Market Overview

Vocera Announces Second Quarter Revenue of $42.7 Million

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Vocera
Communications, Inc.
(NYSE:VCRA), a recognized leader in clinical
communication and workflow solutions, today reported total revenue of
$42.7 million for the second quarter of 2018, an increase of 8% compared
to revenue of $39.7 million in the second quarter of 2017.

"The completeness of our unique solution remains a strong differentiator
for us," said Brent Lang, President and Chief Executive Officer of
Vocera. "We closed several large customer wins, and our cross-selling
efforts are succeeding. We booked four deals each over $2 million
dollars, with strong momentum in the Federal space."

Second quarter of 2018 financial highlights include:

  • Total revenue of $42.7 million, up 8% year-over-year
  • GAAP net loss per share of $(0.12); non-GAAP net income per share of
    $0.09
  • GAAP net loss of $(3.6) million; Adjusted EBITDA of $3.5 million
  • Deferred revenue of $53.4 million as of June 30, 2018
  • Cash, cash equivalents and short-term investments of $206.3 million as
    of June 30, 2018

Second Quarter 2018 Results

Total revenue for the second quarter of 2018 was $42.7 million, compared
to $39.7 million in the second quarter of 2017.

 
(in thousands) Three months ended June 30,
2018   2017   % change
Product revenue
Device $ 15,049 $ 14,990 0.4 %
Software 6,775   6,002   12.9
Total product $ 21,824 $ 20,992 4.0 %
 
Service revenue
Maintenance and support $ 15,505 $ 12,670 22.4 %
Professional services and training 5,357   5,996   (10.7 )
Total service 20,862   18,666   11.8
Total revenue $ 42,686   $ 39,658   7.6 %
 

GAAP gross margin for the second quarter of 2018 was 60.1%, compared to
57.7% in the second quarter of 2017.

 
Three months ended June 30,
2018   2017
Gross margin
Product 69.4 % 67.6 %
Service 50.4 46.6
Total gross margin 60.1 % 57.7 %
 
Non-GAAP gross margin
Product 72.9 % 72.0 %
Service 54.6 51.0
Total non-GAAP gross margin 64.0 % 62.1 %
 

GAAP net loss for the second quarter of 2018 was $(3.6) million, or
$(0.12) per share, compared to $(6.0) million, or $(0.21) per share in
the second quarter of 2017.

 
Three months ended June 30,
(in thousands except per share amounts) 2018   2017
Net income (loss) $ (3,554 ) $ (6,012 )
Net income (loss) per share $ (0.12 ) $ (0.21 )
Non-GAAP net income $ 2,779 $ 444
Non-GAAP net income per share $ 0.09 $ 0.02
Adjusted EBITDA $ 3,473 $ 1,434
 

Deferred revenue at June 30, 2018, was $53.4 million compared to $55.2
million at December 31, 2017. Cash equivalents and short-term
investments were $206.3 million at June 30, 2018 and $81.2 million at
December 31, 2017. In May 2018, the Company issued $143.8 million of
convertible senior notes. The net proceeds, after the purchase of the
capped call and debt issuance costs, were $130.0 million.

Full Year and Third Quarter 2018 Guidance

For the full-year 2018, the Company expects revenue between $175.0
million and $183.0 million and a GAAP loss per share between $(0.65) and
$(0.42). The Company expects non-GAAP net income per share to be between
$0.24 and $0.43 and non-GAAP Adjusted EBITDA to be between $14.0 million
and $20.0 million.

For the third quarter of 2018, the Company expects revenue between $43.0
million and $47.0 million and a GAAP loss per share between $(0.21) and
$(0.11). The Company expects non-GAAP net loss per share to be between
$0.03 and $0.11 and non-GAAP Adjusted EBITDA to be between $3.5 million
and $6.0 million.

Net income and earnings per share guidance for both the full-year and
the third quarter of 2018 reflect the impact of the convertible senior
notes.

   
(in millions except per share amounts) Q3'18 FY'18
Low   High Low   High
Revenue $ 43.0 $ 47.0 $ 175.0 $ 183.0
Loss per share $ (0.21 ) $ (0.11 ) $ (0.65 ) $ (0.42 )
Diluted non-GAAP net income (loss) per share $ 0.03 $ 0.11 $ 0.24 $ 0.43
Adjusted EBITDA $ 3.5 $ 6.0 $ 14.0 $ 20.0
 

Certain amounts in our release may not re-compute due to rounding. A
reconciliation of non-GAAP to GAAP financial measures, and third quarter
and full-year guidance, are included in the financial schedules. The
Company's re-cast financial statements for 2017 and 2016 are included in
the Company's accompanying financial schedules.

Conference Call Information

Vocera Communications will host a conference call at 5 p.m. ET (2 p.m.
PT) today, July 26, 2018, to discuss the Company's results.

Investors may access a free, live webcast of the call through the
Investors section of the Company's website at investors.vocera.com.

The call also can be accessed by dialing 833-238-7944, or 647-689-4192
for international callers, and using the access code 9489401.

