SolarWinds Announces Second Quarter 2011 Results
AUSTIN, TX, Aug 03, 2011 (MARKETWIRE via COMTEX) -- SolarWinds(R) (SWI), a
leading provider of powerful and affordable IT management software, today
reported results for its second quarter ended June 30, 2011.
--Record quarterly total revenue of $45.8 million, representing 29%
year-over-year growth.
--GAAP operating income of $19.1 million and non-GAAP operating income
of $23.3 million, or a non-GAAP operating margin of 51%.
--GAAP diluted earnings per share of $0.18 and non-GAAP diluted earnings
per share of $0.22.
--Cash flows from operating activities of $23.6 million, representing
40% year-over-year growth.
Financial Results SolarWinds reported record total revenue for the second quarter
of 2011 of $45.8 million, a 29% increase over total revenue in the second quarter
of 2010. License revenue was a record $21.1 million in the second quarter of
2011, representing a 22% increase over license revenue in the second quarter of
2010. Maintenance revenue was a record $24.8 million in the second quarter of
2011, representing a 36% increase over maintenance revenue in the second quarter
of 2010.
On a GAAP basis, diluted earnings per share were $0.18 in the second quarter of
2011 compared to $0.11 in the second quarter of 2010. Non-GAAP diluted earnings
per share were $0.22 in the second quarter of 2011 compared to $0.17 in the
second quarter of 2010.
Net cash provided by operating activities was $23.6 million in the second quarter
of 2011 compared to $16.9 million for the second quarter of 2010, representing a
year-over-year increase of 40%. Free cash flow was $24.0 million in the second
quarter of 2011 compared to $19.4 million for the second quarter of 2010,
representing a year-over-year increase of 24%. Cash and cash equivalents at the
end of the second quarter of 2011 were $169.5 million, an increase of $26.2
million from the end of the first quarter of 2011.
The financial results included in this press release are preliminary and pending
final review by the company and its external auditors. Financial results will not
be final until SolarWinds files its quarterly report on Form 10-Q for the period.
Information about SolarWinds' use of these non-GAAP financial measures is
provided below under "Non-GAAP Financial Measures."
Recent Business Highlights "We are pleased with our second quarter results. Our
revenue and bookings growth trends highlight the momentum that we have created
with our strategy to extend the SolarWinds brand into new areas of IT
management," said Kevin Thompson, SolarWinds' President and CEO.
"Users expressed healthy demand for our new products, including SolarWinds
Storage Manager, Virtualization Manager, User Device Tracker, and Application
Performance Monitor. In addition, the release of SolarWinds Log and Event
Manager, which is based on technology we acquired from TriGeo, has received a
positive initial reception from the market. We believe it addresses a long-time
need from our user base for a powerful, affordable and easy-to-use solution for
log and event management."
SolarWinds' business highlights during the second quarter of 2011 include:
--SolarWinds released SolarWinds Virtualization Manager and SolarWinds
Storage Manager, which are complementary and comprehensive solutions
designed to help the IT community conquer virtualization complexity as
environments scale and mature, including managing the server
virtualization layer and optimizing storage performance and capacity
for virtualization.
--SolarWinds announced the acquisition of TriGeo, which adds affordable
and easy-to-use solutions for log and event management to its family
of offerings, and further extends the range of problems SolarWinds can
solve for its users.
--SolarWinds introduced SolarWinds User Device Tracker (UDT), which
provides network engineers with a powerful, affordable, and
easy-to-use solution for comprehensive switch port mapping, historical
switch port tracking, switch capacity analysis, and watch list alerts.
--SolarWinds introduced Real-Time AppFlow Analyzer (RTAFA), which is a
free tool for monitoring AppFlow(TM), an emerging application data
capture method from Citrix.
--SolarWinds also introduced SAN Monitor for EMC CLARiiON, a free tool
for real-time insight into storage performance and capacity on EMC
CLARiiON disk arrays and SAN devices.
