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TheStreet Open House

Acme Packet Reports Record Revenue And Earnings In Second Quarter Of 2011

Stocks in this article: APKT

Acme Packet, Inc. (NASDAQ: APKT), the leader in session delivery network solutions, today announced record results for the quarter ended June 30, 2011 and raised its business outlook for 2011. All earnings per share results are on a fully diluted basis unless otherwise noted.

Results for the Second Quarter of 2011

Total revenue in the second quarter of 2011 was $79.7 million, compared to $53.3 million in the second quarter of 2010 and $74.0 million in the first quarter of 2011. Net income in the second quarter of 2011 was $14.0 million, or $0.20 per share, compared to $9.7 million, or $0.14 per share, in the second quarter of 2010 and $13.7 million, or $0.19 per share, in the first quarter of 2011. Net income on a non-GAAP 1 basis in the second quarter of 2011 was $20.4 million, or $0.29 per share, compared to $12.5 million, or $0.19 per share, in the second quarter of 2010, and $18.9 million, or $0.27 per share, in the first quarter of 2011.

Company Raises Business Outlook for 2011

The Company today raised its business outlook for 2011. The Company’s outlook is based on the current indications for its business, which may change at any time. A reconciliation of the Company’s expected GAAP to non-GAAP business outlook, and a statement as to the use of non-GAAP financial measures, is included at the end of this press release.

 
  Business Outlook for Year Ending December 31, 2011
Estimate Issued April 26, 2011 Issued July 21, 2011
Total revenue (in millions) $310-$315 $315-$320
Total revenue growth rate Approximately 35% Approximately 36%-38%
Non-GAAP 1 EPS $1.10-$1.15 $1.14-$1.18
Total non-GAAP 1 EPS growth rate Approximately 40% Approximately 43%-48%
Diluted share count (in millions)   71.5 71.5
 

Company to Host Live Conference Call and Webcast

The Company’s management team plans to host a live conference call and webcast at 4:30 p.m. eastern time today to discuss the financial results as well as management’s outlook for the business. The conference call may be accessed in the United States by dialing 1.800.230.1093 and using access code “APKT”. The conference call may be accessed outside of the United States by dialing +1.612.288.0337 and using access code “APKT”. The conference call will be simultaneously webcast on the Company’s investor relations website, which can be accessed at www.ir.acmepacket.com. A replay of the conference call will be available approximately two hours after the call by dialing 1.800.475.6701 or +1.320.365.3844 and using access code 209417 or by accessing the webcast replay on the Company’s investor relations website.

__________________

1 A reconciliation of GAAP to non-GAAP results, and a statement on the use of non-GAAP financial measures, is included at the end of this press release.

About Acme Packet

Acme Packet (NASDAQ: APKT), the leader in session delivery network solutions, enables the trusted, first-class delivery of next-generation voice, data and unified communications services and applications across IP networks. Our Net-Net product family fulfills demanding security, service assurance and regulatory requirements in service provider, enterprise and contact center networks. Based in Bedford, Massachusetts, Acme Packet designs and manufactures its products in the USA, selling them through over 150 reseller partners worldwide. More than 1,440 customers in 105 countries have deployed over 13,000 Acme Packet systems, including 90 of the top 100 service providers and 34 of the Fortune 100. For more information visit www.acmepacket.com.

Acme Packet, Inc. Safe Harbor Statement

Statements contained herein that are not historical fact (including those in the section “Company Raises Business Outlook for 2011”) may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may relate to, among other things, expected financial and operating results, expected growth rates, future stock-based compensation and amortization expenses, future business prospects and market conditions. Such forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those anticipated. These include, but are not limited to: the amount of stock-based compensation awarded; the applicable Company stock price used to determine stock-based compensation; the exercise pattern of employee stock options; difficulties expanding the Company’s customer base; difficulties leveraging market opportunities; difficulties providing solutions that meet the needs of customers; poor product sales; long sales cycles; difficulties developing new products; difficulties in relationships with vendors and partners; higher risks in international operations; difficulties managing rapid growth; difficulties managing the Company’s financial performance; the ability to hire and retain employees and appropriately staff operations; the Company’s cash needs; the impact of new accounting pronouncements and increased competition. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in the Company’s recent filings with the Securities and Exchange Commission, including those factors discussed under the caption “Risk Factors” in such filings.

   

Acme Packet, Inc.

