AuthenTec Reports Second Quarter 2012 Financial Results
MELBOURNE, Fla., Aug 08, 2012 (BUSINESS WIRE) -- AuthenTec (AUTH), a leading
provider of mobile and network security, today reported financial results for the
second quarter ended June 29, 2012.
Second Quarter Highlights:
-- Posted revenue of $20.5 million
-- Achieved fourth consecutive quarter of non-GAAP profitability
-- AuthenTec Added to the Russell 3000 and Global Indexes
AuthenTec achieved revenue of $20.5 million for the second quarter of 2012, which
was comprised of approximately $12.7 million from Smart Sensor Solutions and $7.9
million from Embedded Security Solutions.
GAAP Results:
Under Generally Accepted Accounting Principles in the United States of America
(GAAP), consolidated net loss for the second quarter of 2012 was $1.2 million, or
$0.03 per diluted share. This compares to GAAP net loss of $1.5 million, or $0.03
per diluted share, in the first quarter of 2012 and a GAAP net loss of $4.8
million, or $0.11 per diluted share, in the second quarter of 2011.
GAAP gross margin in the second quarter was 57.4 percent, compared to 57.5
percent reported in the first quarter of 2012 and 47.8 percent in the second
quarter of 2011. Total operating expenses on a GAAP basis in the second quarter
were $12.8 million, compared to $11.4 million in the first quarter of 2012, and
$12.3 million in the second quarter of 2011. The $1.4 million sequential increase
in operating expenses was due to fees incurred to support M&A activities as well
as increased R&D investments in our Embedded Security business.
Non-GAAP Results:
On a non-GAAP basis, consolidated net income for the second quarter of 2012 was
$1.3 million, or $0.03 per diluted share. Non-GAAP results exclude certain legal
and other costs, stock-based compensation, as well as the amortization of
acquired intangible assets. The second quarter net income compares to non-GAAP
net income of $0.3 million, or $0.01 per diluted share, in the first quarter of
2012 and a non-GAAP net loss of $1.9 million, or $0.04 per diluted share, in the
second quarter of 2011.
Non-GAAP gross margin in the second quarter was 58.4 percent, compared to 58.7
percent in the first quarter of 2012 and 53.7 percent in the second quarter of
2011.
Total operating expenses on a non-GAAP basis were $10.6 million, an increase from
the $9.8 million reported in the first quarter of 2012 and the $10.4 million in
the second quarter of 2011. A reconciliation of second quarter GAAP to non-GAAP
results is provided in Table 2 following the text of this press release.
As of June 29, 2012, AuthenTec had approximately $25.3 million in cash and
investments, up from the $22.8 million cash and investments at the end of the
first quarter of 2012, and had no debt.
Recent Business Highlights:
-- Posted sequential and year-over-year growth in both business segments. Smart
Sensor revenue of $12.7 million was driven by growth of sensors for wireless to
support new smartphone programs and was partially offset by a decrease in
government programs. Embedded Security revenue of $7.9 million was driven by
increased license revenue from new contracts.
-- Began production of smart fingerprint sensors during the quarter to support
new Android smartphones from Fujitsu.
-- Announced that Samsung has chosen AuthenTec's QuickSec(TM) VPN security for
use in new Android smartphone and tablet models, giving device users built-in
security that enables easier, more secure connections to enterprise networks.
-- Supported the launch of multiple new mobile content delivery programs that
utilize the Company's DRM content protection.
Pending Merger Transaction:
On July 27, AuthenTec filed a Form 8-K with the U.S. Securities and Exchange
Commission disclosing that it had entered into an agreement and plan of merger
with Apple Inc. pursuant to which Apple will acquire all of the outstanding
shares of common stock of AuthenTec for $8.00 per share in cash. The transaction
is subject to customary closing conditions, including regulatory approval and
AuthenTec stockholder approval. Additional details will be provided in the proxy
statement AuthenTec will file with the U.S. Securities and Exchange Commission.
Use of GAAP and Non-GAAP Financial Metrics:
To supplement AuthenTec's consolidated financial statements presented in
accordance with GAAP, the Company uses non-GAAP financial measures that exclude
from the statement of operations the effects of stock-based compensation, certain
acquisition-related charges, amortization of certain intangible assets,
impairments on investments, and costs related to a reduction in workforce.
