CommVault Systems, Inc. Announces Second Quarter Fiscal 2007 Results
Revenues Rise 41 percent to $36.6 million Non-GAAP Operating Income Increases 165 percent to $5.3 million Non-GAAP Net Income of $0.12 per Diluted Share
OCEANPORT, N.J., Nov 06, 2006 /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 second quarter ended September 30, 2006.
N. Robert Hammer, CommVault's Chairman, President and CEO stated, "We had a very solid second quarter in all segments of our business, which were highlighted by record revenues and increased earnings. We are confident in our business model and our ability to achieve our growth and profitability objectives. We are optimistic about the opportunities ahead of us."
Total revenues in the second quarter of fiscal 2007 were a record $36.6 million, an increase of 41 percent over total revenues of $25.9 million in the second quarter of fiscal 2006. Software revenue in the second quarter of fiscal 2007 was $20.3 million, an increase of 36 percent from the second quarter of fiscal 2006.
Income from operations, determined in accordance with United States generally accepted accounting principles (GAAP), was $3.8 million for the second quarter of fiscal 2007 compared to $1.9 million in the second quarter of the prior year. For the second quarter of fiscal 2007, CommVault reported GAAP net income of $4.4 million compared to $2.0 million in the same period of the prior year.
On a non-GAAP basis, operating income increased 165 percent to $5.3 million in the second quarter of fiscal 2007 compared to $2.0 million in the second quarter of the prior year. Non-GAAP net income increased 164 percent to $4.5 million or $0.12 per diluted share from $1.7 million or $0.05 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 at September 30, 2006, totaled $50.2 million and operating cash flow for the quarter was $7.1 million.
Additional Second Quarter Business Highlights:
-- CommVault began trading on NASDAQ in an initial public offering (IPO)
that closed on September 27, 2006 in which CommVault sold 6.1 million
shares and raised net proceeds of approximately $80.2 million.
-- CommVault entered into an agreement with Network Appliance, Inc. to
deliver CommVault(R) Galaxy Express Backup & Recovery software with
the StoreVault S5000 all-in-one network storage appliance, providing
the ultimate in low-cost, reliable data protection and network storage
functionality for small and medium-sized businesses.
-- CommVault received the highest possible rating in Gartner's
MarketScope for Enterprise Backup/Recovery Software, 2006 report.
Fiscal 2007 Guidance
CommVault provided guidance for the fiscal year ending March 31, 2007. CommVault currently expects:
-- Total revenues in the range of $148 million to $150 million.
-- Non-GAAP gross margins of 85.5 percent to 86.0 percent.
-- Non-GAAP operating income margins of 13.5 percent to 14.5 percent.
-- Non-GAAP diluted EPS in the range of $0.42 per share to $0.44 per
share using an effective tax rate of approximately 20 percent and a
weighted average diluted share count of approximately 42.0 million to
43.0 million.
-- A cash income tax rate of less than 4 percent for fiscal 2007.
The Non-GAAP guidance excludes approximately $0.12 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.
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, as a supplement to GAAP measures, in evaluating CommVault's ongoing operational performance. CommVault believes that the use of these non-GAAP financial measures provides 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 investors.
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 percent starting in the second quarter of fiscal 2007 which will result in an estimated effective tax rate of approximately 20 percent 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 has been provided in the financial statement tables included in this press release.
