Attached files

file filename
8-K - 8-K - Gigamon Inc.d622332d8k.htm

Exhibit 99.1

 

MEDIA CONTACT:      INVESTOR CONTACT:
J.T. Eger      Cynthia Hiponia and Alice Kousoum
(408) 493-1247      (408) 493-1399
jt@gigamon.com      IR@gigamon.com

Gigamon Reports Third Quarter 2013 Financial Results

Third Quarter Revenue Growth of 52% year-over-year

Silicon Valley, CALIF., November 4, 2013Gigamon®(NYSE:GIMO), a leader in traffic visibility solutions with the innovative Visibility Fabric™ architecture, today released financial results for the third quarter ended September 28, 2013.

Financial Highlights:

 

    Revenues for the third quarter of fiscal 2013 were $39.0 million, compared to $25.7 million in the third quarter of fiscal 2012, representing growth of 52% year-over-year.

 

    GAAP gross margins of 80% in the third fiscal quarter, in line with the third quarter of fiscal 2012.

 

    Non-GAAP gross margins of 81% in the third fiscal quarter, in line with the third quarter of fiscal 2012.

 

    GAAP net income for the third quarter of fiscal 2013 was $1.4 million, or $0.04 per diluted share, compared to GAAP net income of $1.1 million, or $0.06 per diluted share, in the third quarter of fiscal 2012.

 

    Non-GAAP net income for the third quarter of fiscal 2013 was $5.8 million, or $0.18 per diluted share, compared to non-GAAP net income of $3.8 million, or $0.22 per diluted share, in the third quarter of fiscal 2012.

“We are pleased with the results this quarter demonstrating our continued ability to execute,” said Paul Hooper, CEO of Gigamon. “During the quarter we added 86 new customers including 19 Fortune 1000 companies. We also received the largest order in the company’s history


from a first time customer, indicating that visibility fabrics are increasingly being designed into major infrastructure projects. We are especially pleased with the performance of the GigaVUE HB-1, which experienced the fastest ramp of any Gigamon product since its launch in late June.”

Recent Business Highlights:

 

    Continued adoption of the GigaSMART platform in the third quarter, with approximately 40% of GigaVUE HB-1 customers purchasing one or more GigaSMART applications.

 

    Received the largest order in the Company’s history from the U.S. Army.

 

    Launched an update to the Management Layer of the Company’s patented Flow Mapping® technology that enables network services teams to deliver visibility across departmental silos within the IT organization.

 

    Hosted the Company’s first Asia Pacific Partner conference in Bangkok, Thailand, which was attended by over 80 regional resellers and distributors.

 

    Announced a new Channel Onboarding and Education Program offering online training and certification modules for partner sales and pre-sales teams.

 

    Appointment of David Cox as Vice President of Operations.

Conference Call Information:

Gigamon will host an investor conference call and live webcast today at 5:00 p.m. ET (2:00 p.m. PT) to discuss its financial results for the third quarter ended September 28, 2013. To access the conference call, dial 877-941-8416, using conference code 4644738. Callers outside the U.S. and Canada should dial 480-629-9808, using conference code 4644738. A replay of the conference call will be available through Monday, November 11, 2013. To access the replay, please dial 800-406-7325 and enter pass code 4644738. Callers outside the U.S. and Canada should dial 303-590-3030 and enter pass code 4644738. The live webcast will be accessible on Gigamon’s investor relations website at http://investor.gigamon.com and will be archived and available on this site for twelve months.


Non-GAAP Financial Measurements

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures. Non-GAAP financial measures do not have any standardized meaning and are therefore unlikely to be comparable to similarly titled measures presented by other companies. Gigamon considers these non-GAAP financial measures to be important because they provide useful measures of the operating performance of the company, exclusive of unusual events or factors that do not directly affect what we consider to be our core operating performance, and are used by the company’s management for that purpose. In addition, investors often use similar measures to evaluate the operating performance of a company. Non-GAAP financial measures are presented for supplemental informational purposes only for understanding the company’s operating results. The non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from non- GAAP financial measures presented by other companies. Please see the reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure attached to this release.

