Violin Memory Announces First Quarter Fiscal Year 2017 Financial Results
/EINPresswire.com/ -- SANTA CLARA, CA--(Marketwired - May 24, 2016) - Violin Memory®, Inc. (NYSE: VMEM), a global pioneer of award-winning all flash storage platform solutions for primary storage and active workloads, today announced financial results for the first fiscal quarter ended April 30, 2016.
First Quarter Fiscal 2017 Financial Highlights
- First quarter fiscal 2017 revenue of $9.7 million
- First quarter fiscal 2017 GAAP
1 gross margin of 40% - First quarter fiscal 2017 non-GAAP
2 gross margin of 42% - First quarter fiscal 2017 GAAP net loss of $0.22 per share
- First quarter fiscal 2017 non-GAAP net loss of $0.16 per share
"With the signing of a Global Fortune 100 account in North America this quarter, Violin Memory supports the storage foundation of 10 Fortune 100 accounts, half of whom are on Violin's new product the Flash Storage Platform," said Kevin DeNuccio, President and CEO Violin Memory.
"These largest accounts in the world have gained confidence in the Flash Storage Platform and how it can 'Be Instrumental' in their own data center transformations. These accounts create the foundation and turning point for Violin's renewed growth," added DeNuccio.
First Quarter Fiscal 2017 Financial Results
First quarter fiscal 2017 revenue was $9.7 million, 11% lower sequentially compared to $10.9 million reported in the fourth quarter of fiscal 2016, and 20% lower compared to $12.1 million reported in the first quarter of fiscal year 2016.
First quarter fiscal 2017 GAAP gross margin was 40% compared to 38% reported in the fourth quarter of fiscal 2016 and compared to 43% reported in the first quarter of fiscal year 2016.
First quarter fiscal 2017 non-GAAP gross margin was 42% compared to 48% reported in the fourth quarter of fiscal 2016 and compared to 48% reported in the first quarter of fiscal year 2016.
First quarter fiscal 2017 GAAP net loss was $22.2 million, or $0.22 per share, compared to fourth quarter fiscal 2016 GAAP net loss of $25.5 million, or $0.26 per share and compared to first quarter fiscal 2016 GAAP net loss of $26.5 million, or $0.28 per share.
First quarter fiscal 2017 GAAP net loss included stock-based compensation expense of $4.1 million and restructuring charges of $1.7 million.
Excluding special items, first quarter fiscal 2017 non-GAAP net loss was $16.4 million, or $0.16 per share, compared to fourth quarter fiscal 2016 non-GAAP net loss of $19.4 million, or $0.20 per share, and compared to first quarter fiscal 2016 non-GAAP net loss of $21.2 million, or $0.22 per share.
Cash and cash equivalents, restricted cash and short-term investments totaled $49.2 million as of April 30, 2016.
Business Outlook
The Company will provide additional guidance during today's conference call. Guidance will be posted on Violin Memory's investor relations website at investor.violin-memory.com following the conclusion of the conference call.
All forward-looking non-GAAP measures exclude items such as stock-based compensation expense, amortization of acquired intangibles, restructuring or impairment charges and litigation settlements. A reconciliation of non-GAAP measures to corresponding GAAP measures is not available on a forward-looking basis.
Violin Memory Conference Call Information
Violin Memory will host a conference call today at 1:30 p.m. Pacific Time to discuss financial results and business highlights. This call will be webcast and can be accessed via the Violin Memory website at investor.violin-memory.com. A replay will be available following the call on the same website for one week at the following numbers: (855) 859-2056 (domestic) or (404) 537-3406 (international) using ID #12547576.
Non-GAAP Financial Measures
To supplement the reader's overall understanding of both its reported results presented in accordance with U.S. generally accepted accounting principles ("GAAP") and its outlook, the Company also presents non-GAAP measures of gross profit, gross margin, operating expenses, net loss and net loss per share. The Company uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors as a supplement to GAAP measures in evaluating its ongoing operational performance and trends. As the calculation of non-GAAP financial measures differs between companies, the non-GAAP financial measures used by the Company may not be comparable to similarly titled measures used by other companies. As a result, the Company does not use, nor does it intend to use, the non-GAAP financial measures when assessing the Company's performance against that of other companies.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of the non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
The Company defines non-GAAP gross profit, operating expenses, net loss and net loss per share as the respective GAAP balances adjusted for stock-based compensation expense, restructuring charges and amortization of acquired intangibles.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the following: customers' and potential customers' perceptions and acceptance of the Company's products and services; the future market for the Company's Flash Storage Platform products; the performance of the Company's Flash Storage Products; the Company's ability to achieve renewed growth; and the Company's future business plans and strategy.
