SUNNYVALE, Calif., Feb. 9, 2015 /PRNewswire/ -- Meru Networks,
Inc. (NASDAQ:MERU), a leader in intelligent Wi-Fi networking and
the only wireless LAN vendor to have received certification of
OpenFlow™ conformance, today announced its financial results for
the fourth quarter and full year ended December 31, 2014.
Fourth Quarter 2014 Financial Results
Total revenues
for the fourth quarter of 2014 were $21.7 million, down 28% from $30.2 million in the fourth quarter of
2013. Product revenues for the fourth quarter of 2014 were
$16.9 million, down 33% from the
$25.3 million reported in the fourth
quarter of 2013.
Net loss as reported in accordance with GAAP was $5.2
million for the fourth quarter of 2014, or a net loss
of ($0.22) per basic and diluted share, compared to a net loss
of $2.1 million, or a net loss of ($0.09) per basic
and diluted share, for the same period of 2013.
Meru reported a fourth quarter 2014 non-GAAP net loss of
$4.0 million, or ($0.17) loss per basic and diluted share,
compared to a non-GAAP net loss of $0.1
million, or ($0.00) loss per
basic and diluted share, for the same period of 2013. Non-GAAP
results for the fourth quarter of 2014 exclude the impact of
stock-based compensation expense of $1.2 million. Non-GAAP results for the
fourth quarter of 2013 exclude the impact of stock-based
compensation expense of $2.0 million and the amortization of other
intangibles of $0.1 million. Please
refer to the reconciliation of Meru's GAAP to non-GAAP results
provided at the end of this release.
Full Year 2014 Financial Results
Revenues for the year
ended December 31, 2014 were
$90.9 million, a decrease of 14% from
$105.7 million in 2013.
Products revenues for 2014 were $72.0
million, down 17% from the $87.2
million reported in 2013. Net loss as reported
in accordance with GAAP for 2014 was $20.9
million, or ($0.89) per basic
and diluted share, compared to a net loss of $12.4 million, or ($0.57) per basic and diluted share in 2013.
Non-GAAP net loss for 2014 was $14.4
million, or ($0.61) loss per
basic and diluted share, compared to non-GAAP net loss of
$5.4 million, or ($0.25) loss per basic and diluted share in
2013. Non-GAAP results for 2014 exclude the impact of
stock-based compensation expense of $5.6
million, restructuring costs of $0.7
million, and amortization of other intangibles and
amortization of the fair value of a common stock warrant issued in
connection with debt financing totaling $0.2
million. Non-GAAP results for 2013 exclude stock-based
compensation expense of $6.5 million,
and amortization of acquisition-related intangibles and
amortization of the fair value of a common stock warrant issued in
connection with debt financing totaling $0.4
million.
"2014 was a challenging year for Meru, impacted heavily by the
lack of E-rate funding for K-12 schools in the U.S. It was
also a year of investment in new products and new services,
designed to position us for growth," said Dr. Bami Bastani, president and CEO of Meru
Networks. "To accelerate our path to profitability we have
restructured the company, added Tier 1 distributors, and
supplemented our product portfolio to appeal to the faster growing
segments of the market. We have the highest performing
802.11ac product portfolio, we recently announced the Meru app
store, and tomorrow we will launch Meru
XPress Cloud, serving the SME market."
Conference Call Information
Meru will host a conference call for analysts and investors to
discuss its fourth quarter and full year 2014 results
today, February 9, at 2:00 p.m. Pacific
Time (5:00 p.m. Eastern
Time). To join the live call, individuals may do so by
dialing (877) 852-2926 for domestic callers and (253) 237-1123 for
international callers. The conference ID for the call is
62184717.
The live and archived webcast of the fourth quarter 2014
financial results conference call will also be available at the
investor relations section of Meru's website at
http://investors.merunetworks.com.
About Meru Networks
Meru Networks (NASDAQ: MERU) is a leader in intelligent
802.11ac Wi-Fi solutions delivering uninterrupted user experience
for education, healthcare, hospitality and enterprise. The Meru
open-standards-based architecture is designed to enable unified
management of wired and wireless networks. Its end-to-end
application QoS enables enforceable service-level agreements. Meru
provides top performance and high capacity in
high-density environments. Visit www.merunetworks.com or
call (408) 215-5300 for more information.
©2015 Meru Networks. Meru and Meru
Networks are registered trademarks and the Meru logo is a
trademark of Meru Networks, Inc. in the United States. OpenFlow™ is a trademark of
the Open Networking Foundation.
Cautionary Statement Regarding Forward Looking
Statements
All statements other than statements of historical facts are
statements that can be deemed forward-looking statements, including
any statements of expectations or beliefs. These
forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from those in
the forward looking statements. Risks and uncertainties that could
cause our results to differ materially from those expressed or
implied by such forward-looking statements include, among others:
business and economic conditions and growth trends in the
networking industry, our vertical markets and various geographic
regions; competition in the industry; our future capital needs may
change; changes in overall information technology spending; failure
to develop new products; and those risks and uncertainties
described in documents filed with or furnished to
the Securities and Exchange Commission ("SEC") by Meru,
including under the caption "Risk Factors" in Meru's Quarterly
Report on Form 10-Q filed with
the SEC on October 30, 2014, and any subsequent
reports filed with the SEC. All forward-looking statements in
this press release are based on information available to Meru as of
the date hereof, and Meru assumes no obligation to update these
forward-looking statements, except as required by law.
