Exhibit 99.1
VIOLIN MEMORY, INC.
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
October 31, 2016 | January 31, 2016 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 9,305 | $ | 23,921 | ||||
Restricted cash | — | 10,000 | ||||||
Short-term investments | 2,452 | 42,058 | ||||||
Accounts receivable, net | 3,669 | 5,308 | ||||||
Inventory | 9,749 | 12,001 | ||||||
Other current assets | 1,642 | 4,170 | ||||||
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Total current assets | 26,817 | 97,458 | ||||||
Property and equipment, net | 6,873 | 9,322 | ||||||
Other assets | 5,151 | 6,067 | ||||||
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$ | 38,841 | $ | 112,847 | |||||
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Liabilities and Stockholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Line of credit | $ | — | $ | 13,398 | ||||
Accounts payable | 3,418 | 3,747 | ||||||
Accrued liabilities | 8,374 | 13,570 | ||||||
Deferred revenue | 9,938 | 13,006 | ||||||
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Total current liabilities | 21,730 | 43,721 | ||||||
Convertible senior notes, net | 118,369 | 117,464 | ||||||
Deferred revenue | 4,368 | 6,239 | ||||||
Long-term liabilities | — | 275 | ||||||
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Total liabilities | 144,467 | 167,699 | ||||||
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Stockholders’ deficit: | ||||||||
Preferred stock, $0.0001 par value, 10,000 shares authorized as of October 31, 2016; no shares issued and outstanding as of October 31, 2016 and January 31, 2016 | — | — | ||||||
Common stock, $0.001 par value, 250,000 shares authorized as of October 31, 2016; 25,258 and 24,660 shares issued and outstanding as of October 31, 2016 and January 31, 2016, respectively | 2 | 10 | ||||||
Additional paid-in capital | 514,742 | 505,274 | ||||||
Accumulated other comprehensive income | 563 | 456 | ||||||
Accumulated deficit | (620,933 | ) | (560,592 | ) | ||||
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Total stockholders’ deficit | (105,626 | ) | (54,852 | ) | ||||
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$ | 38,841 | $ | 112,847 | |||||
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VIOLIN MEMORY, INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended October 31, | Nine Months Ended October 31, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
(Unaudited) | ||||||||||||||||
Revenue: | ||||||||||||||||
Product revenue | $ | 1,597 | $ | 6,326 | $ | 7,817 | $ | 22,996 | ||||||||
Service revenue | 5,425 | �� | 6,213 | 16,421 | 16,947 | |||||||||||
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Total revenue | 7,022 | 12,539 | 24,238 | 39,943 | ||||||||||||
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Cost of revenue: | ||||||||||||||||
Cost of product revenue (1) | 2,957 | 3,383 | 10,843 | 13,485 | ||||||||||||
Cost of service revenue (1) | 2,344 | 2,785 | 7,591 | 8,337 | ||||||||||||
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Total cost of revenue | 5,301 | 6,168 | 18,434 | 21,822 | ||||||||||||
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Gross profit | 1,721 | 6,371 | 5,804 | 18,121 | ||||||||||||
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Operating expenses: | ||||||||||||||||
Sales and marketing (1) | 6,173 | 14,049 | 22,721 | 41,144 | ||||||||||||
Research and development (1) | 7,863 | 10,110 | 26,694 | 32,216 | ||||||||||||
General and administrative (1) | 2,645 | 3,456 | 9,293 | 13,315 | ||||||||||||
Restructuring charges | 980 | — | 2,450 | — | ||||||||||||
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Total operating expenses | 17,661 | 27,615 | 61,158 | 86,675 | ||||||||||||
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Loss from operations | (15,940 | ) | (21,244 | ) | (55,354 | ) | (68,554 | ) | ||||||||
Other income (expense), net | (56 | ) | 126 | (364 | ) | 79 | ||||||||||
Interest and other financing expense | (1,596 | ) | (1,649 | ) | (4,569 | ) | (5,093 | ) | ||||||||
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Loss before income taxes | (17,592 | ) | (22,767 | ) | (60,287 | ) | (73,568 | ) | ||||||||
Income taxes | 14 | (98 | ) | 54 | (15 | ) | ||||||||||
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Net loss | $ | (17,606 | ) | $ | (22,669 | ) | $ | (60,341 | ) | $ | (73,553 | ) | ||||
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Net loss per share of common stock, basic and diluted | $ | (0.70 | ) | $ | (0.93 | ) | $ | (2.41 | ) | $ | (3.05 | ) | ||||
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Shares used in computing net loss per share of common stock, basic and diluted | 25,207 | 24,389 | 25,015 | 24,138 | ||||||||||||
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(1) Includes stock-based compensation expense as follows: | ||||||||||||||||
Cost of product revenue | $ | 22 | $ | 233 | $ | 56 | $ | 753 | ||||||||
Cost of service revenue | 112 | 383 | 466 | 1,052 | ||||||||||||
Sales and marketing | 363 | 785 | 1,673 | 3,066 | ||||||||||||
Research and development | 904 | 1,582 | 4,245 | 5,537 | ||||||||||||
General and administrative | 808 | 1,052 | 2,938 | 4,846 |
VIOLIN MEMORY, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
Nine Months Ended October 31, | ||||||||
2016 | 2015 | |||||||
(Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (60,341 | ) | $ | (73,553 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 6,076 | 6,655 | ||||||
Accretion of debt issuance costs to interest expense | 1,013 | 1,287 | ||||||
Loss on disposal of property and equipment | 99 | — | ||||||
Provision for excess and obsolete inventory | 2,940 | — | ||||||
Stock-based compensation | 9,373 | 15,254 | ||||||
Changes in operating assets and liabilities, net: | ||||||||
Accounts receivable | 1,639 | 5,568 | ||||||
Inventory | (2,670 | ) | (1,800 | ) | ||||
Other assets | 2,519 | 911 | ||||||
Accounts payable | 126 | (5,313 | ) | |||||
Accrued liabilities | (5,471 | ) | (5,131 | ) | ||||
Deferred revenue | (4,939 | ) | (3,818 | ) | ||||
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Net cash used in operating activities | (49,636 | ) | (59,940 | ) | ||||
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Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (1,382 | ) | (5,451 | ) | ||||
Decrease (increase) in restricted cash | 10,000 | (7,700 | ) | |||||
Purchase of investments | — | (49,913 | ) | |||||
Sale of investments | — | 1,500 | ||||||
Proceeds from maturity of investments | 39,615 | 52,607 | ||||||
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Net cash provided by (used in) investing activities | 48,233 | (8,957 | ) | |||||
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Cash flows from financing activities: | ||||||||
Proceeds from line of credit | 12,847 | 31,617 | ||||||
Repayment of line of credit | (26,245 | ) | (27,723 | ) | ||||
Proceeds from issuance of common stock, net of issuance costs | 87 | 962 | ||||||
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Net cash used in financing activities | (13,311 | ) | 4,856 | |||||
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Effect of exchange rates on cash and cash equivalents | 98 | 222 | ||||||
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Net increase in cash and cash equivalents | (14,616 | ) | (63,819 | ) | ||||
Cash and cash equivalents at beginning of year | 23,921 | 93,432 | ||||||
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Cash and cash equivalents at end of period | $ | 9,305 | $ | 29,613 | ||||
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Supplemental disclosure of other cash flow information: | ||||||||
Taxes paid | $ | 36 | $ | 271 | ||||
Interest paid | 5,164 | 5,225 | ||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Transfer/exchange of inventory to/for property and equipment | 1,982 | 136 | ||||||
Payables outstanding related to purchases of long-term assets | — | 609 |