CommVault Systems, Inc. Announces Third Quarter Fiscal 2007 Results
-- Revenues Rise 32% to $38.3 million -- Non-GAAP Operating Income Increases 51% to $5.7 million -- Non-GAAP Net Income of $0.10 per Diluted Share
OCEANPORT, N.J., Jan 30, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- CommVault Systems, Inc. (Nasdaq: CVLT), a leading provider of data management software applications, today announced its financial results for the third quarter ended December 31, 2006.
N. Robert Hammer, CommVault's Chairman, President and CEO, stated, "We had a good third quarter with solid progress in all areas of our business, which were highlighted by record revenues and increased earnings. We are confident in our ability to achieve our growth rate and profitability objectives. We are optimistic in our ability to continue to expand our available markets with innovative new products."
Total revenues in the third quarter of fiscal 2007 were a record $38.3 million, an increase of 32% as compared to total revenues of $29.1 million in the third quarter of fiscal 2006. Software revenue in the third quarter of fiscal 2007 was $21.1 million, an increase of 27% from the third quarter of fiscal 2006.
Income from operations, determined in accordance with United States generally accepted accounting principles (GAAP), was $4.2 million for the third quarter of fiscal 2007, a 27% increase from $3.4 million in the same period of the prior year. For the third quarter of fiscal 2007, CommVault reported GAAP net income of $4.6 million, a 30% increase from $3.6 million in the same period of the prior year.
On a non-GAAP basis, operating income increased 51% to $5.7 million in the third quarter of fiscal 2007 compared to $3.8 million in the third quarter of the prior year. Non-GAAP net income increased 49% to $4.6 million, or $0.10 per diluted share from $3.1 million or $0.08 per diluted share.
A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."
Cash and cash equivalents as of December 31, 2006 totaled $56.5 million and operating cash flow for the quarter was $8.7 million.
Fiscal 2007 Guidance
For the fiscal year ending March 31, 2007 CommVault currently expects:
-- Total revenues in the range of $150 million to $151 million.
-- Non-GAAP gross margins of 85.5% to 85.7%.
-- Non-GAAP operating income margins of 14.2% to 14.8%.
-- Non-GAAP diluted EPS in the range of $0.44 per share to $0.46 per
share using an effective tax rate of approximately 20% and a weighted
average diluted share count of approximately 42.0 million to 42.5
million.
-- A cash income tax rate of less than 4% for fiscal 2007.
The non-GAAP guidance excludes approximately $0.11 per share of noncash stock-based compensation charges, net of non-GAAP income tax expense of $0.03 per share. In addition, the non-GAAP guidance also excludes the potential for additional FICA expense that will be incurred by CommVault when employees exercise in the money stock options post-IPO lock-up.
Fiscal 2008 Guidance
For the fiscal year ending March 31, 2008 CommVault currently expects:
-- Total revenues in the range of $191 million to $193 million.
-- Non-GAAP gross margins of 85.5% to 85.7%.
-- Non-GAAP operating income margins of 17.0% to 17.5%.
-- Non-GAAP diluted EPS in the range of $0.54 per share to $0.56 per
share using an effective tax rate of approximately 28% and a weighted
average diluted share count of approximately 47 million to 48 million.
-- A cash income tax rate of less than 4% for fiscal 2008.
The Non-GAAP guidance excludes approximately $0.14 per share to $0.16 per share of noncash stock-based compensation charges, net of non-GAAP income tax expense of approximately $0.06 per share.
Use of Non-GAAP Financial Measures
CommVault has provided in this press release selected financial information that has not been prepared in accordance with GAAP. CommVault uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, when used as a supplement to GAAP measures, in evaluating CommVault's ongoing operational performance. CommVault believes that the use of these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in CommVault's industry, many of which present similar non-GAAP financial measures to the investment community.
The non-GAAP financial results discussed above excludes noncash stock- based compensation charges, accretion of preferred stock dividends and accretion of fair value of cumulative redeemable convertible preferred stock upon its conversion to common stock. In addition, the non-GAAP financial results apply an effective tax rate of 25% starting in the second quarter of fiscal 2007 which will result in an estimated effective tax rate of approximately 20% for fiscal 2007.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. As previously mentioned, a reconciliation of GAAP to non-GAAP results is provided in the financial statement tables included in this press release.
