SANTA CLARA, Calif.,
Oct. 26, 2017 /PRNewswire/ -- Gigamon Inc.
(NYSE:GIMO), the leader in traffic visibility solutions, today
released financial results for its third quarter ended
September 30, 2017.
Third Quarter 2017 Financial Highlights:
- Revenue of $79.2 million,
compared to $83.5 million in the
third quarter of fiscal 2016.
- GAAP gross margin was 82%, compared to 83% in the third quarter
of fiscal 2016.
- Non-GAAP gross margin was 82%, compared to 83% in the third
quarter of fiscal 2016.
- GAAP net income was $2.2 million,
or $0.06 per basic and diluted share,
compared to GAAP net income of $6.1
million, or $0.16 per diluted
share, in the third quarter of fiscal 2016.
- Non-GAAP net income was $9.5
million, or $0.23 per diluted
share, compared to non-GAAP net income of $14.0 million, or $0.36 per diluted share, in the third quarter of
fiscal 2016.
- Cash and short-term investments were $264.6 million, up $6
million from the second quarter of 2017 and up $20 million from the third quarter of fiscal
2016.
Conference Call Information:
In light of the pending acquisition by Elliott Management,
Gigamon will not hold its earnings conference call today to discuss
its third quarter 2017 results. Additionally, Gigamon will
not be providing financial guidance.
Additional Information and Where to Find It
Gigamon will file relevant materials with the Securities and
Exchange Commission (the "SEC") in connection with the proposed
merger, including a preliminary proxy statement on Schedule 14A.
Under the proposed terms, promptly after filing its definitive
proxy statement with the SEC, Gigamon will mail or otherwise make
available the definitive proxy statement and a proxy card to each
stockholder entitled to vote at the special meeting relating to the
proposed transaction. GIGAMON STOCKHOLDERS AND OTHER INVESTORS ARE
ADVISED TO CAREFULLY READ THESE MATERIALS (INCLUDING ANY AMENDMENTS
OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC IN RESPECT OF THE PROPOSED MERGER WHEN THEY BECOME
AVAILABLE, AS THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED MERGER AND THE PARTIES TO THE PROPOSED MERGER.
Gigamon stockholders and other investors may obtain free copies of
the definitive proxy statement, the preliminary proxy statement and
other relevant materials in connection with the proposed merger
(when they become available), along with other documents filed by
Gigamon with the SEC, at the SEC's website
(http://www.sec.gov).
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements generally relate to future
events, including the timing of the proposed transaction and other
information related to the proposed transaction. 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 the proposed transaction and our expectations,
strategy, plans or intentions regarding it. Forward-looking
statements in this press release include, but are not limited to,
our pending acquisition by Elliott Management. 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 the risk that the transaction may
not be completed in a timely manner or at all, which may adversely
affect our business and the trading price of our common stock; the
failure to satisfy the conditions to closing of the transaction,
including obtaining regulatory and shareholder approval; the
occurrence of any event, change or other circumstance that could
give rise to the termination of the definitive agreement; the
potential for litigation relating to the transaction; the risk that
the definitive agreement may be terminated in circumstances that
require us to pay a termination fee; the effect of the announcement
or pendency of the transaction on our business relationships,
results of operations and business generally; risks that the
proposed transaction disrupts current plans and operations; risk
related to diverting management's attention; 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 Annual Report on Form 10-K for
the period ended December 31, 2016 and our most recently
filed quarterly report on Form 10-Q. The forward-looking statements
in this press release are based on information available
to Gigamon as of the date hereof.
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 accompanying tables contain certain
non-GAAP financial measures that exclude stock-based compensation
and related payroll taxes, income tax effects of stock-based
compensation expense, non-recurring items such as restructuring
charges and advisory services and other costs related to
non-routine stockholder matters, and periodic tax items. Non-GAAP
financial measures do not have any standardized meaning and our
non-GAAP financial measures may not be comparable to similarly
titled measures presented by other companies. Gigamon considers
these non-GAAP financial measures 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 core to our 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. We present non-GAAP financial measures for supplemental
informational purposes only to provide additional information in
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. Please see
the reconciliation of non-GAAP financial measures to the most
directly comparable GAAP measures attached to this release.