There are a number of risks and uncertainties that could affect the Company's performance and financial results are included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Company's Annual Report on Form 10-K for the year ended January 31, 2016 which was filed with the SEC on April 6, 2016, and is available on the Company's investor relations website at investor.violin-memory.com and on the SEC's website at www.sec.gov. All forward-looking statements in this press release are based on information available to the Company as of the date hereof, and the Company does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
About Violin Memory, Inc.
Business in a Flash. Violin Memory, the industry pioneer in All Flash Arrays, is the agile innovator, transforming the speed of business with enterprise-grade data services software on its leadership Flash Storage Platforms™. Violin Concerto™ OS 7 delivers complete data protection and data reduction services and consistent high performance in a storage operating system fully integrated with Violin's patented Flash Fabric Architecture™ for cloud, enterprise and virtualized business and mission-critical storage applications. Violin Flash Storage Platforms are designed for primary storage applications at costs below traditional hard disk arrays and accelerate breakthrough CAPEX and OPEX savings while helping customers build the next generation data center. Violin Flash Storage Platforms and All Flash Arrays enhance business agility while revolutionizing data center economics. Founded in 2005, Violin Memory is headquartered in Santa Clara, California. For more information, visit www.violin-memory.com. Follow us on Twitter at twitter.com/violinmemory.
All Violin Memory news releases (financial, acquisitions, manufacturing, products, technology, etc.) are issued exclusively by Business Wire and are immediately thereafter posted on the company's external website. For more information about Violin Memory, including Violin Memory's trademarks, visit www.violin-memory.com.
VIOLIN MEMORY, INC.
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share data)
Three Months Ended
--------------------------------------
April 30, January 31, April 30,
2016 2016 2015
------------ ------------ ------------
Revenue:
Product revenue $ 4,157 $ 4,346 $ 6,823
Service revenue 5,556 6,578 5,278
------------ ------------ ------------
Total revenue 9,713 10,924 12,101
------------ ------------ ------------
Cost of revenue:
Cost of product revenue (1) 3,122 3,692 4,230
Cost of service revenue (1) 2,714 3,067 2,721
------------ ------------ ------------
Total cost of revenue 5,836 6,759 6,951
------------ ------------ ------------
Gross profit 3,877 4,165 5,150
------------ ------------ ------------
Operating expenses:
Sales and marketing (1) 9,032 14,479 13,440
Research and development (1) 10,194 9,480 11,526
General and administrative (1) 3,412 3,850 5,151
Restructuring charges 1,735 - -
------------ ------------ ------------
Total operating expenses 24,373 27,809 30,117
------------ ------------ ------------
Loss from operations (20,496) (23,644) (24,967)
Other income (expense), net (194) (90) 256
Interest and other financing expense (1,459) (1,623) (1,750)
------------ ------------ ------------
Loss before income taxes (22,149) (25,357) (26,461)
Income taxes 10 157 41
------------ ------------ ------------
Net loss $ (22,159) $ (25,514) $ (26,502)
============ ============ ============
Net loss per share of common stock,
basic and diluted $ (0.22) $ (0.26) $ (0.28)
============ ============ ============
Shares used in computing net loss per
share of common stock, basic and
diluted 99,648 98,363 95,478
============ ============ ============
(1) Includes stock-based compensation
expense as follows:
Cost of product revenue $ 6 $ 402 $ 251
Cost of service revenue 201 650 335
Sales and marketing 649 1,677 806
Research and development 2,160 1,647 1,977
General and administrative 1,039 1,732 1,891
------------ ------------ ------------
$ 4,055 $ 6,108 $ 5,260
============ ============ ============
VIOLIN MEMORY, INC.