Conference Call Information
CommVault will host a conference call today, November 6, 2006, at 5:00 p.m. EST to discuss its financial results. To access this call, dial 800-289-0518 (domestic) or 913-981-5523 (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 may contain 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, 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 Six Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues:
Software $20,260 $14,860 $39,048 $27,323
Services 16,378 11,062 31,112 20,722
Total revenues 36,638 25,922 70,160 48,045
Cost of revenues:
Software 391 303 663 640
Services 4,844 3,044 9,357 5,727
Total cost of revenues 5,235 3,347 10,020 6,367
Gross margin 31,403 22,575 60,140 41,678
Operating expenses:
Sales and marketing 16,272 12,671 31,579 24,524
Research and
development 6,100 4,719 11,518 9,057
General and
administrative 4,611 2,952 9,264 6,033
Depreciation and
amortization 582 382 1,079 765
Income from operations 3,838 1,851 6,700 1,299
Interest expense (17) (2) (17) (6)
Interest income 676 256 1,200 431
Income before
income taxes 4,497 2,105 7,883 1,724
Income tax expense (66) (91) (111) (75)
Net income 4,431 2,014 7,772 1,649
Less: accretion of
preferred stock
dividends (1,407) (1,427) (2,818) (2,838)
Less: accretion of
fair value of
preferred stock
upon conversion (102,745) - (102,745) -
Net income (loss)
attributable to
common stockholders $(99,721) $587 $(97,791) $(1,189)
Net income (loss)
attributable to
common stockholders
per share:
Basic $(4.90) $0.02 $(4.96) $(0.06)
Diluted $(4.90) $0.02 $(4.96) $(0.06)
Weighted average shares
used in computing
per share amounts:
Basic 20,353 18,813 19,696 18,810
Diluted 20,353 30,437 19,696 18,810
Table II
CommVault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
September 30, March 31,
2006 2006
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $50,164 $48,039
Trade accounts receivable 17,943 18,238
Prepaid expenses and other current assets 2,101 1,877
Total current assets 70,208 68,154
Property and equipment, net 4,356 3,322
Other assets 438 1,092
Total assets $75,002 $72,568
Liabilities, cumulative redeemable convertible
preferred stock and stockholders'
equity (deficit)
Current liabilities:
Accounts payable $1,194 $1,565
Accrued liabilities 14,074 12,685
Term loan 10,000 -
Deferred revenue 30,171 29,765
Total current liabilities 55,439 44,015
Deferred revenue, less current portion 3,589 3,036
Other liabilities 8 13
Cumulative redeemable convertible preferred stock:
Series A through E - 99,168
Total stockholders' equity (deficit) 15,966 (73,664)
$75,002 $72,568
Table III
CommVault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
September 30,
2006 2005
Cash flows from operating activities
Net income $7,772 $1,649
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,213 785
Noncash stock compensation 2,881 210
Changes in operating assets and liabilities:
Accounts receivable 295 3,285
Prepaid expenses and other current assets (224) 220
Other assets (200) 62
Accounts payable (230) (964)
Accrued expenses 1,317 288
Deferred revenue and other liabilities 954 6,687
Net cash provided by operating activities 13,778 12,222
Cash flows from investing activities
Purchase of property and equipment (2,247) (755)
Net cash used in investing activities (2,247) (755)
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 82,494 -
Proceeds from the exercise of stock options 190 57
Proceeds from term loan 15,000 -
Repayments on term loan (5,000) (99)
Net cash used in financing activities (9,149) (42)
Effects of exchange rate - changes in cash (257) 93
Net increase in cash and cash equivalents 2,125 11,518
Cash and cash equivalents at beginning of period 48,039 24,795
Cash and cash equivalents at end of period $50,164 $36,313
Table IV
CommVault Systems, Inc.
