Double-Take Software, Inc. Announces Fourth Quarter and Year End 2007 Financial Results
biz.yahoo.com
Tuesday February 5, 4:01 pm ET
Company Delivers Record Revenue and Earnings
SOUTHBOROUGH, Mass.--(BUSINESS WIRE)--Double-Take Software, Inc. (NASDAQ: DBTK), a leading provider of recovery solutions, today announced its financial results for the fourth quarter and year ended December 31, 2007. Results for the quarter and full year reflect approximately one week of operations from TimeSpring Software Corporation, Inc. (subsequently renamed Double-Take Canada), which was acquired in late December, 2007.
“We are very pleased with our performance for both the fourth quarter and the whole of 2007. We met or exceeded our income and revenue growth targets each quarter throughout the year. During the year we released an important product, Double-Take 5.0: the industry's first Continuous Full-Server Protection and Recovery Technology which clearly differentiates us from our competition. Additionally, we closed the acquisition of TimeSpring which extends Double-Takes recovery approach beyond disaster recovery for catastrophic failures, to operational recovery, such as recovering from routine human errors, said Dean Goodermote, Chairman of the Board and CEO of Double-Take Software, Inc. “During 2007, we also successfully managed price increases averaging about 11.5% across our key markets. We chose the path of bundling additional features and raising prices rather than selling add-on licenses because it leads to higher maintenance revenue from the maintenance rates on higher-value products, and we believe it also gives existing customers more reason to renew their maintenance,” added Goodermote.
Total revenue for the fourth quarter of 2007, which consists of software revenue, maintenance and professional services revenue, increased 23% to $23.5 million from $19.1 million in the fourth quarter of 2006. No revenue was recognized during the quarter from Double-Take Canada.
Software revenue increased 16% to $14.2 million in the fourth quarter of 2007 from $12.2 million in the fourth quarter 2006. Maintenance and professional services revenue increased 36% to $9.3 million in the fourth quarter of 2007 from $6.9 million in the fourth quarter 2006.
Operating expenses for the fourth quarter of 2007 increased 2% to $15.8 million from $15.5 million for the same period in 2006. Included in operating expenses in the fourth quarter of 2007 and 2006 are the following items:
* Stock option expense of $0.7 million in both the fourth quarter of 2007 and 2006.
* Amortization of intangible assets of $0.2 million for both the fourth quarter of 2007 and 2006.
Additionally, the following items are included in general and administrative expense for the fourth quarter of 2006 only:
* Stock option expense of $0.3 million resulting from the vesting of stock options for the former Chief Executive Officer.
* Expense of $3.2 million resulting from the issuance of 269,845 shares to our Chief Executive Officer upon the completion of our Initial Public Offering.
* Expense reduction of $1.2 million resulting from cash received from our former Chief Operating Officer in December 2006 as a result of the settlement of a dispute.
Expenses during the fourth quarter of 2007 from Double-Take Canada were approximately $0.1 million.
Income from operations was $5.5 million in the fourth quarter of 2007 compared to $1.7 million in the fourth quarter of 2006.
The Company recorded an income tax benefit of $0.3 million in the fourth quarter of 2007 compared to tax expense of $0.1 million in the fourth quarter of 2006. During the fourth quarter, the Company reversed the valuation allowance on approximately $2.4 million of deferred tax assets which related to net operating loss carryforwards available to be utilized in 2009. The reversal of the valuation allowance, which increased diluted EPS by $0.10 per share for the fourth quarter, was recorded during the fourth quarter because the Company determined that it would more likely than not generate sufficient profits in 2009 to realize the benefits associated with the net operating loss carryforwards.
Net income attributable to common stockholders totaled $6.3 million, or $0.27 per diluted share including $0.10 per diluted share related to the reversal of the valuation allowance on deferred tax assets, in the fourth quarter of 2007 compared with net income attributable to common stockholders of $0.5 million, or $0.07 per diluted share, in the fourth quarter of 2006.
Income from operations on an adjusted, non-GAAP basis in the fourth quarter of 2007 was $6.2 million compared with $6.0 million in fourth quarter of 2006. Adjusted, non-GAAP net income in the fourth quarter of 2007 was $6.8 million, compared with $6.0 million before accretion and dividends on preferred stock in the fourth quarter of 2006.