"Looking back on the year so far, we're very pleased with our financial
performance. In addition to accelerating revenue growth, we generated
year-over-year operating cash flow growth of 29% along with non-GAAP operating
margins of over 50% in each quarter even after taking into account the
acquisition of Hyper9 in January," added Mike Berry, SolarWinds' Chief Financial
Officer. "For the second half of the year, we plan to remain focused on
delivering strong margins and cash flow despite the significant investments we
continue to make in order to drive future growth in our business."
Financial Outlook As of August 3, 2011, SolarWinds is providing its financial
outlook for its third quarter and full year of 2011. The financial outlook
includes the anticipated impact of the acquisition of TriGeo, which was completed
on July 1, 2011. The financial information below represents forward-looking
non-GAAP financial information, including an estimate of non-GAAP operating
income, and non-GAAP diluted earnings per share, for the third quarter of 2011
and for the full year 2011. These non-GAAP financial measures exclude, among
other items mentioned below, stock-based compensation expense and related
employer-paid payroll taxes. SolarWinds cannot reasonably estimate the expected
stock-based compensation expense and related employer-paid payroll taxes for
these future periods as the amounts depend upon such factors as the future price
of SolarWinds' stock for purposes of computation. In addition, costs related to
non-recurring items and acquisitions are not something that SolarWinds can
estimate because they are a function of what non-recurring items and
acquisitions, if any, occur and the kind of costs incurred in connection with any
such non-recurring items or acquisitions.
Financial Outlook for the Third Quarter of 2011 SolarWinds management currently
expects to achieve the following results for the third quarter of 2011:
--Total revenue in the range of $50.5-$52.5 million.
--Non-GAAP operating income representing approximately 48% of revenue.
--Non-GAAP diluted earnings per share of $0.21-$0.23.
--Weighted average shares outstanding of approximately 75.5 million.
Financial Outlook for Full Year 2011 SolarWinds management currently expects to
achieve the following results for the full year 2011:
--Total revenue in the range of $191.5-$196.0 million.
--Non-GAAP operating income representing approximately 49%-50% of
revenue.
--Non-GAAP diluted earnings per share of $0.86-$0.90.
--Weighted average shares outstanding of approximately 75.0 million.
Conference Call and Webcast In conjunction with this announcement, SolarWinds
will host a conference call today to discuss its financial results and other
business at 4:00pm CDT (5:00pm EDT/2). A live webcast of the event, including any
supplemental information, will be available on the SolarWinds Investor Relations
website at ir.solarwinds.com. A live dial-in will be available
domestically at 877-681-3372 and internationally at +1-719-325-4838. To access
the live call, please dial in 5-10 minutes before the scheduled start time. A
replay of the webcast will be available on a temporary basis shortly after the
event on the SolarWinds Investor Relations website.
Forward-Looking Statements This press release contains "forward-looking"
statements, which are subject to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including SolarWinds' financial outlook
and its plan to remain focused on delivering strong margins and cash flow. These
forward-looking statements are based on management's beliefs and assumptions and
on information currently available to management. Forward-looking statements
include all statements that are not historical facts and may be identified by
terms such as "continues," "plans," "believes," "intends" or similar expressions
and the negatives of those terms. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, the following: (a) the possibility that general economic
conditions or uncertainty cause information technology spending to be reduced or
purchasing decisions to be delayed; (b) the presence or absence of occasional
large customer orders, including in particular those placed by the U.S. federal
government; (c) the inability to increase sales to existing customers and to
attract new customers; (d) SolarWinds' failure to integrate acquired businesses
and any future acquisitions successfully; (e) the timing and success of new
product introductions by SolarWinds or its competitors; (f) changes in
SolarWinds' pricing policies or those of its competitors; (g) potential foreign
exchange gains and losses related to expenses and sales denominated in currencies
other than the functional currency of an associated entity; and (h) such other
risks and uncertainties described more fully in documents filed with or furnished
to the Securities and Exchange Commission, including the Form 10-Q that
SolarWinds anticipates filing on or before August 9, 2011. All information
provided in this release is as of the date hereof and SolarWinds undertakes no
duty to update this information except as required by law.
