Sphere 3D Corp. (NASDAQ: ANY), a company delivering
containerization, virtualization, and data management solutions via
hybrid cloud, cloud and on-premise implementations through its
global reseller network and professional services organization,
today reported financial results for its second quarter ended June
30, 2018.
|
Financial Highlights |
Three Months Ended |
Six Months Ended |
|
(in millions) |
June 30,2018 |
June 30,2017 |
June 30,2018 |
June 30,2017 |
|
|
|
|
|
|
|
Net revenue |
$18.5 |
$19.4 |
$37.9 |
$41.2 |
|
Gross profit |
$5.7 |
$5.4 |
$11.7 |
$12.2 |
|
Gross margin (%) |
31.0% |
27.7% |
30.9% |
29.7% |
|
Adjusted EBITDA (1) |
$(1.9) |
$(2.6) |
$(5.2) |
$(3.6) |
|
Net loss |
$(6.0) |
$(7.5) |
$(12.8) |
$(15.3) |
| (1) |
Non-GAAP
measure as defined below. See the “Use of GAAP and Non-GAAP
Financial Measures” and “Non-GAAP Reconciliations” sections of this
announcement below. |
Second Quarter 2018 Financial Results:
• Net revenue for the second quarter of 2018 was $18.5 million,
compared to $19.4 million for the second quarter of 2017.
• Product revenue for the second quarter of 2018 was $16.3
million, compared to $17.1 million for the second quarter of
2017.
- Disk systems revenue was $12.7 million, compared to $11.5
million for the second quarter of 2017. Disk systems is defined as
RDX, SnapServer family, virtual desktop infrastructure, and
Glassware derived products.
- Tape archive product revenue was $3.6 million compared to $5.6
million for the second quarter of 2017.
• Service revenue was $2.2 million in the second quarter of
2018 compared to $2.3 million for the second quarter of 2017.
• Gross margin for the second quarter of 2018 was 31.0%,
compared to 27.7% for the second quarter of 2017. Non-GAAP
gross margin for the second quarter of 2018 was 34.0%, compared to
30.6% for the second quarter of 2017. Our methodology for
determining non-GAAP gross margin, which excludes the effect of
intangible asset amortization from gross profit, is described in
the Use of GAAP and Non-GAAP Financial Measures section of this
announcement. See also, “Non-GAAP Reconciliations” below.
• Operating expenses for the second quarter of 2018 were
$9.1 million, compared to $11.5 million for the second quarter of
2017.
• Share-based compensation expense for the second quarter
of 2018 was $0.4 million, compared to $1.5 million for the second
quarter of 2017. Depreciation and amortization was $0.9 million in
the second quarter of 2018, compared to $1.5 million for the second
quarter of 2017.
• Adjusted EBITDA for the second quarter of 2018 was a net
loss of $1.9 million, or a net loss of $0.14 per share, based on
13.7 million weighted average shares outstanding, compared to
adjusted EBITDA net loss of $2.6 million, or a net loss of $0.64
per share, based on 4.1 million weighted average shares outstanding
for the second quarter of 2017. Adjusted EBITDA is a non-GAAP
measure presented as net loss before interest expense, income
taxes, acquisition costs, depreciation and amortization,
share-based compensation, loss on revaluation of investment, and
warrant revaluation gain. For additional information
regarding the non-GAAP financial measures discussed in this
release, please see “Use of GAAP and Non-GAAP Financial Measures”
and "Non-GAAP Reconciliations " below.
• Net loss for the second quarter of 2018 was $6.0 million,
or a net loss of $0.44 per share, compared to a net loss of $7.5
million, or a net loss of $1.81 per share, in the second quarter of
2017.
Six Months Ended June 30, 2018 Financial
Results:
• Net revenue for the first six months of 2018 was $37.9
million, compared to $41.2 million for the first six months of
2017.
• Product revenue for the first six months of 2018 was
$33.7 million, compared to $36.5 million for the first six months
of 2017.
- Disk systems revenue was $25.8 million, compared to $26.5
million for the first six months of 2017. Disk systems is defined
as RDX, SnapServer family, virtual desktop infrastructure, and
Glassware derived products.
- Tape archive product revenue was $7.9 million compared to $10.0
million for the first six months of 2017.
• Service revenue was $4.2 million in the first six months
of 2018 compared to $4.6 million for the first six months of
2017.
• Gross margin for the first six months of 2018 was 30.9%,
compared to 29.7% for the first six months of 2017. Non-GAAP
gross margin for the first six months of 2018 was 33.9%, compared
to 32.4% for the first six months of 2017. Our methodology for
determining non-GAAP gross margin, which excludes the effect of
intangible asset amortization from gross profit, is described in
the Use of GAAP and Non-GAAP Financial Measures section of this
announcement. See also, “Non-GAAP Reconciliations” below.
