Investor Relations

NYSE: ‘CUDA’ $ 22.43 -0.28 -1.23% Volume: 354,582 May 26, 2017

Barracuda Reports Fourth Quarter and Fiscal Year 2016 Results

04/26/2016

- Q4 total revenue grew 16% year-over-year to $83.7 million
- Q4 non-GAAP earnings per share of $0.15
- Q4 dollar-based renewal rate of 96%

CAMPBELL, Calif., April 26, 2016 /PRNewswire/ -- Barracuda Networks, Inc. (NYSE: CUDA), a leading provider of cloud-connected security and data protection solutions, today announced results for its fourth quarter and fiscal year 2016, which ended February 29, 2016.

Barracuda Logo.

"We continue to build momentum in our core focus areas and are pleased with the initial results of our efforts to capitalize on the fastest growing trends in our markets," said BJ Jenkins, President and CEO. "We are focusing our efforts to be the leader in security and data protection for our customers. To reach that goal, we have made investments in enhancing our product portfolio, mobilizing our teams, and expanding our avenues to market to meet the growing demand for cost effective cloud-enabled solutions that can be deployed and managed in 'pay-as-you-go' private and public cloud environments."

"We delivered better than expected results in the fourth quarter, achieved non-GAAP earnings per share of $0.15, and our active subscriber count grew 14% to 278,000," said David Faugno, CFO.  "Demonstrating our belief in our strategy, we repurchased approximately $11 million of our shares in the open market during the quarter, bringing our total for the fiscal year to $19 million."

Fourth Quarter 2016 Financial Summary

  • Total revenue increased 16% to $83.7 million, compared with $72.2 million in the fourth quarter of fiscal year 2015. Appliance revenue was $21.7 million, compared with $20.9 million in the fourth quarter of fiscal year 2015, and recurring subscription revenue grew to $62.1 million, up from $51.2 million in the fourth quarter of fiscal year 2015, representing 74% of total revenue.
  • Gross billings were $95.8 million, compared with $96.1 million in the fourth quarter of fiscal 2015. The count of active subscribers grew 14% to 278 thousand and the dollar-based renewal rate was 96% for the quarter.
  • GAAP net income was $3.2 million, or $0.06 per share, based on a diluted share count of 53.1 million, compared to a GAAP net loss of $68.4 million in the fourth quarter of fiscal 2015.
  • Non-GAAP net income was $7.9 million, or $0.15 per share, based on a diluted share count of 53.1 million. Non-GAAP net income excludes $7.4 million in stock-based compensation expense, $3.8 million of income tax benefits, $3.1 million in amortization of intangibles, $1.4 million in acquisition and other non-recurring benefits, and $0.6 million in other income.

Fiscal Year 2016 Financial Summary

  • Total revenue increased 15% to $320.2 million, compared with $277.4 million in fiscal year 2015. Appliance revenue grew 7% to $89.3 million, up from $83.1 million in fiscal year 2015, and recurring subscription revenue grew 19% to $230.9 million, up from $194.3 million in fiscal year 2015, representing 72% of total revenue.
  • Gross billings increased 4% to $377.5 million, compared with $364.3 million in fiscal year 2015.
  • GAAP net loss was $4.4 million, or $0.08 per share, based on a basic share count of 53.1 million.
  • Non-GAAP net income was $22.7 million, or $0.42 per share, based on a diluted share count of 54.3 million. Non-GAAP net income excludes $28.8 million in stock-based compensation expense, $12.4 million of income tax benefits, $5.6 million in amortization of intangibles, $5.0 million in acquisition and other non-recurring charges, and $0.1 million in other expense.

The reconciliation between GAAP and non-GAAP information is contained in the tables below.