Non-GAAP Financial Measures In addition to disclosing financial measures prepared
in accordance with GAAP, this press release and the accompanying tables contain
certain non-GAAP financial measures. The tables below set forth a reconciliation
of each of these non-GAAP measures to a GAAP financial measure that we consider
to be most comparable. SolarWinds believes that each of these non-GAAP financial
measures provides meaningful supplemental information regarding its performance
by excluding certain items that may not be indicative of its core business
operations. SolarWinds' management and Board of Directors use certain of these
non-GAAP measures to assess operational performance and to determine employee
incentive compensation. Accordingly, these measures may provide helpful insight
to investors on the motivation and decision-making of management in operating the
business. SolarWinds considers free cash flow also to be a liquidity measure that
provides important information regarding the cash generated by the business after
the purchase of property and equipment that can then be used for, among other
things, strategic acquisitions and investments in the business, stock repurchases
and funding ongoing operations.
SolarWinds also believes that these non-GAAP financial measures are used by
investors and security analysts to (a) compare and evaluate its performance from
period to period and (b) compare its performance to those of its competitors.
These non-GAAP measures exclude certain items that can vary substantially from
company to company depending upon their financing and accounting methods, the
book value of their assets, their capital structures and the method by which
their assets were acquired.
There are limitations associated with the use of these non-GAAP financial
measures. These non-GAAP financial measures are not prepared in accordance with
GAAP, do not reflect a comprehensive system of accounting and may not be
completely comparable to similarly-titled measures of other companies due to
potential differences in the exact method of calculation between companies.
Certain items that are excluded from these non-GAAP financial measures can have a
material impact on operating and net income. In addition, free cash flow does not
represent the total increase or decrease in the cash balance for the period.
As a result, these non-GAAP financial measures have limitations and should not be
considered in isolation from, or as a substitute for the most comparable GAAP
measures. SolarWinds' management and Board of Directors compensate for these
limitations by using these non-GAAP financial measures as supplements to GAAP
financial measures and by reviewing the reconciliations of the non-GAAP financial
measures to their most comparable GAAP financial measure. Investors are
encouraged to review the reconciliations of these non-GAAP financial measures to
their most comparable GAAP financial measures that are set forth in the tables
below.
About SolarWinds SolarWinds (SWI) provides powerful and affordable IT management
software to customers worldwide -- from Fortune 500 enterprises to small
businesses. We work to put our users first and remove the obstacles that have
become "status quo" in traditional enterprise software. SolarWinds products are
downloadable, easy to use and maintain, and provide the power, scale, and
flexibility needed to address users' management priorities. Our online user
community, thwack, is a gathering-place where tens of thousands of IT pros solve
problems, share technology, and participate in product development for all of
SolarWinds' products. Learn more today at solarwinds.com.
SolarWinds, SolarWinds.com and Orion are registered trademarks of SolarWinds. All
other company and product names mentioned are used only for identification
purposes and may be trademarks or registered trademarks of their respective
companies.
