Exhibit 99.1
Double-Take Software, Inc. Announces Third Quarter 2009 Financial Results
Company Posts Strong Operating Margin and Cash from Operations
SOUTHBOROUGH, Mass.--(BUSINESS WIRE)--October 27, 2009--Double-Take Software, Inc. (NASDAQ: DBTK), a leading provider of recovery solutions, today announced its financial results for the third quarter ended September 30, 2009.
“I was pleased with the results of the past quarter. The results were similar to our second quarter, which is what we expected. This signals to us that normalized buying patterns have returned,” said Dean Goodermote, Chairman, CEO and President. “We continue to broaden our product portfolio. We just released a major upgrade targeted at the Remote Office Back Office (“ROBO”) market which expands our market opportunity, and our new migration product has opened the door to some larger deals for core Double-Take. I am also optimistic about our ability to execute on a cloud initiative which should position us well in the market next year.”
Total revenue for the quarter, which consists of software revenue and maintenance and professional services revenue, decreased 11.2% to $21.3 million in the third quarter of 2009 from $24.0 million in the third quarter of 2008. Software revenue decreased 20.3% to $10.2 million in the third quarter of 2009 from $12.8 million in the third quarter of 2008. Maintenance and professional services revenue decreased 0.6% to $11.1 million in the third quarter of 2009 compared to the third quarter of 2008. On a constant currency basis, total revenue in the third quarter of 2009 declined by 8.8%, software revenue declined by 18.5% and maintenance and professional services revenue increased by 2.3% compared to the third quarter of 2008.
Income from operations was $3.4 million in the third quarter of 2009 compared to $4.4 million in the third quarter of 2008. Net income totaled $1.6 million, or $0.07 per diluted share, in the third quarter of 2009 compared with $2.6 million, or $0.11 per diluted share, in the third quarter of 2008.
Income from operations on an adjusted, non-GAAP basis in the third quarter of 2009 was $4.6 million compared with $5.4 million in the third quarter of 2008. Adjusted, non-GAAP net income in the third quarter of 2009 was $2.7 million, or $0.12 per diluted share, compared with $3.6 million, or $0.16 per diluted share, in the third quarter of 2008.
The Company calculates these adjusted non-GAAP income measures by excluding the effects in the respective periods of the non-cash stock based compensation from operating expenses. An explanation of these adjusted, 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.
Cash generated from operations was $5.0 million in the third quarter of 2009. Cash and short term investments at September 30, 2009 totaled $89.4 million, an increase of approximately $5.3 million from June 30, 2009.
2009 Financial Guidance
Revenue for the fourth quarter of 2009 is anticipated to be in the range of $22.0 to $24.0 million. Adjusted non-GAAP operating income for the fourth quarter is expected to be $3.8 to $5.5 million. Assuming an effective income tax rate on non-GAAP income of approximately 43%, non-GAAP net income per share for the fourth quarter is expected to be in the range of $0.10 to $0.14 per diluted share and weighted average diluted shares using the treasury method for the fourth quarter are expected to be approximately 23.4 to 23.5 million shares.
See “Non-GAAP Financial Measures” and “Important Note to Investors” below
Non-GAAP Financial Measures
Double-Take Software, Inc. has provided in this press release adjusted financial information that has not been prepared in accordance with generally accepted accounting principles, or GAAP. These non-GAAP financial measures are identified above as “adjusted, non-GAAP” measures. Double-Take Software, Inc. uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to, but not as a substitute for, GAAP measures, in evaluating the Company’s operational performance. Double-Take Software, Inc. believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating operating results and trends, and in comparing its financial results with other companies in Double-Take Software, Inc.’s industry, many of which present similar non-GAAP financial measures to investors. The historical non-GAAP financial measures presented above exclude the following item required to be included by GAAP: non-cash stock-based compensation charges. The Company's expectations for adjusted, non-GAAP income and income per share for the fourth quarter of 2009 excludes the impact of stock-based compensation charges, the amount and significance of which, because of the information and assumptions underlying those charges, cannot readily be determined at this time.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of historic non-GAAP financial measures presented above to GAAP results has been provided in the financial statement tables included in this press release.
Conference Call Information
Double-Take Software, Inc. will discuss these financial results in a conference call at 4:30 p.m. EDT, today. The public is invited to listen to a live web cast of Double-Take Software, Inc.’s conference call on the Investor Relations section of the company website at www.doubletake.com. For those who are unable to participate in the live conference call, an audio replay will be available until Sunday, November 1, 2009 at 7:30 p.m. EDT. To access the audio replay, dial 888-203-1112 or 719-457-0820 and enter replay pass code 5413256. A web cast replay of the call will be available on the Investor Relations section at www.doubletake.com approximately two hours after the conclusion of the call and will remain available for approximately three months.