Recent Company Highlights

  • Launched Barracuda Essentials for Office 365: Added a suite of cloud services, with simple per-user licensing, designed to help organizations expand on the security and data protection functionality in Office 365.
  • Introduced Advanced Security Capabilities: Announced availability of Anti-Phishing Link Protection and Advanced Threat Detection functionality for protection against targeted email attacks for customers of all sizes in on-premises and cloud-based environments. 
  • Expanded NextGen Firewall Appliances: Expanded the NextGen Firewall product family with the new Barracuda NextGen Firewall S-Series, which is designed to enable customers to securely connect thousands of machine endpoints, enabling new 'Internet of Things' applications and deployments.
  • Enhanced Backup Products and Services: Announced enhancements to the Barracuda Backup product lines, including new subscription and cloud storage pricing and two new large-scale Barracuda Backup models. These updates offer additional flexibility for data protection and recovery in a single-source solution.
  • Enhanced Web Application Security Portfolio: Introduced the new Barracuda Vulnerability Manager, a cloud-based service to help customers detect vulnerabilities in their websites and applications running in on-premises, cloud, and hybrid environments.
  • Increased Industry Recognition: Recognized with numerous awards and accolades for channel commitment, customer service, and technology innovation – including CRN 5-Star Partner Program, Cloud Partner Program, and Channel Chief; 2016 SC Magazine Awards for Barracuda NextGen Firewall, Barracuda Web Application Firewall, and for the third time for Best Customer Service; 2016 Cybersecurity Excellence Awards Winner for Network Security for Barracuda NextGen Firewall F-Series; 2016 Infosecurity Products Guide "Gold" as Best Security Vendor, Customer Service Department of the Year, and Innovation in Cloud Security; InfoTech "Champion" for the MSSP use case for next-generation firewalls.

Conference Call Information
Barracuda will host a conference call and corresponding live webcast at 1:30 p.m. PT today. To access the conference call, dial 1-855-560-2573 for the U.S. or 1-412-542-4159 for international callers. The webcast will be available live on the investor relations section of the company's website at investors.barracuda.com, and via replay beginning approximately two hours after the completion of the call for a period of one year. An audio replay of the call will be available to investors beginning at approximately 5:00 p.m. PT today through May 3, 2016 by dialing 1-877-344-7529 in the U.S. or 1-412-317-0088 for international callers, and entering conference ID 10083175. Additional information can be found in an accompanying supplemental investor slide presentation located at investors.barracuda.com.

Forward-Looking Statements
This announcement contains forward-looking statements related to our ability to respond to the shifting market for cloud and SaaS deployments, changes in the growth rate of the markets in which we compete, changes in customer requirements, benefits and potential results related to our new products and product enhancements, and potential results from new initiatives and new channels and go-to-market strategies that involve risks and uncertainties, including statements regarding our expectations regarding financial performance and the potential impact of our new and updated products. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including, but not limited to: fluctuations in demand for our products and services; a highly competitive business environment for network security and storage solutions; the company's effectiveness in controlling expenses; the effects of significant developments in IT infrastructure deployments, particularly cloud computing; the impact of foreign currency fluctuations; the possibility that we might experience delays in the development of new technology and products; risks related to pending or future acquisitions; customer response to our new technology and products; risks related to pending or future litigation and regulatory matters; and a dependency on third parties for certain components of our products. The company undertakes no obligation to update the forward-looking information in this release. More information about potential factors that could affect our business and financial results is included in our filings with the Securities and Exchange Commission, including, without limitation, under the captions: "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Risk Factors," which are on file with the Securities and Exchange Commission.

Non-GAAP Financial Measures
Barracuda provides all financial information required in accordance with generally accepted accounting principles (GAAP). To supplement our consolidated financial statements presented in accordance with GAAP, we are also providing with this press release non-GAAP net income, non-GAAP operating income, adjusted EBITDA and adjusted free cash flow. In preparing our non-GAAP information, we have excluded certain amounts as set forth in the attached financial tables and footnotes. We believe that excluding these items provides both management and investors with additional insight into our current operations and the trends affecting the company. In particular, management finds it useful to exclude these items in order to more readily correlate the company's operating activities with the company's ability to generate cash from operations. Accordingly, management uses these non-GAAP measures, along with the comparable GAAP information, in evaluating our historical performance and in planning our future business activities. Please note that our non-GAAP measures may be different than those used by other companies. The additional non-GAAP financial information we present should be considered in conjunction with, and not as a substitute for, our financial information presented in accordance with GAAP. We have provided a non-GAAP reconciliation of the Condensed Consolidated Statement of Operations for the periods presented in this release, which exclude certain amounts as set forth in the attached financial tables and footnotes for these periods. These measures should only be used to evaluate the company's results of operations in conjunction with the corresponding GAAP measures for comparable financial information and understanding of the company's ongoing performance as a business. Barracuda uses both GAAP and non-GAAP measures to evaluate and manage its operations.