• Operating expenses for the first six months of 2018 were
$20.2 million, compared to $23.1 million for the first six months
of 2017.
• Share-based compensation expense for the first six months
of 2018 was $1.3 million, compared to $3.7 million for the first
six months of 2017. Depreciation and amortization was $2.4 million
in the first six months of 2018, compared to $3.1 million for the
first six months of 2017.
• Adjusted EBITDA for the first six months of 2018 was a net
loss of $5.2 million, or a net loss of $0.49 per share, based on
10.7 million weighted average shares outstanding, compared to
adjusted EBITDA net loss of $3.6 million, or a net loss of $0.99
per share, based on 3.6 million weighted average shares outstanding
for the first six months of 2017. Adjusted EBITDA is a non-GAAP
measure presented as net loss before interest expense, income
taxes, acquisition costs, depreciation and amortization,
share-based compensation, loss on revaluation of investment, and
warrant revaluation gain. For additional information
regarding the non-GAAP financial measures discussed in this
release, please see “Use of GAAP and Non-GAAP Financial Measures”
and "Non-GAAP Reconciliations " below.
• Net loss for the first six months of 2018 was $12.8
million, or a net loss of $1.20 per share, compared to a net loss
of $15.3 million, or a net loss of $4.22 per share, in the first
six months of 2017.
Investor Conference Call:
Sphere 3D will not be hosting a second quarter 2018 earnings
conference call.
Use of GAAP and Non-GAAP Financial
Measures:
To supplement Sphere 3D’s consolidated financial statements
presented in accordance with GAAP, the Company uses Adjusted
EBITDA, a non-GAAP financial measure that excludes from the
consolidated statement of operations the effects of interest
expense, income taxes, acquisition costs, depreciation and
amortization, share-based compensation, loss on revaluation of
investment, and warrant revaluation gain. The Company also uses
Non-GAAP gross profit and Non-GAAP gross-margin, non-GAAP financial
measures that exclude the effect of intangible asset amortization.
Sphere 3D uses the above non-GAAP financial measures internally to
understand, manage and evaluate the business. Management believes
it is useful for itself and investors to review, as applicable,
both GAAP information and the non-GAAP measures in order to assess
the performance of continuing operations and for planning and
forecasting in future periods. The presentation of these non-GAAP
measures is intended to provide investors with an understanding of
the Company’s operational results and trends that enables them to
analyze the base financial and operating performance and facilitate
period-to-period comparisons and analysis of operational trends.
Sphere 3D believes the presentation of these non-GAAP financial
measures is useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision-making.
Non-GAAP financial measures should be considered in addition
to results prepared in accordance with GAAP, but should not be
considered substitutes for or superior to GAAP results. In
addition, the Company’s non-GAAP financial measures may not be
comparable to similarly titled measures utilized by other companies
since such other companies may not calculate such measures in the
same manner as does the Company.
Investors are encouraged to review the reconciliation of these
non-GAAP financial measures to the most comparable GAAP measures,
which are provided in the attached table after the text of this
release.
Additional Information
As previously disclosed, on August 1, 2018,
Overland Storage, Inc., a wholly-owned subsidiary of the Company
(“Overland”), together with its subsidiary, Tandberg Data GmbH, as
co-borrowers under that certain Credit Agreement dated as of April
6, 2016 (as amended from time to time, the “Credit Agreement”),
with CB CA SPV, LLC (“Colbeck”), as lender, failed to make a
required payment of interest due on such date. Such failure
constituted an event of default as of August 6, 2018 under the
Credit Agreement after expiration of a five day cure period.
On August 7, 2018, Overland received a notice from Colbeck
stating that, as a result of such failure, all amounts under
the Credit Agreement are immediately due and payable. The
foregoing also constitutes an event of default under that certain
8% Senior Secured Convertible Debenture in favor of FBC Holdings,
S.à r.l (“FBC” and together with Colbeck, the “Lenders”). The
Company, Overland and their subsidiaries are in continuing
discussions for a potential resolution with the Lenders. Despite
these efforts, there can be no assurance that the Lenders will
ultimately agree to any such resolution.
About Sphere 3DSphere 3D
Corp. (NASDAQ: ANY) delivers containerization, virtualization,
and data management solutions via hybrid cloud, cloud and
on-premise implementations through its global reseller network and
professional services organization. Sphere 3D, along
with its wholly owned subsidiaries Overland Storage,
and Tandberg Data, has a strong portfolio of brands,
including Overland-Tandberg, HVE ConneXions and UCX
ConneXions, dedicated to helping customers achieve their IT goals.
