EBITDA, non-GAAP net income, and non-GAAP diluted net income per share. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.
Adjusted EBITDA. We define adjusted EBITDA as our net income, excluding the impact of stock-based compensation expense; the follow-on public offering expenses; other income (expense), net; depreciation and amortization expense; and our provision for (benefit from) income taxes. We have presented adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In particular, we believe that excluding the impact of these expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.
Non-GAAP net income and non-GAAP diluted net income per share. We define non-GAAP net income as net income as reported in our condensed consolidated statements of operations, excluding the impact of stock-based compensation expense, which is a non-cash charge, the follow-on public offering expenses, which is a one-time non-recurring charge, and the tax effect on these excluded items. The tax effect of the excluded items is calculated using our effective income tax rate for the period, excluding the discrete tax benefits generated from the exercise of non-qualified stock options and the disqualifying disposition of incentive stock options. We believe that excluding these discrete tax benefits from our effective income tax rate results in more useful disclosure to investors and others regarding income tax effects of the excluded items as these amounts may vary from period to period independent of the operating performance of our business. We define non-GAAP diluted net income per share as diluted net income per share attributable to common stockholders reported in our condensed consolidated statements of operations, excluding the impact of cumulative dividends on convertible preferred stock, which are no longer applicable following the conversion to common stock of all of our outstanding preferred stock in December 2017 in connection with our initial public offering, excluding the impact of dividends declared on convertible preferred stock, as we do not intend to declare any dividends for the foreseeable future, and excluding the impact of items that we exclude in calculating non-GAAP net income. For periods in which convertible preferred stock was excluded from GAAP diluted net income per share attributable to common stockholders, we calculate non-GAAP diluted net income per share using a non-GAAP weighted-average share count in which the impact of dilutive convertible preferred stock are added to the GAAP weighted-average share count. We have presented non-GAAP net income and non-GAAP diluted net income per share because they are key measures used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. The presentation of non-GAAP net income and non-GAAP diluted net income per share also allows our management and board of directors to make additional comparisons of our results of operations to other companies in our industry.
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212-871-3927
investorrelations@casa-systems.com
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RECONCILIATION OF SELECTED GAAP AND NON-GAAP PRELIMINARY FINANCIAL MEASURES
(unaudited)
(in thousands, except per share amounts)
Three Months Ended | Year Ended | |||||||||||||||
December 31, 2018 | December 31, 2018 | |||||||||||||||
(Projected) | (Projected) | |||||||||||||||
Low end of range | High end of range | Low end of range | High end of range | |||||||||||||
Reconciliation of Net Income to Non-GAAP Net Income: | ||||||||||||||||
Net income | $ | 9,451 | $ | 13,452 | $ | 67,541 | $ | 71,542 | ||||||||
Stock-based compensation | 2,352 | 2,352 | 8,894 | 8,894 | ||||||||||||
Follow-on public offering expenses | — | — | 815 | 815 | ||||||||||||
Tax effect of excluded items | (259 | ) | (259 | ) | (1,214 | ) | (1,214 | ) | ||||||||
Non-GAAP net income | $ | 11,544 | $ | 15,545 | $ | 76,036 | $ | 80,037 | ||||||||
Reconciliation of Diluted Net Income Per Share Attributable to Common Stockholders to Non-GAAP Diluted Net Income Per Share: |
||||||||||||||||
Diluted net income per share attributable to common stockholders |
$ | 0.11 | $ | 0.15 | $ | 0.73 | $ | 0.78 | ||||||||
Non-GAAP adjustments to net income | 0.02 | 0.02 | 0.09 | 0.09 | ||||||||||||
Non-GAAP diluted net income per share | $ | 0.13 | $ | 0.17 | $ | 0.82 | $ | 0.87 | ||||||||
Reconciliation of Net Income to Adjusted EBITDA: | ||||||||||||||||
Net income | $ | 9,451 | $ | 13,452 | $ | 67,541 | $ | 71,542 | ||||||||
Stock-based compensation | 2,352 | 2,352 | 8,894 | 8,894 | ||||||||||||
Follow-on public offering expenses | — | — | 815 | 815 | ||||||||||||
Depreciation and amortization | 2,422 | 2,422 | 9,459 | 9,459 | ||||||||||||
Other income, net | 3,292 | 3,292 | 12,742 | 12,742 | ||||||||||||
Provision for (benefit from) income taxes | — | — | (5,406 | ) | (5,406 | ) | ||||||||||
Adjusted EBITDA | $ | 17,517 | $ | 21,518 | $ | 94,045 | $ | 98,046 |
Source: Casa Systems, Inc.