Adjusted, non-GAAP net income per diluted share was $0.29 in the fourth quarter of 2007 and includes the effect of the reversal of the valuation allowance on deferred tax assets of $0.10 per diluted share. The company calculates these adjusted non-GAAP income measures by excluding the effects in the respective periods of the non-cash SFAS 123R and other stock-based compensation expenses described as components of Operating Expenses above, net of the related income taxes. An explanation of these non-GAAP financial measures and a reconciliation of these measures to GAAP results are provided in the tables included in this press release, and these measures should only be viewed together with the reconciliation and the further explanation given under “Non-GAAP Financial Measures” below.
For the full year, total revenue increased 36% to $82.8 million for the year ended December 31, 2007, from $60.8 million for the year ended December 31, 2006.
Software revenue for the full year increased 28% to $49.2 million for the year ended December 31, 2007, from $38.4 million for the year ended December 31, 2006. Maintenance and Professional Services revenue increased 50% to $33.6 million for the year ended December 31, 2007, from $22.4 million for the year ended December 31, 2006.
Operating expenses for 2007 increased 25% to $58.0 million from $46.3 million in 2006. Included in operating expenses in 2007 and 2006 are the following items:
* Stock option expense of $2.6 million in 2007 compared to $1.0 million in 2006.
* Amortization of intangible assets of $0.7 million in 2007 compared to $0.4 million in 2006.
Included in general and administrative expense for 2006 only are the following items:
* Stock option expense of $1.2 million resulting from the vesting of stock options for the former Chief Executive Officer.
* Expense of $3.2 million resulting from the issuance of 269,845 shares to our Chief Executive Officer upon the completion of our Initial Public Offering.
* Expense reduction of $1.2 million resulting from cash received from our former Chief Operating Officer in December 2006 as a result of the settlement of a dispute.
Income from operations was $16.6 million for the year ended December 31, 2007 compared with $7.0 million for the same period in 2006.
The Company recorded an income tax benefit of $0.8 million in 2007 compared to tax expense of $0.5 million 2006. During 2007, the Company reversed the valuation allowance on approximately $8.1 million of deferred tax assets which related to net operating loss carryforwards available to be utilized from 2007 through 2009. The first portion of the reversal of the valuation allowance of approximately $5.7 million or $0.25 per diluted share was recorded in the second quarter of 2007 when the Company determined that it would more likely than not generate sufficient profits through 2008 to utilize the benefits associated with its net operating loss carryforwards. The second portion of approximately $2.4 million or $0.10 per share was recorded during the fourth quarter when the Company determined that it would more likely than not generate sufficient profits through 2009 to realize the benefits associated with the net operating loss carryforwards.
Net income attributable to common stockholders was $20.1 million, or $0.87 per diluted share including the $0.35 per diluted share related to the reversal of the valuation allowance on deferred tax assets, versus a net loss of ($0.6) million, or ($0.13) per diluted share for the year ended December 31, 2006.
On an adjusted, non-GAAP basis, income from operations was $19.2 million for the year ended December 31, 2007 compared with $12.4 million for the year ended December 31, 2006. Adjusted, non-GAAP net income was $22.0 million versus $12.2 million before accretion and dividends on preferred stock for the year ended December 31, 2006. The company calculates these adjusted non-GAAP income measures by excluding the effects in the respective periods of the non-cash SFAS 123R and other stock-based compensation expenses. See “Non-GAAP Financial Measures” below.
Cash and short term investments at December 31, 2007 equaled $64.7 million.
The Company is providing its initial guidance for 2008 as follows:
The Company has historically experienced some seasonality in its business with the first quarter being the lowest in terms of software revenue and the fourth quarter being the strongest.
The Company expects revenue for the first quarter of 2008 to be in the range of $21.9 million to $22.5 million. Operating income is expected to be $3.1 million to $3.3 million and adjusted, non-GAAP income per share for the first quarter of 2008 in the range of $0.10 to $0.11 excluding the impact of stock-based compensation charges and using an effective income tax rate of approximately 38%. Weighted average diluted shares are assumed to be approximately 23.4 to 23.5 million shares.
The Company expects full-year 2008 revenue to be in the range of $100.6 million to $103.0 million. Operating income is expected to be $20.6 million to $21.6 million and adjusted, non-GAAP income per share for full year 2008 in the range of $0.63 to $0.65 excluding the impact of stock based compensation charges and using an effective tax rate of approximately 38% and weighted average diluted shares assumed to be approximately 23.6 to 23.7 million. See “Non-GAAP Financial Measures” and “Important Note to Investors” below. |
