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8-K - FORM 8-K - OPNET TECHNOLOGIES INCd428552d8k.htm
EX-2.2 - EXHIBIT 2.2 - OPNET TECHNOLOGIES INCd428552dex22.htm
EX-2.1 - EXHIBIT 2.1 - OPNET TECHNOLOGIES INCd428552dex21.htm
EX-99.2 - EXHIBIT 99.2 - OPNET TECHNOLOGIES INCd428552dex992.htm

Exhibit 99.1

OPNET Announces Financial Results for the Second Quarter of Fiscal 2013

BETHESDA, MD—October 29, 2012—OPNET Technologies, Inc. (NASDAQ: OPNT), the leading provider of solutions for application and network performance management, today announced that revenue for the second fiscal quarter, ended September 30, 2012, was $47.1 million. GAAP diluted earnings per share for the second quarter of fiscal 2013 were $0.17.

Non-GAAP diluted earnings per share for the second quarter of fiscal 2013 were $0.22. Non-GAAP results exclude the income statement effects of stock-based compensation and acquisition-related amortization of intangible assets. A reconciliation of non-GAAP results to GAAP results has been provided in the financial statement table following the text of the press release. For further information, please refer to the section of this press release titled “Use of Non-GAAP Measures.”

Separately, the company today announced that OPNET has signed a definitive agreement to be acquired by Riverbed Technology. Additional information about this transaction is available at the following link: http://www.riverbed.com/us/company/news/press_releases/2012/press_102912.php. As a result of this agreement OPNET will not conduct the investor conference call previously scheduled for Wednesday, November 7, 2012 at 5:00 p.m. Eastern Time to review financial results for the second quarter of fiscal 2013.

Use of Non-GAAP Measures

OPNET uses a variety of financial measures that are not in accordance with generally accepted accounting principles, or GAAP, as supplemental measures to GAAP to evaluate its operational performance. These financial measures, which include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per common share, exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. A detailed explanation of each of the adjustments to such financial measures is described below. A reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure is also included below. Non-GAAP gross margin is non-GAAP gross profit expressed as a percentage of GAAP total revenue. Non-GAAP operating margin is non-GAAP operating income expressed as a percentage of GAAP total revenue.

Management uses non-GAAP financial measures (a) to evaluate OPNET’s historical and prospective financial performance as well as its performance relative to its competitors, and (b) to measure operational profitability and the accuracy of forecasting. In addition, many financial analysts who follow OPNET focus on and publish both historical results and future projections based on non-GAAP financial measures. OPNET believes that it is in the best interest of its investors to provide this information to analysts so that they accurately report the non-GAAP financial information. Moreover, investors have historically requested these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results.

While management believes that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all of OPNET’s competitors and may not be directly comparable to similarly titled measures of OPNET’s competitors due to potential differences in the exact method of calculation. OPNET compensates for these limitations by using these non-GAAP financial measures only as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.


The adjustments we use to derive these non-GAAP financial measures, and the basis for such adjustments, are outlined below:

Amortization of intangibles and its related tax impact. OPNET incurs amortization of intangibles related to various acquisitions it has made in recent years. This amortization is included in the following line items of its GAAP presentation:

 

   

cost of revenue — amortization of acquired technology and customer relationships

 

   

operating expenses — research and development

Management excludes these expenses and their related tax impact for the purpose of calculating non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per common share when it evaluates the continuing operational performance of OPNET because these costs are fixed at the time of an acquisition, are then amortized over a period of three to five years after the acquisition and generally cannot be changed or influenced by management after the acquisition. Accordingly, management does not consider these expenses for purposes of evaluating the performance of OPNET during the applicable time period after a given acquisition, and it excludes such expenses when evaluating OPNET’s financial performance.

Stock-based compensation expense and its related tax impact. OPNET incurs expense related to stock-based compensation, which is included in the following line items of its GAAP presentation:

 

   

cost of revenue — product updates, technical support and services

 

   

cost of revenue — professional services

 

   

operating expenses — research and development

 

   

operating expenses — sales and marketing

 

   

operating expenses — general and administrative

Although stock-based compensation is an expense of OPNET and is viewed as a form of compensation, management excludes these expenses for the purpose of calculating non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income and non-GAAP diluted net income per common share when it evaluates the continuing operational performance of OPNET. Specifically, OPNET excludes stock-based compensation during its quarterly and annual assessments of OPNET’s and management’s performance. In evaluating the performance of senior management, stock-based compensation is excluded from expenditure and profitability results.

Diluted weighted average common shares outstanding. Non-GAAP diluted net income per common share reflects the elimination of amortization of intangibles, stock-based compensation expense and the related tax impacts, all as discussed above. In addition, in cases in which the non-GAAP net income changes from negative to positive when compared to the GAAP net income, or vice versa, the non-GAAP per-share calculation also gives effect to an adjustment to the number of diluted weighted average common shares outstanding reflecting the application of the treasury method and the fact that shares previously considered anti-dilutive would now be considered dilutive, or vice versa.