Legal Notice Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, our expectations that the market for our products will continue to grow and develop; and our expectations regarding product developments and enhancements and adoption of those products by our customers. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include our ability to continue to deliver and improve our products and successfully develop new products; customer acceptance and purchase of our existing products and new products; our ability to retain existing customers and generate new customers; the market for network traffic visibility solutions not continuing to develop; competition from other products and services; and general market, political, economic and business conditions. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our Prospectus related to our public offering of common stock filed pursuant to Rule 424(b) under the Securities Act of 1933 (Registration No. 333-191581). The forward-looking statements in this press release are based on information available to Gigamon as of the date hereof, and Gigamon disclaims any obligation to update any forward-looking statements, except as required by law.


About the Visibility Fabric architecture

At Gigamon we realized that delivering the visibility essential to manage, analyze and secure the complex system that is the IT infrastructure requires a new approach. With millions of traffic flows across thousands of endpoints, visibility needs to be pervasive, intelligent and dynamic. Using our patented, unique technology, we created an innovative new approach for delivering this visibility called the Visibility Fabric architecture. This new approach is intelligent and versatile in its ability to enable visibility into the network. For more information visit http://www.gigamon.com/traffic-visibility-fabric.

About Gigamon

Gigamon provides an intelligent Visibility Fabric™ architecture for enterprises, data centers and service providers around the globe. Our technology empowers infrastructure architects, managers and operators with pervasive and dynamic intelligent visibility of traffic across both physical and virtual environments without affecting the performance or stability of the production network. Through patented technologies and centralized management, the Gigamon GigaVUE portfolio of high availability and high density products intelligently delivers the appropriate network traffic to management, analysis, compliance and security tools. With over eight years’ experience designing and building traffic visibility products in the US, Gigamon solutions are deployed globally across vertical markets including over half of the Fortune 100 and many government and federal agencies. www.gigamon.com


Gigamon Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 28,     September 30,     September 28,     September 30,  
     2013     2012     2013     2012  

Revenue:

        

Product

   $ 29,146      $ 18,700      $ 70,019      $ 45,806   

Service

     9,840        6,994        27,189        19,057   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     38,986        25,694        97,208        64,863   

Cost of revenue:

        

Product

     6,744        4,524        18,566        11,975   

Service

     993        557        3,557        1,502   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue (1), (2)

     7,737        5,081        22,123        13,477   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     31,249        20,613        75,085        51,386   

Operating expenses:

        

Research and development (1), (2)

     8,958        4,809        31,726        12,324   

Sales and marketing (1), (2)

     15,485        9,963        54,020        27,298   

General and administrative (1), (2)

     4,696        3,720        20,893        7,761   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     29,139        18,492        106,639        47,383   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     2,110        2,121        (31,554     4,003   

Other income (expense):

        

Interest income

     32        55        35        61   

Other expense, net

     (52     (17     (77     (50
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     2,090        2,159        (31,596     4,014   

Income tax (expense) benefit (3)

     (704     (37     23,838        (128
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     1,386        2,122        (7,758     3,886   
  

 

 

   

 

 

   

 

 

   

 

 

 

Accretion of preferred stock

     —          (564     (1,088     (1,661

(Earnings) loss attributable to preferred stock holders

     —          (497     1,107        (710
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) to common stock holders

   $ 1,386      $ 1,061      $ (7,739   $ 1,515   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share attributable to common stock holders:

        

Basic

   $ 0.04      $ 0.06      $ (0.34   $ 0.09   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.04      $ 0.06      $ (0.34   $ 0.09   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average number of shares used in per share amounts:

        

Basic

     30,933        17,300        22,529        17,300   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     32,554        17,307        22,529        17,300   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes stock-based compensation expenses, as follows:

