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Control4 Reports Financial Results for the Second Quarter of 2017

SALT LAKE CITY--(BUSINESS WIRE)--

Control4 Corporation (CTRL), a leading global provider of smart-home and networking solutions, today announced financial results for its second quarter ended June 30, 2017.

Revenue for the second quarter of 2017 was a record $61.4 million, compared to revenue of $53.2 million for the second quarter of 2016, representing year-over-year growth of 15%.

GAAP net income for the second quarter of 2017 was $3.9 million, or $0.15 per diluted share, compared to GAAP net income in the second quarter of 2016 of $0.5 million, or $0.02 per diluted share.

Non-GAAP net income for the second quarter of 2017 was $8.4 million, or $0.32 per diluted share, compared to non-GAAP net income in the second quarter of 2016 of $5.5 million, or $0.23 per diluted share. A reconciliation of GAAP to non-GAAP financial information is contained in the attached tables.

Unrestricted cash and net investments increased by $9.6 million to $64.9 million as of June 30, 2017, compared to $55.3 million as of March 31, 2017.

“Our recent business performance aligns with the positive opportunities we see for our products, dealers, and partners in delivering fantastic connected-experiences to homeowners, families, and businesses,” said Martin Plaehn, chairman and chief executive officer of Control4. “Our mid-Q1 addition of Triad to our business is being well received. We have completed the Triad integration into Control4, and we continue to execute on our strategies to enhance and deliver industry-leading connected-home solutions through our expert global channel.”

Commenting on the company’s financial results, Mark Novakovich, chief financial officer of Control4, added: “Our revenue growth is being driven both organically and through successful, strategic acquisitions – and combined with operating leverage in our business, we delivered strong net income performance during the first half of the year. We remain focused on driving revenue growth and operating leverage to enhance long-term shareholder value.”

Q3 and Full-Year 2017 Guidance

The company’s fully diluted shares outstanding increased from 25.7 million at March 31, 2017 to 26.4 million at June 30, 2017. This increase is due primarily to the increase in the average market closing price of the common stock during the quarter. As a result, previously issued stock options which were excluded from the fully diluted share total are now included because the average market price of the stock exceeds their exercise price. As additional stock options vest and the market price of the stock remains above their exercise price, approximately one million additional shares could be included in the dilutive share count. The company’s EPS guidance takes into consideration an anticipated increase in fully diluted shares resulting from an additional vesting and/or the increasing market price of the common stock.

Control4 expects revenue in the third quarter of 2017 to be between $62.5 and $64.5 million. Control4 expects non-GAAP net income for the third quarter of 2017 to be between $6.4 and $7.4 million, or, based on an expected 27.2 million weighted average shares outstanding (diluted), between $0.24 and $0.27 per diluted share. Control4 expects revenue for the full year 2017 to be between $240.5 and $244.5 million. Control4 expects non-GAAP net income to be between $26.5 and $28.5 million, or, based on an expected 27.6 million weighted average shares outstanding (diluted) in the fourth quarter, between $0.99 and $1.06 per diluted share.

Control4 does not provide forward guidance on GAAP net income because certain non-GAAP adjustments are inherently difficult to forecast, whereas others relate to the amortization or expensing of items tied to historical events. For the third quarter of 2017, we expect non-GAAP adjustments for stock compensation expense and amortization of intangible assets to be between $2.9 and $3.2 million, and between $1.2 and $1.4 million, respectively.

Additional Financial and Operational Metrics

1 Primarily consists of hospitality revenue as well as the sale and installation of specialty display products

2Q 2017 1Q 2017 2Q 2016
Dealer Adds2,4
North America 61 103 84
International 49 68 143
Total Dealer Adds 110 171 227
Active Dealers2, 3
North America 2,985 2,959 2,820
International 1,120 1,090 972
Total Active Dealers 4,105 4,049 3,792
Total Dealers2
North America 3,085 3,039 2,865
International 1,242 1,199 1,031
Total Dealers 4,327 4,238 3,896
Controller Shipments 26,142 21,341 24,520

2These dealer figures only include dealers authorized to sell and install the full Control4 line of products and exclude the 1,100 dealers that are currently authorized to sell only the Pakedge and Triad line of products.

3 We define an active, authorized dealer (“active dealer”) as one that has placed an order with us in the trailing 12-month period.

4For the three months ended June 30, 2016, the figures shown in the International and Total line items include 100 dealers that were acquired as part of the direct-to-dealer transition in Australia.

Conference Call

On August 3, 2017, Control4 Corporation (CTRL) will host an investor conference call and will webcast the event beginning at 3:00 p.m. Mountain Time (5:00 p.m. Eastern Time). To access the conference call, dial 719-325-2334 or 800-967-7137 (toll free) and enter passcode 3025081.

The webcast and replay will be accessible on Control4’s investor relations website at http://investor.control4.com/. A replay of the conference call will be available within two hours of the conclusion of the conference call through August 17, 2017. To access the replay, please dial 719-457-0820 or 888-203-1112 and enter passcode 3025081.

Control4 [NASDAQ: CTRL] is a leading global provider of automation and networking systems for homes and businesses, offering personalized control of lighting, music, video, comfort, security, communications, and more into a unified smart home system that enhances the daily lives of its consumers. Control4 unlocks the potential of connected devices, making networks more robust, entertainment systems easier to use, homes more comfortable and energy efficient, and provides families more peace of mind. Today, every home and business needs automation horsepower and a high-performance network to manage the increasing number of connected devices. The Control4 platform interoperates with more than 10,000 third-party consumer electronics products, ensuring an ever-expanding ecosystem of devices will work together. Control4 is now available in 100 countries. Leveraging a professional channel that includes over 5,500 custom integrators, retailers, and distributors authorized to sell the full-line of Control4 products, Pakedge branded networking solutions and Triad Speakers, Control4 is delivering intelligent solutions for consumers, major consumer electronics companies, hotels, and businesses around the world.

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not...


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