8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2020

 

 

Casa Systems, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   001-38324   75-3108867

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

100 Old River Road

Andover, Massachusetts

  01810
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s Telephone Number, Including Area Code: (978) 688-6706

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock, $0.001 par value per share   CASA   The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02

Results of Operations and Financial Condition.

On July 30, 2020, Casa Systems, Inc. (the “Company”) announced its financial results for the fiscal quarter ended June 30, 2020. The full text of the press release issued by the Company in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information contained in Item 2.02 in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

  

Description

99.1    Press release dated July 30, 2020*

 

*

This exhibit shall be deemed to be furnished and not filed.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

    Casa Systems, Inc.
Date: July 30, 2020     By:  

/s/ Scott Bruckner

      Scott Bruckner
      Interim Chief Financial Officer
EX-99.1

Exhibit 99.1

 

LOGO

Casa Systems Reports Second Quarter 2020 Financial Results

Continued Strong Top-Line Performance with Significant Increase in Wireless Backlog

Generated $15.5 Million in Free Cash Flow and Achieved Operating Income of $1.3 Million

Andover, Mass. – July 30, 2020 – Casa Systems, Inc. (Nasdaq: CASA), a leading provider of physical and cloud-native infrastructure technology solutions for mobile, cable and fixed networks, today announced its financial results for its second quarter ended June 30, 2020.

Second Quarter 2020 Financial & Operational Highlights

 

   

Revenue of $83.4 million.

 

   

Gross margin of 51.7% driven by strong demand for hardware.

 

   

GAAP net loss of $(3.0) million or $(0.04) per fully diluted share.

 

   

Non-GAAP net income of $0.7 million or $0.01 per fully diluted share.

 

   

Adjusted EBITDA of $9.4 million.

“The strong momentum in our performance continued during the second quarter of 2020 as we progress along our strategic and operational objectives,” said Jerry Guo, Casa Systems’ President and Chief Executive Officer. “Our revenues exceeded our expectations and our wireless backlog grew by 224% to $84.8 million during the second quarter. These results are indicative of continued robust demand for products in our key growth areas. We remain committed to providing our customers with the critical infrastructure they need to meet the growing demand for connectivity in this unprecedented environment. We are improving results from our ongoing efforts to grow revenue and expand our footprint with our diverse product mix. We are confident that we are setting the stage for long-term, profitable growth through our expanding customer base and product diversity.”

Scott Bruckner, Casa Systems’ Interim Chief Financial Officer, added, “In our first full quarter under the global pandemic, we saw strong results for Casa as we drove profitability and generated meaningful free cash flow, while continuing to diversify our revenues. We also grew our backlog as the result of strong wireless and fixed telco product demand. We have the financial flexibility needed to meet the demand for our products, and we continue to work with our supply chain partners and contract manufacturers in an effort to meet delivery schedules for expanded order volume. As we add new customers, further diversify our product mix, and sustain our reduced cost structure, we will continue to deliver profitable growth.”

To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), we are presenting non-GAAP financial measures in this press release. A reconciliation of GAAP to non-GAAP measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.

Financial Outlook

For the fiscal year 2020 we continue to expect:

 

   

Revenue between $340 million and $360 million


   

Gross Margin in a range of 50% and 60%

 

   

GAAP net loss between $4 million and $14 million

 

   

Adjusted EBITDA between $33 million and $43 million

 

   

GAAP diluted net loss per share between $(0.04) and $(0.16) and Non-GAAP diluted net income per share between $0.00 and $0.12

Guidance for non-GAAP financial measures excludes acquisition costs and other non-recurring expenses, which are one-time non-recurring charges; stock-based compensation, which is a non-cash charge; adjustments to the tax provision for the CARES Act; and the resulting tax effect of these excluded items. We have not reconciled the non-GAAP metrics as to which we provide guidance to their most directly comparable GAAP metrics because certain items that impact these excluded measures are uncertain, out of our control and/or cannot be reasonably calculated or predicted at this time. Accordingly, a reconciliation of the non-GAAP financial metrics included in our guidance to the corresponding GAAP measures is not available without unreasonable effort.

Conference Call Information

Casa Systems is hosting a conference call for analysts and investors to discuss the financial results for its first quarter ended June 30, 2020, and its business outlook at 5:00 p.m. Eastern Standard Time today, July 30, 2020. The conference call can be heard via webcast in the investor relations section of our website at http://investors.casa-systems.com, or by dialing 877-407-4019 in the United States or 201-689-8337 from international locations. Callers should ask to be joined to the Casa Systems call. Shortly after the conclusion of the conference call, a replay of the audio webcast will be available in the investor relations section of our website for 90 days after the event.