Conference Call Information
CommVault will host a conference call today, January 30, 2007, at 5:00 p.m. EST to discuss its financial results. To access this call, dial 877.704.5382 (domestic) or 913.312.1296 (international). Additionally, a live web cast of the conference call will be hosted under "Webcasts and Presentations" located under the "Investor Relations" section on CommVault's Web site http://www.commvault.com .
An archived web cast of this conference call will also be available on the "Investor Relations" section of CommVault's Web site, http://www.commvault.com .
About CommVault
CommVault(R) provides Unified Data Management(TM) solutions for high- performance data protection, universal availability and simplified management of data on complex storage networks. The CommVault(R) QiNetix(TM) platform, based on CommVault's Common Technology Engine, integrates Galaxy backup and recovery, snapshot management and recovery, remote replication, active data migration and archiving, e-mail compliance, enterprise service level management and reporting and storage resource management software solutions. The QiNetix unified approach is designed to allow customers to add/integrate QiNetix components, at a fraction of the time, effort and money required by separate point products.
Information about CommVault is available at http://www.commvault.com or by calling 732.870.4000. CommVault's corporate headquarters is located in Oceanport, New Jersey in the United States. (cvlt-f)
Safe Harbor Statement
This press release contains forward-looking statements, including statements regarding financial projections, which are subject to risks and uncertainties, such as competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, general economic conditions and others. Statements regarding CommVault's beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from anticipated results. CommVault does not undertake to update its forward-looking statements.
CommVault Systems, Inc. CommVault Systems, CommVault Galaxy, CommVault
QiNetix, DataMigrator, DataArchiver, QNet, CommServe StorageManager, Common
Technology Engine, MediaAgent, iDataAgent, CommCell and the CommVault logo are
trademarks and may be registered trademarks in some jurisdictions of CommVault
Systems, Inc. Product and company names herein may be trademarks of their
respective owners.
Table I
CommVault Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2006 2005 2006 2005
Revenues:
Software $21,132 $16,655 $60,180 $43,978
Services 17,198 12,395 48,310 33,117
Total revenues 38,330 29,050 108,490 77,095
Cost of revenues:
Software 528 676 1,191 1,316
Services 5,102 3,565 14,459 9,292
Total cost of revenues 5,630 4,241 15,650 10,608
Gross margin 32,700 24,809 92,840 66,487
Operating expenses:
Sales and marketing 17,379 13,009 48,958 37,533
Research and
development 5,851 4,962 17,369 14,019
General and
administrative 4,470 3,099 13,734 9,132
Depreciation and
amortization 753 388 1,832 1,153
Income from operations 4,247 3,351 10,947 4,650
Interest expense (167) (1) (184) (7)
Interest income 665 381 1,865 812
Income before income
taxes 4,745 3,731 12,628 5,455
Income tax expense (111) (160) (222) (235)
Net income 4,634 3,571 12,406 5,220
Less: accretion of
preferred stock
dividends - (1,427) (2,818) (4,265)
Less: accretion of fair
value of preferred stock
upon conversion - - (102,745) -
Net income (loss)
attributable to common
stockholders $4,634 $2,144 $(93,157) $955
Net income (loss)
attributable to common
stockholders per share:
Basic $0.11 $0.08 $(3.44) $0.03
Diluted $0.10 $0.07 $(3.44) $0.03
Weighted average shares
used in computing per
share amounts:
Basic 41,676 18,822 27,052 18,814
Diluted 46,164 31,484 27,052 30,518
Table II
CommVault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December 31, March 31,
2006 2006
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $56,494 $48,039
Trade accounts receivable 21,737 18,238
Prepaid expenses and other current assets 2,200 1,877
Total current assets 80,431 68,154
Property and equipment, net 4,425 3,322
Other assets 397 1,092
Total assets $85,253 $72,568
Liabilities, cumulative redeemable
convertible preferred stock and
