Delaware | 001-35957 | 26-3963351 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | 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)) |
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 |
Item 9.01 | Financial Statements and Exhibits |
Exhibit No. | Description |
99.1 | Press release issued by Gigamon Inc., dated July 27, 2017, titled “Gigamon Reports Second Quarter 2017 Financial Results” |
GIGAMON INC. | ||
By: | /s/ Rex S. Jackson | |
Rex S. Jackson | ||
Chief Financial Officer |
Exhibit No. | Description |
99.1 | Press release issued by Gigamon Inc., dated July 27, 2017, titled “Gigamon Reports Second Quarter 2017 Financial Results” |
INVESTOR CONTACT: | MEDIA CONTACT: | |
Jennifer Gianola | Judy Kaneko | |
+1 (408) 831-4452 | +1 (408) 831-4238 | |
jennifer.gianola@gigamon.com | judy.kaneko@gigamon.com |
• | Revenue of $69.1 million, compared to $75.1 million in the second quarter of fiscal 2016. |
• | GAAP gross margin was 81%, compared to 82% in the second quarter of fiscal 2016. |
• | Non-GAAP gross margin was 82%, consistent with the second quarter of fiscal 2016. |
• | GAAP net loss was $7.3 million, or $0.20 per basic and diluted share, compared to GAAP net income of $34.0 million, or $0.91 per diluted share, in the second quarter of fiscal 2016 that included a one-time tax benefit of $30.5 million. |
• | Non-GAAP net income was $4.0 million or $0.10 per diluted share, compared to non-GAAP net income of $11.5 million, or $0.30 per diluted share, in the second quarter of fiscal 2016. |
• | Cash and short-term investments were $258.8 million, down $6 million from the first quarter of 2017 and up $31 million from the second quarter of fiscal 2016. |
• | Introduced a new Defender Lifecycle Model to address the increasing speed, volume and polymorphic nature of network cyber threats. This new approach is based on the GigaSECURE® Security Delivery Platform to better integrate security technologies that detect, predict and contain threats throughout networks. |
• | Named the market leader in the Network Monitoring Equipment (NME), Annual Report 2017, by IHS Markit. Gigamon extended to 36 percent market share, nearly twice the share of its nearest competitor. |
• | Announced general availability of the GigaVUE-HC3 high performance appliance addressing the requirements of compute-intensive traffic applications in large enterprise data centers. |
• | Released a new SSL inline capability to address the requirements of customers looking to manage encrypted traffic at scale as increased data volumes are surpassing the capacity and performance of security tools. |
• | Extended cloud visibility into Amazon Web Services (AWS) GovCloud region, enabling compliance with stringent, federal operational requirements. |
• | Appointed Burney Barker, as Senior Vice President of Worldwide Sales to drive direct and indirect Sales execution. |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Revenue: | |||||||||||||||
Product | $ | 43,192 | $ | 51,308 | $ | 87,202 | $ | 95,970 | |||||||
Service | 25,945 | 23,795 | 51,502 | 46,344 | |||||||||||
Total revenue | 69,137 | 75,103 | 138,704 | 142,314 | |||||||||||
Cost of revenue: | |||||||||||||||
Product | 10,424 | 11,510 | 21,028 | 22,217 | |||||||||||
Service | 2,894 | 2,339 | 5,600 | 4,421 | |||||||||||
Total cost of revenue | 13,318 | 13,849 | 26,628 | 26,638 | |||||||||||
Gross profit | 55,819 | 61,254 | 112,076 | 115,676 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development | 20,519 | 17,250 | 40,668 | 32,608 | |||||||||||
Sales and marketing | 36,892 | 28,843 | 70,333 | 56,500 | |||||||||||
General and administrative | 10,281 | 9,147 | 19,336 | 17,142 | |||||||||||
Total operating expenses | 67,692 | 55,240 | 130,337 | 106,250 | |||||||||||