About Double-Take® Software
Headquartered in Southborough, Massachusetts, Double-Take(R) Software (Nasdaq: DBTK) is a leading provider of affordable Workload Optimization products that are simple to use and enable IT managers to easily move, protect, recover and more flexibly run critical IT workloads in physical and virtual environments, regardless of platform or location. With its unparalleled partner programs, technical support, and professional services, Double-Take Software is the solution of choice for about 20,000 customers worldwide, from SMEs to the Fortune 500. Information about Double-Take Software's products and services can be found at www.doubletake.com.
Important Note to Investors
This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases that say Double-Take or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, statements in this release that describe the Company's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All forward-looking statements are inherently speculative, and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in forward-looking statements. These risks and uncertainties include those set forth from time to time in our filings with the Securities and Exchange Commission. We are under no obligation, and do not undertake any duty, to update these forward looking statements at any time.
Double-Take Software, Inc. | ||||
Condensed Consolidated Balance Sheets | ||||
(in thousands) | ||||
(Unaudited) | ||||
Sept. 30, | Dec. 31, | |||
2009 | 2008 | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $41,821 | $40,659 | ||
Short term investments | 47,573 | 32,524 | ||
Accounts receivable, net | 15,806 | 19,593 | ||
Prepaid expenses and other current assets | 2,505 | 6,621 | ||
Deferred tax assets | 4,449 | 5,438 | ||
Total current assets | 112,154 | 104,835 | ||
Property and equipment, net | 3,274 | 4,236 | ||
Intangibles, net | 5,238 | 5,963 | ||
Goodwill | 17,826 | 16,267 | ||
Other assets | 874 | 739 | ||
Total assets | $139,366 | $132,040 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable and accrued expenses | 5,880 | 6,422 | ||
Other liabilities | 832 | 390 | ||
Deferred revenue | 25,869 | 27,078 | ||
Total current liabilities | 32,581 | 33,890 | ||
Long-term deferred revenue | 4,646 | 4,614 | ||
Other long-term liabilities | 40 | 126 | ||
Stockholders' equity | 102,099 | 93,410 | ||
Total liabilities and stockholders' equity | $139,366 | $132,040 |
Double-Take Software, Inc. | |||||||
Consolidated Income Statements | |||||||
(In thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three Months Ended | Nine Months ended | ||||||
Sept. 30, | Sept. 30, | ||||||
2009 | 2008 | 2009 | 2008 | ||||
Revenue: | |||||||
Software licenses | $10,214 | $12,819 | $28,371 | $38,855 | |||
Maintenance and professional services | 11,066 | 11,132 | 32,089 | 32,492 | |||
Total revenue | 21,280 | 23,951 | 60,460 | 71,347 | |||
Cost of revenue: | |||||||
Software licenses | 128 | 156 | 345 | 397 | |||
Maintenance and professional services | 2,144 | 2,342 | 6,255 | 7,198 | |||
Total cost of revenue | 2,272 | 2,498 | 6,600 | 7,595 | |||
Gross profit | 19,008 | 21,453 | 53,860 | 63,752 | |||
Operating expenses: | |||||||
Sales and marketing | 7,702 | 8,393 | 23,666 | 26,293 | |||
Research and development | 3,659 | 4,331 | 11,543 | 12,479 | |||
General and administrative | 3,212 | 3,371 | 9,460 | 10,045 | |||
Depreciation and amortization | 1,005 | 974 | 3,007 | 2,642 | |||
Total operating expenses | 15,578 | 17,069 | 47,676 | 51,459 | |||
Operating Income | 3,430 | 4,384 | 6,184 | 12,293 | |||
Other income, net | 40 | 308 | 105 | 987 | |||
Income before income taxes | 3,470 | 4,692 | 6,289 | 13,280 | |||
Income tax expense | 1,907 | 2,070 | 3,406 | 5,851 | |||
Net income | 1,563 | 2,622 | 2,883 | 7,429 | |||
Net income per share: | |||||||
Basic | $0.07 | $0.12 | $0.13 | $0.34 | |||
Diluted | $0.07 | $0.11 | $0.12 | $0.32 | |||
Weighted-average number of shares used in per share amounts: | |||||||
