Gigamon Reports Fourth Quarter and Fiscal Year 2013 Financial Results

Fiscal Year 2013 Revenue Growth of 45%

PR Newswire

SILICON VALLEY, Calif., Feb. 4, 2014 /PRNewswire/ -- Gigamon® Inc. (GIMO), a leader in traffic visibility solutions with the innovative Visibility Fabric™ architecture, today released financial results for the fourth quarter and fiscal year ended December 28, 2013. 

Fiscal Fourth Quarter 2013 Financial Highlights:

  • Revenues for the fourth quarter of fiscal 2013 were $43.1 million, compared to $31.9 million in the fourth quarter of fiscal 2012, representing growth of 35% year-over-year.
  • GAAP gross margins of 80% in the fourth quarter of fiscal 2013, compared to 79% in the fourth quarter of fiscal 2012.
  • Non-GAAP gross margins of 81% in the fourth quarter of fiscal 2013, compared to 79% in the fourth quarter of fiscal 2012.
  • GAAP net loss for the fourth quarter of fiscal 2013 was $0.1 million, or $0.00 per diluted share, compared to GAAP net income of $2.1 million, or $0.12 per diluted share, in the fourth quarter of fiscal 2012.
  • Non-GAAP net income for the fourth quarter of fiscal 2013 was $6.0 million, or $0.18 per diluted share, compared to non-GAAP net income of $4.9 million, or $0.28 per diluted share, in the fourth quarter of fiscal 2012.
  • We generated $22.5 million of cash from operations.

Fiscal Year 2013 Financial Highlights:

  • Revenues for fiscal year 2013 were $140.3 million, compared to $96.7 million in fiscal year 2012, representing growth of 45% year-over-year.
  • GAAP gross margins of 78% in fiscal year 2013, compared to 79% in fiscal year 2012.
  • Non-GAAP gross margins of 81% in fiscal year 2013, compared to 79% in fiscal year 2012.
  • GAAP net loss for fiscal year 2013 was $9.5 million, or $0.39 per diluted share, compared to GAAP net income of $3.6 million, or $0.21 per diluted share, in fiscal year 2012.
  • Non-GAAP net income for fiscal year 2013 was $15.9 million, or $0.53 per diluted share, compared to non-GAAP net income of $11.1 million, or $0.62 per diluted share, in fiscal year 2012.
  • We generated $23.6 million of cash from operations.

"We are pleased to have exceeded our guidance for both revenue and earnings in the fourth quarter," said Paul Hooper, CEO of Gigamon. "In the quarter we added 92 new customers, including 15 Fortune 1000 companies, continued to expand our portfolio of pervasive visibility and traffic intelligence solutions and laid the foundation for continued growth in 2014."

Recent Business Highlights:

  • Announced new applications and enhancements designed to provide Traffic Intelligence as the next phase of the Visibility Fabric evolution for enterprises and service providers.
  • Introduced a NetFlow Generation application to optimize network management.
  • Increased the attach rate of the GigaSMART® platform in the fourth quarter.
  • Named one of the fastest growing companies in North America on Deloitte's 2013 Technology Fast 500™.
  • Recognized as Business Analytics Innovator of the Year by Telecom Asia's Readers' Choice & Innovation Awards for vision and industry leadership.

Conference Call Information:

Gigamon will host an investor conference call and live webcast today at 5:00 p.m. ET (2:00 p.m. PT) to discuss its financial results for the fourth quarter and fiscal year ended December 28, 2013. To access the conference call, dial 877-941-2068, using conference code 4659690. Callers outside the U.S. and Canada should dial 480-629-9712, using conference code 4659690. A replay of the conference call will be available through Tuesday, February 11, 2014. To access the replay, please dial 800-406-7325 and enter pass code 4659690. Callers outside the U.S. and Canada should dial 303-590-3030 and enter pass code 4659690. The live webcast will be accessible on Gigamon's investor relations website at http://investor.gigamon.com and will be archived and available on this site for twelve months.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies.  Gigamon considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the company, exclusive of unusual events or factors that do not directly affect what we consider to be our core operating performance, and are used by the company's management for that purpose. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company's operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies.  Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure attached to this release.