Income (loss) from operations | (11,873 | ) | 6,014 | (18,261 | ) | 9,426 | |||||||||
Other income (expense): | |||||||||||||||
Interest income | 477 | 219 | 833 | 426 | |||||||||||
Other expense, net | (75 | ) | (173 | ) | (192 | ) | (242 | ) | |||||||
Income (loss) before income tax (provision) benefit | (11,471 | ) | 6,060 | (17,620 | ) | 9,610 | |||||||||
Income tax benefit (provision) | 4,133 | 27,899 | 8,045 | 27,320 | |||||||||||
Net income (loss) | $ | (7,338 | ) | $ | 33,959 | $ | (9,575 | ) | $ | 36,930 | |||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | (0.20 | ) | $ | 0.97 | $ | (0.26 | ) | $ | 1.06 | |||||
Diluted | $ | (0.20 | ) | $ | 0.91 | $ | (0.26 | ) | $ | 1.00 | |||||
Weighted average shares used in computing net income (loss) per share: | |||||||||||||||
Basic | 36,890 | 35,146 | 36,728 | 34,878 | |||||||||||
Diluted | 36,890 | 37,262 | 36,728 | 36,792 |
July 1, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 151,106 | $ | 148,926 | |||
Short-term investments | 107,722 | 109,238 | |||||
Accounts receivable, net | 63,519 | 75,522 | |||||
Inventories, net | 14,301 | 11,347 | |||||
Prepaid expenses and other current assets | 12,176 | 9,909 | |||||
Total current assets | 348,824 | 354,942 | |||||
Property and equipment, net | 14,299 | 11,809 | |||||
Deferred tax assets, non-current | 48,866 | 33,094 | |||||
Other assets, non-current | 1,379 | 1,154 | |||||
TOTAL ASSETS | $ | 413,368 | $ | 400,999 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 4,063 | $ | 5,208 | |||
Accrued liabilities | 24,768 | 34,649 | |||||
Deferred revenue | 65,652 | 68,997 | |||||
Total current liabilities | 94,483 | 108,854 | |||||
Deferred revenue, non-current | 31,021 | 28,785 | |||||
Deferred and other tax liabilities, non-current | 475 | 201 | |||||
Other liabilities, non-current | 510 | 499 | |||||
TOTAL LIABILITIES | 126,489 | 138,339 | |||||
STOCKHOLDERS' EQUITY | |||||||
Common stock | 4 | 4 | |||||
Additional paid-in-capital | 287,145 | 256,774 | |||||
Accumulated other comprehensive loss | (104 | ) | (17 | ) | |||
Retained earnings (Accumulated deficit) | (166 | ) | 5,899 | ||||
TOTAL STOCKHOLDERS' EQUITY | 286,879 | 262,660 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 413,368 | $ | 400,999 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income (loss) | $ | (7,338 | ) | $ | 33,959 | $ | (9,575 | ) | $ | 36,930 | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 2,176 | 1,749 | 4,197 | 3,173 | |||||||||||
Stock-based compensation expense | 16,464 | 10,604 | 29,018 | 18,780 | |||||||||||
Deferred and other income taxes | (4,220 | ) | (30,774 | ) | (8,357 | ) | (30,891 | ) | |||||||
Inventory write-down | 725 | 183 | 931 | 272 | |||||||||||
Other | 113 | 287 | 142 | 312 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | (7,103 | ) | 910 | 11,893 | 3,362 | ||||||||||
Inventories | (3,403 | ) | (1,235 | ) | (4,173 | ) | (3,593 | ) | |||||||
Prepaid expenses and other assets | 770 | (2,110 | ) | (2,022 | ) | (1,238 | ) | ||||||||
Accounts payable | (2,943 | ) | (261 | ) | (1,225 | ) | (515 | ) | |||||||
Accrued liabilities and other liabilities | 3,797 | 7,375 | (10,574 | ) | (5,890 | ) | |||||||||
Deferred revenue | 838 | 1,007 | (1,109 | ) | (2,275 | ) | |||||||||
Net cash provided by (used in) operating activities | (124 | ) | 21,694 | 9,146 | 18,427 | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Purchase of short-term investments | (35,448 | ) | (34,724 | ) | (69,158 | ) | (63,831 | ) | |||||||
Proceeds from maturities of short-term investments | 33,212 | 34,461 | 70,712 | 61,247 | |||||||||||
Purchase of property and equipment | (2,507 | ) | (2,371 | ) | (5,202 | ) | (4,478 | ) | |||||||