Gigamon
Gigamon (NYSE: GIMO) provides active visibility into physical
and virtual network traffic, enabling stronger security and
superior performance. Gigamon's Visibility Fabric and GigaSECURE®,
the industry's first Security Delivery Platform, deliver advanced
intelligence so that security, network and application performance
management solutions in enterprise, government and service provider
networks operate more efficiently and effectively. See more at
www.gigamon.com, the Gigamon Blog, or follow Gigamon on Twitter,
LinkedIn or Facebook.
|
Gigamon
Inc.
|
|
Consolidated
Statements of Operations
|
|
(In thousands,
except per share amounts)
|
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
October 1,
2016
|
|
September 30,
2017
|
|
October 1,
2016
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Product
|
$
|
51,861
|
|
|
$
|
59,835
|
|
|
$
|
139,063
|
|
|
$
|
155,805
|
|
|
Service
|
27,330
|
|
|
23,677
|
|
|
78,832
|
|
|
70,021
|
|
|
Total
revenue
|
79,191
|
|
|
83,512
|
|
|
217,895
|
|
|
225,826
|
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Product
|
11,401
|
|
|
12,197
|
|
|
32,429
|
|
|
34,414
|
|
|
Service
|
3,049
|
|
|
2,141
|
|
|
8,649
|
|
|
6,562
|
|
|
Total cost of
revenue
|
14,450
|
|
|
14,338
|
|
|
41,078
|
|
|
40,976
|
|
|
Gross
profit
|
64,741
|
|
|
69,174
|
|
|
176,817
|
|
|
184,850
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development
|
18,783
|
|
|
18,306
|
|
|
59,451
|
|
|
50,914
|
|
|
Sales and
marketing
|
34,914
|
|
|
31,994
|
|
|
105,247
|
|
|
88,494
|
|
|
General and
administrative
|
10,697
|
|
|
8,887
|
|
|
30,033
|
|
|
26,029
|
|
|
Total operating
expenses
|
64,394
|
|
|
59,187
|
|
|
194,731
|
|
|
165,437
|
|
|
Income (loss) from
operations
|
347
|
|
|
9,987
|
|
|
(17,914)
|
|
|
19,413
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
541
|
|
|
235
|
|
|
1,374
|
|
|
661
|
|
|
Other expense,
net
|
(241)
|
|
|
(144)
|
|
|
(433)
|
|
|
(386)
|
|
|
Income (loss) before
income tax (provision) benefit
|
647
|
|
|
10,078
|
|
|
(16,973)
|
|
|
19,688
|
|
|
Income tax benefit
(provision)
|
1,531
|
|
|
(3,999)
|
|
|
9,576
|
|
|
23,321
|
|
|
Net income
(loss)
|
$
|
2,178
|
|
|
$
|
6,079
|
|
|
$
|
(7,397)
|
|
|
$
|
43,009
|
|
|
Net income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.06
|
|
|
$
|
0.17
|
|
|
$
|
(0.20)
|
|
|
$
|
1.22
|
|
|
Diluted
|
$
|
0.06
|
|
|
$
|
0.16
|
|
|
$
|
(0.20)
|
|
|
$
|
1.15
|
|
|
Weighted average
shares used in computing net income (loss) per share:
|
|
|
|
|
|
|
|
|
Basic
|
37,196
|
|
|
35,770
|
|
|
36,885
|
|
|
35,171
|
|
|
Diluted
|
39,574
|
|
|
38,113
|
|
|
36,885
|
|
|
37,341
|
|
|
Gigamon
Inc.
|
|
Consolidated
Balance Sheets
|
|
(In
thousands)
|
|
(unaudited)
|
|
|
September 30,
2017
|
|
December 31,
2016
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
173,182
|
|
$
|
148,926
|
|
Short-term
investments
|
91,380
|
|
109,238
|
|
Accounts receivable,
net
|
71,741
|
|
75,522
|
|
Inventories,
net
|
15,472
|
|
11,347
|
|
Prepaid expenses and
other current assets
|
12,048
|
|
9,909
|
|
Total current
assets
|
363,823
|
|
354,942
|
|
Property and
equipment, net
|
20,735
|
|
11,809
|
|
Deferred tax assets,
non-current
|
50,734
|
|
33,094
|
|
Other assets,
non-current
|
1,103
|
|
1,154
|
|
TOTAL
ASSETS
|
$
|
436,395
|
|
$
|
400,999
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
Accounts
payable
|
$
|
5,585
|
|
$
|
5,208
|
|
Accrued
liabilities
|
26,897
|
|
34,649
|
|
Deferred
revenue
|
69,960
|
|
68,997
|
|
Total current
liabilities
|
102,442
|
|
108,854
|
|
Deferred revenue,
non-current
|
32,126
|
|
28,785
|
|
Deferred and other
tax liabilities, non-current
|
553
|
|
201
|
|
Other liabilities,
non-current
|
933
|
|
499
|
|
TOTAL
LIABILITIES
|
136,054
|
|
138,339
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Common
stock
|
4
|
|
4
|
|
Additional
paid-in-capital
|
298,400
|
|
256,774
|
|
Accumulated other
comprehensive loss
|
(75)
|
|
(17)
|
|
Retained earnings
(Accumulated deficit)
|
2,012
|
|
5,899
|
|
TOTAL STOCKHOLDERS'
EQUITY
|
300,341
|
|
262,660
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
436,395
|
|
$
|
400,999
|
|
Gigamon
Inc.
