8-K
0001333835false00013338352022-11-032022-11-03

 

 

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): November 3, 2022

 

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 November 3, 2022, Casa Systems, Inc. (the “Company”) announced its financial results for the fiscal quarter ended September 30, 2022. 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 November 3, 2022*

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

*

 

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: November 3, 2022

 

By:

/s/ Edward Durkin

 

 

 

Edward Durkin

 

 

 

Chief Financial Officer

 


EX-99.1

Exhibit 99.1

 

https://cdn.kscope.io/82abc58a72a2f10dce5dd3373b1d9ec5-img245085881_0.jpg 

 

Casa Systems Reports Third Quarter 2022 Financial Results

Continued Progress in Cloud-Native 5G Market Access with Google Cloud Partnership

Execution on Deleveraging Plan with Reduction of Senior Debt by $41.7 million on November 2

Positive Operating Cash Flow and Strong Cash Position

Cable Revenue Increased 20% Sequentially

 

Andover, Mass. – November 3, 2022 – Casa Systems, Inc. (Nasdaq: CASA), a leading provider of cloud-native software and physical broadband technology solutions for wireless, cable and fixed networks, today announced its financial results for its third quarter ended September 30, 2022.

Third Quarter 2022 Financial & Operational Highlights

Revenue of $66.9 million
GAAP net loss of $(31.2) million
Non-GAAP net loss of $(27.4) million
GAAP net loss per fully diluted share of $(0.33)
Non-GAAP net loss per fully diluted share of $(0.29)
Adjusted EBITDA of $(23.3) million
Q3 results include charge to cost of revenue of $12.9 million for estimated warranty settlement
Net Adjusted EBITDA of ($10.4) million
Positive Operating Cash Flows of $11.7 million for the first nine months of 2022 and $2.1 million for the three months ended September 30, 2022
Cash, Cash Equivalents and Restricted Cash of $196.6 million at quarter end

“Despite the continued supply chain headwinds that have impacted our financial performance during the fiscal quarter, our multi-year transformation towards software and cloud has continued to gain positive momentum with additional customer opportunities and partnerships,” said Jerry Guo, Casa Systems' President and Chief Executive Officer. “Robust demand for our products is evidenced by our healthy backlog and solid and growing sales pipeline across all product lines, particularly for Cable and Wireless, including our cloud-native software. The strength of our cloud-native software solutions is clear with our recently announced strategic partnership with Google Cloud, which will help drive the adoption of our cloud-native 5G Core, 5G SA MEC, and other software solutions. This strategic partnership, coupled with in-process future partnerships, growing Tier 1 CSP sales prospects in our sales pipeline and our multi-year partnership with Verizon, provides us with great confidence that we will be able to achieve our transformational goals.”

Edward Durkin, Casa Systems' Chief Financial Officer, said, “Casa continued to navigate several persistent headwinds related to the supply chain and order delays that impacted our top and bottom line during the third quarter. However, we remain optimistic for the future of Casa as our strong backlog and sales pipeline continues to grow. Our balance sheet remains strong, including a healthy cash balance that will help us navigate any potential near-term macro headwinds. We are starting to see increased demand from our Cable customers which is evidenced by the 20% increase in Cable revenue from the prior quarter."


Customer Dispute

As previously disclosed, on July 21, 2022, Casa Systems received written notification from a significant customer of one of its international subsidiaries, of alleged costs incurred and expected to be incurred by that customer with respect to an ongoing warranty matter relating to field replacements of failed units for one particular product. The failure was attributable to an unauthorized part substitution in 2019 by a supplier to the subsidiary. This customer was seeking $56.0 million in recovery of past and estimated future costs. Based on current negotiations, an estimated warranty settlement charge of $12.9 million was recorded in the quarter ended September 30, 2022 within cost of revenue, based on expected installment payments to occur over several years.

Subsequent Events: Term Loan B & Debt Repurchase

On October 27, 2022, Casa Systems’ Board of Directors authorized the use of cash to repurchase up to $50 million of its term loan debt facility. On November 2, 2022, Casa Systems retired $41.7 million of face value of its outstanding debt.

