Casa Systems, Inc. (NASDAQ:CASA), a leading provider of converged
broadband infrastructure technology solutions for mobile, cable and
fixed networks, today announced its financial results for its
second quarter ended June 30, 2018.
Second Quarter 2018 Financial Highlights
- Revenues were $68.7 million, an increase of 3.1% compared to
the second quarter of 2017
- Gross margin of 71.9%, compared to gross margin of 68.7% in the
second quarter of 2017
- GAAP net income of $21.4 million, an increase of 24.8% compared
to the second quarter of 2017
- Non-GAAP net income of $22.2 million, an increase of 15.6%
compared to the second quarter of 2017
- Adjusted EBITDA of $19.8 million, a decrease of 12.4% compared
to the second quarter of 2017
- GAAP net income per fully diluted share of $0.23, compared to a
GAAP net loss per basic share of $0.95 in the second quarter of
2017
- Non-GAAP net income per fully diluted share of $0.24, an
increase of 4.3% compared to the second quarter of 2017
“Our second quarter results reflect continued sales of cable MSO
network upgrades and software capacity expansions across the globe
in support of customer demand for gigabit services with DOCSIS 3.0
and 3.1,” said Jerry Guo, Casa’s President and CEO. “During
the quarter, we expanded into new geographies with new and existing
customers. As part of our land and expand business model, we
believe these deployments will lead to high-margin capacity
expansions in the future. While we are disappointed with the
moderation in our top-line growth during the second quarter, we
believe that this is related to the timing of several projects
involving network transformation and capacity upgrades. Given
the forward pipeline in all three of our end markets, I am as
enthusiastic as ever about the outlook for the company. Based
on our confidence in the future of the business and commitment to
delivering value to our shareholders, we are announcing a stock
repurchase program for up to $75 million of shares of common
stock,” said Guo.
Commenting on the Company’s financial results, Shaun McCarthy,
who will be taking over as Casa’s Interim CFO, added, “During the
second quarter, we saw continued momentum in software-based
capacity expansions, with revenue of $24.6 million, up 214%
year-over-year. This led to GAAP gross margin for the second
quarter of 2018 of 71.9%, an increase of more than 300 basis points
over the second quarter of 2017. Although the timing of
deployments may vary from quarter to quarter, we believe we remain
well positioned to grow our market share and deliver long-term
growth as our customers across all access technologies provide
additional bandwidth and services to their subscribers.”
To supplement our financial results presented in accordance with
Generally Accepted Accounting Principles (GAAP), we are presenting
non-GAAP financial measures in this press release. A reconciliation
of GAAP to non-GAAP measures has been provided in the financial
statement tables included in this press release. An explanation of
these measures is also included below under the heading “Non-GAAP
Financial Measures”.
Updated Financial Outlook
For the fiscal year 2018, we now expect:
- Revenues between $330.0 million and $350.0 million
- Non-GAAP net income between $76.0 million and $83.0
million
- Non-GAAP diluted net income per share between $0.80 and
$0.88
Guidance for non-GAAP financial measures excludes the follow-on
public offering expenses, which are a one-time non-recurring
charge, stock-based compensation, which is a non-cash charge, and
the resulting tax effect of these excluded items. We have not
reconciled the non-GAAP metrics as to which we provide guidance to
their most directly comparable GAAP metrics because certain items
that impact these excluded measures are uncertain, out of our
control and/or cannot be reasonably calculated or predicted at this
time. Accordingly, a reconciliation of the non-GAAP financial
metrics included in our guidance to the corresponding GAAP measures
is not available without unreasonable effort.
Stock Repurchase Program
Casa Systems announced today that its board of directors has
authorized the repurchase of up to $75 million of the Company’s
common stock under a stock repurchase program. The Company’s
management will determine the amount and timing of repurchases
under the program based on its evaluation of market conditions,
stock price and other factors. Repurchases may also be made
under a Rule 10b5-1 plan, which would permit the Company to
repurchase shares when it would otherwise be precluded from doing
so under insider trading laws. The repurchase program may be
superseded or discontinued at any time and has no expiration
date.
Conference Call Information
Casa Systems is hosting a conference call for analysts and
investors to discuss the financial results for its second quarter
ended June 30, 2018, and its business outlook at 5:00 p.m. Eastern
Standard Time today, August 14, 2018. The conference call can be
heard via webcast in the investor relations section of our website
at http://investors.casa-systems.com, or by dialing 877-407-4019 in
the United States or 201-689-8337 from international locations.