        

Cost of revenue

   $ 340      $ 132      $ 3,049      $ 134   

Research and development

     2,468        328        8,846        360   

Sales and marketing

     2,735        473        8,427        559   

General and administrative

     1,524        760        5,035        1,276   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total stock-based compensation expenses

   $ 7,067      $ 1,693      $ 25,357      $ 2,329   
  

 

 

   

 

 

   

 

 

   

 

 

 

(2) Includes performance unit plan compensation expenses, as follows:

        

Cost of revenue

   $ —        $ —        $ 353      $ —     

Research and development

     —          —          5,188        —     

Sales and marketing

     —          —          7,991        —     

General and administrative

     —          —          6,839        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total performance unit plan compensation expenses

   $ —        $ —        $ 20,371      $ —     
  

 

 

   

 

 

   

 

 

   

 

 

 

(3) Includes tax benefit upon conversion of LLC to a C Corporation on May 31, 2013

   $ —        $ —        $ 14,811      $ —     


Gigamon Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     September 28,     December 31,  
     2013     2012  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 65,057      $ 18,675   

Short-term investments

     40,347        —     

Accounts receivable, net

     27,035        20,677   

Inventories

     1,247        3,736   

Deferred income tax asset

     4,447        —     

Prepaid expenses and other current assets

     5,357        3,407   
  

 

 

   

 

 

 

Total current assets

     143,490        46,495   

Property and equipment, net

     3,541        2,686   

Deferred income tax asset, non-current

     19,535        —     

Other assets

     574        2,316   
  

 

 

   

 

 

 

Total assets

   $ 167,140      $ 51,497   
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity (Deficit)

    

Current liabilities:

    

Accounts payable

   $ 1,477      $ 3,221   

Accrued and other current liabilities

     17,745        18,710   

Deferred revenue

     32,240        23,917   
  

 

 

   

 

 

 

Total current liabilities

     51,462        45,848   

Deferred revenue, non-current

     8,705        6,903   

Other liabilities

     274        447   

Commitments and contingencies

    

Series A preferred stock

     —          28,344   

Stockholders’ equity (deficit):

    

Common stock

     3        1,625   

Treasury stock

     (12,469     (12,469

Additional paid in capital

     126,310        1,522   

Accumulated other comprehensive income

     5        —     

Accumulated deficit

     (7,150     (20,723
  

 

 

   

 

 

 

Total stockholders’ equity (deficit)

     106,699        (30,045
  

 

 

   

 

 

 

Total liabilities, preferred stock and stockholders’ equity (deficit)

   $ 167,140      $ 51,497   
  

 

 

   

 

 

 


Gigamon Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 28,     September 30,     September 28,     September 30,  
     2013     2012     2013     2012  

Operating activities:

        

Net income (loss)

   $ 1,386      $ 2,122      $ (7,758   $ 3,886   

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

        

Depreciation and amortization

     766        340        1,964        878   

Stock-based compensation expense

     7,067        1,693        25,357        2,329   

Deferred income taxes

     603        —          (23,982     —     

Inventory (recovery) write-offs

     (242     205        (382     1,587   

Loss on disposal of fixed assets

     —          51        14        51   

Changes in operating assets and liabilities:

        

Accounts receivable, net

     (9,127     318        (6,358     5,078   

Inventories

     2,555        1,624        4,207        1,976   

Prepaid expenses and other assets

     (2,499     698        (2,269     1,382   

Accounts payable

     (1,558     170        (1,643     (1,118

Accrued and other liabilities

     (17,515     999        1,770        4,943   

Deferred revenue

     4,644        2,783        10,125        4,893   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used in) provided by operating activities

     (13,920     11,003        1,045        25,885   

Investing activities:

        

Purchases of available-for-sale investments

     (40,342     —          (40,342     —     

Purchases of property and equipment

     (626     (265     (2,826     (1,505
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (40,968     (265     (43,168     (1,505

Financing activities:

