EX-99.1 2 dex991.htm PRESS RELEASE OF 3PAR INC. DATED OCTOBER 30, 2008 Press Release of 3PAR Inc. dated October 30, 2008

Exhibit 99.1

 

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Adriel Lares

Vice President of Finance and Chief Financial Officer

(510) 413-5999

3PAR Reports Financial Results for Second Quarter of Fiscal 2009

Fremont, Calif.—October 30, 2008—3PAR Inc. (NYSE Arca: PAR), a leading global provider of utility storage, today reported results for the second quarter of fiscal year 2009, which ended September 30, 2008. Revenue for the second quarter was $45.1 million, an increase of 61% compared to revenue of $28.0 million for the same period a year ago, and an increase of 5% compared to $43.0 million in the prior quarter, which ended June 30, 2008.

For the second quarter of fiscal 2009, GAAP net loss was $1.2 million, or ($0.02) per share compared to GAAP net loss of $2.4 million, or ($0.13) per share for the same period in the prior year. Non-GAAP net income, which excludes the impact of stock-based compensation expense, for the second quarter of fiscal 2009 was $520,000, or $0.01 per share, compared to non-GAAP net loss of $1.7 million, or ($0.09) per share for the same period in the prior year.

“We are pleased with our continuing performance as we approach the anniversary of our first year as a public company” said David Scott, Chief Executive Officer. “We believe that our ability to help customers achieve more with less with 3PAR Utility Storage positions us well to continue to take significant market share.”

Additional Second Quarter Fiscal 2009 Financial Information

3PAR reports operating income (loss), net income (loss), and earnings (loss) per share (EPS) on a GAAP and on a non-GAAP basis, which excludes the impact of stock-based compensation expense. The non-GAAP measures are described in greater detail below and are reconciled to the corresponding GAAP measures in the accompanying financial tables.

 

   

GAAP operating loss for the second quarter of fiscal 2009 was $1.4 million, or 3% of revenue. This compares to GAAP operating income of $95,000 in the first quarter of fiscal 2009, or 0% of revenue. Non-GAAP operating income in the second quarter of fiscal 2009 was $291,000, or 1% of revenue. This compares to non-GAAP operating income of $1.4 million, or 3% of revenue, in the first quarter of fiscal 2009. GAAP net loss for the second quarter of fiscal 2009 was $1.2 million as compared to a GAAP net income of $678,000 in the first quarter of fiscal 2009. Non-GAAP net income in the second quarter of fiscal 2009 was $520,000, compared to $2.0 million in the first quarter of fiscal 2008.


   

GAAP EPS for the second quarter of fiscal 2009 was ($0.02) on 60.6 million weighted average shares outstanding, compared to $0.01 in the first quarter of fiscal 2009 on 63.1 million diluted shares outstanding. Non-GAAP EPS in the second quarter of fiscal 2009 was $0.01 on 63.6 million diluted shares outstanding, compared to $0.03 in the first quarter of fiscal 2009.

 

   

Non-GAAP operating income, non-GAAP net income, and non-GAAP EPS are computed net of stock-based compensation. In the second and first quarters of fiscal 2009, the charges related to stock-based compensation were $1.7 million and $1.3 million, respectively.

Reconciliations of Non-GAAP measures to GAAP operating loss, net loss, and EPS are included at the end of this release.

Webcast and Conference Call Information

To access the conference call by phone, please dial 866-356-4281, Passcode 77875924. International participants can dial 617-597-5395, Passcode 77875924. A live webcast of the conference call will also be accessible from the “Investors” section of 3PAR’s Website at www.3PAR.com. Following the webcast, an archived version will be available on the website for seven days. To hear the replay, parties in the United States and Canada should call 888-286-8010 and enter passcode 51937179. International parties can access the replay at +1-617-801-6888 and enter passcode 51937179.

About 3PAR Inc.