Callers should ask to be joined to the Casa Systems call. Shortly
after the conclusion of the conference call, a replay of the audio
webcast will be available in the investor relations section of our
website at http://investors.casa-systems.com for 90 days after the
event.
Safe Harbor Statement
This press release contains forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact
contained in this press release, including statements regarding the
projected results of operations and financial position of Casa
Systems, Inc. (“Casa” or the “Company”), including financial
targets, business strategy, and plans and objectives for future
operations, are forward-looking statements. The words “anticipate”,
“believe”, “continue”, “could”, “estimate”, “expect”, “intend”,
“may”, “plan”, “potential”, “predict”, “project”, “target”,
“should”, “would”, and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. We have based these
forward-looking statements on our estimates and assumptions of our
financial results and our current expectations and projections
about future events and financial trends that we believe may affect
our financial condition, results of operations, business strategy,
short-term and long-term business operations and objectives and
financial needs as of the date of this press release. A
number of important risk factors could cause actual results to
differ materially from the results described, implied or projected
in these forward-looking statements. These factors include, without
limitation: (1) any failure by us to successfully anticipate
technological shifts, market needs and opportunities, and develop
new products and product enhancements that meet those technological
shifts, needs and opportunities; (2) the concentration of a
substantial portion of our revenue in our CCAP solutions and in
certain customers; (3) fluctuations in our revenue due to timing of
large orders and seasonality; (4) the length and lack of
predictability of our sales cycle; (5) any difficulties we may face
in expanding our platform into the wireless market; and (6) other
factors discussed in the “Risk Factors” section of our public
reports filed with the SEC, including our most recent Quarterly
Report on Form 10-Q, which is on file with the SEC and available in
the investor relations section of our website at
http://investors.casa-systems.com and on the SEC’s website at
www.sec.gov. In addition, we operate in a very competitive
and rapidly changing environment. New risks emerge from time to
time. It is not possible for our management to predict all risks,
nor can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements that we may make. In light of these
risks, uncertainties and assumptions, the forward-looking events
and circumstances discussed in this press release are inherently
uncertain and may not occur, and actual results could differ
materially and adversely from those anticipated or implied in the
forward-looking statements. Accordingly, you should not rely upon
forward-looking statements as predictions of future events. We
disclaim any obligation to update publicly or revise any
forward-looking statements for any reason after the date of this
press release. Any reference to our website address in this press
release is intended to be an inactive textual reference only and
not an active hyperlink.
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with
Generally Accepted Accounting Principles (GAAP), we are presenting
the following non-GAAP financial measures in this press release and
the related earnings conference call: non-GAAP net income,
non-GAAP diluted net income per share, adjusted EBITDA and free
cash flow. These non-GAAP financial measures are not based on any
standardized methodology prescribed by GAAP and are not necessarily
comparable to similarly titled measures presented by other
companies.
Non-GAAP net income and non-GAAP diluted net income per
share. We define non-GAAP net income as net income as
reported in our condensed consolidated statements of operations,
excluding the impact of stock-based compensation expense, which is
a non-cash charge, the follow-on public offering expenses, which is
a one-time non-recurring charge, and the tax effect on these
excluded items. The tax effect of the excluded items is calculated
using our effective income tax rate for the period, excluding the
discrete tax benefits generated from the exercise of non-qualified
stock options and the disqualifying disposition of incentive stock
options. We believe that excluding these discrete tax benefits from
our effective income tax rate results in more useful disclosure to
investors and others regarding income tax effects of the excluded
items as these amounts may vary from period to period independent
of the operating performance of our business. We define non-GAAP
diluted net income per share as diluted net income (loss) per share
attributable to common stockholders reported in our condensed
consolidated statements of operations, excluding the impact of
cumulative dividends on convertible preferred stock, which are no
longer applicable following the conversion to common stock of all
of our outstanding preferred stock in December 2017 in connection
with our initial public offering, excluding the impact of dividends
declared on convertible preferred stock, as we do not intend to
declare any dividends for the foreseeable future, and excluding the
impact of items that we exclude in calculating non-GAAP net income.