About Barracuda Networks Inc. (NYSE: CUDA)
Barracuda (NYSE: CUDA) simplifies IT with cloud-enabled solutions that empower customers to protect their networks, applications, and data, regardless of where they reside. These powerful, easy-to-use and affordable solutions are trusted by more than 150,000 organizations worldwide and are delivered in appliance, virtual appliance, cloud and hybrid deployments. Barracuda's customer-centric business model focuses on delivering high-value, subscription-based IT solutions that provide end-to-end network and data security. For additional information, please visit barracuda.com.

Barracuda Networks, Barracuda and the Barracuda Networks logo are registered trademarks or trademarks of Barracuda Networks, Inc. in the US and other countries.

Contacts:
Investor Relations:  Adam Carson; +1 408-342-5480; ir@barracuda.com
Corporate Communications: Mary Catherine Petermann; +1 404-307-6290; mc@barracuda.com

 

Barracuda Networks, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)








February 29, 2016


February 28, 2015

Assets




Current assets:





Cash and cash equivalents

$               118,654


$               151,373


Marketable securities

36,394


40,754


Accounts receivable, net of allowance for doubtful accounts 

36,520


40,725


Inventories, net

5,648


4,454


Deferred costs

31,943


30,221


Deferred income taxes

-


479


Other current assets

12,450


12,260

Total current assets

241,609


280,266







Property and equipment, net

31,910


27,839


Deferred costs, non-current

27,019


27,715


Deferred income taxes, non-current

2,992


443


Other non-current assets

7,293


4,123


Intangible assets, net

39,386


9,217


Goodwill

69,595


39,742

Total assets

$               419,804


$               389,345






Liabilities and stockholders' deficit




Current liabilities:





Accounts payable

$                 15,939


$                 16,356


Accrued payroll and related benefits

12,371


11,656


Other accrued liabilities

19,495


12,465


Deferred revenue

235,411


209,904


Deferred income taxes

-


563


Note payable

268


252

Total current liabilities

283,484


251,196






Long-term liabilities:





Deferred revenue, non-current

157,363


163,253


Deferred income taxes, non-current

2,478


2,396


Note payable, non-current

4,115


4,383


Other long-term liabilities

4,462


7,201






Stockholders' deficit:





Common stock

52


53


Additional paid-in capital

337,439


316,035


Accumulated other comprehensive loss

(4,509)


(4,233)


Accumulated deficit

(365,080)


(350,939)

Total stockholders' deficit

(32,098)


(39,084)

Total liabilities and stockholders' deficit

$               419,804


$               389,345






 

Barracuda Networks, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share information)

(Unaudited)














Three months ended February 28/29,


Twelve months ended February 28/29,




2016


2015


2016


2015











Revenue:










Appliance

$  21,650


$   20,942


$  89,275


$   83,146


Subscription

62,076


51,236


230,883


194,300



Total revenue

83,726


72,178


320,158


277,446











Cost of revenue

19,879


15,779


70,132


58,667











Gross profit

63,847


56,399


250,026


218,779











Operating expenses:









Research and development

17,120


16,570


71,251


58,737


Sales and marketing

33,504


31,621


138,324


125,526


General and administrative

10,998


9,491


47,338


35,438



Total operating expenses

61,622


57,682


256,913


219,701

Income (loss) from operations

2,225


(1,283)


(6,887)