3PAR® (NYSE Arca: PAR) is a leading global provider of utility storage, a category of highly virtualized, tightly-clustered, and dynamically-tiered storage arrays built for utility computing. Organizations use utility computing to build cost-effective virtualized IT infrastructures for flexible workload consolidation. 3PAR Utility Storage gives customers an alternative to traditional arrays by delivering resilient infrastructure with increased agility at a lower total cost to meet their rapidly changing business needs. As a pioneer of thin provisioning—a green technology developed to address storage underutilization and inefficiencies—3PAR offers products designed to minimize power consumption and promote environmental responsibility. With 3PAR, customers have reduced the costs of allocated storage capacity, administration, and SAN infrastructure while increasing adaptability and resiliency. 3PAR Utility Storage is built to meet the demands of open systems consolidation, integrated data lifecycle management, and performance-intensive applications. For more information, visit the 3PAR Website at: www.3PAR.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning 3PAR’s financial performance, the effectiveness of our business strategies, market share opportunities and reception of our value proposition as well as demand for and adoption of our storage solution in our customer markets. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results, to be materially different from any future results expressed or implied by the forward-looking statements. Forward-looking


statements are based on management’s current, preliminary expectations and are subject to risks and uncertainties, including the potential for slower than expected growth of the utility storage market or in customer adoption of 3PAR’s storage solutions, particularly in light of substantial uncertainty about macroeconomic trends in the United States and globally and their potential impact on information technology spending; the impact of competitive conditions; and those additional risks and uncertainties included under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in 3PAR’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, which is on file with the SEC and is available on 3PAR’s investor relations website at ir.3PAR.com and on the SEC website at www.sec.gov. Additional information will also be contained in the Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 that will be filed with the SEC in November 2008.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP earnings (loss) per share (EPS). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Non-GAAP operating income (loss), net income (loss) and EPS. 3PAR defines non-GAAP operating income (loss) and net income (loss) as operating loss and net loss plus stock-based compensation expenses. 3PAR defines non-GAAP EPS as non-GAAP net income (loss) divided by the weighted average basic and diluted shares outstanding. 3PAR’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding 3PAR’s performance by excluding non-cash stock-based compensation expenses. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use under FAS 123R, 3PAR’s management believes that providing these non-GAAP financial measures allows investors to compare these results with those of other companies, as well as providing management with an important tool for financial and operational decision making and for evaluating 3PAR’s operating results (excluding the impact of these non-cash charges) over different periods of time.

There are a number of limitations related to the use of non-GAAP operating income (loss), net income (loss) and EPS versus operating loss, net loss and EPS calculated in accordance with GAAP. First, these non-GAAP financial measures exclude stock-based compensation expenses that are recurring. Stock-based expenses have been and will continue to be for the foreseeable future a significant recurring expense in 3PAR’s business. Second, stock-based awards are an important part of 3PAR’s employees’ compensation and impact their performance. Third, the components of the costs that 3PAR excludes in its calculation of non-GAAP net income (loss) may differ from the components that its peer companies exclude when they report their results of operations. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their most directly comparable financial measures calculated in accordance with GAAP. The accompanying tables have more details on these non-GAAP financial measures, including reconciliations between these financial measures and their most directly comparable GAAP equivalents.

A copy of this press release can be found on the “Investors” page of 3PAR’s Website at www.3PAR.com.


3PAR Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 

     September 30,
2008
   March 31,
2008

ASSETS

     

Current assets:

     

Cash and cash equivalents

   $ 48,376    $ 97,585

Short-term investments

     59,948      18,058

Accounts receivable, net

     33,173      34,596

Inventory

     26,081      18,057

Deferred cost

     5,083      4,273

Prepaid and other current assets

     2,051      2,077
             

Total current assets

     174,712      174,646

Property and equipment, net

     18,235      14,781

Deferred cost, non-current

     —        251

Other non-current assets

     131      156
             

Total assets

   $ 193,078    $ 189,834
             

LIABILITIES AND STOCKHOLDERS’ EQUITY

     

Current liabilities:

     

Line of credit

   $ —      $ 4,000

Accounts payable

     12,324      12,527

Accrued liabilities

     15,904      16,671

Deferred revenue

     30,588      26,051

Accrued warranty

     3,453      3,371

Current portion of notes payable

     —        883
             

Total current liabilities

     62,269      63,503

Accrued warranty, non-current

     2,840      2,813

Deferred revenue, non-current

     5,915      5,945

Other long-term liabilities

     1,143      1,173
             

Total liabilities

     72,167      73,434

Stockholders’ equity

     120,911      116,400
             

Total liabilities and stockholders’ equity

   $ 193,078    $ 189,834
             


3PAR Inc.