Legal Notice Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, our expectations that in 2014 our business will continue to grow.  Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to deliver and improve our products and successfully develop new products; customer acceptance and purchase of our existing products and new products; our ability to retain existing customers and generate new customers; the market for network traffic visibility solutions not continuing to develop; competition from other products and services; and general market, political, economic and business conditions.  The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarterly period ended September 28, 2013, filed with the Securities and Exchange Commission on November 7, 2013. The forward-looking statements in this press release are based on information available to Gigamon as of the date hereof, and Gigamon disclaims any obligation to update any forward-looking statements, except as required by law.

About the Visibility Fabric architecture

At Gigamon we realized that delivering the visibility essential to manage, analyze and secure the complex system that is the IT infrastructure requires a new approach. With millions of traffic flows across thousands of endpoints, visibility needs to be pervasive, intelligent and dynamic. Using our patented, unique technology, we created an innovative new approach for delivering this visibility called the Visibility Fabric architecture. This new approach is intelligent and versatile in its ability to enable visibility into the network. For more information visit http://www.gigamon.com/traffic-visibility-fabric.

About Gigamon

Gigamon provides an intelligent Visibility Fabric™ architecture for enterprises, data centers and service providers around the globe. Our technology empowers infrastructure architects, managers and operators with pervasive and dynamic intelligent visibility of traffic across both physical and virtual environments without affecting the performance or stability of the production network. Through patented technologies and centralized management, the Gigamon GigaVUE portfolio of high availability and high density products intelligently delivers the appropriate network traffic to management, analysis, compliance and security tools. With over eight years' experience designing and building traffic visibility products in the US, Gigamon solutions are deployed globally across vertical markets including over half of the Fortune 100 and many government and federal agencies. www.gigamon.com

 

 


Gigamon Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(unaudited)












Three Months Ended


Fiscal Year Ended



December 28,


December 31,


December 28,


December 31,



2013


2012


2013 (4)


2012

Revenue:








     Product


$               31,698


$                23,710


$             101,717


$                  69,516

     Service


11,389


8,142


38,578


27,199

Total revenue


43,087


31,852


140,295


96,715










Cost of revenue:









     Product (4)


7,646


6,064


26,103


18,039

     Service


1,170


744


4,727


2,246

Cost of revenue (1), (2)


8,816


6,808


30,830


20,285

Gross profit


34,271


25,044


109,465


76,430










Operating expenses:









   Research and development (1), (2)


10,341


5,406


42,067


17,730

   Sales and marketing (1), (2)


18,004


12,061


72,024


39,359

   General and administrative (1), (2)


4,682


3,904


25,575


11,665

      Total operating expenses


33,027


21,371


139,666


68,754

Income (loss) from operations


1,244


3,673


(30,201)


7,676

Other income (expense):









   Interest income


60


3


95


64

   Other expense, net


(17)


(20)


(94)


(70)

Income (loss) before income taxes


1,287


3,656


(30,200)


7,670

Income tax (expense) benefit (3) (4)


(1,375)


(11)


20,663


(139)

Net (loss) income  


(88)


3,645


(9,537)


7,531

Accretion of preferred stock


-


(575)


(1,088)


(2,236)

(Earnings) loss attributable to preferred stock holders


-


(980)


1,107


(1,690)

Net (loss) income to common stock holders


$                     (88)


$                  2,090


$                (9,518)


$                    3,605










Net (loss) income per share attributable to common stock holders:








   Basic


$                  (0.00)


$                    0.12


$                  (0.39)


$                      0.21

   Diluted


$                  (0.00)


$                    0.12


$                  (0.39)


$                      0.21

Weighted-average number of shares used in per share amounts:









   Basic


31,246


17,300


24,722


17,300

   Diluted


31,246


17,393


24,722


17,303



















(1) Includes stock-based compensation expenses, as follows:







Cost of revenue


$                    449


$                       19


$                 3,496


$                       153

Research and development


2,620


182


11,467


542

Sales and marketing


2,606


334


11,034


893

General and administrative


1,511


735


6,546


2,011

   Total stock-based compensation expenses


$                 7,186


$                  1,270


$               32,543


$                    3,599










(2) Includes performance unit plan compensation expenses, as follows:







Cost of revenue


$                         -


$                         -


$                    353


$                           -

Research and development


-


-


5,188


-

Sales and marketing


-


-


7,991


-

General and administrative


-


-


6,839


-

   Total performance unit plan compensation expenses


$                         -


$                         -


$               20,371


$                           -










(3) Includes tax benefit upon conversion of LLC to a C Corporation on May 31, 2013