Additional Information and Where to Find It

The exchange offer for the outstanding common stock of OPNET Technologies, Inc. (“OPNET”) referred to in this press release has not yet commenced. This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares of OPNET. OPNET stockholders are urged to read the relevant exchange offer documents when they become available because they will contain important information that stockholders should consider before making any decision regarding tendering their shares. At the time the offer is commenced, Riverbed Technology, Inc. (“Riverbed”) will file exchange offer materials with the U.S. Securities and Exchange Commission and OPNET will file a Solicitation/Recommendation Statement with respect to the offer. The exchange offer materials (including a Prospectus and certain other offer


documents) and the Solicitation/Recommendation Statement will contain important information, which should be read carefully before any decision is made with respect to the exchange offer. The Prospectus and certain other offer documents, as well as the Solicitation/Recommendation Statement, will be made available to all shareholders of OPNET at no expense to them. The exchange offer materials and the Solicitation/Recommendation Statement will be made available for free at the Securities and Exchange Commission’s web site at www.sec.gov. Free copies of the Offer to Purchase, the related Letter of Transmittal and certain other offering documents will be made available by Riverbed by mail to Riverbed Technologies, Inc., 199 Fremont Street, San Francisco, CA 94105, attention: Investor Relations, and free copies of the Solicitation/Recommendation Statement will be made available by OPNET by mail to OPNET Technologies, Inc., 7255 Woodmont Avenue, Bethesda, Maryland 20814-7900, attention: Investor Relations.

Interests of Certain Persons in the Offer and the Merger

Riverbed will be, and certain other persons may be, soliciting OPNET stockholders to tender their shares in the exchange offer. The directors and executive officers of Riverbed and the directors and executive officers of OPNET may be deemed to be participants in Riverbed’s solicitation of OPNET’s stockholders to tender their shares in the exchange offer.

Investors and shareholders may obtain more detailed information regarding the names, affiliations and interests of the directors and officers of Riverbed and OPNET in the exchange offer by reading the Prospectus and certain other offer documents, as well as the Solicitation/Recommendation Statement, when they become available.

About OPNET Technologies, Inc.

Founded in 1986, OPNET Technologies, Inc. (NASDAQ: OPNT) is the leading provider of solutions for application and network performance management. For more information about OPNET and its products, visit www.opnet.com.

###

OPNET and OPNET Technologies, Inc. are trademarks of OPNET Technologies, Inc. All other trademarks are the property of their respective owners.

Statements in this press release that are not purely historical facts may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. OPNET Technologies, Inc. (“OPNET”) assumes no obligation to update such statements. Forward-looking statements are predictions based upon information available to OPNET as of the date of this press release and involve risks and uncertainties; therefore, actual events or results may differ materially. Factors that may cause OPNET’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements include, among others, those factors listed under the caption “Risk Factors” in OPNET’s Annual Report on Form 10-K for the fiscal year ended March 31, 2012, as filed with the Securities and Exchange Commission on June 8, 2012, as updated from time to time in subsequent SEC filings. The risk factors set forth in the Company’s Form 10-K under the caption “Risk Factors,” as updated from time to time in subsequent SEC filings, are specifically incorporated by reference into this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Note to editors: The word OPNET is spelled with all upper-case letters.

 

OPNET Media Contact:    OPNET Investor Relations:
Sue Cole    Mel Wesley
OPNET Technologies, Inc.    OPNET Technologies, Inc.
(919) 461-2445    (240) 497-3000
Media@opnet.com    ir@opnet.com
www.opnet.com    www.opnet.com


OPNET TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended
September 30,
     Six Months Ended
September 30,
 
     2012      2011      2012      2011  

Revenue:

           

Product

   $ 21,996       $ 20,599       $ 42,115       $ 40,028   

Product updates, technical support, and services

     17,953         15,413         35,004         30,105   

Professional services

     7,111         5,909         13,972         12,035   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenue

     47,060         41,921         91,091         82,168   
  

 

 

    

 

 

    

 

 

    

 

 

 

Cost of revenue:

           

Product

     3,794         3,928         6,734         6,399   

Product updates, technical support, and services

     1,667         1,380         3,311         2,827   

Professional services

     4,786         3,751         9,360         7,617   

Amortization of acquired technology and customer relationships

     800         537         1,418         1,076   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cost of revenue

     11,047         9,596         20,823         17,919   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

     36,013         32,325         70,268         64,249   
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating expenses:

           

Research and development

     10,986         9,088         21,346         18,330   

Sales and marketing

     15,236         13,471         29,458         26,070   

General and administrative

     3,695         2,504         7,179         6,293   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total operating expenses