For more information, visit www.sphere3d.com. Follow us on
Twitter @Sphere3D, @HVEconneXions and @ovltb
Safe Harbor Statement This
press release contains forward-looking statements that involve
risks, uncertainties, and assumptions that are difficult to
predict. Actual results and the timing of events could differ
materially from those anticipated in such forward-looking
statements as a result of risks and uncertainties including,
without limitation, our inability to resolve our existing defaults
under our credit and debt facilities, our inability to obtain
additional debt or equity financing or to refinance our debt; our
inability to consummate the sale of Overland Storage pursuant to
the Share Purchase Agreement we entered into on February 20, 2018,
any increase in our cash needs; the Company’s ability to
maintain listing with the NASDAQ Capital Market; our ability
to successfully integrate the UCX and HVE ConneXions business with
Sphere 3D’s other businesses; market adoption and performance of
our products; the level of success of our collaborations and
business partnerships; possible actions by customers, partners,
suppliers, competitors or regulatory authorities; and other risks
detailed from time to time in our periodic reports contained in our
Annual Information Form and other filings with Canadian securities
regulators (www.sedar.com) and in prior periodic reports filed with
the United States Securities and Exchange
Commission(www.sec.gov). Sphere 3D undertakes no
obligation to update any forward-looking statement, whether written
or oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise, except as
required by law.
Non-GAAP Financial Measures:To
supplement Sphere 3D’s consolidated financial statements presented
in accordance with GAAP, the Company uses non-GAAP financial
measures that exclude from the consolidated statement of operations
the effects of interest expense, income taxes, acquisition costs,
depreciation and amortization, share-based compensation, loss on
revaluation of investment, and warrant revaluation gain. These
non-GAAP financial measures are non-GAAP gross margin and adjusted
EBITDA. Sphere 3D uses the above non-GAAP financial measures
internally to understand, manage and evaluate the business.
Management believes it is useful for itself and investors to
review, as applicable, both GAAP information and the non-GAAP
measures in order to assess the performance of continuing
operations and for planning and forecasting in future periods. The
presentation of these non-GAAP measures is intended to provide
investors with an understanding of the Company’s operational
results and trends that enables them to analyze the base financial
and operating performance and facilitate period-to-period
comparisons and analysis of operational trends. Sphere 3D believes
the presentation of these non-GAAP financial measures is useful to
investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and
operational decision-making. Non-GAAP financial measures should be
considered in addition to results prepared in accordance with GAAP,
but should not be considered substitutes for or superior to GAAP
results. In addition, our non-GAAP financial measures may not be
comparable to similarly titled measures utilized by other companies
since such other companies may not calculate such measures in the
same manner as we do.
Investor Contact:Tina
Brown+1-408-283-4731Investor.relations@sphere3d-overland.com
| SPHERE 3D CORP. |
| CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
| (In thousands, except per share
data) |
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
June 30, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
(Unaudited) |
|
(Unaudited) |
| Net
revenue |
$ |
18,461 |
|
|
$ |
19,438 |
|
|
$ |
37,909 |
|
|
$ |
41,176 |
|
| Cost of
revenue |
12,740 |
|
|
14,051 |
|
|
26,178 |
|
|
28,958 |
|
| Gross
profit |
5,721 |
|
|
5,387 |
|
|
11,731 |
|
|
12,218 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
| Sales and
marketing |
4,014 |
|
|
4,707 |
|
|
8,404 |
|
|
9,504 |
|
| Research
and development |
1,029 |
|
|
1,896 |
|
|
2,317 |
|
|
3,667 |
|
| General
and administrative |
4,030 |
|
|
4,914 |
|
|
9,451 |
|
|
9,903 |
|
| |
9,073 |
|
|
11,517 |
|
|
20,172 |
|
|
23,074 |
|