SolarWinds, Inc
Condensed Consolidated Balance Sheets
(In thousands, except share and per share information)
(Unaudited)
June 30,December 31,
20112010
-------------- --------------
Assets
Current assets:
Cash and cash equivalents$169,513 $142,003
Accounts receivable, net of allowances of
$263 and $201 as of June 30, 2011 and
December 31, 2010, respectively22,66420,255
Income tax receivable5,81510,350
Deferred taxes240261
Other current assets3,5093,210
-------------- --------------
Total current assets201,741176,079
Property and equipment, net6,7016,702
Deferred taxes7,1604,099
Goodwill55,52340,424
Intangible assets and other, net27,31620,173
-------------- --------------
Total assets$298,441 $247,477
============== ==============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$2,636 $2,150
Accrued liabilities7,2608,588
Accrued earnout4,0464,000
Income taxes payable891555
Current portion of deferred revenue59,71952,583
-------------- --------------
Total current liabilities74,55267,876
Long-term liabilities:
Deferred revenue, net of current portion3,1633,175
Other long-term liabilities1,377817
-------------- --------------
Total liabilities79,09271,868
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value: 123,000,000
shares authorized and 72,801,342 and
71,658,808 shares issued and outstanding
as of June 30, 2011 and December 31, 2010,
respectively7372
Additional paid-in capital182,730165,972
Accumulated other comprehensive income
(loss)771(1,256)
Accumulated earnings35,77510,821
-------------- --------------
Total stockholders' equity219,349175,609
-------------- --------------
Total liabilities and stockholders'
equity$298,441 $247,477
============== ==============
SolarWinds, Inc
Condensed Consolidated Statements of Income
(In thousands, except per share information)
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
------------------------------------
2011201020112010
--------------------------------
Revenue:
License$ 21,069$ 17,264$ 41,449$ 34,885
Maintenance and other24,75418,24447,35234,948
--------------------------------
Total revenue45,82335,50888,80169,833
Cost of license revenue8094621,574817
Cost of maintenance and other
revenue1,7581,4583,4792,802
--------------------------------
Gross profit43,25633,58883,74866,214
Operating expenses:
Sales and marketing12,77810,68824,50520,937
Research and development5,0343,82410,0727,451
General and administrative6,3176,92512,98712,246
--------------------------------
Total operating expenses24,12921,43747,56440,634
--------------------------------
Operating income19,12712,15136,18425,580
Other income (expense):
Interest income7067125100
Interest expense-(363)(1,146)
Other income (expense)(210)163(516)211
--------------------------------
Total other income (expense)(140)(133)(391)(835)
--------------------------------
Income before income taxes18,98712,01835,79324,745
Income tax expense5,4363,68210,5327,472
--------------------------------
Net income$ 13,551$8,336$ 25,261$ 17,273
================================
Net income per share:
Basic earnings per share$0.19$0.12$0.35$0.25
================================
Diluted earnings per share$0.18$0.11$0.34$0.24
================================
Weighted shares used to compute net
income per share:
Shares used in computation of
basic earnings per share72,71968,20272,54167,738
================================
Shares used in computation of
diluted earnings per share74,34673,28774,18473,061
================================
SolarWinds, Inc
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share amounts and percentages)
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
------------------------------------
2011201020112010
--------------------------------
Revenue45,82335,50888,80169,833
GAAP cost of revenue$2,567$1,920$5,053$3,619
Amortization of intangible assets
(1)(752)(458)(1,453)(807)
Stock-based compensation expense and
related employer-paid payroll taxes
(2)(47)(44)(100)(88)
--------------------------------
Non-GAAP cost of revenue$1,768$1,418$3,500$2,724
================================
GAAP gross profit$ 43,256$ 33,588$ 83,748$ 66,214
Amortization of intangible assets
(1)7524581,453807
Stock-based compensation expense and
related employer-paid payroll taxes
(2)474410088
--------------------------------
Non-GAAP gross profit$ 44,055$ 34,090$ 85,301$ 67,109
================================
GAAP gross profit as a % of revenue94.4%94.6%94.3%94.8%
Amortization of intangible assets as
a % of revenue (1)1.61.31.61.2
Stock-based compensation expense and
related employer-paid payroll taxes
as a % of revenue (2)0.10.10.10.1
--------------------------------
Non-GAAP gross profit as a % of
revenue96.1%96.0%96.1%96.1%
================================
GAAP sales and marketing expense$ 12,778$ 10,688$ 24,505$ 20,937