     29,917         25,063         57,983         50,693   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income from operations

     6,096         7,262         12,285         13,556   

Interest and other expense, net

     34         —           44         (59
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before provision for income taxes

     6,130         7,262         12,329         13,497   

Provision for income taxes

     2,275         2,476         4,681         4,522   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 3,855       $ 4,786       $ 7,648       $ 8,975   
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic net income per common share

   $ 0.17       $ 0.21       $ 0.33       $ 0.40   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted net income per common share

   $ 0.17       $ 0.21       $ 0.33       $ 0.39   
  

 

 

    

 

 

    

 

 

    

 

 

 

Basic weighted average common shares outstanding

     22,642         22,240         22,528         22,149   
  

 

 

    

 

 

    

 

 

    

 

 

 

Diluted weighted average common shares outstanding

     22,924         22,687         22,843         22,646   
  

 

 

    

 

 

    

 

 

    

 

 

 


OPNET TECHNOLOGIES, INC.

RECONCILIATION OF NON-GAAP RESULTS TO GAAP RESULTS

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended
September 30,
    Three Months
Ended June 30,
 
     2012     2011     2012  

GAAP gross profit

   $ 36,013      $ 32,325      $ 34,255   

Stock-based compensation expense included in cost of revenue

     50        27        43   

Amortization of intangibles included in cost of revenue

     800        537        618   
  

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 36,863      $ 32,889      $ 34,916   
  

 

 

   

 

 

   

 

 

 

GAAP income from operations

   $ 6,096      $ 7,262      $ 6,189   

Stock-based compensation expense — total (included in cost of revenue and in operating expenses)

     1,381        606        987   

Amortization of intangibles — total (included in cost of revenue and in research and development expenses)

     825        562        643   
  

 

 

   

 

 

   

 

 

 

Non-GAAP income from operations

   $ 8,302      $ 8,430      $ 7,819   
  

 

 

   

 

 

   

 

 

 

GAAP net income

   $ 3,855      $ 4,786      $ 3,794   

Stock-based compensation expense — total

     1,381        606        987   

Amortization of intangibles — total

     825        562        643   

Provision for income tax (1)

     (861     (456     (635
  

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 5,200      $ 5,498      $ 4,789   
  

 

 

   

 

 

   

 

 

 

Diluted net income per common share:

      

GAAP

   $ 0.17      $ 0.21      $ 0.16   
  

 

 

   

 

 

   

 

 

 

Non-GAAP

   $ 0.22      $ 0.24      $ 0.21   
  

 

 

   

 

 

   

 

 

 

Diluted weighted average common shares outstanding

      

GAAP

     22,924        22,687        22,781   
  

 

 

   

 

 

   

 

 

 

Non-GAAP

     22,924        22,687        22,781   
  

 

 

   

 

 

   

 

 

 

 

(1) Reflects the tax effect of non-GAAP adjustments above at the statutory rate of 39% based on projected taxable income.


OPNET TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

 

     September 30,
2012
    March 31,
2012
 
ASSETS   

Current assets:

    

Cash and cash equivalents

   $ 54,736      $ 72,357   

Marketable securities

     39,862        38,975   

Accounts receivable, net

     41,073        40,787   

Unbilled accounts receivable

     2,710        1,864   

Inventory

     1,286        1,704   

Deferred income taxes, prepaid expenses and other current assets

     13,571        5,084   
  

 

 

   

 

 

 

Total current assets

     153,238        160,771   
  

 

 

   

 

 

 

Property and equipment, net

     16,227        13,936   

Intangible assets, net

     7,001        2,970   

Goodwill

     22,416        15,406   

Deferred income taxes and other assets

     5,930        5,182   
  

 

 

   

 

 

 

Total assets

   $ 204,812      $ 198,265   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY   

Current liabilities:

    

Accounts payable

   $ 1,533      $ 1,175   

Accrued liabilities

     16,986        17,717   

Other income taxes

     1,163        754   

Deferred rent

     225        222   

Deferred revenue

     46,301        47,909   
  

 

 

   

 

 

 

Total current liabilities

     66,208        67,777   
  

 

 

   

 

 

 

Accrued liabilities

     44        9   

Deferred rent

     3,655        2,745   

Deferred revenue

     6,799        6,950   

Other income taxes

     811        790   
  

 

 

   

 

 

 

Total liabilities

     77,517        78,271   
  

 

 

   

 

 

 

Stockholders’ equity:

    

Common stock

     31        30   

Additional paid-in capital

     136,393        129,439   

Retained earnings

     14,478        13,748   

Accumulated other comprehensive loss

     (1,245     (995

Treasury stock, at cost

     (22,362     (22,228
  

 

 

   

 

 

 

Total stockholders’ equity

     127,295        119,994   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 204,812      $ 198,265