        

(Offering costs for) proceeds from initial public offering, net

     (1,677     (572     95,391        (572

Proceeds from exercise of stock options

     100        —          111        —     

Distribution of income to LLC members

     —          (5,760     (6,997     (13,200
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used in) provided by financing activities

     (1,577     (6,332     88,505        (13,772

Net (decrease) increase in cash and cash equivalents

     (56,465     4,406        46,382        10,608   

Cash and cash equivalents at beginning of period

     121,522        19,304        18,675        13,102   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 65,057      $ 23,710      $ 65,057      $ 23,710   
  

 

 

   

 

 

   

 

 

   

 

 

 


Gigamon Inc.

Reconciliation of Non-GAAP Financial Measures

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 28,     September 30,     September 28,     September 30,  
     2013     2012     2013     2012  

Reconciliation of Gross Profit and Gross Margin on a GAAP Basis to Gross Profit and Gross Margin on a Non-GAAP Basis:

        

Gross profit on a GAAP basis

   $ 31,249      $ 20,613      $ 75,085      $ 51,386   

Stock-based compensation expense

     340        132        3,049        134   

Performance unit plan compensation expense

     —          —          353        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit on a Non-GAAP basis

   $ 31,589      $ 20,745      $ 78,487      $ 51,520   
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenue

   $ 38,986      $ 25,694      $ 97,208      $ 64,863   

Gross margin on a GAAP basis

     80     80     77     79

Gross margin on a Non-GAAP basis

     81     81     81     79

Reconciliation of Operating Income (Loss) and Operating Margin on a GAAP Basis to Operating Income (Loss) and Operating Margin on a Non-GAAP Basis:

        

Operating (loss) income on a GAAP basis

   $ 2,110      $ 2,121      $ (31,554   $ 4,003   

Stock-based compensation expense

     7,067        1,693        25,357        2,329   

Performance unit plan compensation expense

     —          —          20,371        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income on a Non-GAAP basis

   $ 9,177      $ 3,814      $ 14,174      $ 6,332   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating margin on a GAAP basis

     5     8     -32     6

Operating margin on a Non-GAAP basis

     24     15     15     10

Reconciliation of Net Income (Loss) Attributable To Common Stockholders on a GAAP Basis to Net Income Attributable To Common Stockholders on a Non-GAAP Basis:

        

Net income (loss) attributable to common stock holders on a GAAP basis

   $ 1,386      $ 1,061      $ (7,739   $ 1,515   

Accretion of preferred stock

     —          564        1,088        1,661   

Earnings (loss) attributable to preferred stock holders

     —          497        (1,107     710   

Stock-based compensation expense

     7,067        1,693        25,357        2,329   

Performance unit plan compensation expense

     —          —          20,371        —     

Tax benefit upon conversion of LLC to a C Corporation

     —          —          14,811        —     

Income tax effect of Non-GAAP adjustments

     (2,670     —          (42,967     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income on a Non-GAAP basis

   $ 5,783      $ 3,815      $ 9,814      $ 6,215   
  

 

 

   

 

 

   

 

 

   

 

 

 


Gigamon Inc.

Reconciliation of Non-GAAP Financial Measures (continued)

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended      Nine Months Ended  
     September 28,     September 30,      September 28,     September 30,  
     2013     2012      2013     2012  

Reconciliation of Diluted Net Income (Loss) per Share on a GAAP Basis to Diluted Net Income per Share on a Non-GAAP Basis:

         

Diluted net income (loss) per share on a GAAP basis

   $ 0.04      $ 0.06       $ (0.34   $ 0.09   

Accretion of preferred stock

     —          0.03         0.05        0.10   

Earnings (loss) attributable to preferred stock holders

     —          0.03         (0.05     0.04   

Stock-based compensation expense

     0.22        0.10         1.13        0.13   

Performance unit plan compensation expense

     —          —           0.90        —     

Tax benefit upon conversion of LLC to a C corporation

     —          —           0.66        —     

Income tax effect on non-GAAP adjustments

     (0.08     —           (1.91     —     

Impact of difference in number of GAAP and non-GAAP diluted shares

     —          —           (0.10     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted net income per share on a Non-GAAP basis

