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 or Stacie Bosinoff | Jason Treu |
The Blueshirt Group | RightNow Technologies |
415.217.5869/5868 | 972.232.3977 Desk |
todd@blueshirtgroup.com | 214.893.3096 Cell |
Stacie@blueshirtgroup.com | jtreu@rightnow.com |
RIGHTNOW TECHNOLOGIES REPORTS
THIRD QUARTER 2005 FINANCIAL RESULTS
BOZEMAN, MONT. (October 24, 2005)¾RightNow® Technologies, Inc. (NASDAQ: RNOW), a leading provider of on demand CRM software solutions, today announced results for the third quarter ended September 30, 2005. RightNow reported consolidated revenue of $23.2 million for the third quarter of 2005, an increase of 41 percent from the third quarter of 2004. This represents the 31st consecutive quarter of revenue growth for RightNow.
Net income in the third quarter of 2005 was $2.3 million, or $0.07 per diluted share, compared to net income of $1.4 million, or $0.05 per diluted share, in the third quarter of 2004.
For the nine months ended September 30, 2005, RightNow reported revenue of $62.6 million and diluted earnings per share of $0.14, as compared to year-ago revenue of $44 million and diluted earnings per share of $0.08.
At September 30, 2005 deferred revenue totaled $63.8 million, or 43 percent more than one year earlier. Cash from operations for the nine months ended September 30, 2005 was $11.1 million as compared to $3.4 million for the similar period of 2004.
“The CRM market is undergoing revolutionary change, as companies both large and small are realizing the benefits that on demand solutions deliver,” Greg Gianforte, founder and chief executive officer of RightNow, said. “Not only is on demand a disruptive force in all IT departments, but the product confusion created by the Oracle/PeopleSoft/JD Edwards/Retek/Siebel combination has created a leadership and technology vacuum among large enterprises looking to adopt CRM solutions that RightNow is uniquely capable of filling.
“RightNow’s record revenue in the third quarter was driven by the strength and scalability of our product suite, which is gaining momentum across a diverse universe of industries and companies. We are especially encouraged by our success establishing beachheads in large businesses, and then earning the right to expand those deployments through our award-winning technology and unmatched focus on customer satisfaction. We believe that our growth thus far in 2005 is a result of our unique focus and willingness to be accountable for our customers’ success, and we are optimistic about our growth opportunities for the rest of 2005 and beyond.”
RightNow added more than 90 new customers in the third quarter of 2005. New, renewed and expanded customer relationships during the quarter included Aflac, Department of Homeland Security, Enterprise Rent-A-Car, Nationwide Building Society, Sage UK Ltd, Telstra Mobiles, and the University of New Mexico.
“Our business model continues to draw strength from our industry-leading customer retention rate of more than 90%, which drives higher profitability and allows us to reach a wider potential audience through strong customer referrals. We ended the quarter with more than 1,400 active customers, notable especially for the growing number of large enterprise customers in the mix. Our year-to-date operating cash flow
has also increased by more than 220% over the prior year,” Susan Carstensen, chief financial officer of RightNow, said.
Guidance
• For the fourth quarter of 2005, assuming a target mix of 50% to 60% recurring revenue, 20% to 25% perpetual revenue, and 20% to 25% professional services revenue, total revenue is expected to be in the range of $23 to $24 million. EPS is expected to be in the range of $0.02 to $0.04 cents.
• ; For the full year 2005, revenue is expected to be in the range of $85.5 to $86.5 million, and EPS in the range of $0.16 to $0.18 cents.
• The Company will provide 2006 guidance in its quarterly conference call.