Financial Outlook

Due to various uncertainties, including most significantly supply chain challenges and its potential impact on 2022 revenue, Casa Systems suspended its prior full year 2022 guidance indefinitely in May 2022. Any prior guidance should no longer be relied upon.

Conference Call Information

Casa Systems is hosting a conference call for analysts and investors to discuss its financial results for the third quarter ended September 30, 2022, and its business outlook at 5:00 p.m. Eastern Time today, November 3, 2022. The conference call can be heard via webcast in the investor relations section its website at http://investors.casa-systems.com, or by dialing 1-877-407-4019 in the United States or 1-201-689-8337 from international locations with Conference ID 13733327. Shortly after the conclusion of the conference call, a replay of the audio webcast will be available in the investor relations section of Casa Systems’ 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 Systems” or "Casa" or the “Company” or “we”), 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) our ability to fulfill our customers’ orders due to supply chain delays, access to key commodities or technologies or events that impact our manufacturers or their suppliers, including the impacts of the ongoing COVID-19 pandemic; (2) 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; (3) the concentration of a substantial portion of our revenue in certain customers; (4) fluctuations in our revenue due to timing of large orders and


seasonality; (5) the length and lack of predictability of our sales cycle; (6) any difficulties we may face in expanding our platform into the wireless market; (7) any failure to maintain the synergies we have realized from our acquisition of NetComm; (8) increases or decreases in our expenses caused by fluctuations in foreign currency exchange rates and interest rates; and (9) other factors discussed in the “Risk Factors” section of our public reports filed with the Securities and Exchange Commission (the “SEC”), including our most recent Quarterly Report on Form 10-Q and our most recent Annual Report on Form 10-K, which are 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.

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 income, non-GAAP diluted net income per share, adjusted EBITDA, net 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 income as net (loss) income 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; adjustments to the tax provision for the CARES Act; and the tax effect on these excluded items. We believe that excluding amortization expense of acquired intangible assets results in more useful disclosure to investors and others as it is a significant non-cash charge related to an event that is generally infrequent based on our historical activities. We further note that while amortization of acquired intangible assets is excluded from the measures, the revenue of the acquired company is reflected in the measures and the acquired assets contribute to revenue generation. The tax effect of the excluded items was calculated based on specific calculations of each item’s effect on the tax provision. 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 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 (loss) income per share reported in our condensed consolidated statements of operations, excluding the impact of items that we exclude in calculating non-GAAP net income. 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.

Adjusted EBITDA. We define adjusted EBITDA as our net (loss) income, excluding the impact of stock-based compensation expense; other income (expense), net; depreciation and amortization expense; and our (benefit from)


provision for 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, by excluding the impact of these expenses, adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.

Net Adjusted EBITDA. We define net adjusted EBITDA as our net (loss) income, excluding the impact of items that we exclude in calculating adjusted EBITDA; and our warranty settlement provision, as warranty provisions of this significance have not and are not expected to impact our results on a recurring basis. Management and the board of directors believe that, by excluding the impact of this expense, net 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, equipment and software licenses, 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 to 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 and enhance 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:

each of non-GAAP net income, non-GAAP diluted net income per share, adjusted EBITDA and net adjusted EBITDA exclude stock-based compensation expense and amortization of acquired intangible assets because they have recently been, and will continue to be for the foreseeable future, a significant recurring non-cash expense for our business;

 

adjusted EBITDA and net adjusted EBITDA exclude 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 and net adjusted EBITDA do 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;

 

adjusted EBITDA and net adjusted EBITDA do not reflect foreign currency transaction gains and losses, which are reflected in other income (expense), net;

 

adjusted EBITDA and net adjusted EBITDA do not reflect income tax payments that reduce cash available to us;

 

net adjusted EBITDA does not reflect the estimated warranty settlement provision which is expected to 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 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 or report non-GAAP net income, non-GAAP diluted net income per share, adjusted EBITDA, net 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) delivers the core-to-customer building blocks to speed 5G transformation with future-proof solutions and cutting-edge bandwidth for all access types. In today’s increasingly personalized world, Casa Systems creates disruptive architectures built specifically to meet the needs of service provider networks. Our suite of open, cloud-native network solutions unlocks new ways for service providers to build networks without boundaries and maximize revenue-generating capabilities. Commercially deployed in more than 70 countries, Casa Systems serves over 475 Tier 1 and regional communications service providers worldwide. For more information, visit http://www.casa-systems.com.

