Acme Packet Reports Record Revenues and Net Income in Fourth Quarter of Fiscal Year 2006
Wednesday February 7, 4:02 pm ET
- Company Affirms Business Outlook for 2007 -
BURLINGTON, Mass.--(BUSINESS WIRE)--Acme Packet, Inc. (NASDAQ: APKT - News), the leader in session border control solutions, today announced record results for its fourth quarter and fiscal year ended December 31, 2006. The Company also affirmed its previously issued business outlook for 2007. Summary results are as follows:
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Fiscal Year 2006 Q4:
* Total Revenues: $23.7 million, up 87% year over year;
* Net Income: $10.8 million GAAP and $6.5 million non-GAAP(1);
* Diluted Earnings Per Share: $0.18 GAAP and $0.11 non-GAAP(1);
* Tax benefit from the release of the Company's deferred tax asset valuation allowance provided a one-time benefit of $4.8 million, or $0.08 per diluted share;
Fiscal Year 2006:
* Total Revenues: $84.1 million, up 133% year over year;
* Net Income: $28.9 million GAAP and $25.0 million non-GAAP(1);
* Diluted Earnings Per Share: $0.89 GAAP and $0.77 non-GAAP(1);
* Tax benefit from the release of the Company's deferred tax asset valuation allowance provided a one-time benefit of $4.8 million, or $0.15 per diluted share;
Results for Three Month Period Ended December 31, 2006
Total revenues for the three month period ended December 31, 2006 were $23.7 million, an increase of 87% compared to total revenues of $12.7 million for the same period last year. Net income for the three month period ended December 31, 2006 was $10.8 million, or $0.18 per share on a diluted basis. Net income on a non-GAAP basis(1) for the three month period ended December 31, 2006 was $6.5 million, or $0.11 per share on a diluted basis. Net income for the three month period ended December 31, 2005 was $2.4 million.
Non-GAAP net income(1) for the three month period ended December 31, 2006 differs from GAAP net income as it excludes the one-time tax benefit from the release of the Company's deferred tax asset valuation allowance of approximately $4.8 million, or $0.08 per share on a diluted basis, as well as stock-based compensation charges of approximately $458,000, or $0.01 per share on a diluted basis. The Company released the valuation allowance based on its projected ability to utilize its deferred tax assets to offset future taxable income. A reconciliation of GAAP to non-GAAP results is included at the end of this press release.
Results for Twelve Month Period Ended December 31, 2006
Total revenues for the fiscal year ended December 31, 2006, were $84.1 million, an increase of 133% compared to total revenue of $36.1 million last year. Net income for the fiscal year ended December 31, 2006 was $28.9 million, or $0.89 per share on a diluted basis. Net income on a non-GAAP basis(1)for the fiscal year ended December 31, 2006 was $25.0 million, or $0.77 per share on a diluted basis. The Company reported break-even results for the same period last year.
Non-GAAP net income(1) for the fiscal year ended December 31, 2006 differs from GAAP net income as it excludes the one-time tax benefit from the release in the fourth quarter of fiscal year 2006 of the Company's deferred tax asset valuation allowance of approximately $4.8 million, or $0.15 per share on a diluted basis, as well as stock-based compensation charges of approximately $867,000, or $0.03 per share on a diluted basis. A reconciliation of GAAP to non-GAAP results is included at the end of this press release.
"The fourth quarter capped the most successful year in the history of Acme Packet. Our improving financial results continue to be highlighted by strong revenue and earnings growth fueled by strategic new customer wins and expanding deployments taking place throughout our customer base," said Andy Ory, President and Chief Executive Officer of Acme Packet. "With over 360 service provider customers - including 72 of the one hundred largest tier one service providers in the world - we are a leader in both access and peering across wireline, cable, wireless and the Internet. We look forward to 2007 as we seek to expand our leadership position in the Session Border Controller market with broad customer adoption, significant product innovation, and a strong commitment to the success of our customers."
