CommVault Announces Fourth Quarter and Fiscal 2007 Financial Results
Revenue and Earnings Exceed Annual Guidance Fourth Quarter 2007 Highlights Include: -- Revenues of $42.6 Million -- Non-GAAP EBIT of $7.5 Million and Non-GAAP EBIT Margins of 17.5% -- Non-GAAP Diluted Earnings Per Share of $0.14 -- Cash Flow from Operations of $8.1 Million
OCEANPORT, N.J., May 15, 2007 (BUSINESS WIRE) -- CommVault(R) (NASDAQ:CVLT), a leading provider of Unified Data Management(R) solutions, today announced its financial results for the fourth quarter and fiscal year ended March 31, 2007.
N. Robert Hammer, CommVault's chairman, president and CEO stated, "CommVault had a very good fourth quarter and fiscal year with solid progress in all areas of our business. Our results exceeded our annual guidance. We have grown the top-line by a compounded annual growth rate of 37% for the past five years. We are also seeing broader deployment of our full suite of products across a broader spectrum of deal sizes. We continue to make the necessary investments in product innovation, support, marketing and distribution in order to sustain our track record of growth and innovation into fiscal 2008 and beyond."
Total revenues in the fourth quarter of fiscal 2007 were a record $42.6 million, an increase of 32% over the fourth quarter of fiscal 2006 and 11% over the prior quarter. Software revenue in the fourth quarter of fiscal 2007 was $23.7 million, up 28% year-over-year and 12% sequentially. For the full year, total revenues were $151.1 million, an increase of 38% over fiscal 2006, and software revenues were $83.9 million, up 34% from the prior year.
Non-GAAP income from operations (EBIT) increased 23% to $7.5 million in the fourth quarter of fiscal 2007 compared to $6.1 million in the fourth quarter of the prior year. EBIT determined in accordance with U.S. GAAP was $5.6 million for the fourth quarter, a 6% increase from $5.3 million in the same period of the prior year. Non-GAAP EBIT for the full year was $22.7 million, an increase of 100% over fiscal 2006 Non-GAAP EBIT of $11.3 million.
For the fourth quarter of fiscal 2007, non-GAAP net income increased 23% to $6.0 million, or $0.14 per diluted share, from $4.9 million or $0.13 per diluted share in the same period of the prior year. CommVault reported GAAP net income for the quarter of $51.8 million, an increase of $46.3 million compared to the same period of the prior year, which includes an income tax benefit of $45.6 million primarily due to the reversal of deferred tax valuation allowances. Non-GAAP net income for the full year increased 111% to $19.9 million, or $0.47 per diluted share, compared with $9.4 million or $0.25 per diluted share in the prior year.
Operating cash flow totaled $8.1 million for the fourth quarter of fiscal 2007 and $30.6 million for full year. Total cash and cash equivalents as of March 31, 2007 were $65.0 million.
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."
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 17.2% to 17.7%.
-- Non-GAAP diluted EPS in the range of $0.55 per share to $0.57 per share using an effective tax rate of approximately 28% and a weighted average diluted share count of approximately 46 million to 47 million.
-- A cash income tax rate in the range of 4% to 7% based on current assumptions.
The Non-GAAP diluted EPS guidance excludes approximately $0.13 per share to $0.15 per share of noncash stock-based compensation charges, net of non-GAAP income tax benefits of approximately $0.06 per share, and any additional FICA expense that will be incurred by CommVault when employees exercise in the money stock options.
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 exclude noncash stock-based compensation charges, additional FICA expense incurred by CommVault when employees exercise in the money stock options beginning in the fourth quarter of fiscal 2007, 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 resulted in an estimated effective tax rate of approximately 20% for fiscal 2007, and an effective tax rate of 28% beginning in fiscal 2008.
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, May 15, 2007, at 5:00 p.m. EDT to discuss its financial results. To access this call, dial 800-289-0528 (domestic) or 913-981-5522 (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, 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, www.commvault.com.