$                         -


$                         -


$               14,811


$                           -










(4) The Company has revised its financial statements for the second quarter and third quarter of fiscal 2013 to reflect certain corrections related to its accounting for  income taxes and inventory reserve releases, which also impacted the Company's results for the full fiscal year 2013. In accordance with applicable accounting guidance, the Company concluded that these corrections were not material to any of its previously issued financial statements. Please see the tables titled, "Impact of Revisions on Reported GAAP Statements of Operations" following the "GAAP Quarterly Trended Statements of Operations" table and "Impact of Revisions on Reported Non-GAAP Statements of Operations" following the "Non-GAAP Quarterly Trended Statement of Operations" table for further details.

 



Gigamon Inc.

Consolidated Balance Sheets

(In thousands)

(unaudited)






December 28,


December 31,


2013


2012

Assets




Current assets:




   Cash and cash equivalents

$             79,908


$            18,675

   Short-term investments

58,242


-

   Accounts receivable, net

24,528


20,677

   Inventories

1,484


3,736

   Deferred income tax asset

3,574


-

   Prepaid expenses and other current assets

5,606


3,407

      Total current assets

173,342


46,495





   Property and equipment, net

4,389


2,686

   Deferred income tax asset, non-current

17,315


-

   Other assets

471


2,316

      Total assets

$           195,517


$            51,497





Liabilities, Preferred Stock and Stockholders' Equity (Deficit)




Current liabilities:




   Accounts payable

$               1,405


$              3,221

   Accrued liabilities

22,401


13,889

   Members' distribution payable

476


4,821

   Deferred revenue

37,592


23,917

      Total current liabilities

61,874


45,848





Deferred revenue, non-current

9,884


6,903

Other liabilities

321


447





Commitments and contingencies




Series A preferred stock

-


28,344





Stockholders' equity (deficit):




Common stock

3


1,625

Preferred stock

-


-

Treasury stock

(12,469)


(12,469)

Additional paid in capital

144,810


1,522

Accumulated other comprehensive income

23


-

Accumulated deficit

(8,929)


(20,723)

       Total stockholders' equity (deficit)

123,438


(30,045)

          Total liabilities, preferred stock and stockholders' equity (deficit)

$           195,517


$            51,497









 

 

Gigamon Inc.

Consolidated Statements of Cash Flows

(In thousands)

(unaudited)










Three Months Ended


Fiscal Year Ended


December 28,


December 31,


December 28,


December 31,


2013


2012


2013


2012

Operating activities:








Net (loss) income 

$                (88)


$          3,645


$        (9,537)


$           7,531

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








Depreciation and amortization

886


476


2,850


1,354

Stock-based compensation expense

7,186


1,270


32,543


3,599

Deferred income taxes

1,293


-


(20,889)


-

Inventory (recovery) write-down

(326)


(44)


(816)


1,543

Loss on disposal of fixed assets

-


1


14


52

Changes in operating assets and liabilities:








Accounts receivable, net

2,507


(9,358)


(3,851)


(4,280)

Inventories

896


1,028


5,103


3,004

Prepaid expenses and other assets

(1,005)


239


(3,274)


1,621

Accounts payable

(109)


1,516


(1,752)


398

Accrued and other liabilities

4,757


(943)


6,526


4,000

Deferred revenue

6,531


3,965


16,656


8,858

  Net cash provided by operating activities

22,528


1,795


23,573


27,680

Investing activities:








Purchase of short-term investments

(19,383)


-


(59,725)


-

Sale of short-term investments

2,000


-


2,000


-

Purchase of property and equipment

(1,481)


(501)


(4,307)


(2,006)

  Net cash used in investing activities

(18,864)


(501)


(62,032)


(2,006)

Financing activities:








(Offering costs paid for) proceeds from initial public offering, net

(111)


(1,348)


95,280


(1,920)

Proceeds from follow-on public offering, net

10,232


-


10,232


-

Proceeds from exercise of stock options

1,608


-


1,719


-

Shares repurchased for tax withholdings on vesting of restricted stock units

(518)


-


(518)


-

Distribution of income to LLC members

(24)


(4,981)


(7,021)


(18,181)

  Net cash provided by (used in) financing activities

11,187


(6,329)


99,692


(20,101)

Net increase (decrease) in cash and cash equivalents

14,851


(5,035)


61,233


5,573

Cash and cash equivalents at beginning of period

65,057


23,710


18,675


13,102

Cash and cash equivalents at end of period

$           79,908


$        18,675


$       79,908


$         18,675

 

 

Gigamon Inc.

