8/16...CFLO.. QTR Net Sales of $22.4 Million
Pro Forma Net Loss of $0.14 Per Share( expected 17)
SUNNYVALE, Calif.--(BUSINESS WIRE)--Aug. 16, 2000--CacheFlow Inc. (Nasdaq:CFLO - news), the leading provider of content intelligent networking solutions, today reported results for its first quarter of fiscal year 2001 ended July 31, 2000.
First quarter net sales increased 75 percent sequentially to a record $22.4 million, from $12.8 million in the prior quarter. Net loss for the quarter, excluding charges for stock compensation and goodwill amortization, was $4.7 million, or a loss of $0.14 per share. During the prior quarter, the net loss was $6.2 million, or $0.20 per share, excluding stock compensation expense. Additionally, gross margins increased a full percentage point to 63.0% from 62.0% in the prior quarter, which was attributable to reduced manufacturing costs as volume production continues to scale.
Net loss for the quarter, including stock compensation and goodwill amortization, was $25.3 million, or $0.77 per share, compared with $17.7 million, or $0.56 per share, in the prior quarter.
``CacheFlow is off to a terrific start for fiscal year 2001. The market is very strong and CacheFlow continues to grow faster than the overall market which reflects the singular focus of the company as well as the strength and breadth of our product offering,'' said Brian NeSmith, CacheFlow President and Chief Executive Officer. ``The Internet is evolving -- moving from basic packet routing to content intelligent networks and CacheFlow is leading the way. CacheFlow is expanding the overall market for these networks by delivering a complete solution, including hardware appliances, content management tools, and strong industry partnerships. CacheFlow introduced the first Web Server Accelerator for content providers enabling Web sites or Web hosting companies to dramatically improve scalability and response time. CacheFlow delivered the first integrated streaming and Web caching appliance enabling customers to dramatically improve streaming quality. Working with over 20 partners we announced the Adaptive Content Exchange (ACE) initiative in this quarter to provide a complete solution for Web content from the content creation to its final delivery. We continue to see growing opportunities in both enterprises and service providers as the market expands,'' NeSmith concluded.
Key Milestones:
Number One Market Position:
CacheFlow is the number one Internet caching appliance vendor. CacheFlow's relentless focus on delivering best-of-class caching appliances that meet customer-specific needs resulted in CacheFlow's ability to achieve this milestone. The market is rapidly moving toward the appliance-based solution for scalability, performance and ease of implementation. CacheFlow will leverage its appliance foundation with the introduction of specialized hardware devices and content routing protocols that will drive next generation content intelligent networks. For more detail, see the press release issued today.
Web Server Acceleration:
To capitalize on new market opportunities for Web server acceleration, CacheFlow introduced the industry's first and only specialized content accelerator for scaling and accelerating Web sites. The server accelerator also serves as a platform to support SSL acceleration, Denial of Service attack detection and protection, and dynamic content creation, creating new opportunities for CacheFlow's products in the future. CacheFlow strengthened its market leadership in Web server acceleration through several strategic partnerships.
Exodus teamed with CacheFlow to deliver a new Web Server Acceleration Service to Exodus' hosted clients. The new Exodus Web Server Acceleration Service will utilize CacheFlow server accelerators to deliver faster response times and higher levels of scalability to Web sites, expanding online revenue opportunities and creating higher customer loyalty.
Akamai and CacheFlow strengthened their strategic alliance in the quarter. Akamai will sell CacheFlow server accelerators with its Internet content delivery service solutions. The combined solution strengthens content-acceleration infrastructures, helping E-commerce and content sites better serve online customers through enhanced performance, scalability and reliability.
Lycos, a leading Web portal, selected CacheFlow technology for accelerating performance throughout the Lycos Network of Web sites. By enhancing its site infrastructure with CacheFlow, Lycos enabled users of its leading search engine, community, content, email and e-commerce sites to experience improved response times.