CONTACT INFORMATION:

IR Contact

Michael Cummings

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue

 

$

66,899

 

 

$

99,219

 

 

$

202,134

 

 

$

296,226

 

Cost of revenue

 

 

39,616

 

 

 

58,595

 

 

 

121,537

 

 

 

154,047

 

Warranty settlement provision

 

 

12,907

 

 

 

 

 

 

12,907

 

 

 

 

Gross profit

 

 

14,376

 

 

 

40,624

 

 

 

67,690

 

 

 

142,179

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

22,059

 

 

 

21,578

 

 

 

67,545

 

 

 

63,479

 

Selling, general and administrative

 

 

22,442

 

 

 

21,029

 

 

 

66,741

 

 

 

64,492

 

Total operating expenses

 

 

44,501

 

 

 

42,607

 

 

 

134,286

 

 

 

127,971

 

(Loss) income from operations

 

 

(30,125

)

 

 

(1,983

)

 

 

(66,596

)

 

 

14,208

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

810

 

 

 

80

 

 

 

1,118

 

 

 

297

 

Interest expense

 

 

(4,762

)

 

 

(3,969

)

 

 

(12,270

)

 

 

(11,886

)

Gain (loss) on foreign currency, net

 

 

1,546

 

 

 

(375

)

 

 

2,089

 

 

 

(1,353

)

Other income, net

 

 

106

 

 

 

83

 

 

 

285

 

 

 

634

 

Total other expense, net

 

 

(2,300

)

 

 

(4,181

)

 

 

(8,778

)

 

 

(12,308

)

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

 

 

(32,425

)

 

 

(6,164

)

 

 

(75,374

)

 

 

1,900

 

(Benefit from) provision for income taxes

 

 

(1,261

)

 

 

(5,288

)

 

 

5,071

 

 

 

220

 

Net (loss) income

 

$

(31,164

)

 

$

(876

)

 

$

(80,445

)

 

$

1,680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.33

)

 

$

(0.01

)

 

$

(0.89

)

 

$

0.02

 

Diluted

 

$

(0.33

)

 

$

(0.01

)

 

$

(0.89

)

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

94,512

 

 

 

85,660

 

 

 

90,569

 

 

 

84,985

 

Diluted

 

 

94,512

 

 

 

85,660

 

 

 

90,569

 

 

 

88,948

 

 


CASA SYSTEMS, INC.

RECONCILIATION OF SELECTED GAAP AND NON-GAAP FINANCIAL MEASURES

(unaudited)

(in thousands)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(31,164

)

 

$

(876

)

 

$

(80,445

)

 

$

1,680

 

Stock-based compensation

 

 

3,671

 

 

 

3,698

 

 

 

9,178

 

 

 

11,245

 

Amortization of acquired intangible assets

 

 

1,343

 

 

 

1,426

 

 

 

4,195

 

 

 

4,278

 

Tax benefit from release of DTA reserve

 

 

 

 

 

(7,097

)

 

 

 

 

 

(7,097

)

Tax effect of excluded items

 

 

(1,247

)

 

 

(1,278

)

 

 

(3,370

)

 

 

(3,870

)

Non-GAAP net (loss) income

 

$

(27,397

)

 

$

(4,127

)

 

$

(70,442

)

 

$

6,236

 

Non-GAAP net (loss) income margin

 

 

(41.0

)%

 

 

(4.2

)%

 

 

(34.8

)%

 

 

2.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net (loss) income per share

 

$

(0.33

)

 

$

(0.01

)

 

$

(0.89

)

 

$

0.02

 

Non-GAAP adjustments to net (loss) income

 

 

0.04

 

 

 

(0.04

)

 

 

0.11

 

 

 

0.05

 

Non-GAAP diluted net (loss) income per share

 

$

(0.29

)

 

$

(0.05

)

 

$

(0.78

)

 

$

0.07

 

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

 

 

94,512

 

 

 

85,660

 

 

 

90,569

 

 

 

