CacheFlow Announces Record Second Quarter Fiscal Year 2001 Results; Net Sales of $32.5 Million; Pro Forma Net Loss of $0.09 Per Share.Business Editors/High-Tech Writers SUNNYVALE Sunnyvale, city (1990 pop. 117,229), Santa Clara co., W Calif., near San Francisco; settled 1849, inc. 1912. A city in Silicon Valley, its many manufactures include semiconductors; machinery and instruments; electrical, electronic, and aerospace products; , Calif.--(BUSINESS WIRE)--Nov. 21, 2000 CacheFlow Inc. (Nasdaq:CFLO CFLO Central Florida Lyric Opera ), the leading provider of content-smart networking solutions, today announced results for its second fiscal quarter ended October October: see month. 31, 2000. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter of fiscal 2001 were $32.5 million, a 45 percent sequential One after the other in some consecutive order such as by name or number. increase from $22.4 million in the first quarter of fiscal 2001, and a 573% increase from $4.8 million during the corresponding quarter in fiscal 2000. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the quarter, excluding stock compensation expense and goodwill amortization, was $3.1 million, or a pro forma net loss of $0.09 per share, compared to a pro forma net loss of $5.3 million, or $0.22 per share, during the corresponding quarter in fiscal 2000. Including stock compensation expense and goodwill amortization, the net loss for the second quarter of fiscal 2001 was $25.6 million, or a net loss of $0.75 per share. For the first six months of fiscal year 2001, CacheFlow achieved net sales of $55.0 million, a 551% increase over the corresponding period in fiscal 2000. Pro forma net loss for the six months, excluding stock compensation expense and goodwill amortization, was $7.8 million, or $0.23 per share, compared to a pro forma net loss of $8.9 million, or $0.39 per share, during the corresponding period in fiscal 2000. Including stock compensation and goodwill amortization, net loss for the six months was $51.0 million, or a net loss of $1.52 per share. "Our number one appliance A stand-alone hardware device or software environment dedicated to a specific task. See hardware appliance and software appliance. leadership position combined with consistent execution resulted in the company's strongest quarter ever. We gained strong traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. with customers and prospects globally across all of our target markets: enterprises, service providers and content providers. This was enhanced by increased efforts to expand our direct sales force and our network of partners, systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. and resellers," said Brian NeSmith Brian NeSmith is a technology entrepreneur and CEO of Blue Coat Systems, Inc. NeSmith graduated from the Massachusetts Institute of Technology in 1984, holding a Bachelors Degree in electrical engineering. , CacheFlow President and Chief Executive Officer. "During the quarter, key customer segments adopted content-smart networking solutions, including wins for streaming content delivery networks in the financial brokerage BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. community and international service providers. Our expertise in streaming and content distribution technologies will be strengthened through the planned acquisition of Entera. Our solutions were also strengthened with the addition of seven new Adaptive Content Exchange (ACE) partners. Finally, we launched CacheFlow's first customer advisory board consisting of leading service provider and enterprise customers, including ABN Amro ABN AMRO Algemene Bank Nederland-Amsterdam Roterdam Bank (Dutch bank) , Delta Airlines, Exodus Exodus (ĕk`sədəs), book of the Bible, 2d of the 5 books of the Law (the Pentateuch or Torah) ascribed by tradition to Moses. The book continues the story of the ancestors of Israel in Egypt, now grown in number to a large landless , Lycos (Lycos, Inc., Waltham, MA, www.lycos.com) One of the major Web search and content sites on the Web. In 2000, Lycos and Terra Networks, S.A., the leading provider of content and Internet access to the Spanish and Portuguese markets, merged to become Terra Lycos. , MCI (1) (Media Control Interface) A high-level programming interface from Microsoft and IBM for controlling multimedia devices. It provides commands and functions to open, play and close the device. (2) (Microwave Communications Inc. Worldcom The former name of MCI. Based in Jackson, MS, WorldCom, Inc. was a major, international telecommunications carrier. It was founded in 1983 by Bernard Ebbers as Long Distance Discount Service (LDDS), a reseller of AT&T WATS lines to small businesses. and others. This technical advisory board will help guide us as we develop our next generation appliance and content delivery products." Highlights CacheFlow posted a record quarter marked by a broadened position in the enterprise market, strategic wins in channel and technology partnerships, and the launch of four new product lines. These wins have extended the company's leadership in Content-Smart Networking -- a new layer of infrastructure for intelligently accelerating, delivering, and managing static, streaming and dynamic content for enterprise and service provider customers. In the quarter, significant milestones included: -- CacheFlow announced the planned acquisition of Entera, a leading provider of standards-based streaming content distribution and management technologies. The combined offerings will allow customers to build dedicated content delivery networks for live and on-demand Internet streaming video and audio content. Jupiter Communications estimates that the market segment for streaming content delivery and distribution is expected to grow to $6B by 2004. -- CacheFlow extended its reach into the mobile wireless market by signing a global reseller agreement with Ericsson. CacheFlow's market leading solutions will be combined with Ericsson's high-performance IP backbone equipment to create content