A webcast replay of the call will be archived at investors.vocera.com.

Forward-Looking Statements

Statements in this press release that are not strictly historical in
nature are forward-looking statements within the meaning of the U.S.
federal securities laws, including our expected operating results for
the third quarter and full year 2018. These forward-looking statements
are based on limited information currently available to us and our
management's expectations, which are inherently subject to change and
involve a number of risks and uncertainties.

Actual events or results may differ materially from those in any
forward-looking statement due to various factors, including but not
limited to, changes in regulations in the U.S. and other countries; the
effects on government and commercial hospital customers of the federal
budget and budgetary uncertainty; changes in healthcare insurance
coverage and consumers' utilization of healthcare and hospital services;
our ability to achieve and maintain profitability; the demand for our
various solutions in the healthcare and other markets; our lengthy and
unpredictable sales cycle; our ability to offer high-quality services
and support for our solutions; our ability to achieve anticipated
strategic or financial benefits from our acquisitions; our ability to
acquire the sole and limited source hardware and software components of
our solutions; our ability to obtain the required capacity and product
quality from our contract manufacturer; our ability to develop and
introduce new solutions and features to existing solutions and to manage
our growth; the impact of tax law reform on us or our customers; and the
other factors described in our most recently filed Quarterly Report on
Form 10-Q, as well as our other filings with the Securities and Exchange
Commission (SEC). Our filings with the SEC are available on the
Investors section of the Company's web site at www.vocera.com.
The financial and other information contained in this press release
should be read in conjunction with the financial statements and notes
thereto included in our filings with the SEC. Our operating results for
any historical period, including the second quarter of 2018, are not
necessarily indicative of our operating results for any future periods.
This press release speaks only as of its date. We assume no obligation
to update the information in this press release, to revise any
forward-looking statements, or to update the reasons actual events or
results could differ materially from those anticipated in
forward-looking statements.

Use of Non-GAAP Financial Information

This press release contains financial measures that are not calculated
in accordance with U.S. generally accepted accounting principles (GAAP).
Our management evaluates the Company's results and makes operating
decisions using various GAAP and non-GAAP measures. In addition to our
GAAP results, we also consider non-GAAP gross margin, non-GAAP gross
margin for products and for services, non-GAAP net income/(loss),
non-GAAP income/(loss) per diluted share and non-GAAP operating
expenses. We also present Adjusted EBITDA, a non-GAAP measure that we
reconcile to net income/(loss). These non-GAAP measures should not be
considered as a substitute for the corresponding financial measure
derived in accordance with GAAP. We present the non-GAAP measures
because we consider them to be important supplemental information for
our investors for analyzing our performance, core operating results and
trends. Investors are encouraged to review the reconciliation of
non-GAAP financial measures to their most directly comparable GAAP
measures included with this press release.

Our non-GAAP gross margins, non-GAAP net income/(loss), non-GAAP
earnings/(loss) per diluted share, non-GAAP operating expenses, and
Adjusted EBITDA are exclusive of certain items to facilitate
management's review of the comparability of our core operating results
on a period to period basis because such items are not related to our
ongoing core operating results as viewed by management. We define our
"core operating results" as those revenues recorded in a particular
period and the expenses incurred within that period that directly drive
operating income in that period. Management uses these non-GAAP
financial measures in making operating decisions because, in addition to
meaningful supplemental information regarding operating performance, the
measures give us a better understanding of how we should invest in
research and development, fund infrastructure growth and evaluate the
effectiveness of marketing strategies. In calculating the above non-GAAP
results, management specifically adjusted for the following excluded
items:

a) Stock-based compensation expense impact. We recognize
equity plan-related compensation expenses, which represent the fair
value of all share-based payments to employees, including grants of
employee stock options and restricted stock units as non-GAAP
adjustments in each period.

b) Amortization of acquired intangibles. We acquired certain
companies in 2010, 2014 and 2016, and booked intangible assets related
to these acquisitions. The amortization of these acquired intangible
assets is excluded from non-GAAP net income because it is not related to
ongoing controllable management decisions and because it is non-cash in
nature.

c) Acquisition related expenses. In addition to the amortization
of acquired intangibles mentioned above, we also adjust for certain
acquisition-related expenses that we may incur including (i)
professional service fees and (ii) transition costs. Professional
service fees include third party costs related to the acquisition, such
as due diligence costs, accounting fees, legal fees, valuation services
and commissions, if any. Transition costs include retention payments,
transitional employee costs and earn-out payments (including amounts
relating to the distribution of purchase consideration among the selling
equity holders) treated as compensation expense. We consider such costs
and adjustments as highly variable in amount and frequency, being
significantly impacted by the timing and size of any acquisitions. By
excluding acquisition-related costs and adjustments from our non-GAAP
measures, management can better focus on the organic continuing
operations of our baseline and acquired businesses.

d) Restructuring costs. We exclude restructuring costs from
non-GAAP measures because we do not regard these limited-term or
one-time costs as reflective of normal costs we incur to operate our
business. These are defined in U.S. GAAP to include one-time employee
termination benefits, contract termination costs, and other associated
costs, with respect to exit or disposal activities.