88,948

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of Net (Loss) Income to Adjusted
     EBITDA and Net Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(31,164

)

 

$

(876

)

 

$

(80,445

)

 

$

1,680

 

Stock-based compensation

 

 

3,671

 

 

 

3,698

 

 

 

9,178

 

 

 

11,245

 

Amortization of acquired intangible assets

 

 

1,343

 

 

 

1,426

 

 

 

4,195

 

 

 

4,278

 

Depreciation and amortization

 

 

1,853

 

 

 

2,363

 

 

 

6,141

 

 

 

7,708

 

Other expense

 

 

2,300

 

 

 

4,181

 

 

 

8,778

 

 

 

12,308

 

(Provision for) benefit from income taxes

 

 

(1,261

)

 

 

(5,288

)

 

 

5,071

 

 

 

220

 

Adjusted EBITDA

 

 

(23,258

)

 

 

5,504

 

 

 

(47,082

)

 

 

37,439

 

Warranty settlement provision

 

 

12,907

 

 

 

 

 

 

12,907

 

 

 

 

Net Adjusted EBITDA

 

$

(10,351

)

 

$

5,504

 

 

$

(34,175

)

 

$

37,439

 

Net Adjusted EBITDA margin

 

 

(15.5

)%

 

 

5.5

%

 

 

(16.9

)%

 

 

12.6

%

 

 

 

 


CASA SYSTEMS, INC.

RECONCILIATION OF SELECTED GAAP AND NON-GAAP FINANCIAL MEASURES

(unaudited)

(in thousands)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

 

$

2,053

 

 

$

(11,518

)

 

$

11,663

 

 

$

15,197

 

Purchases of property and equipment and software licenses

 

 

(1,215

)

 

 

(1,490

)

 

 

(3,325

)

 

 

(4,404

)

Free cash flow

 

$

838

 

 

$

(13,008

)

 

$

8,338

 

 

$

10,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Stock-Based Compensation Expense:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

$

31

 

 

$

29

 

 

$

92

 

 

$

95

 

Research and development

 

 

824

 

 

 

557

 

 

 

2,113

 

 

 

1,971

 

Selling, general and administrative

 

 

2,816

 

 

 

3,112

 

 

 

6,973

 

 

 

9,179

 

Total

 

$

3,671

 

 

$

3,698

 

 

$

9,178

 

 

$

11,245

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

 

19,891

 

 

 

43,070

 

 

 

68,047

 

 

 

116,081

 

Fixed telco

 

 

14,971

 

 

 

20,187

 

 

 

42,625

 

 

 

51,209

 

Cable

 

 

20,573

 

 

 

24,495

 

 

 

56,449

 

 

 

94,729

 

Product revenue

 

$

55,435

 

 

$

87,752

 

 

$

167,121

 

 

$

262,019

 

Service revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Wireless

 

 

1,478

 

 

 

1,141

 

 

 

4,363

 

 

 

3,416

 

Fixed telco

 

 

316

 

 

 

825

 

 

 

3,027

 

 

 

3,474

 

Cable

 

 

9,670

 

 

 

9,501

 

 

 

27,623

 

 

 

27,317

 

Service revenue

 

$

11,464

 

 

$

11,467

 

 

$

35,013

 

 

$

34,207

 

Total revenue

 

$

66,899

 

 

$

99,219

 

 

$

202,134

 

 

$

296,226

 

 

 

 

 


CASA SYSTEMS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands)

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

193,494

 

 

$

154,703

 

Accounts receivable, net

 

 

49,040

 

 

 

85,774

 

Inventory

 

 

82,189

 

 

 

84,828

 

Prepaid expenses and other current assets

 

 

4,013

 

 

 

5,746

 

Prepaid income taxes

 

 

2,929

 

 

 

23,963

 

Total current assets

 

 

331,665

 

 

 

355,014

 

Property and equipment, net

 

 

20,266

 

 

 

23,508

 

Accounts receivable, net of current portion

 

 

57

 

 

 

115

 

Deferred tax assets

 

 

63

 

 

 

101

 

Goodwill

 

 

50,177

 

 

 

50,177

 

Intangible assets, net

 

 

27,265

 

 

 

