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8x8, Inc. Announces Record First Quarter Fiscal 2013 Results

Stocks in this article: EGHT

NOTE: 8x8, the 8x8 logo, and 8x8 Virtual Office are trademarks of 8x8, Inc. All other trademarks are the property of their respective owners.

   
8x8, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts; unaudited)
 
Three Months Ended
June 30,
2012   2011  
Service revenues $ 23,172 $ 17,021
Product revenues 2,080   1,486  
Total revenues 25,252   18,507  
 
Operating expenses:
Cost of service revenues 5,686 3,815
Cost of product revenues 2,710 2,270
Research and development 1,826 1,407
Sales and marketing 10,541 8,184
General and administrative 2,064 1,225
Gain on patent sale (11,965 ) -  
Total operating expenses 10,862   16,901  
Income from operations 14,390 1,606
Other income, net 8   20  
Income before provision (benefit) for income taxes 14,398 1,626
Provision (benefit) for income taxes 5,781   (321 )
Net income $ 8,617   $ 1,947  
 
Net income per share:
Basic $ 0.12 $ 0.03
Diluted $ 0.12 $ 0.03
 
Weighted average number of shares:
Basic 70,717 62,264
Diluted 74,110 65,808
       
8x8, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, unaudited)
 
 
June 30, March 31,
2012   2012
ASSETS
Current assets
Cash and cash equivalents $ 36,274 $ 22,426
Investments 1,968 1,942
Accounts receivable, net 2,837 2,279
Inventory 593 581
Deferred tax assets 1,952 7,730
Other current assets 946 928
Total current assets 44,570 35,886
Property and equipment, net 5,240 3,820
Intangible assets, net 11,265 11,622
Goodwill 25,150 25,150
Deferred tax assets, non-current 53,977 53,977
Other assets 422 278
Total assets $ 140,624 $ 130,733
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 6,375 $ 5,476
Accrued compensation 3,083 3,105
Accrued warranty 405 387
Deferred revenue 708 891
Other accrued liabilities 2,409 2,356
Total current liabilities 12,980 12,215
 
Other liabilities 39 68
Total liabilities 13,019 12,283
 
Total stockholders' equity 127,605 118,450
Total liabilities and stockholders' equity $ 140,624 $ 130,733
   
8x8, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 
Three Months Ended
June 30,
2012   2011  
Cash flows from operating activities:
Net income $ 8,617 $ 1,947
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 505 338
Amortization 357 26
Stock-based compensation 556 266
Deferred income tax provision (benefit) 5,778 (336 )
Other 75 60
Changes in assets and liabilities:
Accounts receivable, net (626 ) (255 )
Inventory (19 ) 527
Other current and noncurrent assets (148 ) 60
Deferred cost of goods sold (14 ) 5
Accounts payable (35 ) (1,085 )
Accrued compensation (22 ) 207
Accrued warranty 18 16
Accrued taxes and fees 112 123
Deferred revenue (183 ) (144 )
Other current and noncurrent liabilities (45 ) 385  
Net cash provided by operating activities 14,926   2,140  
 
Cash flows from investing activities:
Purchases of property and equipment (1,048 ) (185 )
Acquisition of businesses, net of cash acquired -   (715 )
Net cash used in investing activities (1,048 ) (900 )
 
Cash flows from financing activities:
Capital lease payments (43 ) (9 )
Repurchase of common stock (74 ) (1,038 )
Proceeds from issuance of common stock under employee stock plans 87   267  
Net cash used in financing activities (30 ) (780 )
Net increase in cash and cash equivalents 13,848 460
 
Cash and cash equivalents at the beginning of the period 22,426   16,474  
Cash and cash equivalents at the end of the period $ 36,274   $ 16,934  
                     
8x8, Inc.
Selected Operating Statistics
 
Three Months Ended

June 30, 2011

   

Sept. 30, 2011

   

Dec. 31, 2011

   

March 31, 2012

   

June 30, 2012

Gross business customer additions (1) 2,897 3,176 2,836 2,892 2,943
Gross business customer cancellations (less cancellations within 30 days of sign-up) 1,593 1,620 1,642 1,697 1,458
Business customer churn (less cancellations within 30 days of sign-up) (2) 2.1 % 2.1 % 2.0 % 2.0 % 1.7 %
Total business customers (3) 25,455 26,727 27,677 28,671 29,913
 
Business customer average monthly service revenue per customer (4) $ 200 $ 207 $ 239 $ 244 $ 250
 
Overall service margin 78 % 77 % 77 % 76 % 75 %
Overall product margin -53 % -45 % -24 % -15 % -30 %
Overall gross margin 67 % 66 % 68 % 68 % 67 %
 
Business subscriber acquisition cost per service (5) $ 89 $ 101 $ 92 $ 99 $ 97
Average number of services subscribed to per business customer 8.4 9.0 9.4 9.8 10.1
Business customer subscriber acquisition cost (6) $ 743 $ 906 $ 867 $ 965 $ 980

(1) Includes 250 customers acquired directly from our acquisition in the second fiscal quarter of 2012 from Contactual, Inc. and does not include customers of Virtual Office Solo or Zerigo, Inc. ("Zerigo").

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