Web Server Acceleration represents a major new market for CacheFlow. CacheFlow is uniquely positioned to grow this market with the best product, the focus on increased server acceleration functionality, and a strong emphasis on partners to leverage our distribution presence.
Content Distribution Networks:
Customers are deploying CacheFlow products in content distribution networks for Web, streaming and application content. Customers are deploying CacheFlow based content distribution networks to deliver Web, streaming and application content quickly and reliably by moving content closer to users. In addition, CacheFlow CDNs deliver new revenue-generating opportunities, greater profitability and improved customer satisfaction for Internet data centers and tier-one Internet service providers.
In cooperation with Sportal.com and PSINet, Euro2000 -- the official site of the 2000 European Soccer championships -- deployed CacheFlow accelerators and content management tools across data centers worldwide, and distributed real-time tournament content and live action multi-media to site visitors. The success of the site was extraordinary, breaking the previous Guinness World record for traffic volume to an event-based Web site.
CacheFlow introduced CacheFlow Content Manager -- a Java-based solution that simplifies the management of content across a globally distributed network. Content manager transparently synchronizes content between servers and caches to ensure that reliable and fresh content is delivered to the right user at the right time. Content Manager also allows customers to closely monitor, report and bill on content usage and performance as well as define service level agreements. Content Manager helps content and service providers manage large volumes of frequently changing content and deliver a high level of customer service through an optimized content delivery infrastructure.
CacheFlow expects to make major inroads in this market over the next year. CacheFlow's key strengths are company and product focus, appliance network elements to ease deployment and operational burdens, and sophisticated routing and load balancing mechanisms to handle any type of failure or network congestion.
Web-based Streaming:
With the exploding demand for streaming audio and video content over the Internet, optimization of existing networks to handle these large data flows is required to deliver a high quality of service to users.
Farmclub.com utilizes CacheFlow's optimized streaming appliance to deliver high quality audio and video content to its millions of users worldwide. As a result of the implementation of the CacheFlow solution, Farmclub.com is seeing significant end-user response time improvements and increased server capacity.
Through joint development with RealNetworks, CacheFlow delivered the industry's only Real-certified streaming appliance for splitting and caching both live and on-demand video and audio content. The major boosts in viewer/listener quality and audience reach delivered by the CacheFlow streaming appliance makes applications such as Web broadcasts and online training practical using existing bandwidth. CacheFlow committed support for Microsoft Windows Media and Apple's Quicktime, as well as MP3, Flash and MPEG as integrated streaming applications, and formats.
Integrated, single-box solutions for Web caching and streaming are becoming essential for enterprise customers. The CacheFlow appliance solution delivers substantial improvements in the end-user experience as well as large cost savings for enterprises.
Next Generation Content Networks:
New Web applications and Internet access methods require a new layer of Internet infrastructure to deliver content intelligent networks. This requires specialized hardware devices and content routing protocols that work together to deliver static and dynamically generated content to users at edge networks across geographically dispersed locations.
CacheFlow successfully completed its acquisition and integration of Springbank Networks. Springbank's technology is designed to accelerate access to both static and dynamic objects using modular, highly reliable custom hardware and new content routing protocols. Together, CacheFlow and Springbank technologies will drive significant advancements in infrastructure scalability, performance and reliability for content distribution networks.
CacheFlow introduced the industry's only comprehensive partnering initiative to drive the next generation model for delivery of content intelligent networks -- the Adaptive Content Exchange (ACE) partner initiative already includes 20 leading content vendors. Through partner collaboration, ACE allows customers to speed time to market for delivery of their content intelligent networks.
About CacheFlow Inc.
CacheFlow is focused on building a new layer of content intelligent infrastructure that makes the Internet content-smart. CacheFlow's market leading caching appliances and innovative content delivery technologies enable enterprises, service providers and content providers to deliver the right content to the right place at the right time. Based in Sunnyvale, California, CacheFlow can be contacted via telephone at 408/220-2200, fax at 408/220-2250 or email at info@cacheflow.com.