stockholders' equity (deficit)
Current liabilities:
Accounts payable $1,106 $1,565
Accrued liabilities 15,920 12,685
Term loan 8,750 -
Deferred revenue 33,063 29,765
Total current liabilities 58,839 44,015
Deferred revenue, less current portion 4,333 3,036
Other liabilities 6 13
Cumulative redeemable convertible preferred
stock: Series A through E - 99,168
Total stockholders' equity (deficit) 22,075 (73,664)
$85,253 $72,568
Table III
CommVault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
December 31,
2006 2005
Cash flows from operating activities
Net income $12,406 $5,220
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 2,045 1,188
Noncash stock compensation 4,326 624
Changes in operating assets and liabilities:
Accounts receivable (3,499) 1,245
Prepaid expenses and other current assets (323) 582
Other assets (160) (30)
Accounts payable (316) (199)
Accrued expenses 3,442 1,520
Deferred revenue and other liabilities 4,588 9,958
Net cash provided by operating activities 22,509 20,108
Cash flows from investing activities
Purchase of property and equipment (3,148) (1,765)
Net cash used in investing activities (3,148) (1,765)
Cash flows from financing activities
Payments to Series A through E preferred
stockholders upon conversion to common stock (101,833) -
Net proceeds from initial public offering and
concurrent private placement 82,242 -
Proceeds from the exercise of stock options 343 82
Proceeds from term loan 15,000 -
Repayments on term loan (6,250) (149)
Net cash used in financing activities (10,498) (67)
Effects of exchange rate - changes in cash (408) 185
Net increase in cash and cash equivalents 8,455 18,461
Cash and cash equivalents at beginning of period 48,039 24,795
Cash and cash equivalents at end of period $56,494 $43,256
Table IV
CommVault Systems, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
2006 2005 2006 2005
Non-GAAP financial measures
and reconcilation:
GAAP income from operations $4,247 $3,351 $10,947 $4,650
Add: Noncash stock
compensation (1) 1,445 414 4,326 624
Non-GAAP income from
operations $5,692 $3,765 $15,273 $5,274
GAAP net income (loss)
attributable to common
stockholders $4,634 $2,144 $(93,157) $955
Add: Noncash stock
compensation (1) 1,445 414 4,326 624
Add: Accretion of
preferred stock
dividends (2) - 1,427 2,818 4,265
Add: Accretion of fair
value of preferred stock
upon conversion (3) - - 102,745 -
Less: Non-GAAP provision
for income taxes
adjustment (4) (1,437) (876) (2,866) (1,285)
Non-GAAP net income
attributable to common
stockholders $4,642 $3,109 $13,866 $4,559
GAAP diluted weighted
average shares outstanding 46,164 31,484 27,052 30,518
Add: Conversion of
Series A through E
preferred stock - 6,333 4,122 6,333
Add: Conversion of
Series AA, BB and CC
preferred stock - - 6,305 -
Add: Dilutive effect
of stock options and
warrants - - 3,713 -
Non-GAAP diluted weighted
average shares outstanding 46,164 37,817 41,192 36,851
Non-GAAP diluted net
income per share $0.10 $0.08 $0.34 $0.12
Footnotes - Adjustments
(1) Represents noncash stock compensation charges associated with stock
options granted as follows:
Three Months Ended Nine Months Ended
December 31, December 31,
2006 2005 2006 2005
Cost of services revenue $24 $8 $75 $14
Sales and marketing 701 155 1,978 263
Research and development 182 45 564 77
General and administrative 538 206 1,709 270
Total noncash stock
compensation expense $1,445 $414 $4,326 $624
(2) Represents accretion of preferred stock dividends due on
CommVault's Series A through E cumulative redeemable convertible
preferred stock prior to its conversion to common stock on
September 27, 2006.
(3) Represents accretion of fair value of Series A through E cumulative
redeemable convertible preferred stock upon conversion to common
stock on September 27, 2006.
(4) The provision for income taxes is adjusted to reflect CommVault's
estimated non-GAAP effective tax rate of approximately 25% starting
in the second quarter of fiscal 2007.
SOURCE CommVault Systems, Inc.
Press Contact, Jeremy Skule, Fleishman Hillard, +1-212-453-2245, or jeremy.skule@fleishman.com ; or Investor Relations, Michael Picariello, CommVault, +1-732-728-5380, or ir@commvault.com
http://www.commvault.com