Reconciliation of Non-GAAP Financial Measures

Impact of Non-GAAP Adjustments on Reported Net (Loss) Income

(In thousands, except percentages)

(unaudited)












Three Months Ended


Fiscal Year Ended



December 28,


December 31,


December 28,


December 31,



2013


2012


2013


2012

Reconciliation of Gross Profit and Gross Margin on a GAAP Basis to Gross Profit and Gross Margin on a Non-GAAP Basis:









Gross profit on a GAAP basis


$           34,271


$            25,044


$         109,465


$         76,430

   Stock-based compensation expense


449


19


3,496


153

   Performance unit plan compensation expense


-


-


353


-

Gross profit on a Non-GAAP basis


$           34,720


$            25,063


$         113,314


$         76,583










Revenue


$           43,087


$            31,852


$         140,295


$         96,715

    Gross margin on a GAAP basis


80%


79%


78%


79%

    Gross margin on a Non-GAAP basis


81%


79%


81%


79%










Reconciliation of Operating Income (Loss) and Operating Margin on a GAAP Basis to Operating Income and Operating Margin on a Non-GAAP Basis:









Operating income (loss) on a GAAP basis


$             1,244


$              3,673


$         (30,201)


$           7,676

   Stock-based compensation expense


7,186


1,270


32,543


3,599

   Performance unit plan compensation expense


-


-


20,371


-

Operating income on a Non-GAAP basis


$             8,430


$              4,943


$           22,713


$         11,275










    Operating margin on a GAAP basis


3%


12%


-22%


8%

    Operating margin on a Non-GAAP basis


20%


16%


16%


12%










Reconciliation of Net (Loss) Income Attributable To Common Stockholders on a GAAP Basis to Net Income Attributable To Common Stockholders on a Non-GAAP Basis:









Net (loss) income attributable to common stock holders on a GAAP basis


$                (88)


$              2,090


$           (9,518)


$           3,605

     Accretion of preferred stock


-


575


1,088


2,236

     Earnings (loss) attributable to preferred stock holders


-


980


(1,107)


1,690

   Stock-based compensation expense


7,186


1,270


32,543


3,599

    Performance unit plan compensation expense


-


-


20,371


-

    Tax benefit upon conversion of LLC to a C Corporation


-


-


14,811


-

    Income tax effect of Non-GAAP adjustments


(1,128)


-


(42,295)


-

Net income on a Non-GAAP basis


$             5,970


$              4,915


$           15,893


$         11,130




























 

Gigamon Inc.

Reconciliation of Non-GAAP Financial Measures (continued)

Impact of Non-GAAP Adjustments on Reported Net (Loss) Income

(In thousands, except per share data)

(unaudited)












Three Months Ended


 Fiscal Year Ended 



December 28,


December 31,


December 28,


December 31,



2013


2012


2013


2012

Reconciliation of Diluted Net (Loss) Income per Share on a GAAP Basis to Diluted Net Income per Share on a Non-GAAP Basis:









Diluted net (loss) income per share on a GAAP basis


$               (0.00)


$               0.12


$             (0.39)


$                0.21

    Accretion of preferred stock


-


0.03


0.04


0.13

    Earnings (loss) attributable to preferred stock holders 


-


0.06


(0.04)


0.10

   Stock-based compensation expense


0.23


0.07


1.32


0.21

   Performance unit plan compensation expense


-


-


0.82


-

    Tax benefit upon conversion of LLC to a C corporation


-


-


0.60


-

    Income tax effect on non-GAAP adjustments


(0.04)


-


(1.71)


-

    Impact of difference in number of GAAP and non-GAAP diluted shares


(0.01)


-


(0.11)


(0.03)

Diluted net income per share on a Non-GAAP basis


$                0.18


$               0.28


$              0.53


$                0.62










Reconciliation of GAAP Diluted Weighted-Average Number of Shares to Non-GAAP Diluted Weighted-Average Number of Shares:









GAAP diluted weighted-average number of shares


31,246


17,393


24,722


17,303

   Dilutive impact due to stock options, restricted stock units and employee stock purchase plan purchase rights










2,100


214


5,323


570

Non-GAAP diluted weighted-average number of shares


33,346


17,607


30,045


17,873










 

 


Gigamon Inc.

Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations

Impact of Non-GAAP Adjustments on Reported Net (Loss) Income

For the Three Months and Fiscal Years Ended December 28, 2013 and December 31, 2012

(In thousands, except per share amounts and percentages)

(unaudited)


























Three Months Ended December 28, 2013


Three Months Ended December 31, 2012


Fiscal Year Ended December 28, 2013


Fiscal Year Ended December 31, 2012


As Reported


Adjustments


Non-GAAP


As Reported


Adjustments


Non-GAAP


As Reported


Adjustments


Non-GAAP


As Reported


Adjustments


Non-GAAP

Revenue:
























  Product

$        31,698


$                -


$        31,698


$        23,710


$                -


$        23,710


$      101,717


$            -


$  101,717


$    69,516


$               -


$       69,516

  Service

11,389


-


11,389


8,142


-


8,142


38,578


-


38,578


27,199


-


27,199

Total revenue

43,087


-


43,087


31,852


-


31,852


140,295


-


140,295


96,715


-


96,715

























Cost of revenue:
























  Product (1), (2)

7,646


(215)


7,431


6,064


(9)


6,055


26,103


(2,308)


23,795


18,039


(44)


17,995

  Service (1), (2)

1,170


(234)


936


744


(10)


734


4,727


(1,541)


3,186


2,246


(109)


2,137

Cost of revenue

8,816


(449)


8,367


6,808


(19)


6,789


30,830


(3,849)


26,981


20,285


(153)


20,132

Gross profit

34,271


449


34,720


25,044


19


25,063


109,465


3,849


113,314


76,430


153


76,583

























Product Gross Margin

76%




77%


74%




74%


74%




77%


74%




74%

Service Gross Margin

90%




92%


91%




91%


88%




92%


92%




92%

Total Gross Margin

80%




81%


79%




79%


78%




81%


79%




79%

























Operating expenses:
























Research and development (1), (2)

10,341


(2,620)


7,721


5,406


(182)


5,224


42,067


(16,655)


25,412


17,730


(542)


17,188

Sales and marketing (1), (2)

18,004


(2,606)


15,398


12,061


(334)


11,727


72,024


(19,025)


52,999


39,359


(893)


38,466

General and administrative (1), (2)

4,682


(1,511)


3,171


3,904


(735)


3,169


25,575


(13,385)


12,190


11,665


(2,011)


9,654

Total operating expenses

33,027


(6,737)


26,290


21,371


(1,251)


20,120


139,666


(49,065)


90,601


68,754


(3,446)


65,308

Income (loss) from operations

1,244


7,186


8,430


3,673


1,270


4,943


(30,201)


52,914


22,713


7,676


3,599


11,275

Other income (expense):
























Interest income

60


-


60


3


-


3


95


-


95


64


-


64

Other expense, net

(17)


-


(17)


(20)


-


(20)


(94)


-


(94)


(70)


-


(70)

Income (loss) before income taxes

1,287


7,186


8,473


3,656


1,270


4,926


(30,200)


52,914


22,714


7,670


3,599


11,269

Income tax (expense) benefit (3), (4)

(1,375)


(1,128)


(2,503)


(11)


-


(11)


20,663


(27,484)


(6,821)


(139)


-


(139)

Net (loss) income

(88)


6,058


5,970


3,645


1,270


4,915


(9,537)


25,430


15,893


7,531


3,599


11,130

Accretion of preferred stock

-


-


-


(575)


575


-


(1,088)


1,088


-


(2,236)


2,236


-

(Earnings) loss attributable to preferred stock holders

-


-


-


(980)


980


-


1,107


(1,107)


-


(1,690)


1,690


-

Net (loss) income to common stock holders

$             (88)


$          6,058


$          5,970


$          2,090


$          2,825


$          4,915


$        (9,518)


$    25,411


$    15,893


$      3,605


$         7,525


$       11,130

























Net (loss) income per share attributable to common stockholders:
























Basic

$          (0.00)


$            0.19


$            0.19


$            0.12


$            0.16


$            0.28


$          (0.39)


$        1.03


$        0.64


$        0.21


$           0.43


$           0.64

Diluted

$          (0.00)


$            0.18


$            0.18


$            0.12


$            0.16


$            0.28


$          (0.39)


$        0.92


$        0.53


$        0.21


$           0.41


$           0.62

Weighted-average number of shares used in per share amounts:
























Basic

31,246


-


31,246


17,300


-


17,300


24,722


-


24,722


17,300


-


17,300

Diluted

31,246


2,100


33,346


17,393


214


17,607


24,722


5,323


30,045


17,303


570


17,873

























Notes:

(1) Includes stock-based compensation in the three and twelve months ended December 28, 2013 and December 31, 2012.