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 and financial position 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) any failure by us to successfully anticipate technological shifts, market needs and opportunities, and develop new products and product enhancements that meet those technological shifts, needs and opportunities; (2) the concentration of a substantial portion of our revenue in our CCAP solutions and in certain customers; (3) fluctuations in our revenue due to timing of large orders and seasonality; (4) the length and lack of predictability of our sales cycle; (5) any difficulties we may face in expanding our platform into the wireless market; (6) any failure to fully realize anticipated synergies from our acquisition of NetComm; and (7) other factors discussed in the “Risk Factors” section of our public reports filed with the SEC, including our most recent Quarterly Report on Form 10-Q, which is on file with the SEC and available in the investor relations section of our website at http://investors.casa-systems.com and on the SEC’s website at www.sec.gov. In addition, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any


forward-looking statements that we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. We disclaim any obligation to update publicly or revise any forward-looking statements for any reason after the date of this press release. Any reference to our website address in this press release is intended to be an inactive textual reference only and not an active hyperlink.

COVID-19

The emergence of the coronavirus disease in 2019, or COVID-19, around the world, and particularly in the United States and China, and the accompanying responses of governments and businesses to the pandemic present various risks to us, not all of which we are able to fully evaluate or even to foresee at the current time. While the COVID-19 pandemic did not materially adversely affect our financial results, business operations or liquidity in the quarter ended June 30, 2020, economic and health conditions in the United States and across most of the globe changed rapidly during, and are continuing to change after the end of the quarter. Globally to date, all aspects of our business remain fully operational, our work from home contingency plans have been implemented and are operating successfully. The pandemic has resulted in increased demand for certain of our products and resulting order volumes have created additional pressure on our supply chain. To date, while the increased demand has not resulted in any material delays to our production cycle, we continue to work with our supply chain and contract manufacturers in an effort to ensure continued availability of all anticipated inventory requirements. However, we cannot at this time predict whether, or to what extent, our efforts will be successful. Additionally, we saw decreases in certain operating expenses, such as travel and trade show expense, during the three months ended June 30, 2020 due to the COVID-19 pandemic that we cannot ensure will be maintained. We intend to continue to monitor our business very closely for any effects of COVID-19 for as long as necessary on an ongoing basis.

Due to the above circumstances and as described generally in this Form 10-Q, our results of operations for the three and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full year. Management cannot predict the full impact of the COVID-19 pandemic on our sales channels, supply chain, manufacturing and distribution, or on economic conditions generally, including the effects on our current and potential customers, who may curtail spending on investments in current and/or new technologies, delay new equipment evaluations and trials, and possibly delay payments based on liquidity concerns, all of which could have a material impact on our business in the future. Similarly, our supply chain and our contract manufacturers could be affected, which could cause disruptions to our ability to meet customer demand. Although we have not been materially impacted to date, we cannot predict the extent to which this may impact the future results of our operations. If COVID-19 were to cause such impacts in the future, there would likely be a material adverse impact on our financial results, liquidity and capital resource needs. The use of our revolving line of credit is currently restricted based on the financial covenants we are subject to, and COVID-19 has further created significant uncertainty within capital markets such that access to sufficient additional capital resources, if needed, may not be available. Thus, the ultimate extent of the effects of the COVID-19 pandemic on the Company is highly uncertain and dependent upon future developments, and such effects could exist for an extended period of time even after the pandemic might end.

Non-GAAP Financial Measures

To supplement our financial results presented in accordance with Generally Accepted Accounting Principles (GAAP), we are presenting the following non-GAAP financial measures in this press release and the related earnings conference call: non-GAAP net loss, non-GAAP diluted net loss per share, adjusted EBITDA and free cash flow. 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.

Non-GAAP net income and non-GAAP diluted net income per share. We define non-GAAP net loss as net income (loss) as reported in our condensed consolidated statements of operations, excluding the impact of stock-based compensation expense and amortization of acquired intangible assets, which are non-cash charges; acquisition-related expenses and other non-recurring expenses, which are one-time non-recurring charges; adjustments to the tax provision for the CARES Act; and the tax effect on these excluded items. The tax effect of the excluded items were calculated based on specific calculations of each item’s effect on the tax provision. We define non-GAAP diluted net loss per share as diluted net income (loss) per share reported in our condensed consolidated statements of operations, excluding the impact of items that we exclude in calculating non-GAAP net loss. We have presented


non-GAAP net loss and non-GAAP diluted net loss 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 loss and non-GAAP diluted net loss 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.