Management adjusts for the above items because management believes that,
in general, these items possess one or more of the following
characteristics: their magnitude and timing is largely outside of
Vocera's control; they are unrelated to the ongoing operation of the
business in the ordinary course; they are unusual and we do not expect
them to occur in the ordinary course of business; or they are
non-operational, or non-cash expenses involving stock award grants.

We believe that the presentation of these non-GAAP financial measures is
warranted for several reasons:

1) Such non-GAAP financial measures provide an additional analytical
tool for understanding our financial performance by excluding the impact
of items which may obscure trends in the core operating results of the
business;

2) These non-GAAP financial measures facilitate comparisons to the
operating results of other companies commonly compared to us, which use
similar financial measures to supplement their GAAP results, thus
enhancing the perspective of investors who wish to utilize such
comparisons in their analysis of our performance; and

3) These non-GAAP financial measures are employed by our management in
their own evaluation of performance and are utilized in financial and
operational decision making processes, such as budget planning and
forecasting.

Set forth below are additional reasons why share-based compensation
expense is excluded from our non-GAAP financial measures:

i) While share-based compensation constitutes one of our ongoing and
recurring expenses, it is not an expense that requires cash settlement
by us. We therefore exclude these charges for purposes of evaluating
core operating results. Thus, our non-GAAP measurements are presented
exclusive of stock-based compensation expense to assist management and
investors in evaluating our core operating results.

ii) We present share-based payment compensation expense in our
reconciliation of non-GAAP financial measures on a pre-tax basis because
the exact tax differences related to the timing and deductibility of
share-based compensation are dependent upon the trading price of our
common stock and the timing and exercise by employees of their stock
options. As a result of these timing and market uncertainties, the tax
effect related to share-based compensation expense would be inconsistent
in amount and frequency and is therefore excluded from our non-GAAP
results.

As stated above, we present non-GAAP financial measures because we
consider them to be important supplemental measures of performance.
However, non-GAAP financial measures have limitations as an analytical
tool and should not be considered in isolation or as a substitute for
our GAAP results. In the future, we expect to incur expenses similar to
certain of the non-GAAP adjustments described above and expect to
continue reporting non-GAAP financial measures excluding such items.
Some of the limitations in relying on non-GAAP financial measures are:

  • Our stock options, restricted stock units, and stock purchase plans
    are important components of incentive compensation arrangements and
    will be reflected as expenses in our GAAP results for the foreseeable
    future; and
  • Other companies may calculate non-GAAP financial measures differently
    than us, limiting their usefulness as a comparative measure.

Pursuant to the requirements of SEC Regulation G, a detailed
reconciliation between our non-GAAP and GAAP financial results is set
forth in the financial tables referred to above, and linked to, this
press release. Investors are advised to carefully review and consider
this information strictly as a supplement to the GAAP results for the
respective periods.

About Vocera:

The mission of Vocera Communications, Inc. is to simplify and improve
the lives of healthcare professionals and patients, while enabling
hospitals to enhance quality of care and operational efficiency. In
2000, when the company was founded, we began to forever change the way
care teams communicate. Today, Vocera continues to offer the leading
platform for clinical communication and workflow. More than 1,700
facilities worldwide, including nearly 1,500 hospitals and healthcare
facilities, have selected our solutions for team members to text
securely using smartphones or make calls with our hands-free, wearable
Vocera Badge. Interoperability between Vocera and more than 140 clinical
and operational systems helps reduce alarm fatigue, speed up staff
response times, and improve patient care, safety and experience. In
addition to healthcare, Vocera is at home in luxury hotels, aged care
facilities, nuclear facilities, libraries, retail stores and more.
Vocera makes a difference in any industry where workers are on the move
and need to connect instantly with team members and access resources or
information quickly. In 2017, Vocera made the list of Forbes 100 Most
Trustworthy Companies in America.

Learn more at www.vocera.com,
and follow @VoceraComm on Twitter.

The Vocera logo is a trademark of Vocera Communications, Inc. Vocera®
is a trademark of Vocera Communications, Inc. registered in the United
States and other jurisdictions. All other trademarks appearing in this
release are the property of their respective owners.

 

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

   
Three months ended June 30, Six months ended June 30,
    2018   2017   2018   2017
Revenue    
Product $ 21,824 $ 20,992 $ 42,911 $ 41,044
Service 20,862   18,666   40,017   35,240  
Total revenue 42,686   39,658   82,928   76,284  
Cost of revenue
Product 6,683 6,807 13,028 13,216
Service 10,352   9,962   20,348   19,117  
Total cost of revenue 17,035   16,769   33,376   32,333  
Gross profit 25,651   22,889   49,552   43,951  
Operating expenses
Research and development 7,323 7,371 14,637 14,300
Sales and marketing 15,266 15,246 30,288 30,168
General and administrative 6,176   5,984   12,535   11,679  
Total operating expenses 28,765   28,601   57,460   56,147  
Income (loss) from operations (3,114 ) (5,712 ) (7,908 ) (12,196 )
Interest income 530 128 745 233
Interest expense (997 ) (997 )
Other income (expense), net (528 ) (67 ) (807 ) 42  
Loss before income taxes (4,109 ) (5,651 ) (8,967 ) (11,921 )
Benefit from (provision for) income taxes 555   (361 ) 643   (741 )
Net loss $ (3,554 ) $ (6,012 ) $ (8,324 ) $ (12,662 )
 
