Carbonite, Inc. (NASDAQ:CARB) Files An 8-K Regulation FD Disclosure
Item7.01
| Regulation FD Disclosure. |
In connection with a proposed private offering of convertible
senior notes to qualified institutional buyers in accordance with
Rule 144A under the Securities Act of 1933, as amended (the
Securities Act), Carbonite, Inc. (Carbonite or the Company) is
providing prospective investors with certain information, an
excerpt of which is included below.
This report does not constitute an offer to sell nor a
solicitation of an offer to buy any securities.
The information furnished under this Item 7.01 of Form 8-K shall
not be deemed filed for the purposes of Section18 of the
Securities Exchange Act of 1934, as amended (the Exchange Act),
or otherwise subject to the liabilities of that section and shall
not be deemed to be incorporated by reference into any filing
under the Securities Act or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
Preliminary Estimated Double-Take Financial
Information for the Years ended October31, 2016 and 2015 and
Expected Pro Forma Adjustments
As previously disclosed, on January31, 2017, Carbonite completed
the acquisition of Double-Take Software, Inc. (Double-Take).
Double-Takes financial results for the years ended October31,
2016 and 2015 have not yet been finalized. Preliminary estimated
ranges of Double-Takes historical revenue are included below,
based on currently available information. Carbonite has provided
ranges for revenue, rather than specified amounts, because the
financial procedures and audit for such periods are not yet
complete. As a result, Double-Takes actual revenue may vary
materially from the estimated revenue included herein.
Accordingly, investors should not place undue reliance on these
estimates. This preliminary financial data has been prepared by,
and is the responsibility of, Carbonites management. No
accounting firm has completed any procedures with respect to the
preliminary estimates presented below. Accordingly, no accounting
firm expresses an opinion or any other form of assurance with
respect thereto. These estimates should not be viewed as a
substitute for the financial statements that will be prepared in
accordance with generally accepted accounting principles and
filed with the Securities and Exchange Commission (the SEC) in
the future. Audited financials of Double-Take were not prepared
prior to Carbonites acquisition of Double-Take. In addition,
these estimates are not necessarily indicative of the results to
be achieved for any future period or as part of Carbonite. See
Risks Relating to the Double-Take Acquisition below and Risk
Factors in the Companys Annual Report on Form 10-K for the year
ended December31, 2016 and Forward-Looking Statements below.
For the year ended October31, 2016, Carbonite estimates
Double-Takes total revenue to be between $36million and
$41million, reflecting a decrease from the year ended October31,
2015. For the year ended October31, 2015, Carbonite estimates
Double-Takes total revenue to be between $41million and
$46million.
Carbonite expects to realize certain operational efficiencies and
to make certain investments as it integrates Double-Take into its
business. Certain historical costs, including certain corporate
overhead costs, reflected in the audited financial statements may
not be incurred on an ongoing basis and conversely, Carbonite may
increase its spending levels beyond the spending levels reflected
in the audited financial statements in certain other areas, such
as research and development. As a result, the operating income
(loss), net income (loss) and cash from operating activities
reported in the audited financial statements for the years ended
October31, 2016 and 2015, which Carbonite is required by SEC
rules to file by April18, 2017, may not be an accurate indicator
of the future performance of the Double-Take business.
Carbonite is required by SEC rules to file (i)Double-Takes
audited financial statements as of October31, 2016 and 2015 and
for the years ended October31, 2016 and 2015 and (ii)pro forma
financial statements as of and for the year ended December31,
2016 giving effect to the acquisition, in each case, with the SEC
by April18, 2017. Carbonite expects that the primary pro forma
adjustments will relate to purchase accounting (including
allocation of purchase price to the assets of Double-Take and the
related increase in non-cash amortization and depreciation
charges to reflect any higher value of these assets), deferred
revenue, an increase in debt and interest expense to reflect the
debt incurred to finance the acquisition and other items.
However, there may be other adjustments, and
1
such adjustments may be material, which could adversely affect
the market value of Carbonites common stock. As a result of
financing the acquisition of Double-Take, Carbonites capital
structure shifted to a reduced level of cash and added debt.
Double-Takes historical financial information and Carbonites
related pro forma financial information may differ from investors
expectations and may not accurately reflect the results Carbonite
and Double-Take would have had as a combined company. If
Double-Takes historical financial information or Carbonites pro
forma financial information do not match investors expectations,
it may cause a decrease in the market price of the Companys
common stock.