About CommVault
A singular vision - a belief in a better way to address current and future data management needs - guides CommVault in the development of Unified Data Management(R) solutions for high-performance data protection, universal availability and simplified management of data on complex storage networks. CommVault's exclusive single-platform architecture gives companies unprecedented control over data growth, costs and risk. CommVault's software was designed to work together seamlessly from the ground up, sharing a single code and common function set, to deliver superlative Data Protection, Archive, Replication, and Resource Management. More companies every day join those who have discovered the unparalleled efficiency, performance, reliability, and control only CommVault can offer. Information about CommVault is available at www.commvault.com. 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.
(C)2007 CommVault Systems, Inc. All rights reserved. CommVault, CommVault and logo, the "CV" logo, CommVault Systems, Solving Forward, SIM, Singular Information Management, CommVault Galaxy, Unified Data Management, QiNetix, Quick Recovery, QR, QNet, GridStor, Vault Tracker, Quick Snap, QSnap, Recovery Director, CommServe, and CommCell, are trademarks or registered trademarks of CommVault Systems, Inc. All other third-party brands, products, service names, trademarks, or registered service marks are the property of and used to identify the products or services of their respective owners. All specifications are subject to change without notice.
Table I
CommVault Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
March 31, March 31,
------------------ ------------------
2007 2006 2007 2006
--------- -------- --------- --------
Revenues:
Software $23,690 $18,444 $83,870 $62,422
Services 18,927 13,933 67,237 47,050
--------- -------- --------- --------
Total revenues 42,617 32,377 151,107 109,472
Cost of revenues:
Software 449 448 1,640 1,764
Services 5,585 3,939 20,044 13,231
--------- -------- --------- --------
Total cost of revenues 6,034 4,387 21,684 14,995
--------- -------- --------- --------
Gross margin 36,583 27,990 129,423 94,477
Operating expenses:
Sales and marketing 19,282 13,793 68,240 51,326
Research and development 6,029 5,282 23,398 19,301
General and administrative 4,876 3,143 18,610 12,275
Depreciation and amortization 771 470 2,603 1,623
--------- -------- --------- --------
Income from operations 5,625 5,302 16,572 9,952
Interest expense (142) -- (326) (7)
Interest income 735 450 2,600 1,262
--------- -------- --------- --------
Income before income taxes 6,218 5,752 18,846 11,207
Income tax benefit (expense) 45,630 (216) 45,408 (451)
--------- -------- --------- --------
Net income 51,848 5,536 64,254 10,756
Less: accretion of preferred
stock dividends -- (1,396) (2,818) (5,661)
Less: accretion of fair value of
preferred stock upon conversion -- -- (102,745) --
--------- -------- --------- --------
Net income (loss) attributable
to common stockholders $51,848 $4,140 $(41,309) $5,095
========= ======== ========= ========
Net income (loss) attributable
to common stockholders per
share:
Basic $1.24 $0.14 $(1.35) $0.18
========= ======== ========= ========
Diluted $1.16 $0.13 $(1.35) $0.17
========= ======== ========= ========
Weighted average shares used in
computing per share amounts:
Basic 41,727 18,914 30,670 18,839
========= ======== ========= ========
Diluted 44,657 32,176 30,670 30,932
========= ======== ========= ========
Table II
CommVault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
March 31,
-----------------------
2007 2006
----------- -----------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $65,001 $48,039
Trade accounts receivable, net 22,044 18,238
Prepaid expenses and other current assets 3,657 1,877
Deferred tax assets 9,616 --
----------- -----------
Total current assets 100,318 68,154
Property and equipment, net 4,624 3,322
Deferred tax assets, net 42,543 --
Other assets 554 1,092
----------- -----------
Total assets $148,039 $72,568
=========== ===========
Liabilities, cumulative redeemable convertible
preferred stock and stockholders' equity
(deficit)
Current liabilities:
Accounts payable $1,500 $1,565
Accrued liabilities 20,215 12,685
Term loan 7,500 --
Deferred revenue 36,214 29,765
----------- -----------
Total current liabilities 65,429 44,015
Deferred revenue, less current portion 4,284 3,036
Other liabilities 4 13