Basic | 22,062 | 21,980 | 22,040 | 21,960 | |||
Diluted | 23,359 | 23,089 | 23,255 | 23,097 |
Double-Take Software, Inc. | |||
Consolidated Statements of Cash Flows | |||
(In thousands) | |||
(Unaudited) | |||
Nine months ended | |||
Sept. 30, | |||
2009 | 2008 | ||
Cash flows from operating activities: | |||
Net Income | $2,883 | $7,429 | |
Adjustments to reconcile net income to net cash provided | |||
by operating activities: | |||
Depreciation | 1,839 | 1,718 | |
Amortization of intangible assets | 1,168 | 924 | |
Provision for (recovery of) doubtful accounts | 66 | (180) | |
Stock based compensation | 3,330 | 2,958 | |
Deferred income taxes | 989 | 2,388 | |
Excess tax benefits from stock based compensation | (57) | (139) | |
Changes in: | |||
Accounts receivable | 3,911 | 755 | |
Prepaid expenses and other assets | 4,181 | (187) | |
Other assets | (98) | (3) | |
Accounts payable and accrued expenses | (885) | (1,809) | |
Other liabilities | 496 | 146 | |
Deferred revenue | (1,585) | 2,301 | |
Net cash provided by operating activities | $ 16,238 | $ 16,301 | |
Cash flows from investing activities: | |||
Purchase of property and equipment | (820) | (2,116) | |
Purchase of short term investments | (65,011) | (57,069) | |
Sales and maturities of short term investments | 50,155 | 66,892 | |
Acquisitions, net of cash acquired | - | (10,352) | |
Net cash (used in) investing activities | $ (15,676) | $ (2,645) | |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options | 95 | 88 | |
Excess tax benefits from stock based compensation | 57 | 139 | |
Payments on capital lease obligation | (15) | (38) | |
Net cash provided by financing activities | 137 | 189 | |
Effect of exchange rate changes on cash and cash equivalents | 463 | (604) | |
Net increase in cash and cash equivalents | 699 | 13,845 | |
Cash and cash equivalents - beginning of period | 40,659 | 25,748 | |
Cash and cash equivalents - end of period | $ 41,821 | $ 38,989 |
Double-Take Software, Inc. | |||||||
Reconciliation of GAAP to Non-GAAP Financial Measures | |||||||
(In thousands, except per share data) | |||||||
(Unaudited) | |||||||
Three Months Ended | Nine Months ended | ||||||
Sept. 30, | Sept. 30, | ||||||
2009 | 2008 | 2009 | 2008 | ||||
Non-GAAP financial measures and reconciliation: | |||||||
GAAP income from operations | $ 3,430 | $ 4,384 | $ 6,184 | $ 12,293 | |||
Add: noncash stock based compensation (1) | 1,137 | 995 | 3,330 | 2,958 | |||
Non-GAAP income from operations | $ 4,567 | $ 5,379 | $ 9,514 | $ 15,251 | |||
GAAP net income | $ 1,563 | $ 2,622 | $ 2,883 | $ 7,429 | |||
Add: noncash stock based compensation (1) | 1,137 | 995 | 3,330 | 2,958 | |||
Non-GAAP net income | $ 2,700 | $ 3,617 | $ 6,213 | $ 10,387 | |||
Non-GAAP income per share: | |||||||
Basic | $0.12 | $0.16 | $0.28 | $0.47 | |||
Diluted | $0.12 | $0.16 | $0.27 | $0.45 | |||
Weighted-average number of shares used in per share amounts: | |||||||
Basic | 22,062 | 21,980 | 22,040 | 21,960 | |||
GAAP diluted shares outstanding | 23,359 | 23,089 | 23,255 | 23,097 | |||
Add: effect of excluding stock based compensation | 40 | 57 | 51 | 79 | |||
Non-GAAP diluted shares outstanding | 23,399 | 23,146 | 23,306 | 23,176 | |||
Footnotes to Adjustments | |||||||
(1) Represents noncash stock based compensation charges as follows: | |||||||
Three Months Ended | Nine Months ended | ||||||
Sept. 30, | Sept. 30, | ||||||
2009 | 2008 | 2009 | 2008 | ||||
Stock option expense by line item: | |||||||
Cost of maintenance and professional services | $110 | $91 | $312 | $275 | |||
Sales and marketing | 240 | 211 | 732 | 617 | |||
Research and development | 309 | 273 | 911 | 785 | |||
General and administrative | 478 | 420 | 1,375 | 1,281 | |||
$1,137 | $995 | $3,330 | $2,958 |
CONTACT:
Double-Take Software, Inc.
S. Craig Huke, 317-572-1857
Chief Financial Officer
investor@doubletake.com
or
Sapphire Investor Relations, LLC
Erica Mannion, 212-766-1800, Ext. 203
Investor Relations
investor@doubletake.com