Carbonite Announces Fourth Quarter and Full Year 2012 Financial Results

BOSTON, Feb. 4, 2013 /PRNewswire/ -- Carbonite, Inc. (NASDAQ: CARB), a leading provider of cloud backup solutions for consumers and small businesses, today announced financial results for the fourth quarter and year ended December 31, 2012.

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"During the fourth quarter, we achieved record revenue, realized ongoing operating leverage, and generated significant free cash flow, even after accelerating the payment of our annual cash bonuses into the quarter," said David Friend, Chairman and CEO of Carbonite.  "As we enter 2013, the company will further invest in the small business market where our recent acquisition of Zmanda has bolstered our offerings with comprehensive backup and database archiving.  While we continue to enhance our consumer value proposition, our small business offerings are experiencing faster growth, higher margins, and better retention and will be the key drivers of our growth going forward." 

Financial and Operating Metrics for the Fourth Quarter Ended December 31, 2012

• Bookings for the fourth quarter of 2012 were $27.5 million, an increase of 19% from $23.2 million in the fourth quarter of 2011.
• Revenue for the fourth quarter of 2012 was $23.7 million, an increase of 37% from $17.3 million in the fourth quarter of 2011. 
• Gross margin for the fourth quarter of 2012 was 65.9%, compared to 60.9% in the fourth quarter of 2011.
• Net loss for the fourth quarter of 2012 was ($2.2) million, compared to ($6.1) million in the fourth quarter of 2011.
• Net loss attributable to common stockholders for the fourth quarter of 2012 was ($0.09) per share (basic and diluted), compared to a net loss of ($0.24) per share (basic and diluted) in the fourth quarter of 2011.
• Non-GAAP net loss for the fourth quarter of 2012, which excludes amortization expense on intangible assets, stock-based compensation expense, and patent litigation expense was ($0.3) million, compared to ($5.3) million in the fourth quarter of 2011.
• Non-GAAP net loss per common share for the fourth quarter of 2012 was ($0.01), compared to a non-GAAP net loss per common share of ($0.21) in the fourth quarter of 2011.
• Cash flow from operations for the fourth quarter of 2012 was $5.3 million, compared to $4.9 million in the fourth quarter of 2011.
• Non-GAAP free cash flow for the fourth quarter of 2012 was $2.1 million, compared to $0.9 million in the fourth quarter of 2011.  Both cash flow from operations and free cash flow for the fourth quarter of 2012 include $1.7 million in 2012 annual bonus payments historically paid out in the first quarter and CFO transition costs.
• Cash, cash equivalents, and marketable securities were $55.3 million as of December 31, 2012, compared to $66.3 million as of September 30, 2012. The decline was primarily due to the acquisition of Zmanda Inc. for $13.4 million in net cash which closed on October 31, 2012. 
• Quarterly retention rate was in the 96% to 97% range, consistent with prior quarters since 2009.

Financial and Operating Metrics for the Full Year 2012

• Bookings for the full year 2012 were $98.5 million, an increase of 22% from $80.9 million in 2011.
• Revenue for the full year 2012 was $84.0 million, an increase of 39% from $60.5 million in 2011. 
• Gross margin for the full year 2012 was 65.4%, compared to 61.7% in 2011.
• Net loss for the full year 2012 was ($18.9) million, compared to ($23.5) million in 2011.
• Net loss attributable to common stockholders for the full year 2012 was ($0.74) per share (basic and diluted), compared to a net loss of ($1.84) per share (basic and diluted) in 2011.
• Non-GAAP net loss for the full year 2012, which excludes amortization expense on intangible assets, stock-based compensation expense, patent litigation expense, and a lease exit charge was ($11.7) million, compared to ($21.0) million in 2011.
• Non-GAAP net loss per common share for the full year 2012 was ($0.46), compared to a non-GAAP net loss per common share of ($0.84) in 2011.
• Cash flow from operations for the full year 2012 was $9.2 million, compared to $7.6 million in 2011. Non-GAAP free cash flow for the full year 2012 was ($4.1) million, compared to ($6.0) million in 2011.  Both cash flow from operations and free cash flow for the full year 2012 include $1.7 million in 2012 annual bonus payments historically paid out in the first quarter and CFO transition costs.
• Cash, cash equivalents, and marketable securities were $55.3 million as of December 31, 2012, compared to $72.5 million as of December 31, 2011.  The decline in cash was primarily due to the acquisition of Zmanda Inc. for $13.4 million in net cash which closed on October 31, 2012.

An explanation of non-GAAP measures is provided under the "Non-GAAP Financial Measures" below and reconciliation to the most comparable GAAP measures is provided in the tables at the end of this press release.

