SAN JOSE, Calif.--(BUSINESS WIRE)--
Arlo Technologies, Inc. (NYSE: ARLO), the award-winning, industry leader
that is transforming the way people experience the connected lifestyle,
today updated its fourth quarter 2018 outlook.
When the company provided its original business outlook and guidance for
the fourth quarter of 2018 on October 28, 2018, it had expected that its
new flagship wire-free security camera system, Arlo Ultra (“Ultra”),
would commence commercial distribution in late November 2018. During the
product’s final testing phase, however, the company discovered a quality
issue with the battery from one of its suppliers. The issue has been
resolved, but has caused a delay in the timing of Ultra shipments. The
company now anticipates that Ultra will begin global commercial
distribution in January of 2019.
“While we are disappointed to delay sales of our exciting new product,
Ultra, customer satisfaction is our number one priority and we took
action to ensure we continue to bring the best products to the market.
Arlo is a leader in the market not only because of our incredible
product feature set and ease-of-use, but also our quality and
reliability,” said Matthew McRae, Chief Executive Officer of Arlo
Technologies, Inc. “In final testing, we determined the battery from one
of our suppliers did not meet our performance requirements. We therefore
decided to delay product shipment until the issue had been resolved and
we were confident that the battery meets our high quality standards.
This will produce a short term delay in the growth and profitability we
were expecting, but I remain confident our long term trajectory remains
intact.”
Fourth Quarter 2018 Outlook
As a result of the Ultra shipment delay Arlo is updating its fourth
quarter 2018 financial guidance. The company now expects its fourth
quarter 2018 net revenue to be in the range of $125 million to $130
million, non-GAAP gross margin to be approximately 10%, and non-GAAP
operating loss to be approximately 20% of revenue.
Ultra features 4K Ultra HD resolution with HDR, color night vision and
advanced image processing, all in a sleek, compact design built for both
indoor and outdoor use. Ultra also includes a 1-year subscription to
Arlo Smart Premier, giving users a more personalized, intelligent smart
home security experience, powered by Arlo’s sophisticated AI and
computer vision technologies. Please refer to the detailed
product announcement released Friday, November 30, 2018 to learn
more.
For more information about Arlo Ultra and the full range of Arlo Smart
Home products and services, visit www.arlo.com.
Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995:
This press release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
The words “anticipate,” “expect,” “believe,” “will,” “may,” “should,”
“estimate,” “project,” “outlook,” “forecast” or other similar words are
used to identify such forward-looking statements. However, the absence
of these words does not mean that the statements are not
forward-looking. The forward-looking statements represent Arlo
Technologies, Inc.’s expectations or beliefs concerning future events
based on information available at the time such statements were made and
include statements regarding: Arlo’s future operating performance and
financial condition; expected revenue and GAAP and non-GAAP operating
margins. These statements are based on management's current expectations
and are subject to certain risks and uncertainties, including the
following: future demand for the Company's products may be lower than
anticipated; consumers may choose not to adopt the Company's new product
offerings or to adopt competing products; product performance may be
adversely affected by real world operating conditions; the Company may
be unsuccessful or experience delays in manufacturing and distributing
its new and existing products through delays in component availability
or otherwise; the Company may be unable to collect receivables as they
become due; the Company may fail to manage costs, including the cost of
developing new products and manufacturing and distribution of its
existing offerings; the Company may fail to successfully continue to
effect operating expense savings; changes in the level of Arlo's cash
resources and its planned usage of such resources; changes in Arlo’s
stock price and developments in the business that could increase Arlo’s
cash needs; fluctuations in foreign exchange rates; and the actions and
financial health of the Company's customers. Further, certain
forward-looking statements are based on assumptions as to future events
that may not prove to be accurate. Therefore, actual outcomes and
results may differ materially from what is expressed or forecast in such
forward-looking statements. Further information on potential risk
factors that could affect Arlo and its business are detailed in the
Company's periodic filings with the Securities and Exchange Commission,
including, but not limited to, those risks and uncertainties listed in