For periods in which there was a GAAP diluted net loss per share
attributable to common stockholders, we calculate non-GAAP diluted
net income per share using a non-GAAP weighted-average share count
in which the impact of dilutive convertible preferred stock, stock
options and restricted stock units are added to the GAAP
weighted-average share count. We have presented non-GAAP net income
and non-GAAP diluted net income per share because they are key
measures used by our management and board of directors to
understand and evaluate our operating performance, to establish
budgets and to develop operational goals for managing our business.
The presentation of non-GAAP net income and non-GAAP diluted net
income per share also allows our management and board of directors
to make additional comparisons of our results of operations to
other companies in our industry.
Adjusted EBITDA. We define adjusted EBITDA as
our net income, excluding the impact of stock-based compensation
expense; the follow-on public offering expenses; other income
(expense), net; depreciation and amortization expense; and our
provision for (benefit from) income taxes. We have presented
adjusted EBITDA because it is a key measure used by our management
and board of directors to understand and evaluate our operating
performance, to establish budgets and to develop operational goals
for managing our business. In particular, we believe that excluding
the impact of these expenses in calculating adjusted EBITDA can
provide a useful measure for period-to-period comparisons of our
core operating performance.
Free cash flow. We define free cash flow as net
cash provided by operating activities minus capital expenditures.
We believe free cash flow to be a liquidity measure that provides
useful information to management and investors about the amount of
cash generated by our business that, after purchases of property
and equipment, can be used for strategic opportunities, including
investing in our business, making strategic acquisitions and
strengthening our balance sheet.
We use these non-GAAP financial measures to evaluate our
operating performance and trends and make planning decisions. We
believe that each of these non-GAAP financial measures helps
identify underlying trends in our business that could otherwise be
masked by the effect of the expenses that we exclude in the
calculations of each non-GAAP financial measure. Accordingly, we
believe that these financial measures provide useful information to
investors and others in understanding and evaluating our operating
results, enhancing the overall understanding of our past
performance and future prospects.
Our non-GAAP financial measures are not prepared in accordance
with GAAP, and should not be considered in isolation of, or as an
alternative to, measures prepared in accordance with GAAP. There
are a number of limitations related to the use of these non-GAAP
financial measures rather than the most directly comparable
financial measures calculated and presented in accordance with
GAAP. Some of these limitations are:
- we exclude stock-based compensation expense from each of
non-GAAP net income, non-GAAP diluted net income per share and
adjusted EBITDA as it has recently been, and will continue to be
for the foreseeable future, a significant recurring non-cash
expense for our business and an important part of our compensation
strategy;
- we exclude the discrete tax benefits generated from the
exercise of non-qualified stock options and the disqualifying
disposition of incentive stock options, which are not related to
the operating performance of our business, in calculating the
effective tax rate used to determine the tax effect of the items
excluded from our non-GAAP net income and non-GAAP diluted net
income per share; these discrete tax benefits will result in a
reduction in our income taxes and cash paid for income taxes;
- we exclude the follow-on public offering expenses from non-GAAP
net income, non-GAAP diluted net income per share and adjusted
EBITDA because it is a one-time non-recurring charge, although this
is a use of our cash and included in our operating expenses;
- adjusted EBITDA excludes depreciation and amortization expense
and, although this is a non-cash expense, the assets being
depreciated and amortized may have to be replaced in the
future;
- adjusted EBITDA does not reflect the cash requirements
necessary to service interest on our debt or the cash received from
our interest-bearing financial assets, both of which impact the
cash available to us, and does not reflect foreign currency
transaction gains and losses, all of which are reflected in other
income (expense), net;
- adjusted EBITDA does not reflect income tax payments that
reduce cash available to us;
- free cash flow may not represent our residual cash flow
available for discretionary expenditures, since we may have other
non-discretionary expenditures that are not deducted from this
measure;
- free cash flow may not represent the total increase or decrease
in the cash and cash equivalents for any given period because it
excludes cash provided by or used for other investing and financing
activities; and
- other companies, including companies in our industry, may not
use non-GAAP net income, non-GAAP diluted net income per share,
adjusted EBITDA or free cash flow, or may calculate such non-GAAP
financial measures in a different manner than we do, or may use
other non-GAAP financial measures to evaluate their performance,
all of which could reduce the usefulness of these non-GAAP
financial measures as comparative measures.
For the reconciliations of these non-GAAP financial measures to
the most directly comparable GAAP financial measures, please see
the section of the accompanying tables titled, “Reconciliation of
Selected GAAP and Non-GAAP Financial Measures”.