Non-GAAP Financial Measures
In addition to reporting financial results in accordance with
generally accepted accounting principles, or GAAP, the Company
believes it is appropriate to report certain non-GAAP financial
measures.
The Company's non-GAAP financial measures include the
adjustments as follows:
- Stock‑Based Compensation. When evaluating the
performance of its consolidated results, Meru does not
consider stock‑based compensation charges. Likewise, the Meru
management team excludes stock‑based compensation expense from its
operating plans. In contrast, the Meru management team is
held accountable for cash‑based compensation and such amounts are
included in its operating plans. Further, when considering the
impact of equity award grants, Meru places a greater
emphasis on overall stockholder dilution rather than the accounting
charges associated with such grants. Meru believes it is
useful to provide a non‑GAAP financial measure that excludes
stock‑based compensation in order to better understand the
long‑term performance of its business.
- Restructuring Costs. The Company excludes restructuring
costs because such charges are isolated one-time charges and the
Company does not expect them to recur in the ordinary course of its
business. The Company further believes those charges are not
directly related to its ongoing business results and do not reflect
expected future operating expenses.
- Amortization of intangible assets. The Company excludes
amortization of acquired intangible assets because it is non‑cash
in nature and because the Company believes that the non‑GAAP
financial measures excluding this item provide meaningful
supplemental information regarding operational performance and
liquidity. In addition, excluding this item from various non‑GAAP
measures facilitates internal comparisons to historical operating
results and comparisons to competitors' operating results.
- Amortization of a common stock warrant issued in connection
with debt financing. The Company excludes amortization of
a common stock warrant issued in connection with debt financing
when evaluating the performance of its consolidated results because
the Company believes these costs are unusual in nature and the
Company does not expect them to recur in the ordinary course of its
business. The Company further believes these costs are
unrelated to the ongoing operation of the business in the ordinary
course.
The Company's non-GAAP financial measures include the
following:
- Non‑GAAP net loss - Non-GAAP net loss is net loss as
reported on the Company's condensed consolidated statements of
operations, excluding the impact of stock‑based compensation
expense, restructuring costs, amortization of intangible assets
related to the Company's acquisition of Identity Networks and
amortization of the fair value of a common stock warrant issued in
connection with debt financing.
- Non-GAAP net loss per share of common stock, basic and
diluted - Non-GAAP net loss per share of common stock, basic
and diluted is net loss per share of common stock, basic, as
reported on the Company's condensed consolidated statements of
operations excluding the impact of stock‑based compensation
expense, restructuring costs, amortization of intangible assets
related to the Company's acquisition of Identity Networks, and
amortization of the fair value of a common stock warrant issued in
connection with debt financing.
- Non-GAAP Gross margin - Non-GAAP Gross margin is gross
margin as reported on the Company's condensed consolidated
statements of operations excluding the impact of stock‑based
compensation expense and amortization of intangible assets related
to the Company's acquisition of Identity Networks.
- Non‑GAAP loss from operations - Non-GAAP loss from
operations is loss from operations as reported on the Company's
condensed consolidated statements of operations, excluding impact
of stock‑based compensation expense, restructuring costs, and
amortization of intangible assets related to the Company's
acquisition of Identity Networks.
Meru believes that its non‑GAAP measures provide useful
information to management and investors regarding financial and
business trends relating to its financial condition and results of
operations. Meru also believes the non‑GAAP measures provide useful
supplemental information for investors to evaluate its operating
results in the same manner as the research analysts that follow
Meru, all of whom will present non‑GAAP projections in their
published reports. As such, the non‑GAAP measures provided by Meru
facilitate a more direct comparison of its performance with the
financial projections published by the analysts as well as its
competitors, many of whom report financial results on a non‑GAAP
basis. The economic substance behind Meru's decision to use such
non‑GAAP measures is that such measures approximate its
controllable operating performance more closely than the most
directly comparable GAAP financial measures. For example, Meru's
management has no control over certain variables that have a major
influence in the determination of stock‑based compensation such as
the volatility of its stock price and changing interest rates. In
addition, Meru's management does not consider the amortization of
intangible assets related to the Company's acquisition of Identity
Networks relevant when comparing its performance to prior periods.
Meru believes that all of these excluded expenses do not accurately
reflect the underlying performance of its continuing operations for
the period in which they are incurred, even though these excluded
items may be incurred and reflected in Meru's GAAP financial
results.
The material limitation associated with the use of non‑GAAP
financial measures is that the non‑GAAP measures may not reflect
the full economic impact of Meru's activities. Meru's non‑GAAP
measures may be calculated differently than non‑GAAP financial
information disclosed by other companies. Accordingly, investors
are cautioned not to place undue reliance on non‑GAAP
information.
Investor contact:
Ed Keaney
Market Street Partners
(415) 445-3238
ir@merunetworks.com
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SOURCE Meru Networks, Inc.