   $ 0.18      $ 0.22       $ 0.34      $ 0.36   
  

 

 

   

 

 

    

 

 

   

 

 

 

Reconciliation of GAAP Diluted Weighted-Average Number of Shares to Non-GAAP Diluted Weighted-Average Number of Shares:

         

GAAP diluted weighted-average number of shares

     32,554        17,307         22,529        17,300   

Dilutive impact due to stock options, restricted stock units and employee stock purchase plan purchase rights

     223        234         6,288        122   
  

 

 

   

 

 

    

 

 

   

 

 

 

Non-GAAP diluted weighted-average number of shares

     32,777        17,541         28,817        17,422   
  

 

 

   

 

 

    

 

 

   

 

 

 


Condensed Non-GAAP Consolidated Income Statements

Impact of Non-GAAP Adjustments on Reported Net Income (Loss)

For the Three and Nine Months Ended September 28, 2013 and September 30, 2012

(In thousands, except per share amounts)

(unaudited)

 

    Three Months Ended
September 28, 2013
    Three Months Ended
September 30, 2012
    Nine Months Ended
September 28, 2013
    Nine Months Ended
September 30, 2012
 
    As
Reported
    Adjustments     Non-
GAAP
    As
Reported
    Adjustments     Non-
GAAP
    As
Reported
    Adjustments     Non-
GAAP
    As
Reported
    Adjustments     Non-
GAAP
 

Revenue:

                       

Product

  $ 29,146      $ —        $ 29,146      $ 18,700      $ —        $ 18,700      $ 70,019      $ —        $ 70,019      $ 45,806      $ —        $ 45,806   

Service

    9,840        —          9,840        6,994        —          6,994        27,189        —          27,189        19,057        —          19,057   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

    38,986        —          38,986        25,694        —          25,694        97,208        —          97,208        64,863        —          64,863   

Cost of revenue:

                       

Product (1), (2)

    6,744        (129     6,615        4,524        (33     4,491        18,566        (2,093     16,473        11,975        (35     11,940   

Service (1), (2)

    993        (211     782        557        (99     458        3,557        (1,309     2,248        1,502        (99     1,403   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue

    7,737        (340     7,397        5,081        (132     4,949        22,123        (3,402     18,721        13,477        (134     13,343   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    31,249        340        31,589        20,613        132        20,745        75,085        3,402        78,487        51,386        134        51,520   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Product Gross Margin

    77       77     76       76     73       76     74       74

Service Gross Margin

    90       92     92       93     87       92     92       93

Total Gross Margin

    80       81     80       81     77       81     79       79

Operating expenses:

                       

Research and development (1), (2)

    8,958        (2,468     6,490        4,809        (328     4,481        31,726        (14,034     17,692        12,324        (360     11,964   

Sales and marketing (1), (2)

    15,485        (2,735     12,750        9,963        (473     9,490        54,020        (16,418     37,602        27,298        (559     26,739   

General and administrative (1), (2)

    4,696        (1,524     3,172        3,720        (760     2,960        20,893        (11,874     9,019        7,761        (1,276     6,485   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    29,139        (6,727     22,412        18,492        (1,561     16,931        106,639        (42,326     64,313        47,383        (2,195     45,188   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

    2,110        7,067        9,177        2,121        1,693        3,814        (31,554     45,728        14,174        4,003        2,329        6,332   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense):

                       

Interest income

    32        —          32        55        —          55        35        —          35        61        —          61   

Other expense, net

    (52     —          (52     (17     —          (17     (77     —          (77     (50     —          (50
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (Loss) before income taxes

    2,090        7,067        9,157        2,159        1,693        3,852        (31,596     45,728        14,132        4,014        2,329        6,343   