About Casa Systems, Inc.
Casa Systems, Inc. (NASDAQ: CASA) delivers converged broadband
technology solutions that enable mobile, cable and fixed network
service providers to meet the growing demand for gigabit bandwidth
and services. Our suite of distributed and virtualized solutions
for fixed and mobile 5G ultra-broadband networks are engineered for
performance, flexibility and scale. Commercially deployed in over
70 countries, Casa serves more than 450 Tier 1 and regional service
providers worldwide.
For more information, visit our website at
http://www.casa-systems.com.
Source: Casa Systems, Inc.
IR ContactMonica
Gould212-871-3927investorrelations@casa-systems.com
Lindsay
Savarese212-331-8417investorrelations@casa-systems.com
CASA SYSTEMS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited)(in thousands,
except per share amounts)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
68,722 |
|
|
$ |
66,625 |
|
|
$ |
157,796 |
|
|
$ |
139,354 |
|
Cost of revenue |
|
|
19,321 |
|
|
|
20,847 |
|
|
|
46,440 |
|
|
|
41,236 |
|
Gross
profit |
|
|
49,401 |
|
|
|
45,778 |
|
|
|
111,356 |
|
|
|
98,118 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
16,696 |
|
|
|
14,227 |
|
|
|
37,226 |
|
|
|
28,695 |
|
Sales and
marketing |
|
|
9,621 |
|
|
|
8,156 |
|
|
|
20,889 |
|
|
|
18,236 |
|
General
and administrative |
|
|
6,542 |
|
|
|
4,526 |
|
|
|
13,730 |
|
|
|
9,521 |
|
Total
operating expenses |
|
|
32,859 |
|
|
|
26,909 |
|
|
|
71,845 |
|
|
|
56,452 |
|
Income from
operations |
|
|
16,542 |
|
|
|
18,869 |
|
|
|
39,511 |
|
|
|
41,666 |
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
1,680 |
|
|
|
570 |
|
|
|
2,775 |
|
|
|
1,074 |
|
Interest
expense |
|
|
(4,875 |
) |
|
|
(4,261 |
) |
|
|
(9,547 |
) |
|
|
(8,454 |
) |
Gain
(loss) on foreign currency, net |
|
|
(490 |
) |
|
|
605 |
|
|
|
(514 |
) |
|
|
635 |
|
Other
income, net |
|
|
366 |
|
|
|
320 |
|
|
|
567 |
|
|
|
439 |
|
Total
other income (expense), net |
|
|
(3,319 |
) |
|
|
(2,766 |
) |
|
|
(6,719 |
) |
|
|
(6,306 |
) |
Income before provision
for (benefit from) income taxes |
|
|
13,223 |
|
|
|
16,103 |
|
|
|
32,792 |
|
|
|
35,360 |
|
Provision for (benefit
from) income taxes |
|
|
(8,194 |
) |
|
|
(1,057 |
) |
|
|
(6,401 |
) |
|
|
46 |
|
Net income |
|
|
21,417 |
|
|
|
17,160 |
|
|
|
39,193 |
|
|
|
35,314 |
|
Cumulative dividends on convertible preferred stock |
|
|
— |
|
|
|
(1,467 |
) |
|
|
— |
|
|
|
(2,918 |
) |
Dividends
declared on convertible preferred stock |
|
|
— |
|
|
|
(47,547 |
) |
|
|
— |
|
|
|
(47,547 |
) |
Net income (loss)
attributable to common stockholders, basic and diluted |
|
$ |
21,417 |
|
|
$ |
(31,854 |
) |
|
$ |
39,193 |
|
|
$ |
(15,151 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.26 |
|
|
$ |
(0.95 |
) |
|
$ |
0.48 |
|
|
$ |
(0.45 |
) |
Diluted |
|
$ |
0.23 |
|
|
$ |
(0.95 |
) |
|
$ |
0.42 |
|
|
$ |
(0.45 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used in computing net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
83,257 |
|
|
|
33,652 |
|
|
|
82,447 |
|
|
|
33,635 |
|
Diluted |
|
|
93,864 |
|
|
|
33,652 |
|
|
|
93,733 |
|
|
|
33,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASA SYSTEMS,
INC.RECONCILIATION OF SELECTED GAAP AND NON-GAAP
FINANCIAL MEASURES(unaudited) (in
