"Our core data management business continues to deliver a solid revenue foundation that has enabled us to remain focused on our expansion into the fast growing virtualization markets," said
First Quarter 2015 Financial Results:
The following financial results for the first quarter of 2015 include contribution from the acquisition for the full three months, which contribution is not reflected in the comparative results for the first quarter of 2014.
- Net revenue for the first quarter of 2015 was
$20.1 million, compared to $0.9 millionfor the first quarter of 2014.
- Product revenue for the first quarter of 2015 was
$17.2 million, compared to $0.8 millionfor the first quarter of 2014. Disk systems and virtualization revenue was $10.0 million, compared to $0.8 millionfor the first quarter of 2014. Archive product revenue was $7.2 millioncompared to none for the first quarter of 2014. Service revenue was $2.9 million, compared to $0.1 millionin the first quarter of 2014.
- Gross margin for the first quarter of 2015 was 29.6%, compared to 56.9% for the first quarter of 2014. Non-GAAP gross margin for the first quarter of 2015 was 32.7%. Our methodology for determining non-GAAP gross margin, which excludes the effect of intangible asset amortization from gross profit, is described in the Use of GAAP and Non-GAAP Financial Measures section of this announcement.
- Operating expenses for the first quarter of 2015 were
$13.6 million, compared to $1.3 millionfor the first quarter of 2014.
- Share-based compensation expense was
$0.7 millionin the first quarter of both 2015 and 2014. Depreciation and amortization was $2.0 millionin first quarter of 2015, compared to $0.1 millionin the first quarter of 2014.
- Net loss for the first quarter of 2015 was
$9.5 million, or a loss of $0.27per share, compared to a net loss of $0.8 million, or a loss of $0.04per share, in the first quarter of 2014.
- Adjusted EBITDA for the first quarter of 2015 was a net loss of
$6.1 million, or a net loss of $0.18per share, based on 35.0 million weighted average shares outstanding, compared to adjusted EBITDA of $41,000, or $0.00per share based on 21.7 million weighted average shares outstanding for the first quarter of 2014. Adjusted EBITDA is a non-GAAP measure presented as net loss before interest expense, income taxes, depreciation and amortization and share-based compensation.
- Cash and cash equivalents at
March 31, 2015were $4.4 million, compared to $4.3 millionat December 31, 2014. The Company had $9.9 millionoutstanding under its credit facilities and $19.5 millionoutstanding under its notes from related parties at March 31, 2015.
- As announced earlier today,
Sphere 3Dhas entered into definitive agreements for a non-brokered private placement of shares of its common stock and warrants for a gross purchase price of approximately U.S. $4.1 million.
- In addition to the equity agreement, FBC Holdings S.A.R.L. has agreed in principal to increase the existing revolving credit facility by an additional
$5 million. The terms of the increase are expected to be the same as the current agreement.
- As previously announced,
Sphere 3D, in collaboration with Microsoft, is leveraging its virtualization and storage technologies with Microsoft Azure to simplify and accelerate customers' transitions to cloud-integrated solutions. Sphere 3Dhas announced a series of events titled "Technologies to Power the Next Cloud" with venues at Microsoft Technology Centers in Silicon Valley, New York, Torontoand London. During these events, Sphere 3Dwill present its hybrid cloud-enabling technologies, including Glassware 2.0® Windows container technology for application delivery, and the latest in its virtualized storage technologies for enterprise hybrid cloud infrastructure, to a combined audience of Microsoftand Sphere 3Dchannel partners. Sphere 3Dannounced a strategic alliance with a regional service center in the southern United Statesto support the digital learning needs of over a million public school students. Under the terms of this alliance, the education service center will provide technology integration to regional schools, and is certified to resell, promote, service and support Sphere 3D'svirtualization and data management product portfolio. This partnership aligns with Sphere 3D'sstrategy to securely deliver Windows applications and specialized educational and digital learning software on a number of end user client devices certified for use in the education sector. Sphere 3D'sSnapScale® technology is gaining traction with a number of wins, including the recently-announced deployment with the LISA scientific research institution in Franceto protect its primary scientific research data. The renewed interest in SnapScale is attributable in large part to its patented Peer Set protection technology which ensures the high availability of its storage infrastructure, simplicity of deployment and scalability to accommodate increasing data capacity needs.
- The V3 platform was added to the GSA listing in Q1 2015. This will position our hyper-converged platform to take advantage of government sales opportunities.
Use of GAAP and Non-GAAP Financial Measures:
Investors are encouraged to review the reconciliation of these non-GAAP financial measures to the most comparable GAAP measures, which are provided in the attached table after the text of this release.
Investor Conference Call:
Safe Harbor Statement
This press release contains forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of risks and uncertainties including, without limitation, unforeseen changes in the course of
|SPHERE 3D CORP.|
|SELECTED BALANCE SHEETS INFORMATION|
|March 31,||December 31,|
|Cash and cash equivalents||$||4,364||$||4,258|
|Other current assets||2,976||2,457|
|Total current assets||31,279||32,139|
|Property and equipment, net||3,861||4,427|
|Intangible assets, net||71,272||73,271|
|LIABILITIES AND EQUITY|
|Long-term debt -- related party||19,500||19,500|
|Long-term deferred tax liabilities||4,307||4,387|
|Other long-term liabilities||3,041||3,185|
|Total liabilities and equity||$||145,712||$||149,263|
|SPHERE 3D CORP.|
|(In thousands, except per share data)|
|Three Months Ended|
|Gross Profit - GAAP||$||5,941||$||519|
|Intangible asset amortization||632||-|
|Gross Profit - Non -GAAP||$||6,573||$||519|
|Gross Margin Percentages|
|Depreciation and amortization||1,992||73|
|Net loss per share:|
|Basic and diluted||$||(0.27||)||$||(0.04||)|
|Adjusted Net loss per share:|
|Basic and diluted||$||(0.18||)||$||0.00|
|Shares used in computing net loss and adjusted net loss per share:|
|Basic and diluted||35,003||21,692|
|Non-GAAP Financial Measures:
Sphere uses financial measures which are not calculated and presented in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). Sphere presents these non-GAAP financial measures because it believes them to be important supplemental measures of performance that is commonly used by investors and other interested parties in the evaluation of companies in our industry.
|To supplement Sphere 3D's consolidated financial statements presented in accordance with GAAP, the Company uses Adjusted EBITDA, a non-GAAP financial measure that exclude from the statement of operations the effects of interest expense, income taxes, depreciation and amortization and share-based compensation. The Company also uses Non-GAAP gross profit and Non-GAAP gross-margin, non-GAAP financial measures that exclude the effect of intangible asset amortization from gross-profit. Sphere 3D uses the above non-GAAP financial measures internally to understand, manage and evaluate the business. Management believes it is useful for itself and investors to review, as applicable, both GAAP information and the non-GAAP measures in order to assess the performance of continuing operations and for planning and forecasting in future periods. The presentation of these non-GAAP measures is intended to provide investors with an understanding of the Company's operational results and trends that enables them to analyze the base financial and operating performance and facilitate period-to-period comparisons and analysis of operational trends. Sphere 3D believes the presentation of these non-GAAP financial measures is useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered substitutes for or superior to GAAP results. In addition, our non-GAAP financial measures may not be comparable to similarly titled measures utilized by other companies since such other companies may not calculate such measures in the same manner as we do.|