Net loss per share
Basic $ (0.12 ) $ (0.21 ) $ (0.28 ) $ (0.45 )
Diluted $ (0.12 ) $ (0.21 ) $ (0.28 ) $ (0.45 )
Weighted average shares used to compute net loss per share
Basic 29,867   28,422   29,673   28,088  
Diluted 29,867   28,422   29,673   28,088  
 

Vocera Communications, Inc.

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

   
    June 30,
2018
  December 31,
2017
Assets
Current assets
Cash and cash equivalents $ 27,480 $ 28,726
Short-term investments 178,825 52,507
Accounts receivable, net of allowance 33,489 35,105
Other receivables 1,518 1,331
Inventories 3,923 2,815
Prepaid expenses and other current assets 3,648   3,957
Total current assets 248,883 124,441
Property and equipment, net 6,980 5,751
Intangible assets, net 11,273 13,567
Goodwill 49,246 49,246
Deferred commissions 9,329   10,301
Other long-term assets 1,304   1,667
Total assets $ 327,015   $ 204,973
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 3,302 $ 2,678
Accrued payroll and other current liabilities 11,569 14,689
Deferred revenue, current 40,003   40,734
Total current liabilities 54,874 58,101
Deferred revenue, long-term 13,405 14,417
Convertible senior notes, net 107,374
Other long-term liabilities 2,930   4,455
Total liabilities 178,583 76,973
Stockholders' equity 148,432   128,000
Total liabilities and stockholders' equity $ 327,015   $ 204,973
 

 

Vocera Communications, Inc.

 

Three months ended June 30, 2018

 
  Stock   Intangible   Acquisition    
(In thousands) GAAP compensation amortization related Total Non-GAAP
2018 expense (a) (b) expense (c) adjustments 2018
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(Unaudited)
Revenue
Product $ 21,824 $ $ $ $ $ 21,824
Service 20,862           20,862
Total revenue 42,686           42,686
Cost of revenue
Product 6,683 139 626 765 5,918
Service 10,352   827     60   887   9,465
Total cost of revenue 17,035   966   626   60   1,652   15,383
Gross profit $ 25,651   $ 966   $ 626   $ 60   $ 1,652   $ 27,303
                     
Stock Intangible Acquisition
(In thousands) GAAP compensation amortization related Total Non-GAAP
2018 expense (a) (b) expense (c) adjustments 2018
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating
Expenses (Unaudited)
 
Research and development $ 7,323 $ 755 $ $ $ 755 $ 6,568
Sales and marketing 15,266 1,655 378 2,033 13,233
General and administrative 6,176   2,020   39   (166 ) 1,893   4,283
Total operating expenses $ 28,765   $ 4,430   $ 417   $ (166 ) $ 4,681   $ 24,084

(a) This adjustment reflects the accounting impact of non-cash
stock-based compensation expense.

(b) This adjustment reflects the accounting impact of acquisitions in
2010, 2014 and 2016 in non-cash expense.

(c) This adjustment reflects the costs associated with the acquisition
in 2016.

 

 

Three months ended June 30, 2017

  Stock   Intangible   Acquisition    
(In thousands) GAAP compensation amortization related Total Non-GAAP
2017 expense (a) (b) expense (c) adjustments 2017
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(Unaudited)
Revenue
Product $ 20,992 $ $ $ $ $ 20,992
Service 18,666           18,666
Total revenue 39,658           39,658
Cost of revenue
Product 6,807 125 801 926 5,881
Service 9,962   723     73   796   9,166
Total cost of revenue 16,769   848   801   73   1,722   15,047
Gross profit $ 22,889   $ 848   $ 801   $ 73   $ 1,722   $ 24,611
                     
Stock Intangible Acquisition
(In thousands) GAAP compensation amortization related Total Non-GAAP
2017 expense (a) (b) expense (c) adjustments 2017
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating
Expenses (Unaudited)
 
Research and development $ 7,371 $ 623 $ $ 12 $ 635 $ 6,736
Sales and marketing 15,246 1,779 384 7 2,170 13,076
General and administrative 5,984   1,653   56   220   1,929   4,055
Total operating expenses $ 28,601   $ 4,055   $ 440   $ 239   $ 4,734   $ 23,867

(a) This adjustment reflects the accounting impact of non-cash
stock-based compensation expense.

(b) This adjustment reflects the accounting impact of acquisitions in
2010 and 2014 in non-cash expense.

(c) This adjustment reflects the costs associated with the acquisition
in 2016.

 

 

Vocera Communications, Inc.