Recent Business Highlights:

• Completed the acquisition of Zmanda, Inc., a global provider of open source and cloud backup solutions. This acquisition will enhance Carbonite's offerings for small businesses with the ability to backup databases and file systems to the cloud, and will enable small businesses and resellers to obtain the backup solutions they need from one vendor.
• Announced the appointment of Anthony Folger to the position of Chief Financial Officer and Treasurer. Folger will be responsible for financial strategy and operations. This appointment further strengthens Carbonite's management team as the company moves forward with its strategic growth initiatives.
• Added new features to the Carbonite Business suite to better meet the backup needs of the higher education market. Based on feedback from current education customers, the new Groups and Search features will provide an institution with easier management for the cloud backups of their users and devices.
• Ranked No. 51 on Deloitte's Technology Fast 500™, a ranking of the 500 fastest growing technology, media, telecommunications, life sciences, and clean technology companies in North America.

Business Outlook

Based on information available as of February 4, 2013, Carbonite is issuing guidance for the first quarter and full year 2013 as follows:

First Quarter 2013: The Company expects total revenue for the first quarter to be in the range of $24.3 million to $24.6 million and non-GAAP net loss per common share to be in the range of ($0.17) to ($0.19). Carbonite's expectations of non-GAAP net loss per common share for the first quarter excludes amortization expense on intangible assets, stock-based compensation expense, and patent litigation expense and assume a tax rate of 0% and weighted average shares outstanding of approximately 25.8 million.

Full Year 2013: The Company expects 2013 total revenue to be in the range of $104.0 million to $106.0 million and non-GAAP net loss per common share to be in the range of ($0.40) to ($0.44). Carbonite's expectations of non-GAAP net loss per common share for the full year excludes amortization expense on intangible assets, stock-based compensation expense, and patent litigation expense and assumes a tax rate of 0% and weighted average shares outstanding of approximately 25.9 million.

Conference Call and Webcast Information

Carbonite will host a conference call on February 4, 2013 at 5:00 p.m. Eastern Time (ET) to discuss the Company's fourth quarter financial results and its business outlook. To access this call, dial 800-992-7415 (domestic) or +1-913-312-0708 (international). A replay of this conference call will be available until February 11, 2013 at 877-870-5176 (domestic) or +1-858-384-5517 (international). The replay pass code is 7516543. A live web cast of this conference call will also be available in the investor relations section on the Company's website at http://investor.carbonite.com under "Events and Presentations" and a replay will be archived on the website as well.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures including bookings, non-GAAP net loss and non-GAAP net loss per common share, and free cash flow. Bookings represent the aggregate dollar value of customer subscriptions received during a period and are calculated as revenue recognized during the period plus the change in total deferred revenue during the same period.  Non-GAAP net loss and non-GAAP net loss per common share exclude amortization expenses on intangible assets, stock-based compensation expenses, a lease exit charge associated with our data center relocation, and patent litigation expenses from net loss and give effect to the conversion of preferred stock and issuance of common stock in connection with the Company's initial public offering as if both had happened at the beginning of the period. Non-GAAP free cash flow is calculated by adding the cash portion of the lease exit charge and subtracting cash paid for the purchase of property and equipment from net cash provided by operating activities. Quarterly retention rate is defined as the percentage of customers on the last day of the prior quarter who remain customers on the last day of the current quarter.

The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods and uses these measures in financial reports prepared for management and the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors.

The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant items that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management. In order to compensate for these limitations, management presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company's business.

Cautionary Language Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent the Company's views as of the date of this press release based on the current intent, belief or expectations, estimates, forecasts, assumptions and projections of the Company and members of our management team. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Those statements include, but are not limited to, statements regarding guidance on our future financial results and other projections or measures of future performance, and our expectations concerning market opportunities and our ability to capitalize on them.  Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control. The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including, but not limited to, the Company's ability to profitably attract new customers and retain existing customers, the Company's dependence on the market for online computer backup services, the Company's ability to manage growth, and changes in economic or regulatory conditions or other trends affecting the Internet and the information technology industry. These and other important risk factors are discussed or referenced in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the Securities and Exchange Commission, which is available on www.sec.gov, under the heading "Risk Factors" and elsewhere, and any subsequent periodic or current reports filed by us with the SEC. The Company anticipates that subsequent events and developments will cause its views to change. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances. 

About Carbonite                                  
Carbonite, Inc. (NASDAQ: CARB), is a leading provider of online backup solutions for consumers and small businesses.  Subscribers in more than 100 countries rely on Carbonite to provide easy-to-use, affordable and secure cloud backup solutions with anytime, anywhere data access. Carbonite's backup solution runs on both the Windows and Mac platforms. The company has backed up more than 300 billion files, restored nearly 20 billion files, and currently backs up more than 350 million files each day. For more information, please visit www.carbonite.com, twitter.com/carbonite, twitter.com/carbonitebiz, or facebook.com/CarboniteOnlineBackup.

Investor Relations Contact:  
Cassandra Hudson  
Carbonite  
617-587-1144    
chudson@carbonite.com   

Staci Mortenson  
ICR      
617-587-1102  
investor.relations@carbonite.com

Media Contact:  
Erin Delaney  
Carbonite  
617-421-5637  
media@carbonite.com

SOURCE Carbonite, Inc.