delivery solutions for new content types like WAP and streaming media. Ericsson will resell CacheFlow's technology to mobile and fixed service providers, enabling them to offer faster Internet services to businesses and consumers. -- CacheFlow extended its reach into the network services market by signing a global reseller agreement with Unisys Corporation. Unisys joins Alcatel, CSC, EDS, Lucent, WestCon and Hewlett-Packard as strategic channel partners. -- CacheFlow added seven new leading content vendors to its ACE partner initiative to drive the next generation model for delivery of content smart networks, including RadWare, Symantec, Top Layer Networks, WebTrends and others. New End-to-End end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. Product Portfolio During the quarter, CacheFlow delivered four new product families, the Client Accelerator accelerator: see particle accelerator. (1) A key combination such as Alt-G or Ctrl-Shift H that is used to activate a task. (2) An incubator that expects to develop the company considerably faster than normal. See incubator. 600 and 6000 Series and the Server Accelerator 700 and 7000 Series. Tightly integrated with CacheFlow's content management and delivery products, Real and Windows Media Microsoft's audio and video framework for Windows, which embraces playback, encoding and streaming. Windows Media Player is the digital jukebox and media player that comes with every version of Windows. Streaming services, and solutions from CacheFlow ACE Partners, these new product families provide the industry's broadest portfolio of end-to-end content-smart networking solutions. The Client Accelerator 600 and 6000 Series provide the foundation for enterprise content management from the data center to the network edge. These distributed appliances enable enterprises and service providers to increase user productivity, reduce bandwidth bandwidth Measurement of the capacity of a communications signal. For digital signals, the bandwidth is the data speed or rate, measured in bits per second (bps). For analog signals, it is the difference between the highest and lowest frequency components, measured in hertz costs, and scale existing network infrastructure to support increasing demands for new types of web content. The Server Accelerator 700 and 7000 Series are the industry's first family of appliances built to dramatically increase the scalability How much a system can be expanded. See scalable. scalability - How well a solution to some problem will work when the size of the problem increases. For example, a central server of some kind with ten clients may perform adequately but with a thousand clients it and performance of high-traffic Web sites. The CacheFlow Server Accelerator family enables Web sites to serve five to ten times more content through existing infrastructure and reduce user response times by 50-80 percent. This enables content providers to serve more transactions with lower costs, enabling them to increase revenue and maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. rack space. About CacheFlow Inc. CacheFlow is focused on content-smart networking -- a new layer of infrastructure for intelligently accelerating, delivering, and managing static, streaming, dynamic and application content. CacheFlow's market-leading appliances and innovative content delivery technologies enable enterprises, service providers and content providers to deliver the right content to the right place at the right time. Based in Sunnyvale, California Sunnyvale ([sʌniveil]) is a city in Santa Clara County, California, United States. It is one of the major cities that make up the Silicon Valley. As of the 2000 census, the city population was 131,760. , CacheFlow can be contacted via telephone at 408/220-2200, fax at 408/220-2250 or email at info@cacheflow.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements about CacheFlow's continuing traction with customers, expansion of the direct sales force and indirect sales channels, the adoption of and the company's leadership in content-smart networking solutions, the acquisition of Entera and the market for streaming content delivery and distribution, the addition of ACE partners, revenue opportunities from the Ericsson Er·ics·son , John 1803-1889. American engineer and inventor who built the first ironclad warship, the Monitor (1862), which engaged the Confederate Merrimack in a famous naval battle of the Civil War (March 9, 1862). and Unisys agreements, the performance and market for the new Client Accelerator and Server Accelerator products, and the company's future business and financial prospects. These forward-looking statements involve risks and uncertainties. Actual results could differ materially. Important factors that could cause actual results to differ materially include the level of demand for Cacheflow's products and services; the intensity of competition; CacheFlow's ability to effectively manage product transitions and to continue to expand and improve internal infrastructure; risks associated with potential acquisitions; and risks related to the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the caching appliance A self-contained cache server dedicated to Web caching. See Web cache and NetCache.  NetCache Appliance A NetCache is an "appliance" because it plugs into the network and performs one function: Web caching. industry. For a more detailed discussion of the risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc CacheFlow's business, investors should read CacheFlow's Form 10-Q Form 10-Q See 10-Q. for the quarter ended July July: see month. 31, 2000, and CacheFlow's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended April 30, 2000, which are on file with the Securities and Exchange Commission. All forward-looking statements included in this press release are based upon information available to CacheFlow as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" , and CacheFlow assumes no obligation to update these forward-looking statements.