Condensed Consolidated Statements of Income

(in thousands, except share and per share data)

(unaudited)

 
Three Months Ended June 30, Six Months Ended June 30,
  2011       2010     2011       2010  
Revenue:    
Product $ 64,688 $ 42,031 $ 124,430 $ 84,124
Maintenance, support and service   15,045     11,305     29,270     20,262  
Total revenue   79,733     53,336     153,700     104,386  
 
Cost of revenue:
Product 11,367 7,434 21,312 14,983
Maintenance, support and service   2,525     2,140     5,531     4,408  
Total cost of revenue   13,892     9,574     26,843     19,391  
 
Gross profit   65,841     43,762     126,857     84,995  
 
Operating expenses:
Sales and marketing 24,736 16,623 48,439 33,050
Research and development 12,719 8,646 24,013 17,339
General and administrative 5,788 3,595 10,365 6,879
Merger and integration-related costs   -     -     180     -  
Total operating expenses   43,243     28,864     82,997     57,268  
 
Income from operations 22,598 14,898 43,860 27,727
 
Other (expense) income, net   (196 )   176     (94 )   165  
 
Income before provision for income taxes 22,402 15,074 43,766 27,892
 
Provision for income taxes   8,394     5,345     16,049     9,830  
 
Net income $ 14,008   $ 9,729   $ 27,717   $ 18,062  
 
Net income per share:
Basic $ 0.21 $ 0.16 $ 0.42 $ 0.30
Diluted $ 0.20 $ 0.14 $ 0.39 $ 0.27
 

Weighted average number of common shares used inthe calculation of net income per share:

Basic 66,141,163 61,488,059 65,623,359 60,659,321
Diluted 71,033,614 67,184,884 70,839,456 66,118,943
 
Margin:
Gross margin 82.6 % 82.0 % 82.5 % 81.4 %
Operating margin 28.3 % 27.9 % 28.5 % 26.6 %
Net margin 17.6 % 18.2 % 18.0 % 17.3 %

 

Acme Packet, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

June 30, 2011

 

December 31,2010

Assets
Current assets:
Cash and cash equivalents $ 120,571 $ 91,669
Short-term investments 192,855 179,024
Accounts receivable, net 53,520 34,797
Inventory 9,721 6,662
Deferred product costs 1,048 3,572
Deferred tax asset 3,814 3,814
Income taxes receivable 14,131 9,979
Other current assets   4,760     3,231  
Total current assets 400,420 332,748
Long-term investments 5,000 5,030
Property and equipment, net 21,282 17,156
Acquired intangible assets, net 9,592 9,468
Goodwill 3,269 -
Deferred tax asset, net 14,802 14,802
Other assets   320     940  
Total assets $ 454,685   $ 380,144  
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 8,372 $ 7,161
Accrued expenses and other current liabilities 9,591 14,629
Deferred revenue   32,897     31,998  
Total current liabilities   50,860     53,788  
 
Deferred revenue   1,999     1,546  
Deferred rent   4,584     4,265  
 
Stockholders’ equity:
Common stock 73 71
Additional paid-in capital 315,094 266,114
Treasury stock, at cost (37,522 ) (37,522 )
Other comprehensive income 32 34
Retained earnings   119,565     91,848  
Total stockholders’ equity   397,242     320,545  
Total liabilities and stockholders’ equity $ 454,685   $ 380,144  
 

   

Condensed Consolidated Statements of Cash Flow

(in thousands)

(unaudited)

 
Three Months Ended Six Months Ended
June 30, June 30,
  2011     2010   2011     2010
Cash provided by operating activities $ 8,664   $ 15,061 $ 20,205   $ 23,034
Cash used in investing activities 20,729 22,541 25,002 49,182
Cash provided by financing activities 13,712 17,443 33,699 26,210
 

Acme Packet, Inc.

Statement on Use of Non-GAAP Financial Measures and

Reconciliation of Non-GAAP Net Income and Non-GAAP Net Income Per Share

(in thousands, except share and per share data)

(unaudited)

Statement on Use of Non-GAAP Financial Measures:

To supplement its condensed consolidated financial statements presented in accordance with accounting principles generally accepted in the United States (“GAAP”), the Company discloses certain non-GAAP financial measures, including “non-GAAP net income”, “net income on a non-GAAP basis”, “non-GAAP net income per share”, “non-GAAP EPS” and “net income per share on a non-GAAP basis”. These non-GAAP financial measures are not presented in accordance with GAAP and are not meant to be a substitute for the most directly comparable GAAP measures of “net income”, “EPS” or “net income per share”. Rather, these non-GAAP financial measures should be evaluated in conjunction with its most directly comparable GAAP financial measure and the Company’s financial statements as a whole.

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