| Loss from
operations |
(3,352 |
) |
|
(6,130 |
) |
|
(8,441 |
) |
|
(10,856 |
) |
| Interest
expense |
(1,006 |
) |
|
(1,061 |
) |
|
(1,459 |
) |
|
(2,251 |
) |
| Interest
expense - related party |
(1,278 |
) |
|
(638 |
) |
|
(1,933 |
) |
|
(1,298 |
) |
| Other
income (expense), net |
123 |
|
|
508 |
|
|
(163 |
) |
|
(419 |
) |
| Loss before
income taxes |
(5,513 |
) |
|
(7,321 |
) |
|
(11,996 |
) |
|
(14,824 |
) |
| Provision
for income taxes |
489 |
|
|
192 |
|
|
829 |
|
|
498 |
|
| Net
loss |
$ |
(6,002 |
) |
|
$ |
(7,513 |
) |
|
$ |
(12,825 |
) |
|
$ |
(15,322 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net loss
per share: |
|
|
|
|
|
|
|
|
|
|
|
| Basic and
diluted |
$ |
(0.44 |
) |
|
$ |
(1.81 |
) |
|
$ |
(1.20 |
) |
|
$ |
(4.22 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Shares used
in computing |
|
|
|
|
|
|
|
|
|
|
|
| net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
| Basic and
diluted |
13,651 |
|
|
4,140 |
|
|
10,681 |
|
|
3,631 |
|
| SPHERE 3D CORP. |
| CONDENSED CONSOLIDATED BALANCE
SHEETS |
| (In thousands) |
| |
| |
June 30, |
|
December 31, |
| |
2018 |
|
2017 |
| |
(Unaudited) |
|
(Unaudited) |
|
ASSETS |
|
|
|
| Cash and
cash equivalents |
$ |
2,858 |
|
$ |
4,598 |
| Accounts
receivable, net |
8,849 |
|
11,482 |
|
Inventories |
7,377 |
|
8,366 |
| Other
current assets. |
2,151 |
|
1,829 |
| Total
current assets |
21,235 |
|
26,275 |
| Property
and equipment, net |
2,448 |
|
2,742 |
| Intangible
assets, net |
39,181 |
|
41,473 |
|
Goodwill |
11,590 |
|
11,590 |
| Other
assets |
1,325 |
|
1,200 |
| Total
assets |
$ |
75,779 |
|
$ |
83,280 |
| |
|
|
|
| |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
| Current
liabilities |
$ |
66,748 |
|
$ |
67,910 |
| Deferred
income taxes |
1,316 |
|
1,342 |
| Other
long-term liabilities |
2,529 |
|
3,565 |
| Total
shareholders' equity |
5,186 |
|
10,463 |
| Total
liabilities and shareholders' equity |
$ |
75,779 |
|
$ |
83,280 |
| SPHERE 3D CORP. |
| NON-GAAP RECONCILIATIONS |
| (In thousands, except per share
data) |
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
June 30, |
|
June 30, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
(Unaudited) |
|
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
$ |
18,461 |
|
|
$ |
19,438 |
|
|
$ |
37,909 |
|
|
$ |
41,176 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit -
GAAP |
$ |
5,721 |
|
|
$ |
5,387 |
|
|
$ |
11,731 |
|
|
$ |
12,218 |
|
| Intangible asset
amortization |
555 |
|
|
564 |
|
|
1,113 |
|
|
1,130 |
|
| Gross Profit - Non
-GAAP |
$ |
6,276 |
|
|
$ |
5,951 |
|
|
$ |
12,844 |
|
|
$ |
13,348 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Gross Margin
Percentages |
|
|
|
|
|
|
|
|
|
|
|
| GAAP |
31.0% |
|
|
27.7% |
|
|
30.9% |
|
|
29.7% |
|
| Non-GAAP |
34.0% |
|
|
30.6% |
|
|
33.9% |
|
|
32.4% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
$ |
(6,002 |
) |
|
$ |
(7,513 |
) |
|
$ |
(12,825 |
) |
|
$ |
(15,322 |
) |
| Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
2,284 |
|
|
1,699 |
|
|
3,392 |
|
|
3,549 |
|
| Provision
for income taxes |
489 |
|
|
192 |
|
|
829 |
|
|
498 |
|
|
Acquisition costs |
- |
|
|
- |
|
|
- |
|
|
34 |
|
|
Depreciation and amortization |
926 |
|
|
1,531 |
|
|
2,410 |
|
|
3,057 |
|
|
Share-based compensation |
444 |
|
|
1,497 |
|
|
1,265 |
|
|
3,666 |
|
| Loss on
revaluation of investment |
- |
|
|
- |
|
|
- |
|
|
1,145 |
|
| Warrant
revaluation gain |
- |
|
|
(48 |
) |
|
(259 |
) |
|
(235 |
) |
| Adjusted EBITDA |
$ |
(1,859 |
) |
|
$ |
(2,642 |
) |
|
$ |
(5,188 |
) |
|
$ |
(3,608 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted |
$ |
(0.44 |
) |
|
$ |
(1.81 |
) |
|
$ |
(1.20 |
) |
|
$ |
(4.22 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted net loss per
share: |
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted |
$ |
(0.14 |
) |
|
$ |
(0.64 |
) |
|
$ |
(0.49 |
) |
|
$ |
(0.99 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Shares used in
computing |
|
|
|
|
|
|
|
|
|
|
|
| net loss
and adjusted EBITDA per share: |
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted |
13,651 |
|
|
4,140 |
|
|
10,681 |
|
|
3,631 |
|
Sphere 3D (NASDAQ:ANY)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024
Sphere 3D (NASDAQ:ANY)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024