CACHEFLOW INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share amounts)
Three Months Ended Six Months Ended
October 31, October 31,
--------------------- ---------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
Net sales $ 32,548 $ 4,838 $ 54,993 $ 8,450
Cost of goods sold 11,891 1,886 20,191 3,266
---------- ---------- ---------- ----------
Gross profit 20,657 2,952 34,802 5,184
Operating expenses:
Research and
development 5,524 2,298 10,246 3,911
Sales and marketing 17,330 5,093 31,338 8,574
General and
administrative 2,601 829 4,566 1,496
Stock compensation 7,790 15,243 18,565 18,235
Goodwill
amortization 14,748 -- 24,581 --
---------- ---------- ---------- ----------
Total operating
expenses 47,993 23,463 89,296 32,216
---------- ---------- ---------- ----------
Operating loss (27,336) (20,511) (54,494) (27,032)
Interest income
(expense), net 1,797 (80) 3,713 (116)
---------- ---------- ---------- ----------
Net loss before
income taxes (25,539) (20,591) (50,781) (27,148)
Provision for
income taxes (97) -- (169) --
---------- ---------- ---------- ----------
Net loss $ (25,636)$ (20,591) $ (50,950)$ (27,148)
========== ========== ========== ==========
Basic and diluted net
loss per common share $ (0.75)$ (2.35) $ (1.52)$ (3.19)
========== ========== ========== ==========
Shares used in
computing basic and
diluted net loss
per common share 34,313 8,775 33,517 8,505
========== ========== ========== ==========
Pro forma basic and
diluted net loss
per common share $ (0.75)$ (0.87) $ (1.52)$ (1.19)
========== ========== ========== ==========
Shares used in
computing pro forma
basic and diluted
net loss per common
share (a) 34,313 23,790 33,517 22,878
========== ========== ========== ==========
Pro forma net loss per
share, excluding stock
compensation expense
and goodwill
amortization:
Net loss $ (25,636)$ (20,591) $ (50,950)$ (27,148)
Add:Stock compensation 7,790 15,243 18,565 18,235
Goodwill amortization 14,748 -- 24,581 --
---------- ---------- ---------- ----------
Pro forma net loss
excluding stock
compensation and
goodwill amortization $ (3,098)$ (5,348) $ (7,804)$ (8,913)
Pro forma basic and
diluted net loss per
common share excluding
stock compensation and
goodwill amortization $ (0.09)$ (0.22) $ (0.23)$ (0.39)
========== ========== ========== ==========
Shares used in
computing pro forma
basic and diluted net
loss per common
share (a) 34,313 23,790 33,517 22,878
========== ========== ========== ==========
(a) The pro forma basic and diluted share calculations above give
effect to the conversion of all shares of preferred stock
outstanding at October 31, 1999 into a like number of shares of
common stock, as if the conversion took place on the date of
original issuance. These calculations also reflect the cash
exercise of certain warrants outstanding as of October 31, 1999 to
purchase common shares, as if the exercises took place on the date
of original issuance. No pro forma adjustments were necessary for
stock outstanding as of October 31, 2000 since all preferred stock
converted to common stock in November 1999, and all warrants have
been exercised.
CACHEFLOW INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
October 31, April 30, October 31,
2000 2000 1999
----------- ----------- -----------
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 46,049 $ 91,532 $ 18,866
Short-term investments 68,666 33,788 --
Accounts receivable, net 15,507 3,112 2,084
Inventories 7,520 4,741 3,391
Prepaid expenses and
other current assets 1,313 1,200 352
----------- ----------- -----------
Total current assets 139,055 134,373 24,693
Property and equipment, net 8,133 4,721 2,578
Goodwill, net 152,419 -- --
Other assets 1,205 1,640 1,284
----------- ----------- -----------
Total assets $ 300,812 $ 140,734 $ 28,555
=========== =========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,955 $ 2,465 $ 4,058
Borrowings under
line of credit -- -- 639
Accrued payroll and
related benefits 4,736 2,611 862
Deferred revenue,
short-term 4,324 1,375 687
Other accrued liabilities 5,292 1,487 518
Current portion of
long-term obligations -- -- 1,513
----------- ----------- -----------
Total current liabilities 22,307 7,938 8,277
Deferred revenue, long-term 630 166 --
Long-term obligations,
less current portion -- -- 2,371
----------- ----------- -----------
Total liabilities 22,937 8,104 10,648
Commitments
Stockholders' equity:
Preferred stock -- -- 1
Common stock 4 4 1
Additional paid-in capital 445,604 264,304 105,298
Advance for preferred
stock issuance -- -- 3,090
Treasury stock (1,055) (570) --
Notes receivable
from stockholders (3,756) (4,713) (3,549)
Deferred stock compensation (29,155) (43,489) (39,634)
Accumulated deficit (133,755) (82,805) (47,300)
Accumulated other
comprehensive loss (12) (101) --
----------- ----------- -----------
Total stockholders' equity 277,875 132,630 17,907
----------- ----------- -----------
Total liabilities and
stockholders' equity $ 300,812 $ 140,734 $ 28,555
=========== =========== ===========
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