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Sandvine Reports Q2 2011 Results

Waterloo, Canada; July 7, 2011 – Sandvine, (TSX:SVC; AIM:SAND) a leading provider of intelligent network policy control solutions for fixed and mobile operators, today reported that revenue grew by 25% to $24.0 million in its second quarter of 2011 (Q1 2011: $19.2 million).  The Company recorded GAAP net income of $63,000 (non-GAAP1net income: $1 million). Year-to-date revenue was $43.2 million, up 2% to from the comparable period of 2010. All results are reported in U.S. dollars.

Sandvine achieved record wireless revenue of $11.1 million, representing 46% of the Company’s revenue for the quarter (DSL: 36%, Cable: 16%).

“We won seven new wireless customers in the quarter,” said Dave Caputo, Sandvine’s President and Chief Executive Officer. “We have built our base of over 50 wireless service provider customers largely over the last two and a half years and those efforts are paying off with new wins and several significant follow-on orders.”

During the second quarter, approximately 52% of total revenues came from outside North America (EMEA: 27%; APAC: 16%; CALA: 9%) and 49% of the Company’s revenue was earned through reseller partners. Sandvine’s second quarter results also reflect the success of recent investments in new products.

“During the quarter, demand for our Service Creation solutions, which allow customers to offer differentiated services to their subscribers, was higher than for our traditional Traffic Management solutions. We are also seeing the benefit of our investment in new hardware products as the PTS 24000 and PTS 22000 products have become our customers’ platforms of choice,” added Caputo. “Sandvine is the market share leader in network policy control thanks to unmatched R&D efforts in the space. Our new products continue to be rewarded with orders, and we have only begun to explore how policy can unlock value for broadband network operators and subscribers.”

FINANCIAL HIGHLIGHTS (All amounts are in U.S. dollars)

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

Q2
2011

Q1
2011

Change

Q2
2010

Change

Revenue

24.0

19.2

25%

21.5

11%

Gross Margin percent

77%

71%

6pp

74%

3pp

R&D, SG&A

16.1

14.3

13%

11.5

40%

Net Income (Loss)

0.1

(2.7)

-

1.7

-96%

Diluted Earnings (Loss) Per Share

0.000

(0.020)

-

0.012

-

Non-GAAP1 Income (Loss)

1.0

(1.9)

-

3.4

-71%

Non-GAAP1 Diluted Income (Loss) Per Share

0.007

(0.014)

-

0.024

-71%

Sandvine’s cash, cash equivalents and short term investments balance at the end of the second quarter remained strong at $80.4 million, though down from comparable periods.  The current quarter decline related to a use of cash from changes in working capital balances, primarily driven by a $5.7 million increase in accounts receivable.

Other highlights of Sandvine’s second quarter include:

  • Won 12 new customers across network topologies, sales regions and product categories;
  • Launched a Traffic Management Dashboard for its Network Analytics product;
  • Published its latest Global Internet Phenomena Report, in which the Company broke the news that Netflix is now 29.7% of peak downstream traffic in North America, where it has become the largest source of Internet traffic overall.

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 3414
Toll-free North America: 877 974 0445
Toll-free United Kingdom: 0800 358 5263

To download the complete results in PDF format (~428kb) 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 4450263#) from approximately 10:30 a.m. Eastern time today through July 14.

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 QoS-prioritized 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. For more information, please visit www.sandvine.com

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

INVESTOR RELATIONS CONTACT
Rick Wadsworth
Sandvine
+1 519 880 2400 ext. 3503
rwadsworth@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 10:59:46