(2) Includes performance unit plan compensation related expenses in the twelve months ended December 28, 2013.

(3) Amount for the twelve months ended December 28, 2013 includes tax benefit recorded upon the conversion from an LLC to a C Corporation on May 31, 2013.

(4) Includes income tax effect on non-GAAP adjustments for the three and twelve months ended December 28, 2013.

 

 

Gigamon Inc.

GAAP Quarterly Trended Statements of Operations

(In thousands, except per share data and percentages)

(unaudited)




Three Months Ended



Dec 28, 2013


Sept 28, 2013


June 29, 2013


Mar 30, 2013


Dec 31, 2012


Sept 30, 2012


Jun 30, 2012


Mar 31, 2012

Revenue

















Product

$       31,698


$        29,146


$        23,354


$       17,519


$       23,710


$        18,700


$      16,213


$       10,893


Service

11,389


9,840


9,055


8,294


8,142


6,994


6,254


5,809


Total Revenue

43,087


38,986


32,409


25,813


31,852


25,694


22,467


16,702


















Cost of Revenue

















Product

7,646


6,789


6,944


4,724


6,064


4,524


4,086


3,365


Service

1,170


993


1,911


653


744


557


453


492


Total Cost of Revenue

8,816


7,782


8,855


5,377


6,808


5,081


4,539


3,857


















Gross Profit

34,271


31,204


23,554


20,436


25,044


20,613


17,928


12,845


















Product gross margin

76%


77%


70%


73%


74%


76%


75%


69%

Service gross margin

90%


90%


79%


92%


91%


92%


93%


92%

Gross Margin

80%


80%


73%


79%


79%


80%


80%


77%


















Operating Expenses

















Research & Development

10,341


8,958


17,097


5,671


5,406


4,809


3,570


3,945


Sales & Marketing

18,004


15,485


26,114


12,421


12,061


9,963


9,112


8,223


General and Administrative

4,682


4,696


12,688


3,509


3,904


3,720


2,735


1,306

Total Operating Expenses

33,027


29,139


55,899


21,601


21,371


18,492


15,417


13,474


















Income (Loss) From Operations

1,244


2,065


(32,345)


(1,165)


3,673


2,121


2,511


(629)

Operating Margin

3%


5%


-100%


-5%


12%


8%


11%


-4%


















Interest Income

60


32


1


2


3


55


3


3

Other Expense, Net

(17)


(52)


(18)


(7)


(20)


(17)


(7)


(26)

Income before income tax (provision) benefit

1,287


2,045


(32,362)


(1,170)


3,656


2,159


2,507


(652)

Income Tax (Provision) Benefit

(1,375)


(502)


22,569


(29)


(11)


(37)


(28)


(63)


















Net (Loss) Income  

(88)


1,543


(9,793)


(1,199)


3,645


2,122


2,479


(715)


















Accretion of preferred stock

-


-


(503)


(585)


(575)


(564)


(553)


(544)

Loss (earnings) distributable to preferred unit holders

-


-


538


569


(980)


(497)


(615)


402

Net (loss) income attributable to common stockholders

$           (88)


$          1,543


$        (9,758)


$        (1,215)


$         2,090


$          1,061


$        1,311


$          (857)


















Net (loss) income per share attributable to common stockholders:

















Basic 

$         (0.00)


$           0.05


$          (0.51)


$         (0.07)


$          0.12


$           0.06


$         0.08


$         (0.05)


Diluted

$         (0.00)


$           0.05


$          (0.51)


$         (0.07)


$          0.12


$           0.06


$         0.08


$         (0.05)


















Weighted average shares used in computing net (loss) income per share attributable to common stockholders:

















Basic 

31,246


30,933


19,247


17,300


17,300


17,300


17,300


17,300


Diluted

31,246


32,554


19,247


17,300


17,393


17,307


17,300


17,300



































 

 

 

Gigamon Inc.