AuthenTec uses the above non-GAAP financial measures internally to understand,
manage and evaluate the business. Management believes it is useful for itself and
investors to review, as applicable, both GAAP information and the non-GAAP
measures in order to assess the performance of continuing operations and for
planning and forecasting in future periods. The presentation of these non-GAAP
measures is intended to provide investors with an understanding of AuthenTec's
operational results and trends that enables them to analyze the base financial
and operating performance and facilitate period-to-period comparisons and
analysis of operational trends. AuthenTec believes the presentation of these
non-GAAP financial measures is useful to investors in allowing for greater
transparency with respect to supplemental information used by management in its
financial and operational decision-making. Non-GAAP financial measures should be
considered in addition to results prepared in accordance with GAAP, but should
not be considered substitutes for or superior to GAAP results. In addition, our
non-GAAP financial measures may not be comparable to similarly titled measures
utilized by other companies since such other companies may not calculate such
measures in the same manner as we do.
Investors are encouraged to review the reconciliation of these non-GAAP financial
measures to the comparable GAAP results, which is provided in Table 2 after the
text of this release. For additional information regarding these non-GAAP
financial measures, and management's explanation of why it considers such
measures to be useful, refer to the filings made from time to time with the
Securities and Exchange Commission.
Forward Looking Statements:
This press release contains statements that may relate to expected future results
and business trends that are based upon AuthenTec's current estimate,
expectations, and projections about the industry, and upon management's beliefs,
and certain assumptions it has made that are "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995. Words such as
"anticipates," "guidance," "expects," "intends," "plans," "believes," "seeks,"
"estimates," "may," "should," "will," "prospects," "outlook," "forecast," and
variations of these words or similar expressions are intended to identify
"forward-looking statements." In addition, any statements that refer to
expectations, projections, or other characterizations of future events or
circumstances, including any underlying assumptions, are "forward-looking
statements." Such statements are not guarantees of future performance and are
subject to certain risks, uncertainties, and assumptions that are difficult to
predict. Therefore, AuthenTec's actual results may differ materially and
adversely from those expressed in any "forward-looking statement" as a result of
various factors. These factors include, but are not limited to: disruptions
caused by the announcement and pendency of Apple Inc.'s acquisition of AuthenTec,
including, potential losses or disruptions of customers, vendors or other
commercial relationships prior to the completion of Apple's pending acquisition
of AuthenTec and potential negative effects on AuthenTec's ability to retain
management, technical, sales and other key personnel as a result of the
announcement of the pending acquisition, AuthenTec's ability to integrate
acquired businesses and operate such businesses profitably, demand for, and
market acceptance of, new and existing fingerprint sensors, identity management
software and embedded security products, AuthenTec's ability to secure design
wins for enterprise and consumer laptops, wireless devices and products aimed at
Government markets, customer design wins materializing into production programs,
the timely introduction of new products, the rate at which AuthenTec increases
its activity and opportunities in the wireless market, and additional
opportunities in various markets for applications that might use AuthenTec's
products, AuthenTec's ability to develop and capitalize on its NFC solutions and
changes in product mix, as well as other risks detailed from time to time in its
SEC filings, including those described in AuthenTec's annual report on Form 10-K
filed with the SEC on March 9, 2012. These "forward-looking statements" are made
only as of the date hereof, and AuthenTec undertakes no obligation to update or
revise the "forward-looking statements," whether as a result of new information,
future events or otherwise.
Additional Information and Where to Find It:
In connection with the proposed merger, AuthenTec will prepare a proxy statement
to be filed with the U.S. Securities and Exchange Commission (the "SEC"). When
completed, a definitive proxy statement and a form of proxy will be mailed to the
stockholders of AuthenTec. AUTHENTEC'S STOCKHOLDERS ARE URGED TO READ THE PROXY
STATEMENT REGARDING THE PROPOSED MERGER BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED MERGER. AuthenTec's stockholders will be able to
obtain, without charge, a copy of the proxy statement (when available) and other
relevant documents filed with the SEC from the SEC's website at
sec.gov. AuthenTec's stockholders will also be able to obtain, without
charge, a copy of the proxy statement and other relevant documents (when
available) by directing a request by mail or telephone to AuthenTec, Inc., 100
Rialto Place, Suite 100, Melbourne, Florida 32901, Attention: Corporate
Secretary, or from the Company's website, authentec.com.