Adjusted EBITDA. We define adjusted EBITDA as our net income (loss), excluding the impact of stock-based compensation expense; acquisition-related expenses; other non-recurring 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.

Free cash flow. We define free cash flow as net cash provided by operating activities minus capital expenditures. We believe free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by our business that, after purchases of property and equipment, can be used for strategic opportunities, including investing in our business, making strategic acquisitions and strengthening our balance sheet.

We use these non-GAAP financial measures to evaluate our operating performance and trends and make planning decisions. We believe that each of these non-GAAP financial measures helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of each non-GAAP financial measure. Accordingly, we believe that these financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.

Our non-GAAP financial measures are not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures rather than the most directly comparable financial measures calculated and presented in accordance with GAAP. Some of these limitations are:

 

   

we exclude stock-based compensation expense and amortization of acquired intangible assets from each of non-GAAP net loss, non-GAAP diluted net loss per share and adjusted EBITDA as it has recently been, and will continue to be for the foreseeable future, a significant recurring non-cash expense for our business;

 

   

we exclude acquisition-related expenses and other non-recurring expenses from non-GAAP net loss, non-GAAP diluted net loss per share and adjusted EBITDA because they are one-time non-recurring charges, although these are included in our operating expenses;

 

   

adjusted EBITDA excludes depreciation and amortization expense and, although this is a non-cash expense, the assets being depreciated and amortized may have to be replaced in the future;

 

   

adjusted EBITDA does not reflect the cash requirements necessary to service interest on our debt or the cash received from our interest-bearing financial assets, both of which impact the cash available to us, and does not reflect foreign currency transaction gains and losses, all of which are reflected in other income (expense), net;

 

   

adjusted EBITDA does not reflect income tax payments that reduce cash available to us;

 

   

free cash flow may not represent our residual cash flow available for discretionary expenditures, since we may have other non-discretionary expenditures that are not deducted from this measure;


   

free cash flow may not represent the total increase or decrease in the cash and cash equivalents for any given period because it excludes cash provided by or used for other investing and financing activities; and

 

   

other companies, including companies in our industry, may not use non-GAAP net loss, non-GAAP diluted net loss per share, adjusted EBITDA or free cash flow, or may calculate such non-GAAP financial measures in a different manner than we do, or may use other non-GAAP financial measures to evaluate their performance, all of which could reduce the usefulness of these non-GAAP financial measures as comparative measures.

For the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of Selected GAAP and Non-GAAP Financial Measures.”

About Casa Systems, Inc.

Casa Systems, Inc. (Nasdaq: CASA) is 5G, delivering physical, virtual and cloud-native 5G infrastructure and customer premise networking for high-speed data and multi-service communications networks. Our core and edge convergence technology enable public and private networks for both communications service providers and enterprises. Casa Systems’ products deliver higher performance, improved network flexibility and scalability, increased operational efficiency and lower total cost of ownership (TCO). Commercially deployed in more than 70 countries, Casa serves over 475 Tier 1 and regional service providers worldwide. For more information, visit http://www.casa-systems.com.

CONTACT INFORMATION:

IR Contact

Michael Cummings or Jackie Marcus

617-982-0475

investorrelations@casa-systems.com

Source: Casa Systems


CASA SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2020      2019      2020      2019  

Revenue

   $ 83,350      $ 52,101      $ 166,973      $ 87,587  

Cost of revenue

     40,220        12,796        81,190        23,785  
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     43,130        39,305        85,783        63,802  

Operating expenses:

           

Research and development

     20,688        18,260        41,899        36,665  

Selling, general and administrative

     21,110        17,302        46,101        37,495  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     41,798        35,562        88,000        74,160  
  

 

 

    

 

 

    

 

 

    

 

 

 

Income (loss) from operations

     1,332        3,743        (2,217      (10,358
  

 

 

    

 

 

    

 

 

    

 

 

 

Other income (expense):

           

Interest income

     271        1,570        677        3,222  

Interest expense

     (4,307      (5,225      (8,935      (10,422

Gain (loss) on foreign currency, net

     528        503        680        411  

Other income, net

     35        142        97        371  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other income (expense), net

     (3,473      (3,010      (7,481      (6,418
  

 

 

    

 

 

    

 

 

    

 

 

 

Loss (income) before provision for (benefit from) income taxes

     (2,141      733        (9,698      (16,776

Provision for (benefit from) income taxes

     887        (558      (7,832      (2,728
  

 

 

    

 

 

    

 

 

    

 

 

 

Net (loss) income

   $ (3,028    $ 1,291      $ (1,866    $ (14,048
  

 

 

    

 

 

    

 

 

    

 

 

 

Net (loss) income per share:

           

Basic

   $ (0.04    $ 0.02      $ (0.02    $ (0.17
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

   $ (0.04    $ 0.01      $ (0.02    $ (0.17
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted-average shares used to compute net (loss) income per share:

           

Basic

     83,068        83,884        83,505        83,605  
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted

     83,068        86,369        83,505        83,605  
  

 

 

    

 

 

    

 

 

    

 

 

 


CASA SYSTEMS, INC.

