Rainmaker Reports Record Revenue and Record Profits in Third Quarter
biz.yahoo.com
Wednesday November 1, 4:05 pm ET
Revenue Growth of 42%, 8% Sequentially; EPS of $0.06
CAMPBELL, Calif., Nov. 1 /PRNewswire-FirstCall/ -- Rainmaker Systems, Inc. (Nasdaq: RMKR), a leading provider of outsourced sales and marketing services, today reported record financial results for the third quarter ended September 30, 2006.
Third Quarter Financial Highlights:
* Revenue increased to a record $12.2 million, up 42% year-over-year
* Record GAAP net income of $869,000, or $0.06 per diluted share
* Record EBITDA of $1.7 million, or 14% of net revenue
* Cash and cash equivalents increased by $4 million to $19 million
Rainmaker achieved record third quarter net revenue of $12.2 million, representing a 42% increase over net revenue of $8.6 million in the third quarter of 2005 and an 8% sequential increase from net revenue of $11.3 million in the second quarter of 2006. Revenue includes approximately $180,000 from ViewCentral, for the period from the acquisition's closing on September 15, 2006.
Gross margin was 49% in the third quarter of 2006, compared to 43% in the third quarter of 2005, and 50% in the second quarter of 2006.
Third quarter GAAP net income was $869,000, or $0.06 per diluted share, compared to a net loss of $716,000, or a loss of $0.03 per share, for the third quarter of 2005, and GAAP net income of $771,000, or $0.05 per diluted share, in the second quarter of 2006.
Third quarter non-GAAP net income, excluding stock based compensation of $21,000, amortization of intangible assets from acquisitions of $366,000, and net revenue adjustments related to fair value purchase accounting of $23,000, was $1.2 million, or $0.08 per diluted share, compared to a non-GAAP net loss of $460,000, or a loss of $0.04 per share, for the third quarter of 2005, and non-GAAP net income of $1.1 million, or $0.07 per diluted share, in the second quarter of 2006. See Exhibit A below for a reconciliation of US GAAP net income (loss) to non-GAAP net income (loss).
EBITDA in the third quarter was a record $1.7 million, or 14% of revenue, compared to EBITDA of $194,000 in the same quarter last year and EBITDA of $1.6 million in the second quarter of 2006. See Exhibit B below for a reconciliation of US GAAP net income (loss) to EBITDA.
The tax rate for the third quarter of 2006 was approximately 11%.
Third quarter 2006 EPS results are based on 15.0 million weighted average shares outstanding, calculated using the treasury stock method. Total shares outstanding at September 30, 2006 were approximately 14.6 million common shares, including 755,000 shares issued to shareholders of ViewCentral. In addition, Rainmaker had 2.6 million unexercised options and warrants with an average strike price of approximately $4.00 per share.
Total cash and cash equivalents at September 30, 2006 increased to $19 million, compared with $15 million at June 30, 2006.
Nine-Month 2006 Results
For the first nine months of 2006, Rainmaker reported record revenue of $34.6 million, compared to $23.1 million for the first nine months of 2005; and record GAAP net income for the first nine months of 2006 of $2.5 million, compared to a GAAP net loss of $4.7 million in the first nine months of 2005. GAAP net income per diluted share for the first nine months of 2006 was a record $0.18 per share, compared to a net loss of $(0.46) per share for the first nine months of 2005.
Third-Quarter Business Highlights
* Over 100 industry leading clients
* Fortune 50 hardware client expands relationship to include online
channel renewals
* Announced interoperability with Salesforce.com
* Completed acquisition of ViewCentral, fourth acquisition in two years
Business Update
"Our record financial results reflect continued strong client momentum and the expanded revenue opportunities we are generating with our growing customer base, which has now exceeded a key milestone of more than 100 world class clients," said Michael Silton, CEO of Rainmaker Systems. "During the quarter, we significantly expanded our service capabilities with the completed acquisition of ViewCentral, adding their proven marketing and training solutions to our revenue delivery platform. We are successfully leveraging our expanded suite of services to create cross-selling opportunities and drive increased customer adoption, including both new client signings and expanded agreements with existing customers. Looking ahead, we believe we are well positioned to build on our solid growth momentum and achieve our longer-term goal of growing revenue in excess of 20 percent annually."
Financial Guidance
For 2006, Rainmaker is raising its revenue guidance to grow full year revenue to a range of $48 million to $48.5 million, representing approximately 48% annual growth. |