thousands, except percentages and per share amounts)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Net Income to Non-GAAP Net Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
21,417 |
|
|
$ |
17,160 |
|
|
$ |
39,193 |
|
|
$ |
35,314 |
|
Stock-based compensation |
|
|
94 |
|
|
|
1,914 |
|
|
|
4,324 |
|
|
|
3,814 |
|
Follow-on
public offering expenses |
|
|
815 |
|
|
|
— |
|
|
|
815 |
|
|
|
— |
|
Tax
effect of excluded items |
|
|
(138 |
) |
|
|
126 |
|
|
|
(595 |
) |
|
|
(5 |
) |
Non-GAAP
net income |
|
$ |
22,188 |
|
|
$ |
19,200 |
|
|
$ |
43,737 |
|
|
$ |
39,123 |
|
Non-GAAP
net income margin |
|
|
32.3 |
% |
|
|
28.8 |
% |
|
|
27.7 |
% |
|
|
28.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Diluted Net Income (Loss) Per
Share Attributable to Common Stockholders
to Non-GAAP Diluted Net Income Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share attributable to common stockholders |
|
$ |
0.23 |
|
|
$ |
(0.95 |
) |
|
$ |
0.42 |
|
|
$ |
(0.45 |
) |
Cumulative dividends on convertible preferred stock |
|
|
— |
|
|
|
0.02 |
|
|
|
— |
|
|
|
0.03 |
|
Dividends
declared on convertible preferred stock |
|
|
— |
|
|
|
0.57 |
|
|
|
— |
|
|
|
0.57 |
|
Non-GAAP
adjustments to net income |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.05 |
|
|
|
0.05 |
|
Dilutive
convertible preferred stock and stock-based awards |
|
|
— |
|
|
|
0.57 |
|
|
|
— |
|
|
|
0.27 |
|
Non-GAAP diluted net
income per share |
|
$ |
0.24 |
|
|
$ |
0.23 |
|
|
$ |
0.47 |
|
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used in computing diluted net income (loss) per share |
|
|
93,864 |
|
|
|
33,652 |
|
|
|
93,733 |
|
|
|
33,635 |
|
Dilutive
effect of convertible preferred stock |
|
|
— |
|
|
|
40,382 |
|
|
|
— |
|
|
|
40,382 |
|
Dilutive
effect of stock options |
|
|
— |
|
|
|
9,082 |
|
|
|
— |
|
|
|
9,180 |
|
Dilutive
effect of restricted stock units |
|
|
— |
|
|
|
437 |
|
|
|
— |
|
|
|
420 |
|
Weighted-average shares
used in computing non-GAAP diluted net income per share |
|
|
93,864 |
|
|
|
83,553 |
|
|
|
93,733 |
|
|
|
83,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Net Income to Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
21,417 |
|
|
$ |
17,160 |
|
|
$ |
39,193 |
|
|
$ |
35,314 |
|
Stock-based compensation |
|
|
94 |
|
|
|
1,914 |
|
|
|
4,324 |
|
|
|
3,814 |
|
Follow-on
public offering expenses |
|
|
815 |
|
|
|
— |
|
|
|
815 |
|
|
|
— |
|
Depreciation and amortization |
|
|
2,366 |
|
|
|
1,841 |
|
|
|
4,668 |
|
|
|
3,569 |
|
Other
income (expense), net |
|
|
3,319 |
|
|
|
2,766 |
|
|
|
6,719 |
|
|
|
6,306 |
|
Provision
for (benefit from) income taxes |
|
|
(8,194 |
) |
|
|
(1,057 |
) |
|
|
(6,401 |
) |
|
|
46 |
|
Adjusted
EBITDA |
|
$ |
19,817 |
|
|
$ |
22,624 |
|
|
$ |
49,318 |
|
|
$ |
49,049 |
|
Adjusted
EBITDA margin |
|
|
28.8 |
% |
|
|
34.0 |
% |
|
|
31.3 |
% |
|
|
35.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASA SYSTEMS,
INC.RECONCILIATION OF SELECTED GAAP AND NON-GAAP
FINANCIAL MEASURES
(Continued)(unaudited) (in
thousands, except percentages and per share amounts)
|
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Reconciliation
of Net Cash Provided by Operating |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Activities to Free Cash Flow: |
Net cash
provided by operating activities |
|
$ |
31,260 |
|
|
