Tintri: Fiscal 4Q18 Financial Results
Loss surpassing revenue, searching for new CEO
This is a Press Release edited by StorageNewsletter.com on March 6, 2018 at 1:59 pm| (in $ million) | 4Q17 | 4Q18 | FY17 | FY18 |
| Revenue | 40.8 | 28.9 | 125.1 | 125.9 |
| Growth | -29% | 1% | ||
| Net income (loss) | (25.5) | (37.4) | (105.8) | (157.7) |
Tintri, Inc. reported results for its fourth quarter and fiscal year 2018 which ended on January 31, 2018.
“We are pleased with financial results that exceeded our revenue and EPS outlook, indicating the company has improved visibility into customer purchasing dynamics. We have taken a number of important actions to strengthen our balance sheet, improve our operating model, and reduce our cash burn,” said Ken Klein, chairman and CEO. “We also expanded our differentiated product portfolio and increased our footprint with existing customers.”
Business and Financial Highlights
• Q4 revenue of $28.9 million, better than the company’s guidance.
• Q4 net loss per share: ($1.19) per share GAAP and ($0.72) per share non-GAAP, better than the company’s guidance.
• Ken Klein, chairman and CEO, will transition from his CEO role after a successor is found.
• Implemented work force reduction and lowered facilities footprint, as part of a plan to reduce FY19 operating expense by more than $70 million.
• Strengthened balance sheet by drawing on a $25 million note facility with certain existing stockholders.
• Tom Cashman promoted to EVP, WW sales and alliances.
CEO and Sales Management Change
Chairman and CEO Ken Klein will transition from his CEO role after a successor is found. He expects to continue to serve as CEO and as a board member until the new CEO is appointed and an orderly transition has occurred. The board of directors has initiated a search for a successor to lead the company in its next stage of evolution and has established a search process and engaged an executive search firm.
“On behalf of the board, I would like to thank Ken for his 4 years of leadership and many contributions to Tintri,” said Harvey Jones, board member. “Ken transformed the company and expanded Tintri’s technology differentiation in the market. The board of directors is grateful to Ken for his continued involvement as we conduct a comprehensive search for the company’s next CEO.”
“We made progress on our financial initiatives this quarter, by reporting a strong Q4, reducing our operating expenses, and strengthening our balance sheet. I am proud of the transformation the company has made and I believe the company is on the right trajectory,” said Klein. “I am ready to transition leadership to the right successor to propel the company forward.”
Tom Cashman has been promoted to EVP, WW sales and alliances. He joined the company in 2015, and had served most recently as SVP, international sales and global alliances. Prior to that, he served in senior sales leadership capacities with Informix, Tivoli Systems, IBM, and CA Technologies.
Promissory Notes Financing
On March 2, 2018, the company announced the issuance of Promissory Notes to certain existing stockholders for aggregate gross proceeds of $25 million. The Promissory Notes will have an interest rate of 8.0% per annum and are scheduled to mature 18 months from the date of issuance.
Work Force and Facilities Restructuring
The company has implemented a restructuring and reduction in force plan of approximately 20% of the company’s global workforce. On February 21, 2018, the company also announced an early termination of a facility lease. The restructuring, which consisted of a reduction in force and a termination of a facility lease, is part of an overall plan to optimize the company’s operating model.
The company expects to substantially complete the restructuring in its first quarter of fiscal year 2019, which ends on April 30, 2018. The company estimates it will incur approximately $4.8 million to $5.8 million of cash expenditures in connection with the restructuring, substantially all of which relate to severance costs and contract termination costs. Total restructuring expenses are estimated at $6.2 million to $7.2 million, substantially all of which related to severance costs, write-off of net leasehold costs, and contract termination costs. The company expects to recognize most of these charges in the first quarter of fiscal year 2019.
Comments
Chairman and CEO Ken Klein is "pleased with financial results" and "by reporting a strong Q4", in fact being a disaster.
Revenue decreased 9% Q /Q and 29% Y/Y with huge loss meaning that the company is going to closed or to be sold unless new CEO to be hired rerverse the dramatic situation.
And next month is going worst with sales expected to be down quarterly 31% to 33% in the range of $20 million to $21 million.
Nevertheless the company add 50 new customers during this most recent three-month period, with some wins against Dell, Hitachi Vantara and NetApp. Total now reaches 1,540.
Chairman and CEO Klein commented: "Our top 25 customers have now invested on average 24 times our initial Tintri purchases in their lifetime today. In other words, an initial spend of $100,000 has turned into an average of $2.4 million over the customers life with us. The number of customers at lifetime to date purchases greater than $1 million increase 43% from last year."
Product revenue which consists of systems sales and software license revenue fell 41% Y/Y to $19.3 million. Services revenue which stems from maintenance and support agreements grew yearly 24% to $9.6 million. Services revenue accounted for 33% of total revenue compared with 19% in the same quarter a year ago.
The firm expect flash pricing to stabilize but DRAM memory pricing to continue to increase over the near to mid-term.
In 4FQ18, 68% of revenue came from the U.S. and 32% from international operations. This compares with 74% and 26% respectively in the same quarter a year ago.
With the workforce reductions and other cost and expense actions, Tintri expects to reduce FY19 operating expenses by more than $70 million. Consequently, by 4FQ19, it expects to approach operating cash flow breakeven based on planned revenue levels.
The vendor finished the quarter with $32.3 million in cash, cash equivalents and investments.
Subscribe to our free daily newsletter
