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Sandvine Reports Q4 and Fiscal Year 2010 Results

Waterloo, Canada; January 13, 2011 – Sandvine, (TSX:SVC; AIM:SAND) a leading provider of intelligent network policy control solutions for fixed and mobile operators, today reported record quarterly revenue of $25.0 million and GAAP net income of $0.9 million (non-GAAP1: $1.7 million) for its fourth quarter of 2010. Fiscal 2010 revenue was $93.8 million, 36% higher than the $68.8 million reported for fiscal 2009. GAAP net income for fiscal 2010 was $5.6 million (non-GAAP1: $10.1 million), compared to a loss of $19.5 million (non-GAAP1: $10.5 million loss) in fiscal 2009.

“The DSL market and the Asia Pacific sales region were exceptionally strong for us in both the fourth quarter and full year. For the year, revenue from the DSL market almost doubled and revenue from Asia Pacific grew by over 160%,” said Dave Caputo, Sandvine’s President and Chief Executive Officer. “We grew revenue in every sales region, thanks in part to our reseller revenue almost doubling for the year. We now work with over 20 resellers globally, including four strategic relationships with major network equipment providers.”

For the fourth quarter, approximately 60% of the Company’s revenue was derived from the DSL access market (FY 2010: 47%), 22% from the mobile access market (FY 2010: 30%) and 18% from cable network operators (FY 2010: 23%). During the fourth quarter, approximately 72% of total revenues came from outside North America (FY 2010: 58%) and 64% of the Company’s revenue was earned through reseller partners (FY 2010: 50%).

FINANCIAL HIGHLIGHTS (All amounts are in Canadian dollars)


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

Q4
2010

Q4
2009

Change

Q3
2010

Change

Revenue

25.0

19.0

32%

24.4

2%

Gross Margin percent

72%

73%

-1pp

74%

-2pp

R&D, SG&A

15.0

14.5

4%

13.8

9%

Net Income (Loss)

0.9

(4.7)

-

2.2

-60%

Diluted Earnings (Loss) Per Share

0.006

(0.035)

-

0.016

-63%

Non-GAAP1 Income (Loss)

1.7

(1.8)

-

3.1

-44%

Non-GAAP1 Diluted Income (Loss) Per Share

0.012

(0.013)

-

0.022

-45%

Sandvine’s cash, cash equivalents and and marketable securities balance at the end of the fourth quarter remained strong at $90.3 million (August 31: $89.4 million; November 30, 2009: $85.8 million) and increased by $4.5 million since November 30, 2009.

Sandvine’s fiscal 2010 non-GAAP1 net income was $10.1 million, or $0.072 per diluted share (GAAP basis: $5.6 million, or $0.040 per diluted share) compared to a $10.5 million loss, or $0.077 loss per diluted share for fiscal 2009 (GAAP basis: $19.5 million loss, 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 200 service provider customers in over 80 countries. Together these customers serve more than 90 million fixed line broadband subscribers and more than 250 million mobile subscribers, a rapidly growing number of whom use broadband data services. In the fourth quarter of 2010 Sandvine won five new customers.

  • By access technology: two DSL service providers, two mobile service providers and one
    cable operator.
  • By geography: three from EMEA, one from Asia Pacific and one from North America.
  • Sales channel: two customers were won through reseller partners, including one through a strategic relationship with a global network equipment vendor.

Change in Functional and Reporting Currency

As a result of the continuing shift experienced in the proportion of Sandvine’s revenues, expenses, assets and liabilities that are denominated in U.S. dollars (USD), and its expectation that this shift will continue in future periods, effective December 1, 2010 Sandvine has adopted the USD as its functional and reporting currency. In conjunction with adopting the US dollar as the Company’s reporting currency, certain historical USD denominated financial results have been included in the Company’s Management’s Discussion and Analysis, filed on SEDAR. This information is provided for the purpose of assisting readers in comparing such results with results to be reported after December 1, 2010.

CONFERENCE CALL The Company will discuss the financial 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.

Local dial-in number 416 644 3416
Toll-free North America 877 974 0446
Toll-free United Kingdom 0800 358 5263

To download the complete results in PDF format (~111kb) please click the link below:
[download release]

A replay of the call will be available at 416-640-1917 or toll-free at 877-289-8525 (passcode 4398340#) from approximately 10:30 a.m. Eastern time today through January 20.

ABOUT SANDVINE

Sandvine’s network policy control solutions focus on protecting and improving the quality of experience on the Internet. Our award-winning network equipment and software helps DSL, FTTx, cable, fixed wireless and mobile operators better understand network traffic, manage network congestion, create new services and revenues, mitigate traffic that is malicious or undesirable to subscribers, deliver QoS­prioritized multimedia services and increase subscriber satisfaction. With service provider customers in more than 80 countries serving hundreds of millions of broadband and mobile data subscribers, Sandvine is enhancing the Internet experience worldwide.

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

MEDIA CONTACT
Sacha DeGroot
Sandvine
+1 519 880 2232
sdegroot@sandvine.com

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

CAUTION REGARDING FORWARD LOOKING INFORMATION

Certain statements in this press release which are not historical facts constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Statements related to Sandvine’s projected revenues, earnings, growth rates, revenue mix and product plans are forward-looking statements as are any statements relating to future events, conditions or circumstances. The use of terms such as “may”, “anticipated”, “expected”, “projected”, “targeting”, “estimate”, “intend” and similar terms are intended to assist in identification of these forward-looking statements. Readers are cautioned not to place undue reliance upon any such forward-looking statements. Such forward-looking statements are not promises or guarantees of future performance and involve both known and unknown risks and uncertainties that may cause the actual results, performance, achievements or developments of the Company to differ materially from the results, performance, achievements or developments expressed or implied by such forward-looking statements. Forward-looking statements are based on management’s current plans, estimates, projections, beliefs and opinions, and the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change.

UPDATED : 2013-07-04 10:48:13