(922)











Other income (expense), net

604


(1,147)


(262)


(3,674)











Income (loss) before income taxes

2,829


(2,430)


(7,149)


(4,596)

Benefit from (provision for) income taxes

406


(65,921)


2,727


(62,902)

Net income (loss)

$    3,235


$ (68,351)


$  (4,422)


$ (67,498)











Net income (loss) per share:









Basic


$      0.06


$      (1.30)


$    (0.08)


$      (1.30)


Diluted

$      0.06


$      (1.30)


$    (0.08)


$      (1.30)











Weighted-average shares used to compute net income (loss) per share:









Basic


52,746


52,629


53,070


51,898


Diluted

53,118


52,629


53,070


51,898











 

Barracuda Networks, Inc.

Reconciliation of Selected GAAP to Non-GAAP Financial Measures

(in thousands)

(Unaudited)












Three months ended February 28/29,


Twelve months ended February 28/29,



2016


2015


2016


2015










GAAP cost of revenue

$  19,879


$   15,779


$    70,132


$    58,667


Amortization of intangible assets (1)

1,561


404


3,247


2,283


Depreciation expense (2)

1,550


930


5,062


3,175


Stock-based compensation expense (3)

310


143


1,062


389

Non-GAAP cost of revenue

$  16,458


$   14,302


$    60,761


$    52,820










GAAP sales and marketing expense

$  33,504


$   31,621


$  138,324


$  125,526


Amortization of intangible assets (1)

1,544


181


2,343


1,160


Depreciation expense (2)

(69)


34


160


153


Stock-based compensation expense (3)

1,565


1,265


6,566


3,811


Acquisition and other non-recurring charges (4)

(1,029)


99


(1,346)


99

Non-GAAP sales and marketing expense

$  31,493


$   30,042


$  130,601


$  120,303










GAAP research and development expense

$  17,120


$   16,570


$    71,251


$    58,737


Depreciation expense (2)

113


187


657


670


Stock-based compensation expense (3)

2,141


1,510


8,247


4,410


Acquisition and other non-recurring charges (4)

(536)


378


1,685


1,505

Non-GAAP research and development expense

$  15,402


$   14,495


$    60,662


$    52,152










GAAP general and administrative expense

$  10,998


$      9,491


$    47,338


$    35,438


Depreciation expense (2)

674


355


1,831


1,190


Stock-based compensation expense (3)

3,414


2,458


12,971


8,448


Acquisition and other non-recurring charges (4)

126


199


4,649


686

Non-GAAP general and administrative expense

$    6,784


$      6,479


$    27,887


$    25,114










GAAP total expense

$  81,501


$   73,461


$  327,045


$  278,368


Amortization of intangible assets (1)

3,105


585


5,590


3,443


Depreciation expense (2)

2,268


1,506


7,710


5,188


Stock-based compensation expense (3)

7,430


5,376


28,846


17,058


Acquisition and other non-recurring charges (4)

(1,439)


676


4,988


2,290

Non-GAAP total expense

$  70,137


$   65,318


$  279,911


$  250,389


Depreciation expense (2)

2,268


1,506


7,710


5,188

Non-GAAP total expense including depreciation

$  72,405


$   66,824


$  287,621


$  255,577

 

 










Barracuda Networks, Inc.

Reconciliation of Selected GAAP to Non-GAAP Financial Measures

(in thousands, except per share information)

(Unaudited)












Three months ended February 28/29,


Twelve months ended February 28/29,



2016


2015


2016


2015










GAAP operating income (loss)

$    2,225


$   (1,283)


$    (6,887)


$        (922)


Amortization of intangible assets (1)

3,105


585


5,590


3,443


Stock-based compensation expense (3)

7,430


5,376


28,846


17,058


Acquisition and other non-recurring charges (4)

(1,439)


676


4,988


2,290

Non-GAAP operating income

$  11,321


$      5,354


$    32,537


$    21,869










GAAP net income (loss) 

$    3,235


$ (68,351)


$    (4,422)