 

Six months ended June 30, 2018

  Stock   Intangible   Acquisition    
(In thousands) GAAP compensation amortization related Total Non-GAAP
2018 expense (a) (b) expense (c) adjustments 2018
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(Unaudited)
Revenue
Product $ 42,911 $ $ $ $ $ 42,911
Service 40,017           40,017
Total revenue 82,928           82,928
Cost of revenue
Product 13,028 240 1,454 1,694 11,334
Service 20,348   1,473     120   1,593   18,755
Total cost of revenue 33,376   1,713   1,454   120   3,287   30,089
Gross profit $ 49,552   $ 1,713   $ 1,454   $ 120   $ 3,287   $ 52,839
                     
Stock Intangible Acquisition
(In thousands) GAAP compensation amortization related Total Non-GAAP
2018 expense (a) (b) expense (c) adjustments 2018
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating
Expenses (Unaudited)
 
Research and development $ 14,637 $ 1,362 $ $ 1,362 $ 13,275
Sales and marketing 30,288 3,151 756 3,907 26,381
General and administrative 12,535   3,757   84   30   3,871   8,664
Total operating expenses $ 57,460   $ 8,270   $ 840   $ 30   $ 9,140   $ 48,320

(a) This adjustment reflects the accounting impact of non-cash
stock-based compensation expense.

(b) This adjustment reflects the accounting impact of acquisitions in
2010, 2014 and 2016 in non-cash expense.

(c) This adjustment reflects the costs associated with the acquisition
in 2016.

 

 

Six months ended June 30, 2017

  Stock   Intangible   Acquisition    
(In thousands) GAAP compensation amortization related Total Non-GAAP
2017 expense (a) (b) expense (c) adjustments 2017
Reconciliation of GAAP Gross Profit to Non-GAAP Gross Profit
(Unaudited)
Revenue
Product $ 41,044 $ $ $ $ $ 41,044
Service 35,240           35,240
Total revenue 76,284           76,284
Cost of revenue
Product 13,216 191 1,493 1,684 11,532
Service 19,117   1,177     169   1,346   17,771
Total cost of revenue 32,333   1,368   1,493   169   3,030   29,303
Gross profit $ 43,951   $ 1,368   $ 1,493   $ 169   $ 3,030   $ 46,981
 
 
Reconciliation of GAAP Operating Expenses to Non-GAAP Operating
Expenses (Unaudited)
 
Research and development $ 14,300 $ 1,035 $ $ 47 $ 1,082 $ 13,218
Sales and marketing 30,168 3,044 769 15 3,828 26,340
General and administrative 11,679   3,039   111   491   3,641   8,038
Total operating expenses $ 56,147   $ 7,118   $ 880   $ 553   $ 8,551   $ 47,596

(a) This adjustment reflects the accounting impact of non-cash
stock-based compensation expense.

(b) This adjustment reflects the accounting impact of acquisitions in
2010, 2014 and 2016 in non-cash expense.

(c) This adjustment reflects the costs associated with the acquisition
in 2016.

 
Vocera Communications, Inc.
Non-GAAP Net income and net income per share and Adjusted EBITDA
(In thousands, except per share amounts)
(Unaudited)
       
Three months ended June 30, Six months ended June 30,
2018 2017 2018 2017
GAAP net income (loss) $ (3,554 )

 

$ (6,012 ) $ (8,324 ) $ (12,662 )
Add back:
Stock compensation expense 5,396 4,903 9,983 8,486
Acquisition related expenses (106 )

 

312 150 722
Interest income (514 ) (117 ) (703 ) (209 )
Interest expense 997

 

 

997

 

Depreciation and amortization expense 1,809 1,987 3,776 3,791
Provision for (benefit from) income taxes (555 )

 

361   (643 ) 741  
Non-GAAP adjusted EBITDA $ 3,473   $ 1,434   $ 5,236   $ 869  
 
GAAP net income (loss) $ (3,554 ) $ (6,012 ) $ (8,324 ) $ (12,662 )
Add back:
Stock compensation expense 5,396 4,903 9,983 8,486
Intangible amortization 1,043 1,241 2,294 2,373
Acquisition related expenses (106 ) 312   150   722  
Non-GAAP net income $ 2,779   $ 444   $ 4,103   $ (1,081 )
Net income per share
Basic $ 0.09 $ 0.02 $ 0.14 $ (0.04 )
Diluted $ 0.09 $ 0.02 $ 0.13 $ (0.04 )
Weighted average shares used to compute net income per share
Basic 29,867 28,422 29,673 28,088
Diluted 31,038 28,422 30,910 28,088
 
Vocera Communications, Inc.
Future guidance for operating results
(In millions, except per share amounts)
 
Reconciliation for GAAP to Non-GAAP for net income (loss) and net
income (loss) per share
 

Three months ended
September 30, 2018

 