Condensed Consolidated Statement of Operations

(On a GAAP basis)

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended
September 30,
    Six Months Ended
September 30,
 
     2008     2007     2008     2007  

Revenue:

        

Product

   $ 41,427     $ 26,775     $ 81,351     $ 49,898  

Support

     3,720       1,206       6,749       1,891  
                                

Total revenue

     45,147       27,981       88,100       51,789  

Cost of revenue:

        

Product

     14,551       9,126       28,572       17,236  

Support

     1,157       239       2,163       455  
                                

Total cost of revenue (1)

     15,708       9,365       30,735       17,691  
                                

Gross profit

     29,439       18,616       57,365       34,098  

Operating expenses:

        

Research and development (1)

     12,034       8,909       22,191       16,716  

Sales and marketing (1)

     15,078       9,936       29,379       20,393  

General and administrative (1)

     3,747       2,212       7,120       4,266  
                                

Total operating expenses

     30,859       21,057       58,690       41,375  
                                

Loss from operations

     (1,420 )     (2,441 )     (1,325 )     (7,277 )

Interest and other income, net

     125       116       878       298  
                                

Loss before provision for income taxes

     (1,295 )     (2,325 )     (447 )     (6,979 )

Income tax benefit (provision)

     104       (38 )     (66 )     (68 )
                                

Net loss

   $ (1,191 )   $ (2,363 )   $ (513 )   $ (7,047 )
                                

Net income (loss) per common share, basic and diluted

   $ (0.02 )   $ (0.13 )   $ (0.01 )   $ (0.38 )
                                

Shares used to compute basic and diluted net loss per common share

     60,608       18,534       60,421       18,431  
                                

 

(1)    Includes stock-based compensation as follows:

        

Cost of revenues

     66       36       114       79  

Research and development

     551       155       1,004       410  

Sales and marketing

     722       266       1,277       412  

General and administrative

     372       182       603       278  


3PAR Inc.

Condensed Consolidated Statement of Operations

(GAAP to non-GAAP reconciliation)

(In thousands, except per share amounts)

(Unaudited)

 

     Three Months Ended
September 30,
    Six Months Ended
September 30,
 
     2008     2007     2008     2007  

GAAP operating loss

   $ (1,420 )   $ (2,441 )   $ (1,325 )   $ (7,277 )

Plus:

        

Stock-based compensation

     1,711       639       2,998       1,179  
                                

Non-GAAP operating income (loss)

   $ 291     $ (1,802 )   $ 1,673     $ (6,098 )
                                

GAAP net loss

   $ (1,191 )   $ (2,363 )   $ (513 )   $ (7,047 )

Plus:

        

Stock-based compensation

     1,711       639       2,998       1,179  
                                

Non-GAAP net income (loss)

   $ 520     $ (1,724 )   $ 2,485     $ (5,868 )
                                

GAAP net loss per common share

   $ (0.02 )   $ (0.13 )   $ (0.01 )   $ (0.38 )

Plus:

        

Stock-based compensation

   $ 0.03     $ 0.04     $ 0.05     $ 0.06  
                                

Non-GAAP net income (loss) per common share basic

   $ 0.01     $ (0.09 )   $ 0.04     $ (0.32 )
                                

Non-GAAP net income (loss) per common share diluted

   $ 0.01     $ (0.09 )   $ 0.04     $ (0.32 )
                                

Shares used in computing basic non-GAAP net income (loss) per common share

     60,608       18,534       60,421       18,431  
                                

Shares used in computing diluted non-GAAP net income (loss) per common share

     63,582       18,534       63,539       18,431