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Sandvine Reports Q4 And Fiscal Year 2009 Results

Waterloo, Canada; January 14, 2010 – Sandvine Corporation, (TSX:SVC; AIM:SAND) a leading provider of intelligent broadband network solutions for DSL, cable, FTTx, fixed wireless and mobile operators, today reported fourth quarter 2009 revenue of $19.0 million. Revenue was 19% higher than in Q3 2009 and 2% higher than in Q4 2008. Fiscal year 2009 revenue was $68.8 million, 35% higher than revenue of $51.1 million reported for fiscal year 2008.

“This was a solid quarter for Sandvine. We reported record revenue from the DSL market and had another good quarter in the wireless market. All of our sales regions globally continue to contribute meaningfully to our business,” said Dave Caputo, president and chief executive officer.

Sandvine’s strategy has largely focused on expanding its business with mobile and DSL service providers, increasing sales through reseller channels and extending the Company’s reach outside North America and through reseller channels. For fiscal 2009, revenue from the DSL and mobile markets combined grew by more than 80%, while revenue outside North America grew by more than 60%, as did revenue from reseller partners.

“Sandvine’s annual revenue from mobile service providers was over four times higher than in fiscal 2008. Our revenue from our AsiaPacific sales region almost tripled over the previous year, and revenue from our core North American region also grew,” said Caputo.

FINANCIAL HIGHLIGHTS (All amounts are in Canadian dollars)


Millions of dollars, except per share data and where otherwise indicated

Q4 2009

Q4 2008

Δ

Q3 2009

Δ

FY 2009

FY 2008

Δ

Revenue

19.0

18.6

2%

16.0

19%

68.8

51.1

35%

Gross Margin percent

73%

82%

-9pp

73%

-

74%

78%

-4pp

R&D, SG&A

14.5

14.8

-2%

13.6

7%

57.1

51.9

10%

Net Loss

(4.7)

(1.8)

  

(4.4)

  

(19.5)

(19.6)

  

Diluted Loss Per Share

(0.035)

(0.013)

  

(0.032)

  

(0.144)

(0.144)

  

Non-GAAP1 Loss

(1.8)

(0.1)

  

(3.1)

  

(10.5)

(13.7)

  

Non-GAAP1 Diluted Loss Per Share

(0.013)

(0.000)

  

(0.023)

  

(0.077)

(0.100)

  

Despite revenue growth in Q4 2009, the GAAP net loss increased over the previous quarter as a result of an increase of $1.7 million in non-cash stock-based compensation expense. This increase related to the surrender and cancellation of certain stock options as reported in our December 1, 2009 news release. Compared to Q4 2008, the GAAP net loss increased as a result of higher stock-based compensation expense and a lower gross margin.  The lower gross margin resulted from a change in product mix due to lower stand alone software sales as compared to Q4 2008.

Despite higher cash operating expenses in the quarter, on a non-GAAP1 basis Sandvine’s net loss improved over Q3 2009. This improvement related to the revenue growth experienced during the quarter. Compared to Q4 2008, the non-GAAP1 net loss increased, largely due to the higher gross margin experienced in Q4 2008. A reconciliation of GAAP to non-GAAP1 results is included as Table 1.

The Company’s cash and marketable securities at November 30, 2009 totaled $85.8 million.

Sandvine’s fiscal 2009 non-GAAP1 net loss was $10.5 million, or 0.077 per diluted share, (GAAP basis: $19.5 million, or 0.144 per diluted share) compared to $13.7 million, or 0.100 per diluted share for fiscal 2008 (GAAP basis: $19.6 million, or 0.144 per diluted share).

Sandvine is focused on growing its fixed and mobile service provider customer base and the number of broadband subscribers they represent. The Company has over 180 service provider customers in over 70 countries. Together these customers serve more than 80 million fixed line broadband subscribers and more than 200 million mobile subscribers, a rapidly growing number of whom use data services.

In the fourth quarter of 2009 Sandvine won eight new customers.

  • By access technology: six wireless operators and two DSL service providers.
  • By geography: three from Asia-Pacific, three from North America and one each from the Caribbean and Latin America, and EMEA. Sandvine made initial sales to customers in two new countries.
  • Sales channel: two customers were won through reseller partners, including one that was won through a strategic relationship with a global network equipment vendor.

CONFERENCE CALL

The Company will discuss the quarterly results and business outlook on a conference call at 8:30 a.m. Eastern time (1:30 BST) today. A webcast will be available on Sandvine’s website.

Date: January 14, 2010
Time: 8:30 a.m. Eastern (1:30 BST)
Local dial-in number: 416 644 3414
Toll-free North America: 800 814 4859
Toll-free United Kingdom: 0800 358 5263

A replay of the call will be available at 416-640-1917 or at 877-289-8525 (passcode 4195835) from approximately 10:30 a.m. Eastern time on the day of the call through January 21.

To download the complete results in PDF format (~221kb) please click the link below:
[download release]

ABOUT SANDVINE

Sandvine is focused on protecting and improving the quality of experience on the Internet. Our award-winning network equipment and solutions help cable, DSL, FTTx, fixed wireless and mobile operators better serve their subscribers and understand network trends; offer new services; mitigate malicious traffic; manage network congestion; and deliver QoS-prioritized multimedia services. With broadband service provider customers in over 70 countries serving hundreds of millions of fixed and mobile subscribers, Sandvine is enhancing the Internet experience worldwide. www.sandvine.com

INVESTOR RELATIONS
Rick Wadsworth
Sandvine
+1 519 880 2400 ext. 3503
rwadsworth@sandvine.com

MEDIA CONTACT
Jennifer Ross 
Sandvine
+1 519 880 2232
jross@sandvine.com

AIM NOMAD
Andrew Chubb
Canaccord Adams Limited
+44 0207 050 6500