Income tax (expense) benefit (3), (4)

    (704     (2,670     (3,374     (37     —          (37     23,838        (28,156     (4,318     (128     —          (128
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

    1,386        4,397        5,783        2,122        1,693        3,815        (7,758     17,572        9,814        3,886        2,329        6,215   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Accretion of preferred stock

    —          —          —          (564     564        —          (1,088     1,088        —          (1,661     1,661        —     

Loss (earnings) attributable to preferred stock holders

    —          —          —          (497     497        —          1,107        (1,107     —          (710     710        —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) to common stock holders

  $ 1,386      $ 4,397      $ 5,783      $ 1,061      $ 2,754      $ 3,815      $ (7,739   $ 17,553      $ 9,814      $ 1,515      $ 4,700      $ 6,215   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share attributable to common stockholders:

                       

Basic

  $ 0.04      $ 0.15      $ 0.19      $ 0.06      $ 0.16      $ 0.22      $ (0.34   $ 0.78      $ 0.44      $ 0.09      $ 0.27      $ 0.36   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  $ 0.04      $ 0.14      $ 0.18      $ 0.06      $ 0.16      $ 0.22      $ (0.34   $ 0.68      $ 0.34      $ 0.09      $ 0.27      $ 0.36   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average number of shares used in per share amounts:

                       

Basic

    30,933        —          30,933        17,300        —          17,300        22,529        —          22,529        17,300        —          17,300   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

    32,554        223        32,777        17,307        234        17,541        22,529        6,288        28,817        17,300        122        17,422   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Notes:
(1) Includes stock-based compensation in the three and nine months ended September 28, 2013 and September 30, 2012.
(2) Includes performance unit plan compensation related expenses in the nine months ended September 28, 2013.
(3) Amount for the nine months ended September 28, 2013 includes tax benefit upon conversion from an LLC to a C Corporation on May 31, 2013.
(4) Includes income tax effect on non-GAAP adjustments for the three and nine months ended September 28, 2013.

Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies.

Gigamon’s management uses the non-GAAP financial measures to gain an understanding of Gigamon’s comparative operating performance and future prospects, and utilizes these measures in its internal financial statements for purposes of its internal budgets and financial goals. Management also believes that the exclusion of the non-GAAP items provides an additional measure of the company’s operating results and facilitates comparisons of the company’s core operating performance against prior periods and business model objectives. Management believes that investors should have access to the same set of tools that management uses to analyze Gigamon’s results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP. Gigamon endeavors to compensate for the limitation of the non-GAAP measures presented by also providing the most directly comparable GAAP measures and descriptions of the reconciling items and adjustments to derive the non-GAAP measures.

For periods presented:

- Non-GAAP gross margin is calculated as non-GAAP gross profit divided by GAAP revenue. Non-GAAP gross profit consists of GAAP gross profit excluding the effects of stock-based compensation expense and any performance unit plan compensation.

- Non-GAAP operating margin is calculated as non-GAAP income (loss) from operations divided by GAAP revenue. Non-GAAP income (loss) from operations consists of GAAP income (loss) from operations excluding the effects of stock-based compensation expense and any performance unit compensation expenses.

- Non-GAAP net income is calculated as GAAP net income (loss) excluding the effects of stock-based compensation expense and tax provision adjustments related to non-GAAP income. For the nine months ended September 28, 2013, non-GAAP net income also excludes the effects of performance unit plan compensation, and a tax benefit for the conversion of LLC to C Corporation.

- Non-GAAP net income per diluted share is calculated as non-GAAP net income divided by non-GAAP weighted average diluted shares outstanding for the three and nine months ended September 28, 2013 and September 30, 2012. Non-GAAP weighted-average diluted shares outstanding is calculated as GAAP weighted-average diluted shares outstanding including the dilutive impact due to stock options, employee stock purchase plan’s purchase rights and restricted stock units.