Impact of Revisions on Reported GAAP Statements of Operations

For the Three Months Ended June 29, 2013 and September 28, 2013

(In thousands, except per share amounts and percentages)

(unaudited)

















Explanatory Note:
The Company's financial statements for the second and third quarters of fiscal 2013 have been revised to reflect certain corrections related to its accounting for income taxes and inventory reserve releases. In accordance with applicable accounting guidance, the Company has concluded that these corrections were not material to any of its previously issued financial statements. As a result of these corrections, the Company has revised its results for the second and third quarters of fiscal 2013 as set forth below:


















Three Months Ended June 29, 2013


Three Months Ended September 28, 2013


As Reported


Income Tax Adjustment


Inventory Adjustment


As Adjusted


As Reported


Income Tax Adjustment


Inventory Adjustment


As Adjusted

Revenue:
















    Product

$      23,354






$      23,354


$      29,146






$      29,146

    Service

9,055






9,055


9,840






9,840

Total revenue

32,409


-


-


32,409


38,986


-


-


38,986

















Cost of revenue:
















    Product

7,098




(154)


6,944


6,744




45


6,789

    Service

1,911






1,911


993






993

Cost of revenue

9,009


-


(154)


8,855


7,737


-


45


7,782

Gross profit

23,400


-


154


23,554


31,249


-


(45)


31,204

















Product Gross Margin

70%






70%


77%






77%

Service Gross Margin

79%






79%


90%






90%

Total Gross Margin

72%






73%


80%






80%

















Operating expenses:
















  Research and development

17,097






17,097


8,958






8,958

  Sales and marketing

26,114






26,114


15,485






15,485

  General and administrative

12,688






12,688


4,696






4,696

    Total operating expenses

55,899


-


-


55,899


29,139


-


-


29,139

(Loss) income from operations

(32,499)


-


154


(32,345)


2,110


-


(45)


2,065

Other income (expense):
















  Interest income

1






1


32






32

  Other expense, net

(18)






(18)


(52)






(52)

(Loss) income before income taxes

(32,516)


-


154


(32,362)


2,090


-


(45)


2,045

Income tax benefit (expense) 

24,571


(2,002)




22,569


(704)


202




(502)

Net (loss) income

(7,945)


(2,002)


154


(9,793)


1,386


202


(45)


1,543

Accretion of preferred stock

(503)






(503)


-






-

(Earnings) loss attributable to preferred stock holders

538






538


-






-

Net (loss) income to common stock holders

$       (7,910)


$      (2,002)


$           154


$      (9,758)


$        1,386


$           202


$           (45)


$        1,543

















Net (loss) income per share attributable to common stockholders:
















  Basic

$         (0.41)






$        (0.51)


$          0.04






$          0.05

  Diluted

$         (0.41)






$        (0.51)


$          0.04






$          0.05

Weighted-average number of shares used in per share amounts:
















  Basic

19,247






19,247


30,933






30,933

  Diluted

19,247






19,247


32,554






32,554

















 

 

Gigamon Inc.

Non-GAAP Quarterly Trended Statements of Operations

(In thousands, except per share data and percentages)

(unaudited)





Three Months Ended


Dec 28, 2013


Sept 28, 2013


June 29, 2013


Mar 30, 2013


Dec 31, 2012


Sept 30, 2012


Jun 30, 2012


Mar 31, 2012




































Revenue:

















Product 

$      31,698


$       29,146


$       23,354


$      17,519


$      23,710


$       18,700


$ 16,213


$      10,893


Services 

11,389


9,840


9,055


8,294


8,142


6,994


6,254


5,809


Total revenue 

43,087


38,986


32,409


25,813


31,852


25,694


22,467


16,702


Cost of revenue:

















Product 

7,431


6,660


4,992


4,712


6,055


4,491


4,084


3,365


Services 

936


782


819


649


734


458


453


492


Total cost of revenue 

8,367


7,442


5,811


5,361


6,789


4,949


4,537


3,857



















Gross profit 

34,720


31,544


26,598


20,452


25,063


20,745


17,930


12,845



















Product Gross Margin

77%


77%


79%


73%


74%


76%


75%


69%


Services Gross Margin

92%


92%


91%


92%


91%


93%


93%


92%


Gross margin 

81%


81%


82%


79%


79%


81%


80%


77%



















Research and development 

7,721


6,490


5,840


5,361


5,224


4,481


3,538


3,945


Sales and marketing 

15,398


12,750


12,860


11,991


11,727


9,490


9,026


8,223


General and administrative 

3,171


3,172


3,175


2,672


3,169


2,960


2,219


1,306


Total operating expenses 

26,290


22,412


21,875


20,024


20,120


16,931


14,783


13,474


Income from operations 

8,430


9,132


4,723


428


4,943


3,814


3,147


(629)


