Exhibit 99.1
ST. BERNARD SOFTWARE REPORTS ITS FOURTH QUARTER AND YEAR
ENDED 2007 FINANCIAL RESULTS
SAN DIEGO, CA, MARCH 11, 2008 — St. Bernard Software, Inc. (OTCBB: SBSW), a leader in Web security appliances and pioneer of hybrid secure content management solutions today announced preliminary, unaudited financial results for its fourth quarter and year ended December 31, 2007. The company cautioned that its final results could be subject to change based on adjustments in connection with the audit of its 2007 financial statements.
2007 Highlights:
| | • | | Completed the divestiture of the UpdateEXPERT product in January and Open File Manager product in August of 2007. |
| | • | | Grew St. Bernard’s core product, iPrism, customer billing by approximately 15% annually. |
| | • | | Executed on the cost reduction and right-sizing strategy to align the company’s cost structure with the new company strategy and operating plan. |
| | • | | Transitioned to a world class supplier for our h-series appliance hardware resulting in increased capabilities with lower cost and improved reliability. |
| | • | | Established the company’s strategic platform in the development of the industry first Hybrid Secure Content Management product family. |
“2007 was a year of transition for St. Bernard Software”, said Vince Rossi, CEO of St. Bernard Software. “During the year we completed the sale of our UpdateEXPERT and Open File Manager product lines and refocused the company around a Hybrid Secure Content Management product family. We transitioned to a world class supplier for our h-series hardware appliances which we believe will improve the capabilities and reliability of our appliances. The company went through a significant and necessary cost reduction and right-sizing effort to more properly align the cost structure with the size and focus of the company. We now believe the evolution to our new company strategy is complete. We believe the company and our products are in a high growth market segment and that we are well positioned to participate in that growth.”
Financial Results
Revenue in the fourth quarter was $4.2 million which is at the high end of the $3.9 to $4.3 million guidance previously provided. Revenue for the year ended December 31, 2007 is expected to be $19.1 million, a decrease of $3.5 million or 15.5% compared to 2006. The decrease is due primarily to the sale of our UpdateEXPERT and Open File Manager products lines in January and August 2007 resulting in lower revenues of $6.1 million, offset by an increase of $2.7 million associated with our iPrism and LivePrism products. GAAP loss per share for 2007 was $0.51, an increase of $0.17 compared to 2006. St. Bernard Software’s cash balance was $1.3 million at December 31, 2007.
Business Outlook
Mr. Rossi added, “We are optimistic about 2008, and believe that we will achieve good growth in our Hybrid Secure Content Management product family. Historically the first quarter is seasonally the weakest of the year and, as such, we currently expect our Q1 2008 revenue to range from $3.8 to $4.2 million.”
Conference Call Information
A live conference call scheduled for 2:00 p.m. today can be accessed at:
800-240-5318 (US and Canada)
303-262-2130 (International)
Passcode: Give the company name “St. Bernard”
A webcast is also available atwww.stbernard.com under Investor Relations.
Conference Call Replay
A replay of today’s conference call can be accessed at:
800-405-2236 (US and Canada)
303-590-3000 (International)
Passcode: 11109790#
Available today, 8:00 p.m. ET through Thursday, March 18, 2008 at 11:59 pm
A webcast is also available atwww.stbernard.com under Investor Relations.
About St. Bernard Software
St. Bernard Software (OTCBB: SBSW) is the world's Hybrid Security solutions provider. St. Bernard offers a full suite of Hybrid Security solutions that integrate on-premises appliances with on-demand services to protect corporate networks from online threats, enforce acceptable use policies and archive messages.
St. Bernard’s suite of iPrism® solutions — iPrism Web Filter, iPrism Email Filter, iPrism IM Filter and iPrism Message Archive — deliver secure content management with the control of an appliance combined with the scalability of a hosted service. St. Bernard's iPrism solutions are designed to prevent Internet threats, such as spam, viruses, spyware and phishing, from entering corporate networks across all electronic communications: email, IM and Web. For more information, please visit www.stbernard.com.
©2008 St. Bernard Software, Inc. All rights reserved. The St. Bernard Software logo, LivePrism, iPrism, and iGuard are trademarks of St. Bernard Software, Inc. All other trademarks and registered trademarks are hereby acknowledged.
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, among other things, any statements regarding the capabilities of our products; statements regarding our financial results and cash balance for, and at, respectively, the quarter and year ended December 31, 2007; any projections of earnings, revenues (including where the underlying contract has already been signed), or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include, among other things, risk of technical failures related to our products or the hardware incorporated into our products;, performance of contracts by customers and partners; employee management issues; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; and the risk that audited financial results may differ materially from those provided in this release. Announcements of contract awards should not be interpreted as reflecting revenue in any particular period and may relate to revenue recorded in prior periods. These and other risks and factors that could cause events or our results to differ from those expressed or implied by such forward-looking statements are described in our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as well as other subsequent filings with the Securities and Exchange Commission. We assume no obligation and do not intend to update these forward-looking statements.
Contact:
St Bernard Software:
Vincent Rossi, Chief Executive Officer / Acting Chief Financial Officer
(858) 524-2000
Or
(858) 524-2002
St. Bernard Software, Inc.