$  (67,498)


Amortization of intangible assets (1)

3,105


585


5,590


3,443


Stock-based compensation expense (3)

7,430


5,376


28,846


17,058


Acquisition and other non-recurring charges (4)

(1,439)


676


4,988


2,290


Income tax effect on non-GAAP exclusions (5)

(3,793)


64,326


(12,435)


56,445


Other expense (income) adjustments (6)

(631)


1,111


87


3,330

Non-GAAP net income

$    7,907


$      3,723


$    22,654


$    15,068










Non-GAAP diluted earnings per share (7)

$      0.15


$        0.07


$         0.42


$         0.28

Weighted-average shares used to compute diluted earnings per share

53,118


54,656


54,337


54,002










(1)

Amortization of Intangible Assets.We provide non-GAAP information which excludes expenses for the amortization of intangible assets, as well as certain losses on disposal and impairment of such assets, that primarily relate to purchased intangible assets associated with our acquisitions. We believe that eliminating this expense from our non-GAAP measures is useful to investors, because the amortization of intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of our acquisition transactions, which also vary in frequency from period to period. Accordingly, we analyze the performance of our operations in each period without regard to such expenses.










(2)

Depreciation Expense. We provide non-GAAP information which excludes depreciation expense related to the amortization of property and equipment, as well as certain losses from disposal of such assets. We believe that eliminating this expense from our non-GAAP measures is useful to investors, because the acquisition of property and equipment, and the corresponding depreciation expense, can be inconsistent in amount and can vary from period to period.










(3)

Stock-Based Compensation Expense. We provide non-GAAP information which excludes expenses for stock-based compensation. We believe the exclusion of this item allows for financial results that are more indicative of our continuing operations. We believe that the exclusion of stock-based compensation expense provides for a better comparison of our operating results to prior periods and to our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types.










(4)

Acquisition and Other Non-Recurring Charges. We exclude certain expense items resulting from acquisitions and other non-recurring charges, which we do not expect to recur in our continuing operating results. We believe that adjusting for these charges allows us to better compare results from period to period in order to assess the ongoing operating results of our business. The charges include: (i) costs and settlements associated with an internal investigation of export control compliance, (ii) costs associated with an intellectual property settlement, and (iii) legal, valuation consulting and other expenses incurred in connection with acquisitions, the fair value remeasurements of contingent considerations, the payments made under the terms of certain acquisition agreements and other non-recurring expenses.










(5)

Income Tax Effect of Non-GAAP Exclusions. We believe providing financial information with and without the income tax effect of excluding items related to our non-GAAP financial measures provide our management and users of the financial statements with better clarity regarding the ongoing performance and future liquidity of our business. Excluded items include, but are not limited to: (i) amortization expense of intangible assets, (ii) stock-based compensation expense, (iii) acquisition and other non-recurring charges, and (iv) quarterly changes to the valuation allowance previously established.










(6)

Other expense (income) adjustments. We provide non-GAAP information that excludes the effect of certain other income and losses. These adjustments most significantly consist of foreign currency remeasurement gains and losses. For all non-functional currency account balances, the remeasurement of such balances to the functional currency will result in either a foreign exchange gain or a loss which is recorded in other income (expense), net. We believe that eliminating these items from our non-GAAP measures is useful to investors, because foreign currency remeasurement adjustments can be inconsistent in amount and can vary from period to period.










(7)

Non-GAAP Diluted Earnings Per Share. We provide non-GAAP diluted earnings per share. The non-GAAP diluted earnings per share amount is calculated based on our non-GAAP net income divided by the weighted-average diluted shares outstanding for the period.



















 

 

Barracuda Networks, Inc.

Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA

(in thousands)

(Unaudited)












Three months ended February 28/29,


Twelve months ended February 28/29,



2016


2015


2016


2015










GAAP net income (loss)

$      3,235


$ (68,351)


$   (4,422)


$ (67,498)


Deferred revenue, end of period

392,774


372,862


392,774


372,862


Less: Deferred revenue, beginning of period

(391,617)


(357,694)


(372,862)


(313,157)


Less: Deferred costs, end of period

(58,962)


(57,936)


(58,962)


(57,936)


Deferred costs, beginning of period

59,255


56,114


57,936


50,279


Other expense (income), net

(604)


1,147


262


3,674


Provision for (benefit from) income taxes

(406)


65,921


(2,727)


62,902


Acquisition and other non-recurring charges

(1,439)


676


4,988


2,290


Stock-based compensation expense

7,430


5,376


28,846


17,058


Amortization of intangible assets

3,105


585


5,590


3,443


Depreciation expense

2,268


1,506


7,710


5,188

Adjusted EBITDA (1)

$   15,039


$   20,206


$   59,133


$   79,105



















(1)

Adjusted EBITDA. We define adjusted EBITDA as net income (loss) plus increases in deferred revenue and increases in the associated deferred costs, plus non-cash and non-operating charges which include: (i) other expense (income), net, (ii) provision for (benefit from) income taxes, (iii) acquisition and other non-recurring charges, (iv) stock-based compensation expense, (v) amortization of intangible assets, including certain losses on disposal and impairment of intangible assets, and (vi) depreciation expense, including certain losses on disposal of fixed assets. The deferred revenue balances for the periods presented exclude any remaining acquisition date deferred revenue amounts assumed in connection with our acquisition of C2C Systems Limited, which closed in the second quarter of fiscal 2015. We believe adjusted EBITDA provides an indication of profitability from our operations, and provides a consistent measure of our performance from period to period. 

 

 

Barracuda Networks, Inc.

Reconciliation of GAAP Cash Flows from Operating Activities to Adjusted Free Cash Flow

(in thousands)

(Unaudited)












Three months ended February 28/29,


Twelve months ended February 28/29,



2016


2015


2016


2015










GAAP cash flows from operating activities

$  15,395


$  21,030


$  49,266


$  54,104

Purchase of property and equipment

(2,318)


(5,458)


(7,818)


(12,517)

Acquisition and other non-recurring charges (1)

3,373


667


5,107


2,017

Adjusted free cash flow (2)

$  16,450


$  16,239


$  46,555


$  43,604



















(1)

Acquisition and Other Non-Recurring Charges. We exclude the cash flow impact resulting from acquisitions and other non-recurring charges, which we do not expect to recur in our continuing operating results. We believe that adjusting for these cash outflows allows us to better compare results from period to period in order to assess the ongoing operating results of our business. The cash flows include: (i) payments associated with an intellectual property settlement, (ii) payments associated with an internal investigation of export control compliance, and (iii) payments related to legal, valuation consulting and other expenses incurred in connection with acquisitions, as well as the payments under the terms of certain acquisition agreements and other non-recurring expenses.










(2)

Adjusted Free Cash Flow. We define adjusted free cash flow as cash flows from operating activities less the purchases of property and equipment plus the cash flow effect of acquisition and other non-recurring charges. We believe that adjusting free cash flow to exclude these charges allows us to better compare results from period to period in order to assess the ongoing free cash flow of our business. We believe adjusted free cash flow is an important liquidity measure that reflects the cash generated by the business after the purchase of property and equipment that can then be used for, among other things, strategic acquisitions, investments in the business and funding ongoing operations.










 

 

Barracuda Networks, Inc.

Reconciliation of GAAP Revenue to Gross Billings

(in thousands)

(Unaudited)












Three months ended February 28/29,


Twelve months ended February 28/29,



2016


2015


2016


2015










GAAP Revenue

$   83,726


$   72,178


$  320,158


$  277,446


Total deferred revenue, end of period

392,774


372,862


392,774


372,862


Less:  total deferred revenue, beginning of period

(391,617)


(357,694)


(372,862)


(313,157)


Deferred revenue adjustments

10,905


8,779


37,445


27,141


Total change in deferred revenue and adjustments

12,062


23,947


57,357


86,846

Gross billings (1)(2)

$   95,788


$   96,125


$  377,515


$  364,292




























(1)

Gross Billings. We define gross billings as total revenue plus the change in deferred revenue and other adjustments, which primarily consist of returns and reserves with respect to the 30-day right of return we provide to customers, as well as rebates for certain channel partner activities. The deferred revenue balances for the periods presented exclude any remaining acquisition date deferred revenue amounts assumed in connection with our acquisition of C2C Systems Limited, which closed in the second quarter of fiscal 2015. We believe that gross billings provide insight into the sales of our solutions and performance of our business.