|
|
Consolidated
Statements of Cash Flows
|
|
(In
thousands)
|
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30, 2017
|
October 1,
2016
|
|
September
30, 2017
|
October 1,
2016
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
2,178
|
|
|
$
|
6,079
|
|
|
$
|
(7,397)
|
|
|
$
|
43,009
|
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,214
|
|
|
1,642
|
|
|
6,411
|
|
|
4,815
|
|
|
Stock-based
compensation expense
|
10,973
|
|
|
10,104
|
|
|
39,991
|
|
|
28,884
|
|
|
Deferred and other
income taxes
|
(1,790)
|
|
|
(679)
|
|
|
(10,147)
|
|
|
(31,570)
|
|
|
Other
|
6
|
|
|
54
|
|
|
148
|
|
|
366
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(8,221)
|
|
|
(14,929)
|
|
|
3,672
|
|
|
(11,567)
|
|
|
Inventories
|
(1,336)
|
|
|
(862)
|
|
|
(4,761)
|
|
|
(4,316)
|
|
|
Prepaid expenses and
other assets
|
78
|
|
|
(1,753)
|
|
|
(1,944)
|
|
|
(2,991)
|
|
|
Accounts
payable
|
1,757
|
|
|
569
|
|
|
532
|
|
|
54
|
|
|
Accrued liabilities
and other liabilities
|
1,083
|
|
|
9,227
|
|
|
(9,308)
|
|
|
3,470
|
|
|
Deferred
revenue
|
5,413
|
|
|
3,290
|
|
|
4,304
|
|
|
1,015
|
|
|
Net cash provided by
(used in) operating activities
|
12,355
|
|
|
12,742
|
|
|
21,501
|
|
|
31,169
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Purchase of
short-term investments
|
(8,941)
|
|
|
(20,942)
|
|
|
(78,099)
|
|
|
(84,773)
|
|
|
Proceeds from
maturities of short-term investments
|
25,300
|
|
|
24,500
|
|
|
96,012
|
|
|
85,747
|
|
|
Purchase of property
and equipment
|
(6,977)
|
|
|
(1,523)
|
|
|
(12,179)
|
|
|
(6,001)
|
|
|
Net cash provided by
(used in) investing activities
|
9,382
|
|
|
2,035
|
|
|
5,734
|
|
|
(5,027)
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from
employee stock purchase plan
|
4,487
|
|
|
3,417
|
|
|
9,443
|
|
|
6,785
|
|
|
Proceeds from
exercise of stock options
|
40
|
|
|
5,528
|
|
|
983
|
|
|
9,654
|
|
|
Shares repurchased
for tax withholdings on vesting of restricted stock
units
|
(4,188)
|
|
|
(3,411)
|
|
|
(12,592)
|
|
|
(7,240)
|
|
|
Net cash provided by
(used in) financing activities
|
339
|
|
|
5,534
|
|
|
(2,166)
|
|
|
9,199
|
|
|
NET INCREASE
(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
22,076
|
|
|
20,311
|
|
|
25,069
|
|
|
35,341
|
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH — Beginning of period
|
151,919
|
|
|
135,242
|
|
|
148,926
|
|
|
120,212
|
|
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH — End of period
|
$
|
173,995
|
|
|
$
|
155,553
|
|
|
$
|
173,995
|
|
|
$
|
155,553
|
|
|
Gigamon
Inc.