Stock-based compensation expense and
related employer-paid payroll taxes
(2)(921)(854)(1,830)(1,513)
--------------------------------
Non-GAAP sales and marketing expense $ 11,857$9,834$ 22,675$ 19,424
================================
GAAP research and development
expense$5,034$3,824$ 10,072$7,451
Stock-based compensation expense and
related employer-paid payroll taxes
(2)(406)(463)(876)(840)
--------------------------------
Non-GAAP research and development
expense$4,628$3,361$9,196$6,611
================================
GAAP general and administrative
expense$6,317$6,925$ 12,987$ 12,246
Amortization of intangible assets
(1)(683)(387)(1,154)(669)
Stock-based compensation expense and
related employer-paid payroll taxes
(2)(1,433)(3,077)(2,861)(4,519)
Public offering costs (3)-(151)-(170)
Lawsuit settlement costs and related
legal fees, net of reimbursements
(3)-69-217
Severance costs related to
retirement of former Executive
Chairman (3)-(208)-(208)
Acquisition related costs (4)90(144)(914)(410)
--------------------------------
Non-GAAP general and administrative
expense$4,291$3,027$8,058$6,487
================================
GAAP operating expense$ 24,129$ 21,437$ 47,564$ 40,634
Amortization of intangible assets
(1)(683)(387)(1,154)(669)
Stock-based compensation expense and
related employer-paid payroll taxes
(2)(2,760)(4,394)(5,567)(6,872)
Public offering costs (3)-(151)-(170)
Lawsuit settlement costs and related
legal fees, net of reimbursements
(3)-69-217
Severance costs related to
retirement of former Executive
Chairman (3)-(208)-(208)
Acquisition related costs (4)90(144)(914)(410)
--------------------------------
Non-GAAP operating expense$ 20,776$ 16,222$ 39,929$ 32,522
================================
GAAP operating income$ 19,127$ 12,151$ 36,184$ 25,580
Amortization of intangible assets
(1)1,4358452,6071,476
Stock-based compensation expense and
related employer-paid payroll taxes
(2)2,8074,4385,6676,960
Public offering costs (3)-151-170
Lawsuit settlement costs and related
legal fees, net of reimbursements
(3)-(69)-(217)
Severance costs related to
retirement of former Executive
Chairman (3)-208-208
Acquisition related costs (4)(90)144914410
--------------------------------
Non-GAAP operating income$ 23,279$ 17,868$ 45,372$ 34,587
================================
GAAP operating margin41.7%34.2%40.7%36.6%
Amortization of intangible assets as
a % of revenue (1)3.12.42.92.1
Stock-based compensation expense and
related employer-paid payroll taxes
as a % of revenue (2)6.112.56.410.0
Public offering costs as a % of
revenue (3)-0.4-0.2
Lawsuit settlement costs and related
legal fees, net of reimbursements,
as a % of revenue (3)-(0.2)-(0.3)
Severance costs related to
retirement of former Executive
Chairman as a % of revenue (3)-0.6-0.3
Acquisition related costs as a % of
revenue (4)(0.2)0.41.00.6
--------------------------------
Non-GAAP operating margin50.8%50.3%51.1%49.5%
================================
GAAP other income (expense), net$(140) $(133) $(391) $(835)
Debt issuance costs write-off (3)-131-334
Acquisition related costs (4)108-108-
--------------------------------
Non-GAAP other income (expense), net $(32) $(2) $(283) $(501)
================================
GAAP income tax expense$5,436$3,682$ 10,532$7,472
Income tax effect on non-GAAP
exclusions (3)1,1231,6332,1702,517
--------------------------------
Non-GAAP income tax expense$6,559$5,315$ 12,702$9,989
================================
GAAP net income$ 13,551$8,336$ 25,261$ 17,273
Amortization of intangible assets
(1)1,4358452,6071,476
Stock-based compensation expense and
related employer-paid payroll taxes
(2)2,8074,4385,6676,960
Debt issuance costs write-off (3)-131-334
Public offering costs (3)-151-170
Lawsuit settlement costs and related
legal fees, net of reimbursements
(3)-(69)-(217)
Severance costs related to
retirement of former Executive
Chairman (3)-208-208
Acquisition related costs (4)181441,022410
Tax benefits associated with above
adjustments (3)(1,123)(1,633)(2,170)(2,517)
--------------------------------
Non-GAAP net income$ 16,688$ 12,551$ 32,387$ 24,097
================================
Non-GAAP diluted earnings per share
(5)$0.22$0.17$0.44$0.33
================================
Weighted average shares used in
computing diluted earnings per
share74,34673,28774,18473,061
================================
GAAP net income as a % of revenue29.6%23.5%28.4%24.7%
Amortization of intangible assets as
a % of revenue (1)3.12.42.92.1
Stock-based compensation expense and
related employer-paid payroll taxes
as a % of revenue (2)6.112.56.410.0
Debt issuance costs write-off as a %
of revenue (3)-0.4-0.5
Public offering costs as a % of
revenue (3)-0.4-0.2
Lawsuit settlement costs and related
legal fees, net of reimbursements,