Condensed Consolidated Balance Sheets
(Unaudited; in thousands)
April 30, January 31,
2016 2016
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 20,178 $ 23,921
Restricted cash 5,000 10,000
Short-term investments 24,001 42,058
Accounts receivable, net 3,920 5,308
Inventory 11,478 12,001
Other current assets 2,936 4,170
------------ ------------
Total current assets 67,513 97,458
Property and equipment, net 9,375 9,322
Other assets 5,757 6,067
------------ ------------
$ 82,645 $ 112,847
============ ============
Liabilities and Stockholders' Deficit
Current liabilities:
Short-term borrowings $ 5,774 $ 13,398
Accounts payable 1,914 3,747
Accrued liabilities 11,209 13,570
Deferred revenue 12,625 13,006
------------ ------------
Total current liabilities 31,522 43,721
Convertible senior notes 117,787 117,464
Deferred revenue, noncurrent 5,867 6,239
Long-term liabilities 336 275
------------ ------------
Total liabilities 155,512 167,699
------------ ------------
Stockholders' deficit:
Preferred stock - -
Common stock 10 10
Additional paid-in capital 509,324 505,274
Accumulated other comprehensive income 550 456
Accumulated deficit (582,751) (560,592)
------------ ------------
Total stockholders' deficit (72,867) (54,852)
------------ ------------
$ 82,645 $ 112,847
============ ============
VIOLIN MEMORY, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited; in thousands)
Three Months Ended
-------------------------
April 30, April 30,
2016 2015
------------ ------------
Cash flows from operating activities:
Net loss $ (22,159) $ (26,502)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 1,993 2,475
Accretion of debt issuance costs to interest
expense 359 449
Stock-based compensation 4,055 5,260
Changes in operating assets and liabilities,
net:
Accounts receivable 1,388 7,535
Inventory (140) (5,951)
Other assets 1,235 1,667
Accounts payable (2,333) 1,430
Accrued liabilities (2,300) (4,383)
Deferred revenue (753) (1,157)
------------ ------------
Net cash used in operating activities (18,655) (19,177)
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (610) (162)
Decrease in restricted cash 5,000 -
Purchase of short-term investments - (20,672)
Maturity of short-term investments 18,057 7,412
------------ ------------
Net cash provided by (used in) investing
activities 22,447 (13,422)
------------ ------------
Cash flows from financing activities:
Proceeds from line of credit 5,774 4,000
Repayment of line of credit (13,398) (10,000)
Proceeds from exercise of common stock options - 316
Taxes paid related to net share settlement of
equity awards (5) -
------------ ------------
Net cash used in financing activities (7,629) (5,684)
------------ ------------
Effect of exchange rates on cash and cash
equivalents 94 (30)
------------ ------------
Net increase in cash and cash equivalents (3,743) (38,313)
Cash and cash equivalents at beginning of year 23,921 93,432
------------ ------------
Cash and cash equivalents at end of period $ 20,178 $ 55,119
============ ============
VIOLIN MEMORY, INC.
Reconciliation of GAAP to Non-GAAP Measures
(Unaudited; in thousands, except per share data)
Three Months Ended
--------------------------------------
April 30, January 31, April 30,
2016 2016 2015
------------ ------------ ------------
Gross profit (GAAP) $ 3,877 $ 4,165 $ 5,150
Stock-based compensation 207 1,052 586
Amortization of acquired
intangibles - - 14
------------ ------------ ------------
Gross profit (Non-GAAP) $ 4,084 $ 5,217 $ 5,750
============ ============ ============
Operating expenses (GAAP) $ 24,373 $ 27,809 $ 30,117
Stock-based compensation (3,849) (5,056) (4,674)
Restructuring charges (1,735) - -
------------ ------------ ------------
Operating expenses (Non-GAAP) $ 18,789 $ 22,753 $ 25,443
============ ============ ============
Net loss (GAAP) $ (22,159) $ (25,514) $ (26,502)
Stock-based compensation 4,056 6,108 5,260
Restructuring charges 1,735 - -
Amortization of acquired
intangibles - - 14
------------ ------------ ------------
Net loss (Non-GAAP) $ (16,368) $ (19,406) $ (21,228)
============ ============ ============
Net loss per common share, basic and
diluted (GAAP) $ (0.22) $ (0.26) $ (0.28)
Stock-based compensation 0.04 0.06 0.06
Restructuring charges 0.02 - -
Amortization of acquired
intangibles 0.00 - -
------------ ------------ ------------
Net loss per common share, basic and
diluted (Non-GAAP) $ (0.16) $ (0.20) $ (0.22)
============ ============ ============
Investor Relations Contact:
Olga Dorovskikh
Violin Memory, Inc.
650-396-1525
ir@vmem.com
Media Contact:
Meghan Brown
10Fold
925-271-8234
violin@10fold.com
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