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Procera Networks, Inc. Message Board

  • petercohen33 petercohen33 Apr 6, 2013 10:44 AM Flag


    There is a whole lot of emotion on this board and some is very toxic. A few common sense facts , shrinking a Companies Balance Sheet at this stage in their development for the sake of increasing EPS is not a priority. If management felt they were behind the ball interms of technology and did not have a best of breed business platform maybe that option would be considered. That being said i am in favor of Procera buying back when they legally can 825,000 shares issued for Vineyard thereby lowering acquisition cost by 15-20% .STB8444 If you review most recent earning release and revisit conference calls Q3 & Q4 / Yearend & Vineyard you will feel more confident that Procera is a leader in a unique growth space whose application use is growing significantly. Management plate is full , discussions about additional acquisitions are premature there is much on JB's plate now that needs to get digested. The bulk up on personnel on the support side in the 2nd half of 2012 is in direct correlation to JB's comments back on Q3 conference call / earning release about 2 galactic wins . Taking on a additional 30 employee in Q1 from Vineyard is positioning Procera to build two additional complementry businesses that were purchased from Vineyard . EPS line has been hit by the perfect storm near term. Margins on Service & Support line have come in from upper 80's / low 90's in the beginning of 2012 to upper 70's in Q4 &Q1 those margins will bottom at current levels and gradually move back towards historical norms over the next year. Procera needed to hire additional Support personnel in anticipation of greater customer demand by large and very large Service provider , none of that revenue is currently reflected on Procera current run rate. That revenue will probably starts becoming visible during 2nd half 2013 . PKT absorbed several near term one time hits from Vineyard acquisition , 1st one was incurred Q4 / 2012 $590,000 of business development expenses for

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    • due diligence and legal support for the acquisition of Vineyard that , they expect to incur approximately $900,000 of acquisition costs in Q1 of 2013, including advisory fees related to the Vineyard acquisition. A portion of the acquisition proceeds of 27.4 million is held in escrow and will be released from escrow upon the 1 year anniversary of employment of the three founders to the founders approximately $5.6 million. This portion of the acquisition proceeds will be treated as contingent compensation by Procera and amortized to expense over this 1-year period and will be excluded from non-GAAP operating results . OEM business / Partnership needs to be prioritized one of the most important business initiatives for Procera is to widen their Paw Print beyond their direct Sales Force. OEM software licensing is a new business model for Procera that will begin with the Vineyard acquisition. Procera will license software for 1 or more years and recognize the revenue over the license term. They expect to renew licenses to Vineyard's existing customers, and sell licenses to new customers, building a renewable revenue base. Almost all of Vineyard's pre-acquisition deferred revenue was eliminated as part of purchase accounting for the acquisition and they expect to rebuild the deferred revenue over the next few quarters.

      • 1 Reply to petercohen33
      • Unfortunately the market did a pivot on us w/o giving anyone a heads up. For 2 years Procera traded w/in a 4-6 X of top line. After Q3 earning release / conference call personally my expectation of takeaway / valuation and share price was multiple expansion / price higher. I felt communicating 2 Galactic wins and on the same day hearing AT&T CapEx plans positioned Procera to be recognized in a much more positive manner. Witnessing the carnage to the share price in light of a business that appears to be both executing and growing in a fertile growth space has been very counter intuitive. pk with the benefit of hindsight , seems to feel that Management was remiss not looking for a exit when share price was higher. My response to pk easily to be a Monday morning QB & you really have very little insight about their business their potential business relationships & customers they are currently in discussions with. Procera's present run rate reflects very little of the heavy lifting & newer relationships that have come onboard. The $ Procera raised in June which provides them with the Capitol necessary to both attract bigger customer & pursue other avenues of growth you call dilution. That is were your credibilty as a poster goes to zero , insult on top of injury you get some sort of Cathartic pleasure or release posting the same #$%^ everyday. We are all very unhappy with the manner in which Procera share price imploded. On April 4th i post a thread on this Message Board Stifel Financial Research , 4 pages back to back to back so all interested parties can benefit from most recent insight PKT's Investment Banker has to say u are so inconsiderate so angry and selfish that u step right in the middle of the report with this post , '
        pkarnett83•Apr 4, 2013 2:02 PM
        Well what a shocker we have here. The stock is down $2.50 a share since this meeting. All a coincidence, right?
        Time to grow up pk , you are a frustrated investor and instead of taking ownership when things don't work out you become a very negative angry influence ; you are selfish and acting out like a spoiled disruptive child on this message board . Everyone of your post have a very common theme.

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