as a % of revenue (3)-(0.2)-(0.3)
Severance costs related to
retirement of former Executive
Chairman as a % of revenue (3)-0.6-0.3
Acquisition related costs as a % of
revenue (4)0.00.41.20.6
Tax benefits associated with above
adjustments as a % of revenue (3)(2.5)(4.6)(2.4)(3.6)
--------------------------------
Non-GAAP net income as a % of
revenue36.4%35.3%36.5%34.5%
================================
(1) Amortization of Intangible Assets. We provide non-GAAP information
which excludes expenses for the amortization of intangible assets. Because
of varying fair value amounts of intangible assets, subjective impairment
assumptions and the variety of useful lives, which affect the recognition
of amortization expense, we believe that the exclusion of amortization
expense allows for more accurate comparisons of our operating results to
our peer companies. We also exclude amortization of purchased intangible
assets associated with our acquisitions. The amortization of purchased
intangible assets associated with our acquisitions results in our
recording expenses in our GAAP financial statements that were already
expensed by the acquired company before the acquisition and for which we
have not expended cash. Moreover, had we internally developed the products
acquired, the amortization of intangible assets, and the expenses of
uncompleted research and development would have been expensed in prior
periods. Accordingly, we analyze the performance of our operations in each
period without regard to such expenses.
(2) Stock-Based Compensation Expense and Related Employer-Paid Payroll
Taxes. We provide non-GAAP information which excludes expenses for stock-
based compensation and related employer-paid payroll taxes. We believe the
exclusion of these items allows for financial results that are more
indicative of our continuing operations. We believe that the exclusion of
stock-based compensation expense provides for a better comparison of our
operating results to prior periods and to our peer companies as the
calculations of stock-based compensation vary from period to period and
company to company due to different valuation methodologies, subjective
assumptions and the variety of award types. Employer-paid payroll taxes on
stock based compensation is dependent on our stock price and the timing of
the taxable events related to the equity awards, over which our management
has little control, does not correlate to the core operation of our
business. Because of these unique characteristics of stock-based
compensation and the related employer-paid payroll taxes, management
excludes these expenses when analyzing the organization's business
performance.
(3) Other Items. We exclude certain other unplanned items which we believe
are not indicative of our continuing operations and which amounts and
timing are difficult to estimate in advance, including the following, when
applicable: (i) write-off of debt issuance costs; (ii) public offering
costs; (iii) lawsuit settlement costs and related legal fees, net of
related reimbursements from insurance proceeds; (iv) severance costs
related to retirement of certain executive officers; and (v) the income
tax effect on our financial statements of excluding items related to our
non-GAAP financial measures. Although these events are reflected in our
GAAP financials, these transactions which are not indicative of our
continuing operations may limit the comparability of our ongoing
operations with prior and future periods. We also believe providing
financial information with and without the income tax effect of excluding
items related to our non-GAAP financial measures provide our management
and users of the financial statements with better clarity regarding the
on-going performance and future liquidity of our business. Because of
these factors, we assess our operating performance both with these amounts
included and excluded, and by providing this information, we believe the
users of our financial statements are better able to understand the
financial results of what we consider our continuing operations.
(4) Acquisition Related Charges. We exclude certain expense items resulting
from acquisitions including the following, when applicable: (i)
amortization of purchased intangible assets associated with our
acquisitions (see Note 1 for further discussion); (ii) acquisition related
charges such as legal, accounting and advisory fees; (iii) changes in fair
value of contingent consideration; (iv) costs related to integrating the
acquired businesses; and (v) restructuring costs, including adjustments
related to changes in estimates, related to acquisitions. Acquisitions
result in non-continuing operating expenses, which would not otherwise
have been incurred by us in the normal course of our business operations.