RECONCILIATION OF SELECTED GAAP AND NON-GAAP FINANCIAL MEASURES

(unaudited)

(in thousands)

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2020      2019      2020     2019  

Reconciliation of Net (Loss) Income to Non-GAAP Net Income (Loss):

          

Net (loss) income

   $ (3,028    $ 1,291      $ (1,866   $ (14,048

Stock-based compensation

     3,579        2,659        6,016       4,559  

Acquisition-related expenses

     —          582        —         1,450  

Amortization of acquired intangible assets

     1,426        —          2,852       —    

Other non-recurring expenses

     —          —          —         1,255  

Tax benefit from CARES Act

     —          —          (9,310     —    

Tax effect of excluded items

     (1,251      1,587        (2,240     (769
  

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP net income (loss)

   $ 726      $ 6,119      $ (4,548   $ (7,553
  

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP net income (loss) margin

     0.9      11.7      (2.7 )%      (8.6 )% 
  

 

 

    

 

 

    

 

 

   

 

 

 

Reconciliation of Diluted Net (Loss) Income Per Share to Non-GAAP Diluted Net Income (Loss) Per Share:

          

Diluted net (loss) income per share

   $ (0.04    $ 0.01      $ (0.02   $ (0.17

Non-GAAP adjustments to net (loss) income

   $ 0.05        0.06        (0.03     0.08  
  

 

 

    

 

 

    

 

 

   

 

 

 

Non-GAAP diluted net income (loss) per share

   $ 0.01      $ 0.07      $ (0.05   $ (0.09
  

 

 

    

 

 

    

 

 

   

 

 

 

Weighted-average shares used in computing diluted net income (loss) per share

     83,068        86,369        83,505       83,605  
  

 

 

    

 

 

    

 

 

   

 

 

 

Reconciliation of Net (Loss) Income to Adjusted EBITDA:

          

Net (loss) income

   $ (3,028    $ 1,291      $ (1,866   $ (14,048

Stock-based compensation

     3,579        2,659        6,016       4,559  

Acquisition-related expenses

     —          582        —         1,450  

Amortization of acquired intangible assets

     1,426        —          2,852       —    

Other non-recurring expenses

     —          —          —         1,255  

Depreciation and amortization

     3,054        2,489        6,401       4,885  

Other income, net

     3,473        3,010        7,481       6,418  

Provision for (benefit from) income taxes

     887        (558      (7,832     (2,728
  

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 9,391      $ 9,473      $ 13,052     $ 1,791  
  

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA margin

     11.3      18.2      7.8     2.0
  

 

 

    

 

 

    

 

 

   

 

 

 


CASA SYSTEMS, INC.

RECONCILIATION OF SELECTED GAAP AND NON-GAAP FINANCIAL MEASURES

(unaudited)

(in thousands)

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2020      2019      2020      2019  

Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow:

           

Net cash provided by (used in) operating activities

   $ 17,867      $ (17,271    $ 43,936      $ (31,120

Purchases of property and equipment

     (2,327      (1,929      (2,717      (3,764
  

 

 

    

 

 

    

 

 

    

 

 

 

Free cash flow

   $ 15,540      $ (19,200    $ 41,219      $ (34,884
  

 

 

    

 

 

    

 

 

    

 

 

 

Summary of Stock-Based Compensation Expense:

           

Cost of revenue

   $ 39      $ 53      $ 70      $ 124  

Research and development

     650        502        1,087        643  

Selling, general and administrative

     2,890        2,104        4,859        3,792  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 3,579      $ 2,659      $ 6,016      $ 4,559  
  

 

 

    

 

 

    

 

 

    

 

 

 

Summary of Revenue:

           

Wireless

   $ 15,510      $ 1,426      $ 36,167      $ 1,654  

Fixed telecom

     23,819        1        41,751      $ 45  

Cable

     32,799        40,796        67,968        67,177  
  

 

 

    

 

 

    

 

 

    

 

 

 

Product

     72,128        42,223        145,886        68,876  

Service

     11,222        9,878        21,087        18,711  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue

   $ 83,350      $ 52,101      $ 166,973      $ 87,587  
  

 

 

    

 

 

    

 

 

    

 

 

 


CASA SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands)

 

     June 30,
2020
    December 31,
2019
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 149,148     $ 113,638  

Accounts receivable, net

     52,867       93,100  

Inventory

     85,965       93,604  

Prepaid expenses and other current assets

     5,772       4,884  

Prepaid income taxes

     10,843       3,217  
  

 

 

   

 

 

 

Total current assets

     304,595       308,443  

Property and equipment, net

     32,303       35,910  

Accounts receivable, net of current portion

     324       575  

Deferred tax assets

     665       69  

Goodwill

     50,347       50,347  

Intangible assets, net

     38,295       41,148  

Other assets

     6,007       7,820  
  

 

 

   

 

 

 

Total assets

   $ 432,536     $ 444,312  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 26,488     $ 25,890  

Accrued expenses and other current liabilities

     31,324       34,567  

Accrued income taxes

     486       —    

Deferred revenue

     18,061       25,485  

Current portion of long-term debt, net of unamortized debt issuance costs

     8,374       8,524  
  

 

 

   

 

 

 

Total current liabilities

     84,733       94,466  

Accrued income taxes, net of current portion

     10,887       12,381  

Deferred tax liabilities

     9,166       8,993  

Deferred revenue, net of current portion

     3,546       4,583  

Long-term debt, net of current portion and unamortized debt issuance costs

     283,805       284,756  

Other liabilities, non-current

     687       569  
  

 

 

   

 

 

 

Total liabilities

     392,824       405,748  
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     85       84  

Treasury Stock

     (4,826     (1,795

Additional paid-in capital

     175,496       169,561  

Accumulated other comprehensive loss

     (2,113     (2,222

Accumulated deficit

     (128,930     (127,064
  

 

 

   

 

 

 

Total stockholders’ equity

     39,712       38,564  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 432,536     $ 444,312  
  

 

 

   

 

 

 


CASA SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

     Six Months Ended June 30,  
     2020     2019  

Cash flows provided by (used in) operating activities:

    

Net (loss) income

   $ (1,866   $ (14,048

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     9,255       4,885  

Stock-based compensation

     6,016       4,559  

Deferred income taxes

     (420     (5,379

Increase in provision for doubtful accounts

     23       1,255  

Excess and obsolete inventory valuation adjustment

     1,118       (1,264

Gain on disposal of assets

     10       —    

Changes in operating assets and liabilities:

    

Accounts receivable

     40,377       24,225  

Inventory

     6,217       (23,075

Prepaid expenses and other assets

     1,419       (1,859

Prepaid income taxes

     (7,624     (28

Accounts payable

     1,331       (7,865

Accrued expenses and other current liabilities

     (2,480     (6,387

Accrued income taxes

     (1,016     (759

Deferred revenue

     (8,424     (5,380
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     43,936       (31,120
  

 

 

   

 

 

 

Cash flows used in investing activities:

    

Purchases of property and equipment

     (2,717     (3,764
  

 

 

   

 

 

 

Net cash used in investing activities

     (2,717     (3,764
  

 

 

   

 

 

 

Cash flows used in financing activities:

    

Principal repayments of debt

     (1,660     (1,656

Proceeds from exercise of stock options

     414       2,168  

Payments of dividends and equitable adjustments

     (622     (2,090

Repurchases of common stock

     (3,031     —    

Employee taxes paid related to net share settlement of equity awards

     (487     (1,004
  

 

 

   

 

 

 

Net cash used in financing activities

     (5,386     (2,582
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (340     50  
  

 

 

   

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

     35,493       (37,416

Cash, cash equivalents and restricted cash at beginning of period

     114,657       281,606  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $ 150,150     $ 244,190  
  

 

 

   

 

 

 

Supplemental disclosures of cash flow information:

    

Cash paid for interest

   $ 5,502     $ 9,539  
  

 

 

   

 

 

 

Cash paid for income taxes

   $ 1,889     $ 2,857  
  

 

 

   

 

 

 

Supplemental disclosures of non-cash operating, investing and financing activities:

    

Purchases of property and equipment included in accounts payable

   $ 564     $ 1,626  
  

 

 

   

 

 

 

Unpaid equitable adjustments included in accrued expenses and other current liabilities

   $ 124     $ 1,246  
  

 

 

   

 

 

 

Release of customer incentives included in accounts receivable and accrued expenses and other current liabilities

   $ —       $ 5,604  
  

 

 

   

 

 

 

Fair value of cash flow hedges

   $ 527     $ —