AuthenTec and its directors and officers may be deemed to be participants in the
solicitation of proxies from AuthenTec's stockholders with respect to the special
meeting of stockholders that will be held to consider the proposed merger.
Information about AuthenTec's directors and executive officers and their
ownership of AuthenTec's common stock is set forth in AuthenTec's Annual Report
on Form 10-K, which was filed with the SEC on March 9, 2012 and subsequently
amended on April 25, 2012. Stockholders may obtain additional information
regarding the interests of AuthenTec and its directors and executive officers in
the proposed merger, which may be different than those of AuthenTec's
stockholders generally, by reading the proxy statement and other relevant
documents regarding the proposed merger, when filed with the SEC.
About AuthenTec
AuthenTec is a leading provider of mobile and network security. The company's
diverse product and technology offering helps protect individuals and
organizations through secure networking, content and data protection, access
control and strong fingerprint security on PCs and mobile devices. AuthenTec
encryption technology, fingerprint sensors and identity management software are
deployed by the leading mobile device, networking and computing companies,
content and service providers, and governments worldwide. AuthenTec's products
and technologies provide security on hundreds of millions of devices, and the
company has shipped more than 100 million fingerprint sensors for integration in
a wide range of portable electronics including over 20 million mobile phones. Top
tier customers include Alcatel-Lucent, Cisco, Fujitsu, HBO, HP, Lenovo, LG,
Motorola, Nokia, Orange, Samsung, Sky, and Texas Instruments. Learn more at
authentec.com or follow us on twitter.com/authentecnews.
AuthenTec, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Table 1
Three months endedSix months ended
------------------------------------------- ----------------------------
June 29,March 30,July 1,June 29,July 1,
20122012201120122011
------------- --------------- ------------- ------------- --------------
Revenue$ 20,547$ 17,460$ 16,211$ 38,007$31,687
Cost of revenue8,7557,4218,46416,17616,515
Gross profit11,79210,0397,74721,83115,172
57.4 %57.5 %47.8 %57.4 %47.9 %
Operating expenses:
Research and development6,0475,7296,47711,77612,364
Selling and marketing4,3333,8984,0778,2318,067
General and administrative2,4421,7581,7404,2014,198
Restructuring and impairment related charges--39-322
-------------------------------
Total operating expenses12,82211,38512,33324,20824,951
Operating loss(1,030)(1,346)(4,586)(2,377)(9,779)
Other income (expenses)105(71)(117)34(391)
------------ --------- --------------- --
Income before Taxes(925)(1,417)(4,703)(2,343)(10,170)
Provision for income taxes306100141406276
-------------------------------
Net loss$ (1,231)$ (1,517)$ (4,844)$ (2,749)$ (10,446)
== ====== ===== ====== ===== ====== ==== ====== ==== ======= ==
Net loss per share:
Basic$(0.03)$(0.03)$(0.11)$(0.06)$(0.24)
== ====== ===== ====== ===== ====== ==== ====== ==== ======= ==
Diluted$(0.03)$(0.03)$(0.11)$(0.06)$(0.24)
== ====== ===== ====== ===== ====== ==== ====== ==== ======= ==
Shares used in computing net income (loss) per common share:
Basic44,60844,40143,75344,50543,677
===============================
Diluted44,60844,40143,75344,50543,677
===============================
Three months endedSix months ended
------------------------------------------- ----------------------------
June 29,March 30,July 1,June 29,July 1,
20122012201120122011
------------- --------------- ------------- ------------- --------------
Other Financial Metrics:
Stock-based compensation expense:
Cost of revenue25292154174
153158164311503
Research and development
133156135289409
Selling and marketing
14815690304468
General and administrative
Costs related to reduction in workforce
Cost of revenue--50-50
Research and development--370-370
Selling and marketing--102-102
Legal and acquisition related costs
Research and development171171-342-
Selling and marketing9910072199155
General and administrative69634309730558
Provision for income taxes85--85-
Amortization of purchased tangible and intangible assets
Cost of revenue1771778953541,464
Research and development300300234600470
Selling and marketing499499464998929
Restructuring and impairment related charges--39-322
AuthenTec, Inc.