Company Affirms Business Outlook for 2007
The Company expects total revenues for 2007 to range between $108.0 million and $112.0 million with sequential growth in each quarter of the year. The Company expects GAAP net income to range between $16.5 million and $17.5 million, or between $0.25 and $0.27 per share on a diluted basis. The Company expects non-GAAP(1) net income for 2007 to range between $18.5 million and $19.5 million, or between $0.28 and $0.30 per share on a diluted basis. The Company's outlook for non-GAAP(1) net income differs from GAAP net income in 2007 as it excludes estimated stock-based compensation of approximately $2.0 million, or $0.03 per share. The Company's outlook for 2007 assumes a fully effective non-GAAP tax rate of 35%. In contrast, the Company realized an effective non-GAAP tax rate of 5% in 2006. The Company expects its full year weighted average diluted share count to be approximately 66.0 million in 2007 as compared to 32.4 million in 2006.
Operational Highlights
The following milestones were completed or announced since the Company's third quarter of fiscal year 2006 ended on September 30, 2006:
* The Company demonstrated multiple session border controller (SBC) configurations at each of the four service provider-hosted Global MSF Interoperability 2006 test locations in Japan, Korea, the United Kingdom, and the United States. As the only network equipment vendor to test at all four host sites over the two-week evaluation period, the Company demonstrated that its Net-Net® family of products is capable of independently supporting a broad range of applications and network conditions, such as real-time interactive IP-based voice, video and multimedia sessions, across a real world, multi-vendor IMS-based infrastructure.
* The Company announced that Arcor AG & Co., the second largest German wireline operator, has deployed Acme Packet's Net-Net SBCs as part of its strategic agreement to adopt Italtel's Next Generation Networks (NGN) architecture. The architecture has been utilized to create a Class 4 voice over IP (VoIP) solution to expand the current transit network and a Class 5 solution to develop new IP telephony and multimedia services for residential and business customers. Arcor has deployed the Net-Net SBCs in seven points-of-presence in high-availability configurations.
* The Company announced that Wind Telecomunicazioni SpA, one of the few European telecom operators which offers integrated fixed, mobile and Internet services, has deployed Net-Net SBCs to support its new residential VoIP offering. Wind's VoIP service promises a unique, user-friendly consumer experience and will be available to potentially 80% of Italy's population. The Net-Net SBCs are elements of an Alcatel-Lucent triple-play deployment and IP network transformation program announced in October 2006.
* The Company hosted its second annual customer conference from October 4-6, 2006 in Cambridge, Massachusetts. A record number of customers and partners attended "Acme Packet Interconnect 2006" to participate in various panel discussions exploring technical and business case studies related to the use of SBCs in the carrier environment and network with other Acme Packet customers.
* The Company launched Acme Packet Connected Universe(TM), a new program which connects Acme Packet-enabled service providers and is designed to facilitate fast, interoperable IP interconnect and peering relationships for trusted, first-class IP interactive communications services. With Acme Packet SBCs at each interconnect border, participating companies can accelerate time-to-market as the Net-Net SBCs easily interoperate with each other and help ensure signaling compatibility between networks to extend service reach, drive down costs, and improve service quality. Acme Packet Connected Universe members include Global Crossing, Impsat Fiber Networks, NeuStar, O1 Communications, Stealth Communications, VeriSign and XConnect.
* The Company completed an initial public offering which included approximately 9.7 million primary shares and approximately 3.5 million secondary shares. Cash proceeds to the Company, net of expenses, totaled approximately $83.2 million. The Company's common stock began trading on the Nasdaq Global Market under the symbol "APKT" on October 13, 2006.
* The Company announced that Mr. David Elsbree, a former senior partner at Deloitte & Touche, had been appointed to the Board of Directors of Acme Packet and appointed as chair of the Audit Committee. Mr. Elsbree was a partner with Deloitte & Touche where he served many of the firm's most complex software and technology client companies. Mr. Elsbree is a member of the National Association of Corporate Directors and Financial Executives International and is a graduate of Northeastern University.
Company to Host Live Conference Call and Webcast
The Company's management team will host a live conference call and webcast at 5:00 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 (877) 209-0397 and using pass code "APKT". The conference call may be accessed outside of the United States by dialing (612) 332-1213 and using pass 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 webcast will be available approximately two hours after the call. |