Operating margin

20%


23%


15%


2%


16%


15%


14%


-4%



















Interest income 

60


32


1


2


3


55


3


3


Other expense, net 

(17)


(52)


(18)


(7)


(20)


(17)


(7)


(26)


Income before provision for income taxes

8,473


9,112


4,706


423


4,926


3,852


3,143


(652)


Income tax provision

(2,503)


(3,374)


(915)


(29)


(11)


(37)


(28)


(63)


Net income

$       5,970


$         5,738


$         3,791


$          394


$       4,915


$         3,815


$  3,115


$         (715)





















































Basic EPS

$         0.19


$          0.19


$          0.20


$         0.02


$         0.28


$          0.22


$    0.18


$        (0.04)


Diluted EPS

$         0.18


$          0.18


$          0.14


$         0.02


$         0.28


$          0.22


$    0.18


$        (0.04)



















Weighted Average Shares for Basic EPS

31,246


30,933


19,247


17,300


17,300


17,300


17,300


17,300


Weighted Average Shares for Diluted EPS

33,346


32,777


27,456


17,883


17,607


17,541


17,413


17,300



















 

 

 

Gigamon Inc.

Impact of Revisions on Reported Non-GAAP Statements of Operations

For the Three Months Ended June 29, 2013 and September 28, 2013

(In thousands, except per share amounts and percentages)

(unaudited)













Explanatory Note:
The Company's financial statements for the second and third quarters of fiscal 2013 have been revised to reflect certain corrections related to its accounting for inventory reserve releases. In accordance with applicable accounting guidance, the Company has concluded that these corrections were not material to any of its previously reported Non-GAAP financial statements. As a result of these corrections, the Company has  revised its  Non-GAAP results  for the second and third quarters of fiscal 2013 as set forth below:














Three Months Ended June 29, 2013


Three Months Ended September 28, 2013


As Reported


Inventory Adjustment


As Adjusted


As Reported


Inventory Adjustment


As Adjusted

Revenue:












    Product

$      23,354




$      23,354


$      29,146




$      29,146

    Service

9,055




9,055


9,840




9,840

Total revenue

32,409


-


32,409


38,986


-


38,986













Cost of revenue:












    Product 

5,146


(154)


4,992


6,615


45


6,660

    Service 

819




819


782




782

Cost of revenue

5,965


(154)


5,811


7,397


45


7,442

Gross profit

26,444


154


26,598


31,589


(45)


31,544













Product Gross Margin

78%




79%


77%




77%

Service Gross Margin

91%




91%


92%




92%

Total Gross Margin

82%




82%


81%




81%













Operating expenses:












  Research and development 

5,840




5,840


6,490




6,490

  Sales and marketing 

12,860




12,860


12,750




12,750

  General and administrative 

3,175




3,175


3,172




3,172

    Total operating expenses

21,875


-


21,875


22,412


-


22,412

Income (loss) from operations

4,569


154


4,723


9,177


(45)


9,132

Other income (expense):












  Interest income

1




1


32




32

  Other expense, net

(18)




(18)


(52)




(52)

Income (Loss) before income taxes

4,552


154


4,706


9,157


(45)


9,112

Income tax expense

(915)




(915)


(3,374)




(3,374)

Net income (loss) 

3,637


154


3,791


5,783


(45)


5,738

Accretion of preferred stock

-




-


-




-

(Earnings) loss attributable to preferred stock holders

-




-


-




-

Net income (loss) to common stock holders

$        3,637


$           154


$        3,791


$        5,783


$           (45)


$        5,738













Net income per share attributable to common stockholders:












  Basic

$          0.19




$          0.20


$          0.19




$          0.19

  Diluted

$          0.13




$          0.14


$          0.18




$          0.18

Weighted-average number of shares used in per share amounts:












  Basic

19,247




19,247


30,933




30,933

  Diluted

27,456




27,456


32,777




32,777

























 

 

 

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