Consolidated Balance Sheets
| | | | | | | | |
| | | December 31,
2007 | | | December 31,
2006 | |
| | | (Unaudited) | | | | |
Assets | | | | | | | | |
Current Assets | | | | | | | | |
Cash and cash equivalents | | $ | 1,297,000 | | | $ | 4,842,000 | |
Accounts receivable - net of allowance for doubtful accounts of $59,000 and $678,000 in 2007 and 2006, respectively | | | 3,255,000 | | | | 3,964,000 | |
Inventories | | | 158,000 | | | | 730,000 | |
Prepaid expenses and other current assets | | | 440,000 | | | | 484,000 | |
| | | | | | | | |
Total current assets | | | 5,150,000 | | | | 10,020,000 | |
Fixed Assets - Net | | | 1,301,000 | | | | 1,726,000 | |
Other Assets | | | 215,000 | | | | 3,938,000 | |
Goodwill | | | 7,568,000 | | | | 7,709,000 | |
| | | | | | | | |
| | $ | 14,234,000 | | | $ | 23,393,000 | |
| | | | | | | | |
Liabilities and Stockholders’ Deficit | | | | | | | | |
Current Liabilities | | | | | | | | |
Line of credit | | $ | 1,566,000 | | | $ | 296,000 | |
Accounts payable | | | 3,026,000 | | | | 4,559,000 | |
Accrued compensation expenses | | | 1,188,000 | | | | 1,526,000 | |
Accrued expenses and other current liabilities | | | 406,000 | | | | 292,000 | |
Current portion of capitalized lease obligations | | | 153,000 | | | | 75,000 | |
Deferred revenue | | | 9,589,000 | | | | 11,873,000 | |
| | | | | | | | |
Total current liabilities | | | 15,928,000 | | | | 18,621,000 | |
Deferred Rent | | | 232,000 | | | | — | |
Capitalized Lease Obligations, Less Current Portion | | | 170,000 | | | | 142,000 | |
Deferred Revenue | | | 5,860,000 | | | | 5,843,000 | |
| | | | | | | | |
Total liabilities | | | 22,190,000 | | | | 24,606,000 | |
| | | | | | | | |
Commitments and Contingencies | | | | | | | | |
Stockholders’ Deficit | | | | | | | | |
Preferred stock, $0.01 par value; 5,000,000 shares authorized and 0 shares issued and outstanding | | | — | | | | — | |
Common stock, $0.01 par value; 50,000,000 shares authorized and 14,760,052 and 14,764,251 shares issued and outstanding in 2007 and 2006, respectively | | | 148,000 | | | | 148,000 | |
Additional paid-in capital | | | 39,079,000 | | | | 38,305,000 | |
Accumulated deficit | | | (47,183,000 | ) | | | (39,666,000 | ) |
| | | | | | | | |
Total stockholders’ deficit | | | (7,956,000 | ) | | | (1,213,000 | ) |
| | | | | | | | |
| | $ | 14,234,000 | | | $ | 23,393,000 | |
| | | | | | | | |
St. Bernard Software, Inc.
Consolidated Statements of Operations
| | | | | | | | |
| | | Years ended December 31, | |
| | | 2007 | | | 2006 | |
| | | (Unaudited) | | | | |
Revenues | | | | | | | | |
License | | $ | 1,711,000 | | | $ | 3,851,000 | |
Appliance | | | 3,160,000 | | | | 3,144,000 | |
Subscription | | | 14,205,000 | | | | 15,563,000 | |
| | | | | | | | |
Total Revenues | | | 19,076,000 | | | | 22,558,000 | |
| | | | | | | | |
Cost of Revenues | | | | | | | | |
License | | | 70,000 | | | | 102,000 | |
Appliance | | | 3,194,000 | | | | 2,229,000 | |
Subscription | | | 3,859,000 | | | | 4,051,000 | |
| | | | | | | | |
Total Cost of Revenues | | | 7,123,000 | | | | 6,382,000 | |
| | | | | | | | |
Gross Profit | | | 11,953,000 | | | | 16,176,000 | |
Sales and marketing expenses | | | 13,387,000 | | | | 11,246,000 | |
Research and development expenses | | | 6,035,000 | | | | 6,401,000 | |
General and administrative expenses | | | 7,858,000 | | | | 7,955,000 | |
Impairment of intangible assets related to the acquisition of AgaveOne | | | 3,262,000 | | | | — | |
| | | | | | | | |
Total Operating Expenses | | | 30,542,000 | | | | 25,602,000 | |
| | | | | | | | |
Loss from Operations | | | (18,589,000 | ) | | | (9,426,000 | ) |
Other (Income) Expense | | | | | | | | |
Interest expense - net | | | 196,000 | | | | 128,000 | |
Gain on sale of assets | | | (11,284,000 | ) | | | — | |
Other income | | | (26,000 | ) | | | — | |
Warrant income | | | — | | | | (2,630,000 | ) |
| | | | | | | | |
Total Other Income | | | (11,114,000 | ) | | | (2,502,000 | ) |
| | | | | | | | |
Income (Loss) Before Income Taxes | | | (7,475,000 | ) | | | (6,924,000 | ) |
Income tax expense | | | (42,000 | ) | | | (1,100,000 | ) |
| | | | | | | | |
Net Income (Loss) | | $ | (7,517,000 | ) | | $ | (8,024,000 | ) |
| | | | | | | | |
Income (Loss) Per Common Share - Basic and Diluted | | $ | (0.51 | ) | | $ | (0.68 | ) |
| | | | | | | | |
Weighted Average Shares Outstanding | | | 14,769,567 | | | | 11,724,974 | |
| | | | | | | | |