The statements contained in this press release that are not purely historical are forward-looking statements, including statements regarding CacheFlow's expectations, beliefs, intentions or strategies regarding the future. All forward-looking statements included in this press release are based upon information available to CacheFlow as of the date hereof, and CacheFlow assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. These and other risks relating to CacheFlow's business are set forth in CacheFlow's Form 10-K for the year ended April 30, 2000, and other reports filed from time to time with the Securities and Exchange Commission.
Note to Editors: CacheFlow is a registered trademark of CacheFlow Inc. in the U.S. and worldwide. All other trademarks mentioned in this document are the property of their respective owners.
CACHEFLOW INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except per-share amounts)
Three Months Ended
July 31,
2000 1999
Net sales $ 22,445 $ 3,612
Cost of goods sold 8,300 1,380
Gross profit 14,145 2,232
Operating expenses:
Research and development 4,722 1,613
Sales and marketing 14,008 3,481
General and administrative 1,965 667
Stock compensation 10,775 2,992
Goodwill amortization 9,833 -
Total operating expenses 41,303 8,753
Operating loss (27,158) (6,521)
Interest income (expense), net 1,916 (36)
Net loss before income taxes (25,242) (6,557)
Provision for income taxes 72 -
Net loss $ (25,314) $ (6,557)
Basic and diluted net loss per common share $ (0.77) $ (0.80)
Shares used in computing basic and diluted
net loss per common share 32,723 8,236
Pro forma basic and diluted net loss per
common share $ (0.77) $ (0.30)
Shares used in computing pro forma basic and
diluted net loss per common share (a) 32,723 21,967
Pro forma net loss per common share,
excluding stock compensation expense
and goodwill amortization:
Net loss $ (25,314) $ (6,557)
Add: Stock compensation 10,775 2,992
Add: Goodwill amortization 9,833 -
Net loss excluding stock compensation
expense and goodwill amortization $ (4,706) $ (3,565)
Pro forma basic and diluted net loss
per common share excluding stock
compensation expense
and goodwill amortization $ (0.14) $ (0.16)
Shares used in computing pro forma basic and
diluted net loss per common share (a) 32,723 21,967
(a) The pro forma basic and diluted share calculations above give
effect to the conversion of all shares of preferred stock outstanding
at July 31, 1999 into a like number of shares of common stock, as if
the conversion took place on the date of original issuance. These
calculations also reflect the cash exercise of certain warrants
outstanding as of July 31, 1999 to purchase common shares, as if the
exercises took place on the date of original issuance.
Similar adjustments were not required at July 31, 2000 since all
preferred shares had converted to common shares and certain warrants
were exercised, and both groups of securities were outstanding for the
three months ended July 31, 2000.
CACHEFLOW INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
July 31, April 30,
2000 2000
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 84,289 $ 91,532
Short-term investments 27,288 33,788
Accounts receivable, net 8,022 3,112
Inventories 6,656 4,741
Prepaid expenses and other
current assets 1,048 1,200
Total current assets 127,303 134,373
Property and equipment, net 5,821 4,721
Goodwill, net 167,155 -
Other assets 818 1,640
Total assets $ 301,097 $ 140,734
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,949 $ 2,465
Accrued payroll and
related benefits 2,089 2,611
Deferred revenue 2,423 1,375
Other accrued liabilities 3,989 1,487
Total current liabilities 11,450 7,938
Deferred revenue 330 166
Total liabilities 11,780 8,104
Commitments
Stockholders' equity:
Common stock 4 4
Additional paid-in capital 438,896 264,304
Notes receivable from
stockholders (4,149) (4,713)
Deferred stock compensation (36,208) (43,489)
Accumulated other
comprehensive loss (52) (101)
Accumulated deficit (108,119) (82,805)
Treasury stock (1,055) (570)
Total stockholders' equity 289,317 132,630
Total liabilities and
stockholders' equity $ 301,097 $ 140,734 |