Cumulative redeemable convertible preferred
stock: Series A through E -- 99,168
Total stockholders' equity (deficit) 78,322 (73,664)
----------- -----------
$148,039 $72,568
=========== ===========
Table III
CommVault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Year Ended
March 31,
-------------------
2007 2006
--------- ---------
Cash flows from operating activities
Net income $64,254 $10,756
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income taxes (52,159) --
Depreciation and amortization 2,893 1,682
Noncash stock-based compensation 5,969 1,391
Excess tax benefits from stock-based
compensation (1,233) --
Changes in operating assets and liabilities:
Accounts receivable (3,806) 67
Prepaid expenses and other current assets (1,780) 109
Other assets (317) 105
Accounts payable 77 (664)
Accrued liabilities 9,008 2,234
Deferred revenue and other liabilities 7,688 10,170
--------- ---------
Net cash provided by operating activities 30,594 25,850
Cash flows from investing activities
Purchase of property and equipment (4,195) (2,814)
--------- ---------
Net cash used in investing activities (4,195) (2,814)
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 (486)
Proceeds from the exercise of stock options 1,864 705
Excess tax benefits from stock-based compensation 1,233 --
Proceeds from term loan 15,000 --
Repayments on term loan (7,500) (166)
--------- ---------
Net cash provided by (used in) financing
activities (8,994) 53
Effects of exchange rate -- changes in cash (443) 155
--------- ---------
Net increase in cash and cash equivalents 16,962 23,244
Cash and cash equivalents at beginning of year 48,039 24,795
--------- ---------
Cash and cash equivalents at end of year $65,001 $48,039
========= =========
Table IV
CommVault Systems, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Ended Year Ended
March 31, March 31,
------------------ ------------------
2007 2006 2007 2006
--------- -------- --------- --------
Non-GAAP financial measures and
reconciliation:
GAAP income from operations $5,625 $5,302 $16,572 $9,952
Noncash stock-based
compensation(1) 1,643 767 5,969 1,391
FICA expense on stock option
exercises(2) 187 -- 187 --
--------- -------- --------- --------
Non-GAAP income from operations $7,455 $6,069 $22,728 $11,343
========= ======== ========= ========
GAAP net income (loss)
attributable to common
stockholders $51,848 $4,140 $(41,309) $5,095
Noncash stock-based
compensation(1) 1,643 767 5,969 1,391
FICA expense on stock option
exercises(2) 187 -- 187 --
Accretion of preferred stock
dividends(3) -- 1,396 2,818 5,661
Accretion of fair value of
preferred stock upon
conversion(4) -- -- 102,745 --
Non-GAAP provision for income
taxes adjustment(5) (47,642) (1,414) (50,508) (2,699)
--------- -------- --------- --------
Non-GAAP net income
attributable to common
stockholders $6,036 $4,889 $19,902 $9,448
========= ======== ========= ========
GAAP diluted weighted average
shares outstanding 44,657 32,176 30,670 30,932
Conversion of Series A
through E preferred stock -- 6,333 3,105 6,333
Conversion of Series AA, BB
and CC preferred stock -- -- 4,751 --
Dilutive effect of stock
options and warrants -- -- 3,518 --
--------- -------- --------- --------
Non-GAAP diluted weighted
average shares outstanding 44,657 38,509 42,044 37,265
========= ======== ========= ========
Non-GAAP diluted net income per
share $0.14 $0.13 $0.47 $0.25
========= ======== ========= ========
Footnotes - Adjustments
(1) Represents noncash stock-based compensation charges associated
with stock options granted as follows:
Three Months Ended Year Ended
March 31, March 31,
------------------- -------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Cost of services revenue $25 $11 $100 $25
Sales and marketing 758 205 2,736 468
Research and development 175 60 739 137
General and administrative 685 491 2,394 761
--------- --------- --------- ---------
Total noncash stock-based
compensation expense $1,643 $767 $5,969 $1,391
========= ========= ========= =========
(2) Represents additional FICA expenses incurred by CommVault when
employees exercise in the money stock options.
(3) 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.
(4) Represents accretion of fair value of Series A through E
cumulative redeemable convertible preferred stock upon conversion
to common stock on September 27, 2006.
(5) 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
CommVault Michael Picariello, 732-728-5380 ir@commvault.com