$ |
7,605 |
|
|
$ |
82,368 |
|
|
$ |
21,021 |
|
Purchases
of property and equipment |
|
|
(1,997 |
) |
|
|
(1,792 |
) |
|
|
(4,501 |
) |
|
|
(3,650 |
) |
Free cash
flow |
|
$ |
29,263 |
|
|
$ |
5,813 |
|
|
$ |
77,867 |
|
|
$ |
17,371 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
Stock-Based Compensation Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
$ |
(72 |
) |
|
$ |
65 |
|
|
$ |
137 |
|
|
$ |
136 |
|
Research
and development |
|
|
(1,016 |
) |
|
|
462 |
|
|
|
1,002 |
|
|
|
978 |
|
Sales and
marketing |
|
|
235 |
|
|
|
258 |
|
|
|
610 |
|
|
|
535 |
|
General
and administrative |
|
|
947 |
|
|
|
1,129 |
|
|
|
2,575 |
|
|
|
2,165 |
|
Total |
|
$ |
94 |
|
|
$ |
1,914 |
|
|
$ |
4,324 |
|
|
$ |
3,814 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of
broadband products |
|
$ |
33,929 |
|
|
$ |
47,910 |
|
|
$ |
84,688 |
|
|
$ |
105,250 |
|
Capacity
expansions |
|
|
24,608 |
|
|
|
7,840 |
|
|
|
54,038 |
|
|
|
15,709 |
|
Product |
|
|
58,537 |
|
|
|
55,750 |
|
|
|
138,726 |
|
|
|
120,959 |
|
Service |
|
|
10,185 |
|
|
|
10,875 |
|
|
|
19,070 |
|
|
|
18,395 |
|
Total
revenue |
|
$ |
68,722 |
|
|
$ |
66,625 |
|
|
$ |
157,796 |
|
|
$ |
139,354 |
|
|
|
CASA SYSTEMS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(unaudited)(in thousands)
|
|
June 30, |
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
342,925 |
|
|
$ |
260,820 |
|
Accounts
receivable, net |
|
|
70,852 |
|
|
|
122,634 |
|
Inventory |
|
|
33,705 |
|
|
|
36,148 |
|
Prepaid
expenses and other current assets |
|
|
4,657 |
|
|
|
5,151 |
|
Prepaid
income taxes |
|
|
75 |
|
|
|
538 |
|
Total
current assets |
|
|
452,214 |
|
|
|
425,291 |
|
Property and equipment,
net |
|
|
29,237 |
|
|
|
29,363 |
|
Accounts receivable,
net of current portion |
|
|
3,243 |
|
|
|
4,710 |
|
Deferred tax
assets |
|
|
19,953 |
|
|
|
9,718 |
|
Other assets |
|
|
1,560 |
|
|
|
615 |
|
Total
assets |
|
$ |
506,207 |
|
|
$ |
469,697 |
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
16,251 |
|
|
$ |
15,833 |
|
Accrued
expenses and other current liabilities |
|
|
30,897 |
|
|
|
48,250 |
|
Accrued
income taxes |
|
|
841 |
|
|
|
118 |
|
Deferred
revenue |
|
|
31,467 |
|
|
|
34,224 |
|
Current
portion of long-term debt, net of unamortized debt issuance
costs |
|
|
2,168 |
|
|
|
2,156 |
|
Total
current liabilities |
|
|
81,624 |
|
|
|
100,581 |
|
Accrued income taxes,
net of current portion |
|
|
7,831 |
|
|
|
8,810 |
|
Deferred revenue, net
of current portion |
|
|
15,120 |
|
|
|
14,691 |
|
Long-term debt, net of
current portion and unamortized debt issuance costs |
|
|
294,368 |
|
|
|
295,459 |
|
Total
liabilities |
|
|
398,943 |
|
|
|
419,541 |
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
|
|
Common
stock |
|
|
86 |
|
|
|
81 |
|
Additional paid-in capital |
|
|
147,211 |
|
|
|
128,798 |
|
Accumulated other comprehensive income (loss) |
|
|
(309 |
) |
|
|
194 |
|
Accumulated deficit |
|
|
(39,724 |
) |
|
|
(78,917 |
) |
Total
stockholders' equity |
|
|
107,264 |
|
|
|
50,156 |
|
Total
liabilities and stockholders' equity |
|
$ |
506,207 |
|
|
$ |
469,697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASA SYSTEMS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (unaudited)(in thousands)
|
|
Six Months Ended
June 30, |
|
|
|
2018 |
|
|