Net cash provided by (used in) investing activities | (4,743 | ) | (2,634 | ) | (3,648 | ) | (7,062 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Proceeds from employee stock purchase plan | — | — | 4,956 | 3,368 | |||||||||||
Proceeds from exercise of stock options | 362 | 2,749 | 943 | 4,126 | |||||||||||
Shares repurchased for tax withholdings on vesting of restricted stock units | (4,065 | ) | (2,444 | ) | (8,404 | ) | (3,829 | ) | |||||||
Net cash provided by (used in) financing activities | (3,703 | ) | 305 | (2,505 | ) | 3,665 | |||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (8,570 | ) | 19,365 | 2,993 | 15,030 | ||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period | 160,489 | 115,877 | 148,926 | 120,212 | |||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period | $ | 151,919 | $ | 135,242 | $ | 151,919 | $ | 135,242 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Total Revenue | $ | 69,137 | $ | 75,103 | $ | 138,704 | $ | 142,314 | |||||||
Reconciliation of GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Profit and Non-GAAP Gross Margin: | |||||||||||||||
GAAP gross profit | 55,819 | 61,254 | 112,076 | 115,676 | |||||||||||
Stock-based compensation expense | 792 | 538 | 1,469 | 1,008 | |||||||||||
Stock-based compensation related payroll taxes | 29 | 20 | 60 | 36 | |||||||||||
Non-GAAP gross profit | $ | 56,640 | $ | 61,812 | $ | 113,605 | $ | 116,720 | |||||||
GAAP gross margin | 81 | % | 82 | % | 81 | % | 81 | % | |||||||
Non-GAAP gross margin | 82 | % | 82 | % | 82 | % | 82 | % | |||||||
Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Operating Income: | |||||||||||||||
GAAP operating income (loss) | $ | (11,873 | ) | $ | 6,014 | $ | (18,261 | ) | $ | 9,426 | |||||
Stock-based compensation expense | 16,464 | 10,605 | 29,018 | 18,780 | |||||||||||
Stock-based compensation related payroll taxes | 330 | 274 | 837 | 557 | |||||||||||
Non-recurring items | 586 | — | 586 | — | |||||||||||
Non-GAAP operating income | $ | 5,507 | $ | 16,893 | $ | 12,180 | $ | 28,763 | |||||||
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income: | |||||||||||||||
GAAP net income (loss) | $ | (7,338 | ) | $ | 33,959 | $ | (9,575 | ) | $ | 36,930 | |||||
Stock-based compensation expense | 16,464 | 10,605 | 29,018 | 18,780 | |||||||||||
Stock-based compensation related payroll taxes | 330 | 274 | 837 | 557 | |||||||||||
Non-recurring items | 586 | — | 586 | — | |||||||||||
Income tax effect of Non-GAAP adjustments | (6,086 | ) | (33,330 | ) | (12,279 | ) | (36,583 | ) | |||||||
Non-GAAP net income | $ | 3,956 | $ | 11,508 | $ | 8,587 | $ | 19,684 |
Three Months Ended | Six Months Ended | ||||||||||||||
July 1, 2017 | July 2, 2016 | July 1, 2017 | July 2, 2016 | ||||||||||||
Reconciliation of GAAP Diluted Net Income (Loss) per Share to Non-GAAP Diluted Net Income per Share: | |||||||||||||||
GAAP diluted net income (loss) per share | $ | (0.20 | ) | $ | 0.91 | $ | (0.26 | ) | $ | 1.00 | |||||
Stock-based compensation expense | 0.45 | 0.28 | 0.79 | 0.51 | |||||||||||
Stock-based compensation related payroll taxes | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||
Non-recurring items | 0.01 | — | 0.01 | — | |||||||||||
Income tax effect of non-GAAP adjustments | (0.16 | ) | (0.89 | ) | (0.33 | ) | (1.00 | ) | |||||||
Impact of difference in number of GAAP and non-GAAP diluted shares | (0.01 | ) | (0.01 | ) | (0.02 | ) | (0.01 | ) | |||||||
Non-GAAP diluted net income per share | $ | 0.10 | $ | 0.30 | $ | 0.21 | $ | 0.52 | |||||||
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 | 36,890 | 37,262 | 36,728 | 36,792 | |||||||||||
Dilutive impact due to stock-based compensation | 3,987 | 793 | 3,776 | 786 | |||||||||||
Non-GAAP diluted weighted-average number of shares | 40,877 | 38,055 | 40,504 | 37,578 |