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
(In thousands,
except percentages)
|
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
October 1,
2016
|
|
September 30,
2017
|
October 1,
2016
|
|
Total
Revenue
|
$
|
79,191
|
|
|
$
|
83,512
|
|
|
$
|
217,895
|
|
|
$
|
225,826
|
|
|
Reconciliation of
GAAP Gross Profit and GAAP Gross Margin to Non-GAAP Gross Profit
and Non-GAAP Gross Margin:
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
64,741
|
|
|
69,174
|
|
|
176,817
|
|
|
184,850
|
|
|
Stock-based
compensation expense
|
333
|
|
|
519
|
|
|
1,802
|
|
|
1,527
|
|
|
Stock-based
compensation related payroll taxes
|
19
|
|
|
28
|
|
|
79
|
|
|
64
|
|
|
Non-GAAP gross
profit
|
$
|
65,093
|
|
|
$
|
69,721
|
|
|
$
|
178,698
|
|
|
$
|
186,441
|
|
|
GAAP gross
margin
|
82
|
%
|
|
83
|
%
|
|
81
|
%
|
|
82
|
%
|
|
Non-GAAP gross
margin
|
82
|
%
|
|
83
|
%
|
|
82
|
%
|
|
83
|
%
|
|
Reconciliation of
GAAP Operating Income (Loss) to Non-GAAP Operating
Income:
|
|
|
|
|
|
|
|
|
GAAP operating income
(loss)
|
$
|
347
|
|
|
$
|
9,987
|
|
|
$
|
(17,914)
|
|
|
$
|
19,413
|
|
|
Stock-based
compensation expense
|
10,973
|
|
|
10,104
|
|
|
39,991
|
|
|
28,884
|
|
|
Stock-based
compensation related payroll taxes
|
199
|
|
|
414
|
|
|
1,036
|
|
|
971
|
|
|
Non-recurring
items
|
2,305
|
|
|
—
|
|
|
2,891
|
|
|
—
|
|
|
Non-GAAP operating
income
|
$
|
13,824
|
|
|
$
|
20,505
|
|
|
$
|
26,004
|
|
|
$
|
49,268
|
|
|
Reconciliation of
GAAP Net Income (Loss) to Non-GAAP Net Income:
|
|
|
|
|
|
|
|
|
GAAP net income
(loss)
|
$
|
2,178
|
|
|
$
|
6,079
|
|
|
$
|
(7,397)
|
|
|
$
|
43,009
|
|
|
Stock-based
compensation expense
|
10,973
|
|
|
10,104
|
|
|
39,991
|
|
|
28,884
|
|
|
Stock-based
compensation related payroll taxes
|
199
|
|
|
414
|
|
|
1,036
|
|
|
971
|
|
|
Non-recurring
items
|
2,305
|
|
|
—
|
|
|
2,891
|
|
|
—
|
|
|
Income tax effect of
Non-GAAP adjustments
|
(6,189)
|
|
|
(2,593)
|
|
|
(18,468)
|
|
|
(39,176)
|
|
|
Non-GAAP net
income
|
$
|
9,466
|
|
|
$
|
14,004
|
|
|
$
|
18,053
|
|
|
$
|
33,688
|
|
|
Gigamon
Inc.
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures (continued)
|
|
(In thousands,
except per share amounts)
|
|
(unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
October 1,
2016
|
|
September 30,
2017
|
|
October 1,
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
|
$
|
0.06
|
|
|
$
|
0.16
|
|
|
$
|
(0.20)
|
|
|
$
|
1.15
|
|
|
Stock-based
compensation expense
|
0.27
|
|
|
0.27
|
|
|
1.08
|
|
|
0.77
|
|
|
Stock-based
compensation related payroll taxes
|
0.01
|
|
|
0.01
|
|
|
0.03
|
|
|
0.03
|
|
|
Non-recurring
items
|
0.06
|
|
|
—
|
|
|
0.08
|
|
|
—
|
|
|
Income tax effect of
non-GAAP adjustments
|
(0.16)
|
|
|
(0.07)
|
|
|
(0.50)
|
|
|
(1.05)
|
|
|
Impact of difference
in number of GAAP and non-GAAP diluted shares
|
(0.01)
|
|
|
(0.01)
|
|
|
(0.05)
|
|
|
(0.01)
|
|
|
Non-GAAP diluted net
income per share
|
$
|
0.23
|
|
|
$
|
0.36
|
|
|
$
|
0.44
|
|
|
$
|
0.89
|
|
|
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
|
39,574
|
|
|
38,113
|
|
|
36,885
|
|
|
37,341
|
|
|
Dilutive impact due
to stock-based compensation
|
1,546
|
|
|
544
|
|
|
3,827
|
|
|
673
|
|
|
Non-GAAP diluted
weighted-average number of shares
|
41,120
|
|
|
38,657
|
|
|
40,712
|
|
|
38,014
|
|
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SOURCE Gigamon