(2)

In order to determine how our business performed exclusive of the effect of foreign currency fluctuations, we compare the percentage change in our gross billings from one period to another using a constant currency. To present this gross billings information, the current and comparative prior period results for entities that operate in other than U.S. dollars are converted into U.S. dollars at constant exchange rates. For example, the rates in effect at February 28, 2015, which was the last day of our prior fiscal year's comparable quarter, were used to convert current and comparable prior period gross billings rather than the actual exchange rates in effect during the respective period.










 

Barracuda Networks, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)












Three months ended February 28/29,


Twelve months ended February 28/29,



2016


2015


2016


2015










Operating activities








Net income (loss)

$      3,235


$  (68,351)


$    (4,422)


$  (67,498)

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








Depreciation, amortization and impairment expense

5,373


2,091


13,300


8,631


Stock-based compensation expense

7,430


5,376


28,846


17,058


Excess tax benefits from equity compensation plans

(398)


(2,195)


(3,788)


(8,947)


Deferred income taxes

(2,665)


69,458


(6,592)


59,261


Other

(1,759)


282


(865)


486

Changes in operating assets and liabilities:









Accounts receivable, net

5,500


(160)


4,427


(12,945)


Inventories, net

471


682


(1,193)


1,189


Income taxes, net

1,873


(3,625)


2,756


(485)


Deferred costs

385


(2,101)


(1,112)


(8,189)


Other assets

(388)


(2,138)


(2,187)


(2,158)


Accounts payable 

957


3,239


(720)


2,835


Accrued payroll and related benefits

(382)


1,656


3,339


1,959


Other liabilities

(5,306)


1,722


(1,526)


3,566


Deferred revenue

1,069


15,094


19,003


59,341

Net cash provided by operating activities

15,395


21,030


49,266


54,104










Investing activities









Proceeds from the sale of marketable securities

1,108


249


10,310


249


Proceeds from the maturity of marketable securities

5,520


735


20,047


735


Purchase of marketable securities

(6,981)


(30,489)


(26,021)


(41,977)


Purchase of property and equipment

(2,318)


(5,458)


(7,818)


(12,517)


Purchase of intangible assets

-


-


-


(38)


Purchase of investments in non-marketable equity and debt securities

-


(100)


(1,400)


(1,200)


Business combinations, net of cash acquired

-


-


(56,862)


(4,791)

Net cash used in investing activities

(2,671)


(35,063)


(61,744)


(59,539)










Financing activities









Proceeds from issuance of common stock

133


3,916


4,845


16,476


Taxes paid related to net share settlement of equity awards

(765)


(1,515)


(6,734)


(5,369)


Repurchase of common stock

(11,216)


-


(19,216)


-


Employee loans extended, net of repayment

24


1,150


(2,464)


1,921


Excess tax benefits from equity compensation plans

398


2,195


3,788


8,947


Repayment of note payable

(64)


(60)


(285)


(237)


Other

(75)


(34)


(330)


(34)

Net cash provided by (used in) financing activities

(11,565)


5,652


(20,396)


21,704










Effect of exchange rate changes on cash and cash equivalents

422


(141)


155


(775)

Net increase (decrease) in cash and cash equivalents

1,581


(8,522)


(32,719)


15,494










Cash and cash equivalents at beginning of period

117,073


159,895


151,373


135,879

Cash and cash equivalents at end of period

$  118,654


$  151,373


$  118,654


$  151,373



















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SOURCE Barracuda Networks, Inc.

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