Non-GAAP Financial Information - Consolidated
(In thousands, except per share amounts)
(Unaudited)
Table 2
Three months endedSix months ended
------------------------------------------- ----------------------------
June 29,March 30,July 1,June 29,July 1,
20122012201120122011
------------- --------------- ------------- ------------- --------------
Net loss on GAAP basis:$ (1,231)$ (1,517)$ (4,844)$ (2,749)$ (10,446)
Stock-based compensation expense4594994109581,554
Costs related to reduction in workforce--522-522
Legal and acquisition related costs9663053811,271713
Amortization of purchased tangible and intangible assets9769761,5931,9522,863
Restructuring and impairment related charges--39-322
Tax Provision85--85-
-------------------------------
Net income (loss) on non-GAAP basis:$1,255$263$ (1,899)$1,517$(4,472)
== ========= ======== ====== ==== ======== ======= ==
Non-GAAP basic earnings per share$0.03$0.01$(0.04)$0.03$(0.10)
Non-GAAP diluted earnings per share$0.03$0.01$(0.04)$0.03$(0.10)
Three months endedSix months ended
------------------------------------------- ----------------------------
June 29,March 30,July 1,June 29,July 1,
20122012201120122011
------------- --------------- ------------- ------------- --------------
Gross profit on GAAP basis:$ 11,792$ 10,039$7,747$ 21,831$15,172
Stock-based compensation expense25292154174
Costs related to reduction in workforce--50-50
Amortization of purchased tangible and intangible assets1771778953541,464
-------------------------------
Gross profit on non-GAAP basis:$ 11,994$ 10,245$8,713$ 22,239$16,860
== ========= ======== ======== ======== =======
Non-GAAP gross margin58.4 %58.7 %53.7 %58.5 %53.2 %
Three months endedSix months ended
------------------------------------------- ----------------------------
June 29,March 30,July 1,June 29,July 1,
20122012201120122011
------------- --------------- ------------- ------------- --------------
Operating expenses on GAAP basis:$ 12,822$ 11,385$ 12,333$ 24,208$24,951
Stock-based compensation expense(434)(470)(389)(904)(1,380)
Costs related to reduction in workforce--(472)-(472)
Legal and acquisition related costs(966)(305)(381)(1,271)(713)
Amortization of purchased tangible and intangible assets(799)(799)(698)(1,598)(1,399)
Restructuring and impairment related charges--(39)-(322)
------------------ --------------- --
Operating expenses on non-GAAP basis:$ 10,623$9,811$ 10,354$ 20,435$20,665
== ========= ======== ======== ======== =======
AuthenTec, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
Table 3
As of
-----------------------------------
June 29,December 30,
20122011
--------------- -------------------
Assets
Current assets
Cash and cash equivalents$21,316$17,200
Restricted Cash750-
Accounts receivable9,6179,444
Inventory9,7048,111
Other current assets1,6901,716
----------------
Total current assets43,07736,471
Long-term investments3,2363,249
Purchased intangibles18,41320,287
Goodwill3,5013,501
Property and equipment, net3,4523,640
----------------
Total assets$71,679$67,148
== ============ ========
Liabilities and stockholders' equity
Current liabilities
Accounts payable$7,920$3,539
Accrued compensation and benefits3,1634,399
Deferred revenue5,9704,145
Accrued litigation related legal fees-114
Other accrued liabilities4,2562,634
----------------
Total current liabilities21,30914,831
Long-term liabilities
Deferred rent308398
Other liabilities354768
----------------
Total long-term liabilities6621,166
Total liabilities21,97115,997
----------------
Stockholders' equity
Common stock448443
Additional paid-in capital194,022192,694
Accumulated other comprehensive income2350
Accumulated deficit(144,785)(142,036)
-------- ---------- ----
Total stockholders' equity$49,708$51,151
-- ------------ --------
Total liabilities and stockholders' equity$71,679$67,148
== ============ ========
SOURCE: AuthenTec
Investor Contact:
Shelton Group
Brett L. Perry, Director of Investor Relations, 972-239-5119 ext 159
bperry@sheltongroup.com
or
Media Contact:
AuthenTec
Brent Dietz, Director of Communications, 321-308-1320
brent.dietz@authentec.com |