Risks Relating to the Double-Take Acquisition
Carbonite may be unable to successfully integrate the
operations of Double-Take into its business
Carbonites integration of Double-Take into its business is
subject to a number of risks, including the following:
|
it may not be able to integrate successfully and to manage successfully the challenges presented by the integration process, which may result in Carbonite not fully achieving the operating efficiencies, synergies, cost savings, revenue enhancements and other benefits currently anticipated from the acquisition of Double-Take; |
|
product, technology and sales force integrations may be difficult to complete on a timely basis or at all; |
|
Carbonite may not be able to retain Double-Takes customers and partners; |
|
the indebtedness incurred in completing the acquisition of Double-Take may decrease Carbonites flexibility and increase its borrowing costs; and |
|
Carbonite may lose executives and other key employees and be unable to attract and retain such executives and employees. |
Any of the foregoing, and other factors, could harm Carbonites
ability to achieve profitability from the Double-Take business or
to realize other anticipated benefits of the acquisition of
Double-Take, and Carbonite could experience a material adverse
effect on its business, financial condition or results of
operations.
Double-Takes historical financial information and
Carbonites related pro forma financial information may differ
from investors expectations and may not accurately reflect the
results Carbonite would have had as a combined
company.
Under SEC rules, Double-Take is a significant acquisition based
on the purchase price Carbonite paid compared to its total assets
as of December31, 2016 and, based on currently available
preliminary information from Double-Take and subject to the
completion of the financial procedures and audit with respect to
Double-Take, Double-Takes income before taxes and extraordinary
items for the year ended October31, 2016. Audited financials of
Double-Take were not prepared prior to Carbonites acquisition of
Double-Take. Carbonite is required, however, to SEC rules, to
file audited financial statements of Double-Take as of October
31, 2016 and 2015 and for the years ended October 31, 2016 and
2015 and pro forma financial statements as of and for the year
ended December 31, 2016 giving effect to the Double-Take
acquisition with the SEC by April18, 2017.
Carbonite has presented preliminary estimated ranges of
Double-Takes historical revenue in this current report, based on
currently available information. Carbonite has provided ranges
because the financial procedures and audit for such periods are
not yet complete. As a result, Double-Takes actual revenue may
vary materially from the estimated revenue included herein and
will not be publicly available until after the closing of this
offering. Accordingly, you should not place undue reliance on
these estimates. This preliminary financial data has been
prepared by, and is the responsibility of, management. No
accounting firm has completed any procedures with respect to the
preliminary estimates presented herein. Accordingly, no
accounting firm expresses an opinion or any other form of
assurance with respect thereto. These estimates should not be
viewed as a substitute for the financial statements that will be
prepared in accordance with GAAP and filed with the SEC in the
future. Audited financials of Double-Take were not prepared prior
to the Double-Take Acquisition. In addition, these estimates are
not necessarily indicative of the results to be achieved for any
future period or as part of Carbonite.
In addition, Carbonite expects to realize certain operational
efficiencies and to make certain investments as Carbonite
integrates Double-Take into its business. Certain historical
costs, including certain corporate overhead costs, reflected in
the audited financial statements may not be incurred on an
ongoing basis and conversely, Carbonite may increase its spending
levels beyond the spending levels reflected in the audited
financial statements in certain other areas, such as research and
development. As a result, the operating income (loss), net income
(loss) and cash from operating activities reported in the audited
financial statements for the years ended October 31, 2016 and
2015 may not be an accurate indicator of the future performance
of the Double-Take business.
Carbonite expects that the primary pro forma adjustments will
relate to purchase accounting (including allocation of purchase
price to the assets of Double-Take and the related increase in
non-cash amortization and depreciation charges to reflect any
higher value of these assets), deferred revenue, an increase in
debt and interest expense to reflect the debt incurred to finance
the acquisition and other items. However, there may be other
adjustments, and such adjustments may be material, which could
adversely affect the market value of Carbonites common stock. As
a result of financing the acquisition of Double-Take, Carbonites
capital structure shifted to a reduced level of cash and added
debt.
2
The pro forma financial information will be based in part on
certain assumptions regarding the acquisition of Double-Take and
the transactions relating thereto that Carbonite believes are
reasonable. However, Carbonites assumptions may prove to be
inaccurate. Accordingly, the pro forma financial information may
not be indicative of what Carbonites results of operations and
financial condition would have been had Carbonite and Double-Take
been a consolidated entity during the periods presented, or what
the combined entitys results of operations and financial
conditions will be in the future. The challenge of integrating
previously independent businesses makes evaluating Carbonites
business and Carbonites future financial prospects uncertain.