We believe that providing non-GAAP information for acquisition related
expense items in addition to the corresponding GAAP information allows the
users of our financial statements to better review and understand the
historic and current results of our continuing operations, and also
facilitates comparisons to less acquisitive peer companies.
(5) Non-GAAP Net Income Per Share Item. We provide diluted non-GAAP net
income per share. The diluted non-GAAP net income per share amount was
calculated based on our non-GAAP net income and the weighted-average
number of shares outstanding during the reporting period. The diluted non-
GAAP income per share included additional dilution from potential issuance
of common stock, except when such issuances would be anti-dilutive.
SolarWinds, Inc
Reconciliation of Free Cash Flow to GAAP Cash Flows From Operating
Activities
(In thousands)
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
------------------------------------
2011201020112010
--------------------------------
Reconciliation of free cash flow to
GAAP cash flows from operating
activities:
GAAP cash flows from operating
activities$ 23,637$ 16,898$ 42,503$ 32,821
Excess tax benefit from stock-
based compensation8743,3104,4397,193
Purchases of property and
equipment(465)(852)(1,063)(1,434)
--------------------------------
Free cash flow$ 24,046$ 19,356$ 45,879$ 38,580
================================
SolarWinds, Inc
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
----------------------------------------
2011201020112010
------------------------------------
Cash flows from operating
activities
Net income$13,551$8,336$25,261$17,273
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization2,1261,3883,9582,492
Provision for doubtful
accounts79(9)6815
Stock-based compensation
expense2,7814,2885,4506,609
Deferred taxes765169293(511)
Excess tax benefit from
stock-based compensation(874)(3,310)(4,439)(7,193)
Other non-cash expenses103197213501
Changes in operating assets
and liabilities, net of
assets acquired and
liabilities assumed in
business combinations:
Accounts receivable(1,866)1,469(2,154)(1,991)
Income taxes receivable(119)(593)(109)(493)
Prepaid income taxes-807-4,675
Prepaid and other current
assets(1,672)(99)(252)(622)
Accounts payable741(381)463(1,141)
Accrued liabilities1,101(699)(1,784)(308)
Accrued interest payable-(525)-(539)
Income taxes payable4,3793,0119,8007,460
Deferred revenue and other
liabilities2,5422,8495,7356,594
------------------------------------
Net cash provided by
operating activities23,63716,89842,50332,821
Cash flows from investing
activities
Purchases of property and
equipment(465)(852)(1,063)(1,434)
Purchases of intangible assets
and other(184)(108)(292)(209)
Acquisition of businesses--(23,000)(28,039)
Earnout payments for
acquisitions--(3,743)-
------------------------------------
Net cash used in investing
activities(649)(960)(28,098)(29,682)
Cash flows from financing
activities
Repurchase of common stock(2)-(307)-
Exercise of stock options1,8162,5677,0095,836
Excess tax benefit from stock-
based compensation8743,3104,4397,193
Repayment of long-term debt-(25,000)-(44,097)
Repayments of capital lease
obligations-(2)-(9)
------------------------------------
Net cash provided by (used
in) financing activities2,688(19,125)11,141(31,077)
Effect of exchange rate changes
on cash and cash equivalents520(1,134)1,964(2,083)
------------------------------------
Net increase (decrease) in
cash and cash equivalents26,196(4,321)27,510(30,021)
Cash and cash equivalents
Beginning of period143,317104,088142,003129,788
------------------------------------
End of period$ 169,513$99,767$ 169,513$99,767
====================================
Supplemental disclosure of cash
flow information
Cash paid for interest$-$742$-$1,280
====================================
Cash paid (received) for
income taxes$376$289$464$(3,658)
====================================
Noncash investing and financing
transactions
Accrued earnout$-$-$3,938$3,743
====================================
Stock issued for acquisition$-$-$-$9,221
====================================
CONTACTS:
Investors:
Dave Hafner
Phone: 512.682.9867
Email Contact
Media:
Tiffany Nels
Phone: 512.682.9545
Email Contact
SOURCE: SolarWinds |
