EXHIBIT 99.1
40 Enterprise Boulevard
PO Box 9300
Bozeman, MT 59718-9300
406.522.4200 P
406.522.4227 F
FOR IMMEDIATE RELEASE
For Further Information, Contact: | | |
Investor Relations: | | Corporate Communications: |
Todd Friedman | | Jason Treu |
The Blueshirt Group | | RightNow Technologies |
415.217.5869 | | 972.232.3977 Desk |
todd@blueshirtgroup.com | | 214.893.3096 Cell |
| | jtreu@rightnow.com |
RIGHTNOW TECHNOLOGIES REPORTS
SECOND QUARTER 2005 FINANCIAL RESULTS
BOZEMAN, MONT. (July 25, 2005)¾RightNow® Technologies, Inc. (NASDAQ: RNOW) today announced results for the second quarter ended June 30, 2005. RightNow reported consolidated revenue of $21.1 million for the second quarter of 2005, an increase of 43 percent from the second quarter of 2004. This represents the 30th consecutive quarter of revenue growth for RightNow.
Net income in the second quarter of 2005 was $1.6 million, or $0.05 per diluted share, compared to net income of $634,000, or $0.02 per diluted share, in the second quarter of 2004.
For the six months ended June 30, 2005, RightNow reported revenue of $39.4 million and diluted earnings per share of $0.07, as compared to year-ago revenue of $27.6 million and diluted earnings per share of $0.03.
“Our intense focus on helping our customers better serve their customers continues to drive top- and bottom-line growth at RightNow,” Greg Gianforte, founder and chief executive officer of RightNow, said. “By providing the industry’s most complete on demand CRM suite, we continue to garner industry recognition for our technology leadership and the return-on-investment achieved by our customers worldwide.”
This past quarter, RightNow earned Nucleus Research’s prestigious Technology ROI Award for an unprecedented third consecutive year and was the only company to have two customers receive ROI Leadership Awards from Baseline magazine. RightNow was also recognized for its leadership by several leading industry analyst firms and media organizations—including CRM Magaizne, which named the company a Service Leader.
This quarter, RightNow also completed its acquistion of Convergent Voice and, as the only CRM vendor with native voice capabilities, launched a ground-breaking Voice-Enabled CRM initiative.
RightNow added 80 new customers in the second quarter of 2005. The number of customers that purchased the company’s sales, marketing on full CRM solutions increased by more than 50 percent. New, renewed and expanded customer relationships during the quarter included Continental Tire, DeVry Inc., drugstore.com, EDS, Experian Ltd, IBM, Monster, Nikon UK, Orbitz, RealNetworks, and TomTom.
“We have delivered 30 consecutive quarters of revenue growth because of our commitment to customer satisfaction, as evidenced by our industry-leading annual customer retention rate of more than 90 percent,” Susan Carstensen, chief financial officer, said. “Customer retention is the bedrock of continued growth for a company with a recurring revenue model, and we our proud to lead the on-demand market in this key performance metric.”
Guidance
• For the third quarter of 2005, revenue is currently anticipated to be in the range of $21.5 to $22 million and EPS in the range of $0.03 to $0.04 cents.
• For the full year 2005, revenue is currently anticipated to be in the range of $81 to 85 million, and EPS in the range of $0.13 to $0.17 cents.
Quarterly Conference Call
RightNow Technologies will discuss its quarterly results via teleconference at 4:30 p.m. (ET)/2:30 p.m. (MT) today, July 25, 2005. To access the call, please dial (800) 810-0924 at least five minutes prior to the start time. A live audio webcast of the call will also be available at www.shareholder.com/rnow/medialist.cfm. A replay of today’s conference call will be available on the company Web site at www.shareholder.com/rnow/, under the Investor Webcasts menu, from 5:30 p.m. (MT) on July 25, 2005 until 10:00 p.m. (MT) August 15, 2005.
Historical Financial and Supplementary Information
Current quarter consolidated financial statements are included with this press release. To view the company’s historical quarterly consolidated financial statements and supplementary data, please visit www.rightnow.com.
About RightNow Technologies, Inc.