Carbonites potential for future business success and operating
profitability must be considered in light of the risks,
uncertainties, expenses and difficulties typically encountered by
recently combined companies.
If Double-Takes historical financial information or Carbonites
pro forma financial information do not match investors
expectations, it may cause a decrease in the market price of the
Companys common stock.
| Item8.01 | Other Events. |
In a press release issued on March28, 2017, Carbonite announced
that it intends to offer convertible senior notes in a proposed
private offering, subject to market and other conditions. A copy
of the press release is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
The board of directors of Carbonite has authorized an increase to
Carbonites existing share repurchase program from $20million to
$30million aggregate in repurchases of the Companys outstanding
common stock. Following such increase, Carbonite has
approximately $20.2million available under the share repurchase
program. Carbonite intends to use up to $20.0million of the net
proceeds from the proposed private offering to repurchase shares
of its common stock from purchasers of notes in the offering in
privately negotiated transactions effected through one or more of
the initial purchasers or their affiliates conducted currently
with the pricing of the notes and may repurchase shares from time
to time on the open market or in privately negotiated
transactions continuing through May15, 2018.
Carbonite intends to use approximately $40.0million of the net
proceeds from its proposed private offering to repay all amounts
outstanding under its existing revolving credit facility,
including the related letters of credit, and terminate the Credit
Agreement, dated as of May6, 2015, with Silicon Valley Bank,
governing such facility and all commitments and obligations
thereunder.
Forward-Looking Statements
Certain matters discussed in this press release have
forward-looking statements intended to qualify for the safe
harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
may generally be identified as such because the context of such
statements will include words such as anticipate, believe, could,
estimate, expect, intend, may, plan, potential, predict, project,
should, will, would or words of similar import. Similarly,
statements that describe the Companys future plans, objectives or
goals are also forward-looking statements. Such statements
include, but are not limited to, the proposed private offering of
convertible senior notes, the preliminary financial information
regarding Double-Take, preliminary pro form information about the
consolidated enterprise, expected operating efficiencies and the
planned repayment and termination of the Companys existing
revolving credit facility. Forward-looking statements are subject
to a number of risks and uncertainties, many of which involve
factors or circumstances that are beyond the Companys control.
The Companys actual results could differ materially from those
stated or implied in forward-looking statements due to a number
of factors, including, but not limited to, economic conditions
and markets (including current financial conditions), exchange
rate fluctuations, risks associated with debt prepayment, stock
repurchases or acquisitions rather than to retaining such cash
for future needs, and changes in regulatory conditions or other
trends affecting the Internet and the information technology
industry. These and other important risk factors are discussed
under the heading Risk Factors in the Companys Annual Report on
Form 10-K for the fiscal year ended December31, 2016 filed with
the SEC, which is available on www.sec.gov, and elsewhere in any
subsequent periodic or current reports filed by the Company with
the SEC. Except as required by applicable law, the Company does
not undertake any obligation to update the Companys
forward-looking statements to reflect future events, new
information or circumstances.
3
| Item9.01 | Financial Statements and Exhibits. |
(d) Exhibits
|
Exhibit No. |
Description |
|
| Exhibit99.1 | Press Release of Carbonite, Inc., dated March28, 2017 |
4
About Carbonite, Inc. (NASDAQ:CARB)
Carbonite, Inc. (Carbonite) is a provider of cloud and business continuity solutions. The Company’s solutions are designed to address the specific needs of small and medium sized businesses and individuals. It offers various solutions, such as Carbonite Personal, Carbonite Pro, Carbonite Server Backup and MailStore. Carbonite Personal solution, which includes unlimited cloud backup for approximately one computer at over three different service levels, including Personal Basic, Personal Plus and Personal Prime for individuals. Carbonite Pro, the Company’s small business workstation solutions automatically back up files to the cloud and include an unlimited number of devices for an annual fee based on the amount of storage needed. Carbonite Server Backup, the Company’s hybrid server backup solution that protects an unlimited number of servers, databases and live applications. It offers over three solutions, such as MailStore Server, MailStore Provider Edition and MailStore Home. Carbonite, Inc. (NASDAQ:CARB) Recent Trading Information
Carbonite, Inc. (NASDAQ:CARB) closed its last trading session down -0.10 at 19.70 with 207,474 shares trading hands.