Reconciliation of GAAP to Non-GAAP
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30,
2006 2006 2005 2005
Non- Non-
GAAP Adjustments GAAP GAAP Adjustments GAAP
Revenues:
Software $20,260 $- $20,260 $14,860 $- $14,860
Services 16,378 - 16,378 11,062 - 11,062
Total revenues 36,638 - 36,638 25,922 - 25,922
Cost of revenues:
Software 391 - 391 303 - 303
Services (1) 4,844 (25) 4,819 3,044 (4) 3,040
Total cost of
revenues 5,235 (25) 5,210 3,347 (4) 3,343
Gross margin 31,403 25 31,428 22,575 4 22,579
Operating expenses:
Sales and
marketing (1) 16,272 (660) 15,612 12,671 (78) 12,593
Research and
development (1) 6,100 (195) 5,905 4,719 (25) 4,694
General and
administr-
ative (1) 4,611 (604) 4,007 2,952 (52) 2,900
Depreciation and
amortization 582 - 582 382 - 382
Income from
operations 3,838 1,484 5,322 1,851 159 2,010
Interest expense (17) - (17) (2) - (2)
Interest income 676 - 676 256 - 256
Income before
income taxes 4,497 1,484 5,981 2,105 159 2,264
Income tax
expense (2) (66) (1,429) (1,495) (91) (475) (566)
Net income 4,431 55 4,486 2,014 (316) 1,698
Less: accretion of
preferred stock
dividends (3) (1,407) 1,407 - (1,427) 1,427 -
Less: accretion of
fair value of
preferred
stock upon
conversion (4) (102,745) 102,745 - - - -
Net income (loss)
attributable to
common
stockholders $(99,721) $104,207 $4,486 $587 $1,111 $1,698
Net income (loss)
attributable to
common stockholders
per share:
Basic $(4.90) $0.13 $0.02 $0.05
Diluted $(4.90) $0.12 $0.02 $0.05
Weighted average
shares used in
computing per share
amounts:
Basic 20,353 15,323 35,676 18,813 16,019 34,832
Diluted 20,353 18,590 38,943 30,437 6,333 36,770
Table V
CommVault Systems, Inc.
Reconciliation of GAAP to Non-GAAP
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Six Months Ended September 30,
2006 2006 2005 2005
Non- Non-
GAAP Adjustments GAAP GAAP Adjustments GAAP
Revenues:
Software $39,048 $- $39,048 $27,323 $- $27,323
Services 31,112 - 31,112 20,722 - 20,722
Total revenues 70,160 - 70,160 48,045 - 48,045
Cost of revenues:
Software 663 - 663 640 - 640
Services (1) 9,357 (51) 9,306 5,727 (6) 5,721
Total cost of
revenues 10,020 (51) 9,969 6,367 (6) 6,361
Gross margin 60,140 51 60,191 41,678 6 41,684
Operating expenses:
Sales and
marketing (1) 31,579 (1,277) 30,302 24,524 (108) 24,416
Research and
development (1) 11,518 (382) 11,136 9,057 (32) 9,025
General and
administr-
ative (1) 9,264 (1,171) 8,093 6,033 (64) 5,969
Depreciation and
amortization 1,079 - 1,079 765 - 765
Income from
operations 6,700 2,881 9,581 1,299 210 1,509
Interest expense (17) - (17) (6) - (6)
Interest income 1,200 - 1,200 431 - 431
Income before
income taxes 7,883 2,881 10,764 1,724 210 1,934
Income tax
expense (2) (111) (1,429) (1,540) (75) (409) (484)
Net income 7,772 1,452 9,224 1,649 (199) 1,450
Less: accretion of
preferred stock
dividends (3) (2,818) 2,818 - (2,838) 2,838 -
Less: accretion of
fair value of
preferred
stock upon
conversion (4) (102,745) 102,745 - - - -
Net income (loss)
attributable to
common
stockholders $(97,791) $107,015 $9,224 $(1,189) $2,639 $1,450
Net income (loss)
attributable to
common stockholders
per share:
Basic $(4.96) $0.26 $(0.06) $0.04
Diluted $(4.96) $0.24 $(0.06) $0.04
Weighted average
shares used in
computing per share
amounts:
Basic 19,696 15,671 35,367 18,810 16,019 34,829
Diluted 19,696 18,997 38,693 18,810 17,558 36,368
Footnotes - Adjustments
(1) Represents noncash stock-based compensation charges associated with
stock options granted.
(2) 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.
(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.
SOURCE CommVault Systems, Inc.
Press Contact, Jeremy Skule of Fleishman Hillard, +1-212-453-2245, jeremy.skule@fleishman.com , or Investor Relations, Michael Picariello of CommVault, +1-732-728-5380, ir@commvault.com
http://www.commvault.com