RightNow (NASDAQ: RNOW) provides organizations with industry-leading on demand CRM solutions to build customer-focused businesses. RightNow’s acclaimed technology, comprehensive services and commitment to customer success deliver high returns on investment for its customers. More than 1,300 organizations worldwide use RightNow solutions including British Airways, British Telecom, Cisco Systems, Continental Tire North America, John Deere, Nikon and the Social Security Administration. Founded in 1997, RightNow is headquartered in Bozeman, Montana, with additional offices in North America, Europe and Asia. For further information, please visit www.rightnow.com.
RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ is a registered trademark of the NASDAQ Stock Market.
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Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected results of operations and management’s future strategic plans. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
The risks and uncertainties referred to above include, but are not limited to, risks associated with our business model; our ability to develop or acquire, and gain market acceptance for new products, including our new sales and marketing automation products, in a cost-effective and timely manner; the gain or loss of key customers; competitive pressures and other factors such as the availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; the rate at which our present and future customers adopt our existing and future products and services; our ability to expand operations; fluctuations in our operating results due to changes in our mix of revenues, and our rate of growth; interruptions or delays in our hosting operations or breaches of our security measures; our ability to expand, retain and motivate our employees and manage our growth; and our plans for new product releases. Further information on potential factors that could affect our financial results is included in our Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.
FRNOW
RightNow Technologies, Inc.
Consolidated Balance Sheets
(In thousands) (Unaudited)
| | June 30, | | Dec 31, | |
| | 2005 | | 2004 | |
Assets | | | | | |
Cash and cash equivalents | | $ | 30,292 | | $ | 18,944 | |
Short-term investments | | 24,181 | | 31,188 | |
| | | | | |
Accounts receivable | | 15,799 | | 16,939 | |
Term receivables, current | | 14,733 | | 10,090 | |
Allowance for doubtful accounts | | (1,608 | ) | (1,581 | ) |
Net receivables | | 28,924 | | 25,448 | |
| | | | | |
Prepaid expenses | | 1,196 | | 1,255 | |
Total current assets | | 84,593 | | 76,835 | |
| | | | | |
Property and equipment, net | | 5,375 | | 4,393 | |
Term receivables, non-current | | 10,234 | | 5,756 | |
Intangible assets, net | | 1,783 | | 1,113 | |
Other | | 245 | | 212 | |
Total Assets | | $ | 102,230 | | $ | 88,309 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Accounts payable | | $ | 2,409 | | $ | 1,720 | |
Commissions and bonuses payable | | 2,550 | | 2,648 | |
Other accrued liabilities | | 4,191 | | 3,715 | |
Current portion of long-term debt | | 31 | | — | |
Current portion of deferred revenue | | 40,669 | | 36,020 | |
Total current liabilities | | 49,850 | | 44,103 | |
| | | | | |
Long-term debt, net of current portion | | 131 | | — | |
Deferred revenue, net of current portion | | 16,699 | | 13,105 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock | | 30 | | 29 | |
Warrants | | 107 | | 291 | |
Additional paid-in capital | | 74,479 | | 72,367 | |
Accumulated other comprehensive income (loss) | | (445 | ) | (605 | ) |
Accumulated deficit | | (38,621 | ) | (40,981 | ) |
Total stockholders’ equity | | 35,550 | | 31,101 | |
Total Liabilities Stockholders’ Equity | | $ | 102,230 | | $ | 88,309 | |
RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)
| | Three Months Ended
June 30, | | Six Months Ended
June 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
Revenue: | | | | | | | | | |
Software, hosting and support | | $ | 16,864 | | $ | 11,709 | | $ | 30,738 | | $ | 22,429 | |
Professional services | | 4,214 | | 3,053 | | 8,682 | | 5,190 | |
Total revenue | | 21,078 | | 14,762 | | 39,420 | | 27,619 | |
| | | | | | | | | |
Cost of revenue: | | | | | | | | | |
Software, hosting and support | | 2,276 | | 1,636 | | 4,340 | | 3,215 | |
Professional services | | 2,879 | | 1,573 | | 5,575 | | 2,883 | |
Total cost of revenue | | 5,155 | | 3,209 | | 9,915 | | 6,098 | |
| | | | | | | | | |
Gross profit | | 15,923 | | 11,553 | | 29,505 | | 21,521 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Sales and marketing | | 10,557 | | 8,037 | | 20,014 | | 14,885 | |
Research and development | | 2,426 | | 1,807 | | 4,587 | | 3,612 | |
General and administrative | | 1,586 | | 1,016 | | 2,996 | | 2,169 | |
Total operating expenses | | 14,569 | | 10,860 | | 27,597 | | 20,666 | |
| | | | | | | | | |
Income from operations | | 1,354 | | 693 | | 1,908 | | 855 | |
| | | | | | | | | |
Interest and other income (expense), net | | 331 | | (46 | ) | 623 | | (110 | ) |
| | | | | | | | | |
Income before income taxes | | 1,685 | | 647 | | 2,531 | | 745 | |
Provision for income taxes | | (126 | ) | (13 | ) | (171 | ) | (31 | ) |
Net income | | $ | 1,559 | | $ | 634 | | $ | 2,360 | | $ | 714 | |
| | | | | | | | | |
Net income per share: | | | | | | | | | |
Basic | | $ | 0.05 | | $ | 0.04 | | $ | 0.08 | | $ | 0.05 | |
Diluted | | $ | 0.05 | | $ | 0.02 | | $ | 0.07 | | $ | 0.03 | |
| | | | | | | | | |
Shares used in the computation: | | | | | | | | | |
Basic | | 30,232 | | 15,185 | | 30,025 | | 15,012 | |
Diluted | | 33,367 | | 26,187 | | 33,477 | | 25,821 | |
RightNow Technologies, Inc.
Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
| | Three Months Ended
June 30, | | Six Months Ended
June 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
Operating activities: | | | | | | | | | |
Net income | | $ | 1,559 | | $ | 634 | | $ | 2,360 | | $ | 714 | |
Non-cash adjustments: | | | | | | | | | |
Depreciation and amortization | | 828 | | 711 | | 1,570 | | 1,335 | |
Provision for losses on accounts receivable | | (8 | ) | 117 | | 44 | | 202 | |
Changes in operating accounts: | | | | | | | | | |
Receivables | | (5,866 | ) | (4,178 | ) | (8,268 | ) | (5,728 | ) |
Prepaid expenses | | 67 | | (536 | ) | 23 | | (797 | ) |
Accounts payable | | 2 | | (130 | ) | 778 | | 150 | |
Commissions and bonuses payable | | 588 | | 671 | | (75 | ) | 496 | |
Other accrued liabilities | | 371 | | 568 | | 579 | | 868 | |
Deferred revenue | | 4,941 | | 4,406 | | 8,760 | | 5,523 | |
Other | | 82 | | (241 | ) | 32 | | (408 | ) |
Cash provided by operating activities | | 2,564 | | 2,022 | | 5,803 | | 2,355 | |
| | | | | | | | | |
Investing activities: | | | | | | | | | |
Net change in short-term investments | | (4,483 | ) | — | | 7,005 | | — | |
Acquisition of property and equipment | | (1,070 | ) | (858 | ) | (2,148 | ) | (1,619 | ) |
Acquisition of intangible assets | | (1,012 | ) | (406 | ) | (1,012 | ) | (406 | ) |
Other | | — | | 1 | | — | | 1 | |
Cash provided (used) by investing activities | | (6,565 | ) | (1,263 | ) | 3,845 | | (2,024 | ) |
| | | | | | | | | |
Financing activities: | | | | | | | | | |
Proceeds from long-term debt | | — | | 797 | | — | | 1,675 | |
Proceeds from issuance of common stock: | | | | | | | | | |
Initial public offering, less offering costs | | — | | (603 | ) | — | | (775 | ) |
Employee stock options and stock purchase plan | | 1,217 | | 90 | | 1,805 | | 201 | |
Repurchase of common stock | | — | | — | | — | | (2 | ) |
Payments on long-term debt | | — | | (456 | ) | — | | (860 | ) |
Cash provided (used) by financing activities | | 1,217 | | (172 | ) | 1,805 | | 239 | |
| | | | | | | | | |
Effect of foreign exchange rates on cash and cash equivalents | | (79 | ) | (27 | ) | (105 | ) | (18 | ) |
| | | | | | | | | |
Increase (decrease) in cash and cash equivalents | | (2,863 | ) | 560 | | 11,348 | | 552 | |
| | | | | | | | | |
Cash and cash equivalents at beginning of period | | 33,155 | | 8,352 | | 18,944 | | 8,360 | |
Cash and cash equivalents at end of period | | $ | 30,292 | | $ | 8,912 | | $ | 30,292 | | $ | 8,912 | |