Year ended
December 31, 2018

Low   High Low   High
Revenue $ 43.0 $ 47.0 $ 175.0 $ 183.0
GAAP net loss (6.5 ) (3.5 ) (19.7 ) (12.7 )
Stock compensation expense 6.0 5.5 22.0 21.0
Intangible amortization expense 1.2 1.2 4.7 4.7
Acquisition and restructuring expense   0.2   0.2   0.5   0.5  
Total adjustments   7.4   6.9   27.2   26.2  
Non-GAAP net income $ 0.9   $ 3.4   $ 7.6   $ 13.6  
Weighted average shares (in thousands)
Basic 30,500 30,500 30,060 30,060
Diluted - GAAP 30,500 30,500 30,060 30,060
Diluted - Non-GAAP 32,000 32,000 31,560 31,560
 
GAAP net loss per share, basic and diluted $ (0.21 ) $ (0.11 ) $ (0.65 ) $ (0.42 )
 
Non-GAAP net income (loss) per share :
Basic $ 0.03 $ 0.11 $ 0.25 $ 0.45
Diluted $ 0.03 $ 0.11 $ 0.24 $ 0.43
 
 
Reconciliation of Non-GAAP net income (loss) to adjusted EBITDA

Three months ended
September 30, 2018

Year ended
December 31, 2018

Low High Low High
Non-GAAP net income $ 0.9   $ 3.4   $ 7.6   $ 13.6  
Interest expense, net 1.1 1.1 2.6 2.6
Depreciation expense 1.0 1.0 3.5 3.5
Provision for income taxes   0.5   0.5   0.4   0.4  
Total adjustments   2.6   2.6   6.5   6.5  
Adjusted EBITDA $ 3.5   $ 6.0   $ 14.0   $ 20.0  
 

* Amounts may not recompute due to rounding.

 
 
 

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations and Condensed
Consolidated Balance Sheets Adjusted for the Adoption of The New
Revenue Standard (ASC 606) on a Fully Retrospective Basis

 
 

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations Adjusted for
the Adoption of the New Revenue Standard

(In Thousands, Except Per Share Amounts)

(Unaudited)

     
As Adjusted As Reported Change
Year Ended December 31, 2017   2016 2017   2016 2017   2016
Revenue      
Product revenue
Devices $ 61,746 $ 50,614 $ 60,869 $ 50,061 $ 877 $ 553
Software 29,839     23,621   27,996     20,606   1,843     3,015  
Total product 91,585     74,235   88,865     70,667   2,720     3,568  
Service revenue
Maintenance and support 52,342 43,408 52,542 43,438 (200 ) (30 )
Professional services and training 22,062     14,383   21,141     13,591   921     792  
Total service 74,404     57,791   73,683     57,029   721     762  
Total revenue 165,989     132,026   162,548     127,696   3,441     4,330  
Cost of revenue
Product 27,244 22,788 27,244 22,788
Service 37,683     26,287   37,683     26,287        
Total cost of revenue 64,927     49,075   64,927     49,075        
Gross profit 101,062     82,951   97,621     78,621   3,441     4,330  
Operating expenses
Research and development 27,685 18,266 27,685 18,266
Sales and marketing 60,107 51,274 59,986 52,811 121 (1,537 )
General and administrative 23,970     24,499   23,970     24,499        
Total operating expenses 111,762     94,039   111,641     95,576   121     (1,537 )
Income (loss) from operations (10,700 ) (11,088 ) (14,020 ) (16,955 ) 3,320 5,867
Interest income 604 684 604 684
Other income (expense), net (42 )   (467 ) (42 )   (467 )      
Income (loss) before income taxes (10,138 ) (10,871 ) (13,458 ) (16,738 ) 3,320 5,867
Provision for income taxes (759 )   (529 ) (759 )   (529 )      
Net income (loss) $ (10,897 )   $ (11,400 ) $ (14,217 )   $ (17,267 ) $ 3,320     $ 5,867  
 
Net income (loss) per share
Basic and diluted $ (0.38 ) $ (0.42 ) $ (0.50 ) $ (0.64 ) $ 0.12 $ 0.21
Weighted average shares used to compute net income (loss) per share
Basic and diluted 28,655     26,859   28,655     26,859   28,655     26,859  
 

Vocera Communications, Inc.

Condensed Consolidated Statements of Operations Adjusted for
the Adoption of the New Revenue Standard