the section entitled “Part II - Item 1A. Risk Factors,” in the Company's
quarterly report on Form 10-Q for the fiscal quarter ended September 30,
2018. Given these circumstances, you should not place undue reliance on
these forward-looking statements. Arlo undertakes no obligation to
release publicly any revisions to any forward-looking statements
contained herein to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
Non-GAAP Financial Information:
We have disclosed certain non-GAAP financial measures that exclude
certain charges, including non-GAAP gross margin, non-GAAP operating
margin and non-GAAP operating loss. These supplemental measures exclude
adjustments for separation expense, stock-based compensation expense,
and amortization of intangibles. These non-GAAP measures are not in
accordance with or an alternative for GAAP, and may be different from
similarly-titled non-GAAP measures used by other companies. We believe
that these non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with our results of operations as
determined in accordance with GAAP and that these measures should only
be used to evaluate our results of operations in conjunction with the
corresponding GAAP measures. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for the most directly comparable GAAP measures. We compensate
for the limitations of non-GAAP financial measures by relying upon GAAP
results to gain a complete picture of our performance.
In calculating non-GAAP financial measures, we exclude certain items to
facilitate a review of the comparability of our operating performance on
a period-to-period basis because such items are not, in our view,
related to our ongoing operational performance. We use non-GAAP measures
to evaluate the operating performance of our business, for comparison
with forecasts and strategic plans, and for benchmarking performance
externally against competitors. In addition, management’s incentive
compensation is determined using certain non-GAAP measures. Since we
find these measures to be useful, we believe that investors benefit from
seeing results “through the eyes” of management in addition to seeing
GAAP results. We believe that these non-GAAP measures, when read in
conjunction with our GAAP measure, provide useful information to
investors by offering:
· the ability to make more meaningful period-to-period comparisons of
our on-going operating results;
· the ability to better identify trends in our underlying business and
perform related trend analyses;
· a better understanding of how management plans and measures our
underlying business; and
· an easier way to compare our operating results against analyst
financial models and operating results of competitors that supplement
their GAAP results with non-GAAP financial measures.
The following are explanations of the adjustments that we incorporate
into non-GAAP measures, as well as the reasons for excluding them in the
reconciliations of these non-GAAP financial measures:
Separation expense consists of expenses that are related to the planned
separation of our business from NETGEAR. These consist primarily of
third-party consulting fees, legal fees, IT costs, employee bonuses for
services related to the separation, and other one-time expenses incurred
to complete the separation. We consider our operating results without
these charges when evaluating our ongoing performance and forecasting
our earnings trends, and therefore exclude such charges when presenting
non-GAAP financial measures. We believe that the assessment of our
operations excluding these costs is relevant to our assessment of
internal operations and comparisons to the performance of our
competitors.
Stock-based compensation expense consists of non-cash charges for the
estimated fair value of stock options, restricted stock units and shares
under the employee stock purchase plan granted to employees. We believe
that the exclusion of these charges provides for more accurate
comparisons of our operating results to peer companies due to the
varying available valuation methodologies, subjective assumptions and
the variety of award types. In addition, we believe it is useful to
investors to understand the specific impact stock-based compensation
expense has on our operating results.
Amortization of intangibles consists primarily of non-cash charges that
can be impacted by, among other things, the timing and magnitude of
acquisitions. We consider our operating results without these charges
when evaluating our ongoing performance and forecasting our earnings
trends, and therefore exclude such charges when presenting non-GAAP
financial measures. We believe that the assessment of our operations
excluding these costs is relevant to an assessment of our internal
operations and comparisons to our prior and future periods and to the
performance of our competitors.
Source: Arlo-F
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Arlo Investor Relations
Erik Bylin
investors@arlo.com
(510)
315-1004
Source: Arlo Technologies, Inc.