31,144

 

Other assets

 

 

8,475

 

 

 

8,648

 

Total assets

 

$

437,968

 

 

$

468,707

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

13,784

 

 

$

28,087

 

Accrued expenses and other current liabilities

 

 

41,753

 

 

 

41,382

 

Accrued income taxes

 

 

6,598

 

 

 

4,991

 

Deferred revenue

 

 

33,597

 

 

 

14,473

 

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

 

 

1,933

 

 

 

1,924

 

Total current liabilities

 

 

97,665

 

 

 

90,857

 

Accrued income taxes, net of current portion

 

 

8,175

 

 

 

7,732

 

Deferred tax liabilities

 

 

2,812

 

 

 

5,293

 

Deferred revenue, net of current portion

 

 

5,799

 

 

 

7,012

 

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

 

 

272,739

 

 

 

274,193

 

Other liabilities, net of current portion

 

 

8,214

 

 

 

1,701

 

Total liabilities

 

 

395,404

 

 

 

386,788

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

  Common stock

 

 

98

 

 

 

88

 

  Treasury Stock

 

 

(14,837

)

 

 

(13,645

)

  Additional paid-in capital

 

 

240,579

 

 

 

193,654

 

  Accumulated other comprehensive (loss) income

 

 

(3,805

)

 

 

878

 

  Accumulated deficit

 

 

(179,471

)

 

 

(99,056

)

     Total stockholders’ equity

 

 

42,564

 

 

 

81,919

 

     Total liabilities and stockholders’ equity

 

$

437,968

 

 

$

468,707

 

 


CASA SYSTEMS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

Operating activities:

 

 

 

 

 

 

Net (loss) income

 

$

(80,445

)

 

$

1,680

 

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

 

 

 

 

 

 

Depreciation and amortization

 

 

10,336

 

 

 

11,986

 

Stock-based compensation

 

 

9,178

 

 

 

11,245

 

Deferred income taxes

 

 

(2,435

)

 

 

(1,322

)

Change in provision for doubtful accounts

 

 

178

 

 

 

63

 

Change in provision for excess and obsolete inventory

 

 

5,934

 

 

 

(98

)

Gain on disposal of assets

 

 

7

 

 

 

29

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

35,573

 

 

 

13,194

 

Inventory

 

 

(3,454

)

 

 

9,302

 

Prepaid expenses and other assets

 

 

1,833

 

 

 

(1,648

)

Prepaid income taxes

 

 

21,013

 

 

 

(5,873

)

Accounts payable

 

 

(13,568

)

 

 

(17,553

)

Accrued expenses and other current liabilities

 

 

7,470

 

 

 

(6,074

)

Accrued income taxes

 

 

2,053

 

 

 

(1,601

)

Deferred revenue

 

 

17,990

 

 

 

1,867

 

Net cash provided by operating activities

 

 

11,663

 

 

 

15,197

 

Investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(2,611

)

 

 

(2,979

)

Purchases of software licenses

 

 

(714

)

 

 

(1,425

)

Net cash used in investing activities

 

 

(3,325

)

 

 

(4,404

)

Financing activities:

 

 

 

 

 

 

Principal repayments of debt

 

 

(2,250

)

 

 

(9,025

)

Proceeds from exercise of stock options

 

 

304

 

 

 

3,532

 

Employee taxes paid related to net share settlement of equity awards

 

 

(2,074

)

 

 

(6,315

)

Proceeds from sale of common stock, net of issuance costs

 

 

39,370

 

 

 

 

Payments of dividends and equitable adjustments

 

 

(1

)

 

 

(97

)

Repurchases of common stock

 

 

(1,192

)

 

 

 

Net cash provided by (used in) financing activities

 

 

34,157

 

 

 

(11,905

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(3,697

)

 

 

111

 

Net increase in cash, cash equivalents and restricted cash

 

 

38,798

 

 

 

(1,001

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

157,804

 

 

 

158,461

 

Cash, cash equivalents and restricted cash at end of period

 

$

196,602

 

 

$

157,460

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

Cash paid for interest

 

$

11,419

 

 

$

12,167

 

Cash paid for income taxes

 

$

7,845

 

 

$

8,288

 

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