2017 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
39,193 |
|
|
$ |
35,314 |
|
Adjustments to
reconcile net income to net cash provided by operating |
|
|
|
|
|
|
|
|
activities: |
Depreciation and amortization |
|
|
4,668 |
|
|
|
3,569 |
|
Stock-based compensation |
|
|
4,324 |
|
|
|
3,814 |
|
Deferred
income taxes |
|
|
(10,253 |
) |
|
|
959 |
|
Decrease
in provision for doubtful accounts |
|
|
(6 |
) |
|
|
— |
|
Excess
and obsolete inventory valuation adjustment |
|
|
(1,443 |
) |
|
|
245 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
47,265 |
|
|
|
36,199 |
|
Inventory |
|
|
3,079 |
|
|
|
(3,562 |
) |
Prepaid
expenses and other assets |
|
|
(452 |
) |
|
|
2,195 |
|
Prepaid
income taxes |
|
|
463 |
|
|
|
(7,616 |
) |
Accounts
payable |
|
|
3,170 |
|
|
|
(14,881 |
) |
Accrued
expenses and other current liabilities |
|
|
(5,113 |
) |
|
|
(7,077 |
) |
Accrued
income taxes |
|
|
(245 |
) |
|
|
(8,629 |
) |
Deferred
revenue |
|
|
(2,282 |
) |
|
|
(19,509 |
) |
Net cash
provided by operating activities |
|
|
82,368 |
|
|
|
21,021 |
|
Cash flows
(used in) provided by investing activities: |
|
|
|
|
|
|
|
|
Purchases of property
and equipment |
|
|
(4,501 |
) |
|
|
(3,650 |
) |
Proceeds from
maturities of marketable securities |
|
|
— |
|
|
|
14,589 |
|
Net cash
(used in) provided by investing activities |
|
|
(4,501 |
) |
|
|
10,939 |
|
Cash flows
provided by (used in) financing activities: |
|
|
|
|
|
|
|
|
Principal repayments of
debt |
|
|
(1,651 |
) |
|
|
(1,645 |
) |
Proceeds from exercise
of stock options |
|
|
10,147 |
|
|
|
160 |
|
Payments of dividends
and equitable adjustments |
|
|
(5,486 |
) |
|
|
(197,153 |
) |
Follow-on offering
selling shareholders profit disgorgement |
|
|
3,811 |
|
|
|
— |
|
Payments of initial
public offering costs |
|
|
(1,148 |
) |
|
|
(1,511 |
) |
Employee taxes paid
related to net share settlement of equity awards |
|
|
— |
|
|
|
(3,788 |
) |
Net cash
provided by (used in) financing activities |
|
|
5,673 |
|
|
|
(203,937 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(429 |
) |
|
|
337 |
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash |
|
|
83,111 |
|
|
|
(171,640 |
) |
Cash, cash equivalents
and restricted cash at beginning of period |
|
|
260,820 |
|
|
|
329,554 |
|
Cash, cash equivalents
and restricted cash at end of period |
|
$ |
343,931 |
|
|
$ |
157,914 |
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for
interest |
|
$ |
8,834 |
|
|
$ |
8,134 |
|
Cash paid for income
taxes |
|
$ |
3,554 |
|
|
$ |
15,096 |
|
Supplemental
disclosures of non-cash operating, investing |
|
|
|
|
|
|
|
|
and financing activities: |
Purchases of property
and equipment included in accounts payable |
|
$ |
373 |
|
|
$ |
282 |
|
Prepaid expenses and
other current assets included in accounts payable |
|
$ |
405 |
|
|
$ |
526 |
|
Deferred public
offering costs included in accounts payable and accrued
expenses |
|
$ |
— |
|
|
$ |
85 |
|
and other
current liabilities |
Unpaid equitable
adjustments included in accrued expenses |
|
$ |
5,174 |
|
|
$ |
10,212 |
|
and other
current liabilities |
Release of customer
incentives included in accounts receivable and |
|
$ |
5,932 |
|
|
$ |
13,415 |
|
accrued
expenses and other current liabilities |
|
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