Quarterly Conference Call
RightNow Technologies will discuss its quarterly results via teleconference at 4:30 p.m. (ET)/2:30 p.m. (MT) today, October 24, 2005. To access the call, please dial (800) 810-0924 at least five minutes prior to the start time. An 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 by calling (888) 203-1112, or on the company Web site at www.rightnow.com, under the Investor Webcasts menu, by 5:30 p.m. (MT) on October 24, 2005. The replay will be available through Monday, November 7, 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 1,400 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 and voice automation products, in a cost-effective and timely manner; the gain or loss of key customers; competitive pressures; 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, breaches of our security measures; our ability to protect our intellectual property from infringement, and to avoid infringing the intellectual property rights of third parties; and our ability to expand, retain and motivate our employees and manage our growth. Further information on potential factors that could affect our financial results is included in our Annual Report on Form 10-K, quarterly reports on Form 10-Q, and 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)
| | Sep 30,
2005 | | Dec 31,
2004 | |
Assets | | | | | |
Cash and cash equivalents | | $ | 39,594 | | $ | 18,944 | |
Short-term investments | | 20,883 | | 31,188 | |
Accounts receivable | | 21,968 | | 16,939 | |
Term receivables, current | | 14,105 | | 10,090 | |
Allowance for doubtful accounts | | (1,960 | ) | (1,581 | ) |
Net receivables | | 34,113 | | 25,448 | |
Prepaid expenses | | 1,771 | | 1,255 | |
Total current assets | | 96,361 | | 76,835 | |
| | | | | |
Property and equipment, net | | 5,597 | | 4,393 | |
Term receivables, non-current | | 10,801 | | 5,756 | |
Intangible assets, net | | 1,631 | | 1,113 | |
Other | | 261 | | 212 | |
| | | | | |
Total Assets | | $ | 114,651 | | $ | 88,309 | |
| | | | | |
Liabilities and Stockholders’ Equity | | | | | |
Accounts payable | | $ | 2,018 | | $ | 1,720 | |
Commissions and bonuses payable | | 3,344 | | 2,648 | |
Other accrued liabilities | | 5,617 | | 3,715 | |
Current portion of long-term debt | | 29 | | — | |
Current portion of deferred revenue | | 45,694 | | 36,020 | |
Total current liabilities | | 56,702 | | 44,103 | |
| | | | | |
Long-term debt, net of current portion | | 125 | | — | |
Deferred revenue, net of current portion | | 18,058 | | 13,105 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock | | 31 | | 29 | |
Warrants | | 107 | | 291 | |
Additional paid-in capital | | 76,339 | | 72,367 | |
Accumulated other comprehensive income (loss) | | (433 | ) | (605 | ) |
Accumulated deficit | | (36,278 | ) | (40,981 | ) |
Total stockholders’ equity | | 39,766 | | 31,101 | |
| | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 114,651 | | $ | 88,309 | |
RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
Revenue: | | | | | | | | | |
Software, hosting and support | | $ | 18,005 | | $ | 12,976 | | $ | 48,743 | | $ | 35,405 | |
Professional services | | 5,149 | | 3,450 | | 13,831 | | 8,640 | |
Total revenue | | 23,154 | | 16,426 | | 62,574 | | 44,045 | |
| | | | | | | | | |
Cost of revenue: | | | | | | | | | |
Software, hosting and support | | 2,253 | | 1,729 | | 6,593 | | 4,944 | |
Professional services | | 3,026 | | 1,979 | | 8,601 | | 4,862 | |
Total cost of revenue | | 5,279 | | 3,708 | | 15,194 | | 9,806 | |
| | | | | | | | | |
Gross profit | | 17,875 | | 12,718 | | 47,380 | | 34,239 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Sales and marketing | | 11,248 | | 8,055 | | 31,262 | | 22,940 | |
Research and development | | 2,937 | | 2,028 | | 7,524 | | 5,640 | |
General and administrative | | 1,627 | | 1,164 | | 4,623 | | 3,333 | |
Total operating expenses | | 15,812 | | 11,247 | | 43,409 | | 31,913 | |
| | | | | | | | | |
Income from operations | | 2,063 | | 1,471 | | 3,971 | | 2,326 | |
| | | | | | | | | |
Interest and other income (expense), net | | 440 | | 30 | | 1,063 | | (80 | ) |
| | | | | | | | | |
Income before income taxes | | 2,503 | | 1,501 | | 5,034 | | 2,246 | |
Provision for income taxes | | (160 | ) | (61 | ) | (331 | ) | (92 | ) |
Net income | | $ | 2,343 | | $ | 1,440 | | $ | 4,703 | | $ | 2,154 | |
| | | | | | | | | |
Net income per share: | | | | | | | | | |
Basic | | $ | 0.08 | | $ | 0.06 | | $ | 0.16 | | $ | 0.12 | |
Diluted | | $ | 0.07 | | $ | 0.05 | | $ | 0.14 | | $ | 0.08 | |
| | | | | | | | | |
Shares used in the computation: | | | | | | | | | |
Basic | | 30,802 | | 23,734 | | 30,287 | | 17,963 | |
Diluted | | 33,667 | | 30,671 | | 33,541 | | 27,519 | |
RightNow Technologies, Inc.
Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, | |
| | 2005 | | 2004 | | 2005 | | 2004 | |
Operating activities: | | | | | | | | | |
Net income | | $ | 2,343 | | $ | 1,440 | | $ | 4,703 | | $ | 2,154 | |
Non-cash adjustments: | | | | | | | | | |
Depreciation and amortization | | 892 | | 746 | | 2,462 | | 2,081 | |
Provision for losses on accounts receivable | | 216 | | 349 | | 260 | | 551 | |
Deferred income taxes | | 94 | | — | | 218 | | — | |
Changes in operating accounts: | | | | | | | | | |
Receivables | | (6,072 | ) | (5,366 | ) | (14,340 | ) | (11,094 | ) |
Prepaid expenses | | (609 | ) | (344 | ) | (586 | ) | (1,141 | ) |
Accounts payable | | (373 | ) | 217 | | 405 | | 367 | |
Commissions and bonuses payable | | 807 | | 102 | | 732 | | 598 | |
Other accrued liabilities | | 1,444 | | 315 | | 2,023 | | 1,183 | |
Deferred revenue | | 6,523 | | 3,694 | | 15,283 | | 9,217 | |
Other | | (17 | ) | (90 | ) | (109 | ) | (498 | ) |
Cash provided by operating activities | | 5,248 | | 1,063 | | 11,051 | | 3,418 | |
| | | | | | | | | |
Investing activities: | | | | | | | | | |
Net change in short-term investments | | 3,298 | | (25,943 | ) | 10,303 | | (25,943 | ) |
Acquisition of property and equipment | | (1,124 | ) | (1,004 | ) | (3,272 | ) | (2,623 | ) |
Acquisition of intangible assets | | (23 | ) | (95 | ) | (1,035 | ) | (501 | ) |
Other | | 8 | | — | | 8 | | 1 | |
Cash provided (used) by investing activities | | 2,159 | | (27,042 | ) | 6,004 | | (29,066 | ) |
| | | | | | | | | |
Financing activities: | | | | | | | | | |
Proceeds from long-term debt | | 162 | | — | | 162 | | 1,675 | |
Proceeds from issuance of common stock: | | | | | | | | | |
Initial public offering, less offering costs | | — | | 41,462 | | — | | 40,687 | |
Employee stock options and stock purchase plan | | 1,767 | | 105 | | 3,572 | | 306 | |
Repurchase of common stock | | — | | — | | — | | (2 | ) |
Payments on long-term debt | | (8 | ) | (2,713 | ) | (8 | ) | (3,573 | ) |
Cash provided by financing activities | | 1,921 | | 38,854 | | 3,726 | | 39,093 | |
| | | | | | | | | |
Effect of foreign exchange rates on cash and cash equivalents | | (26 | ) | 19 | | (131 | ) | 1 | |
| | | | | | | | | |
Increase (decrease) in cash and cash equivalents | | 9,302 | | 12,894 | | 20,650 | | 13,446 | |
| | | | | | | | | |
Cash and cash equivalents at beginning of period | | 30,292 | | 8,912 | | 18,944 | | 8,360 | |
Cash and cash equivalents at end of period | | $ | 39,594 | | $ | 21,806 | | $ | 39,594 | | $ | 21,806 | |