       
Q1 2017 Q2 2017 Q3 2017 Q4 2017
(In Thousands, Except Per Share Amounts, Unaudited) As Adjusted   As Reported   Change As Adjusted   As Reported   Change As Adjusted   As Reported   Change As Adjusted   As Reported   Change
Revenue                
Product revenue
Devices $ 14,058 $ 14,121 $ (63 ) $ 14,990 $ 14,837 $ 153 $ 16,524 $ 16,084 $ 440 $ 16,174 $ 15,827 $ 347
Software 5,994     5,912     82   6,002     5,821     181   9,494     7,165     2,329   8,349     9,098     (749 )
Total product 20,052     20,033     19   20,992     20,658     334   26,018     23,249     2,769   24,523     24,925     (402 )
Service revenue
Maintenance and support 12,000 11,852 148 12,670 12,583 87 13,837 13,746 91 13,835 14,361 (526 )
Professional services and training 4,574     4,410     164   5,996     5,209     787   5,730     5,305     425   5,762     6,217     (455 )
Total service 16,574     16,262     312   18,666     17,792     874   19,567     19,051     516   19,597     20,578     (981 )
Total revenue 36,626     36,295     331   39,658     38,450     1,208   45,585     42,300     3,285   44,120     45,503     (1,383 )
Cost of revenue
Product 6,409 6,409 6,807 6,807 7,208 7,208 6,820 6,820
Service 9,155     9,155       9,962     9,962       9,241     9,241       9,325     9,325      
Total cost of revenue 15,564     15,564       16,769     16,769       16,449     16,449       16,145     16,145      
Gross profit 21,062     20,731     331   22,889     21,681     1,208   29,136     25,851     3,285   27,975     29,358     (1,383 )
Operating expenses
Research and development 6,929 6,929 7,371 7,371 6,644 6,644 6,741 6,741
Sales and marketing 14,922 14,581 341 15,246 15,377 (131 ) 14,840 15,831 (991 ) 15,099 14,197 902
General and administrative 5,695     5,695       5,984     5,984       6,088     6,088       6,203     6,203      
Total operating expenses 27,546     27,205     341   28,601     28,732     (131 ) 27,572     28,563     (991 ) 28,043     27,141     902  
Income (loss) from operations (6,484 ) (6,474 ) (10 ) (5,712 ) (7,051 ) 1,339 1,564 (2,712 ) 4,276 (68 ) 2,217 (2,285 )
Interest income 105 105 128 128 177 177 194 194
Other income (expense), net 109     109       (67 )   (67 )     (41 )   (41 )     (43 )   (43 )    
Income (loss) before income taxes (6,270 ) (6,260 ) (10 ) (5,651 ) (6,990 ) 1,339 1,700 (2,576 ) 4,276 83 2,368 (2,285 )
Provision for income taxes (380 )   (380 )     (361 )   (361 )     (309 )   (309 )     291     291      
Net income (loss) $ (6,650 )   $ (6,640 )   $ (10 ) $ (6,012 )   $ (7,351 )   $ 1,339   $ 1,391     $ (2,885 )   $ 4,276   $ 374     $ 2,659     $ (2,285 )
 
Net income (loss) per share
Basic $ (0.24 ) $ (0.24 ) $ $ (0.21 ) $ (0.26 ) $ 0.05 $ 0.05 $ (0.10 ) $ 0.15 $ 0.01 $ 0.09 $ (0.08 )
Diluted $ (0.24 ) $ (0.24 ) $ $ (0.21 ) $ (0.26 ) $ 0.05 $ 0.05 $ (0.10 ) $ 0.14 $ 0.01 $ 0.09 $ (0.07 )
Weighted average shares used to compute net income (loss) per share
Basic 27,751     27,751     27,751   28,422     28,422     28,422   29,130     29,130     29,130   29,317     29,317     29,317  
Diluted 27,751     27,751     27,751   28,422     28,422     28,422   30,473     29,130     30,473   30,704     30,704     30,704  
 

Vocera Communications, Inc.

Condensed Consolidated Balance Sheets Adjusted for the Adoption
of the New Revenue Standard

(In Thousands, Unaudited)

     
As Adjusted As Reported Change
As of December 31,   2017   2016 2017   2016 2017   2016
Assets      
Current assets
Cash and cash equivalents $ 28,726 $ 35,033 $ 28,726 $ 35,033 $ $
Short-term investments 52,507 39,033 52,507 39,033
Accounts receivable, net 35,105 24,142 35,105 24,142
Other receivables 1,331 1,211 1,170 1,211 161
Inventories 2,815 4,556 2,815 4,556
Prepaid expenses and other current assets 3,957     3,364   3,957     3,364        
Total current assets 124,441 107,339 124,280 107,339 161
Property and equipment, net 5,751 5,894 5,751 5,894
Intangible assets, net 13,567 18,200 13,567 18,200
Goodwill 49,246 49,246 49,246 49,246
Deferred Commissions 10,301 10,422 10,301 10,422
Other long-term assets 1,667     1,394   1,667     1,394        
Total assets $ 204,973     $ 192,495   $ 194,511     $ 182,073   $ 10,462     $ 10,422  
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 2,678 $ 3,231 $ 2,678 $ 3,231 $ $
Accrued payroll and other current liabilities 14,689 15,896 14,689 15,896
Deferred revenue, current 40,734     38,194   47,276     43,845   (6,542 )   (5,651 )
Total current liabilities 58,101 57,321 64,643 62,972 (6,542 ) (5,651 )
Deferred revenue, long-term 14,417 11,523 16,438 11,155 (2,021 ) 368
Other long-term liabilities 4,455     4,505   4,455     4,505        
Total liabilities 76,973 73,349 85,536 78,632 (8,563 ) (5,283 )
Total stockholders' equity 128,000     119,146   108,975     103,441   19,025     15,705  
Total liabilities and stockholders' equity $ 204,973     $ 192,495   $ 194,511     $ 182,073   $ 10,462     $ 10,422  
 

Vocera Communications, Inc.

Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share and
Adjusted EBITDA Adjusted for the Adoption of the New Revenue
Standard

(In Thousands, Except Per Share Amounts)

(Unaudited)

   
Year Ended December 31, 2017 Year Ended December 31, 2016
    As Adjusted   As Reported   Change As Adjusted   As Reported   Change
GAAP net income (loss) $ (10,897 )   $ (14,217 )   $ 3,320 $ (11,400 )   $ (17,267 )   $ 5,867
Add back:
Stock compensation expense 18,196 18,196 12,035 12,035
Acquisition related expenses 1,269 1,269 5,822 5,822
Interest income (549 ) (549 ) (627 ) (627 )
Depreciation and amortization expense 7,643 7,643 3,770 3,770
Provision for income taxes 759     759       529     529    
Non-GAAP adjusted EBITDA $ 16,421     $ 13,101     $ 3,320   $ 10,129     $ 4,262     $ 5,867
 
GAAP net income (loss) $ (10,897 ) $ (14,217 ) $ 3,320 $ (11,400 ) $ (17,267 ) $ 5,867
Add back:
Stock compensation expense 18,196 18,196 12,035 12,035
Intangible amortization 4,633 4,633 1,375 1,375
Acquisition related expenses 1,269     1,269       5,822     5,822    
Non-GAAP net income $ 13,201     $ 9,881     $ 3,320   $ 7,832     $ 1,965     $ 5,867
Net income per share
Basic $ 0.46 $ 0.33 $ 0.12 $ 0.29 $ 0.07 $ 0.22
Diluted $ 0.44 $ 0.33 $ 0.11 $ 0.28 $ 0.07 $ 0.21
Weighted average shares used to compute net income per share
Basic 28,655 29,673 28,655 26,859 28,088 26,859
Diluted 30,268 30,268 30,268 28,126 28,126 28,126
 

Vocera Communications, Inc.

Non-GAAP Net Income (Loss) and Net Income (Loss) Per Share and
Adjusted EBITDA Adjusted for the Adoption of the New Revenue
Standard

(In Thousands, Except Per Share Amounts)

(Unaudited)

       
Q1 2017 Q2 2017 Q3 2017 Q4 2017
    As Adjusted   As Reported   Change As Adjusted   As Reported   Change As Adjusted   As Reported   Change As Adjusted   As Reported   Change
GAAP net income (loss) $ (6,650 )   $ (6,640 )   $ (10 ) $ (6,012 )   $ (7,351 )   $ 1,339 $ 1,391   $ (2,885 )   $ 4,276 $ 374   $ (3,554 )   $ (2,285 )
Add back:
Stock compensation expense 3,583 3,583 4,903 4,903 4,718 4,718 4,992 4,992
Acquisition related expenses 410 410 312 312 287 287 260 260
Interest income (92 ) (92 ) (117 ) (117 ) (162 ) (162 ) (178 ) (178 )
Depreciation and amortization expense 1,804 1,804 1,987 1,987 1,964 1,964 1,888 1,888
Provision for income taxes 380     380       361     361       309     309       (291 )   (291 )    
Non-GAAP adjusted EBITDA $ (565 )   $ (555 )   $ (10 ) $ 1,434     $ 95     $ 1,339   $ 8,507     $ 4,231     $ 4,276   $ 7,045     $ 9,330     $ (2,285 )
 
GAAP net income (loss) $ (6,650 ) $ (6,640 ) $ (10 ) $ (6,012 ) $ (7,351 ) $ 1,339 $ 1,391 $ (2,885 ) $ 4,276 $ 374 $ 2,659 $ (2,285 )
Add back:
Stock compensation expense 3,583 3,583 4,903 4,903 4,718 4,718 4,992 4,992
Intangible amortization 1,132 1,132 1,241 1,241 1,169 1,169 1,091 1,091
Acquisition related expenses 410     410       312     312       287     287       260     260      
Non-GAAP net income $ (1,525 )   $ (1,515 )   $ (10 ) $ 444     $ (895 )   $ 1,339   $ 7,565     $ 3,289     $ 4,276   $ 6,717     $ 9,002     $ (2,285 )
Net income per share
Basic $ (0.05 ) $ (0.05 ) $ $ 0.02 $ (0.03 ) $ 0.05 $ 0.26 $ 0.11 $ 0.15 $ 0.23 $ 0.31 $ (0.08 )
Diluted $ (0.05 ) $ (0.05 ) $ $ 0.01 $ (0.03 ) $ 0.04 $ 0.25 $ 0.11 $ 0.14 $ 0.22 $ 0.29 $ (0.07 )
Weighted average shares used to compute net income per share
Basic 27,751 27,751 27,751 28,422 28,422 28,422 29,130 29,130 29,130 29,317 29,867 29,317
Diluted 27,751 27,751 27,751 29,806 28,422 29,806 30,473 30,473 30,473 30,704 30,704 30,704

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