Exhibit 99.1
Double-Take Software, Inc. Announces First
Quarter 2007 Financial Results
SOUTHBOROUGH, Mass.--(BUSINESS WIRE)--April 25, 2007--Double-Take
Software, Inc. (NASDAQ: DBTK), a leading provider of recovery
solutions, today announced its financial results for the first quarter
2007.
Total revenue for the quarter, which consists of software revenue
and maintenance and professional services revenue, increased 67.9% to
$17.9 million in the first quarter of 2007 from $10.7 million in the
first quarter of 2006. Revenue for the first quarter of 2007 includes
revenue from Double-Take EMEA for the entire quarter. Double-Take EMEA
was acquired by the Company on May 23, 2006. (Formerly Sunbelt Systems
Software S.A.S., Double-Take EMEA was Double-Take Software's near
exclusive distributor in Europe.)
Software revenue increased 63.1% to $10.4 million in the first
quarter of 2007 from $6.4 million in the first quarter of 2006.
Maintenance and professional services revenue increased 74.9% to $7.5
million in the first quarter of 2007 from $4.3 million in the first
quarter of 2006.
Operating expenses for the first quarter of 2007 increased 49.3%
to $13.5 million from $9.1 million in the first quarter of 2006.
Included in operating expenses in the first quarter of 2007 were the
following items:
-- Stock option expense of $0.3 million related to SFAS 123R.
-- Amortization of intangible assets of $0.2 million related to
the acquisition of Double Take EMEA in May 2006.
Included in operating expenses in the first quarter of 2006 was
$0.4 million of stock option expense resulting from the adoption of
SFAS 123R and the vesting of stock options for the former CEO and $0.1
million related to the issuance of Series C Preferred shares to
management.
Income from operations was $2.5 million in the first quarter of
2007 compared to $0.3 million in the first quarter of 2006. Net income
attributable to common stockholders was $2.9 million, or $0.13 per
diluted share, in the first quarter of 2007 compared to a loss of
($1.7) million, or ($.44) per diluted share, in the first quarter of
2006.
Income from operations on an adjusted, non-GAAP basis in the first
quarter of 2007 was $2.8 million, compared to $0.8 million in the
first quarter of 2006. Adjusted, non-GAAP net income before accretion
and dividends on preferred stock was $3.2 million in the first quarter
of 2007 compared to $0.8 million in the first quarter of 2006.
Dividend and accretion charges occurred until our Initial Public
Offering in December 2006 when all preferred shares were converted
into common shares. Adjusted, non-GAAP net income per diluted share
was $0.14 in the first quarter of 2007. We calculate these adjusted
non-GAAP income measures by excluding the effects in the respective
periods of the non-cash SFAS 123R and other stock-based compensation
expenses described as components of Operating Expenses above. An
explanation of these 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 and cash equivalents at March 31, 2007 totaled $56.7 million.
"We got off to a very solid start to 2007," said Dean Goodermote,
Chairman of the Board and CEO of Double-Take Software. "Especially
pleasing was the continued expansion of our international business,
the continued additional sales of our products within our large
installed base and the continued growth of our partner program".
Guidance
The Company expects revenue for the second quarter of 2007 to be
in the range of $19.0 to $19.5 million. Operating income is expected
to be $3.1 to $3.3 million and adjusted, non-GAAP income per share for
the second quarter of 2007 is expected to be in the range of $0.15 to
$0.16 per share excluding the impact of stock-based compensation
charges and using an estimated effective income tax rate of
approximately 12% and weighted average diluted shares of approximately
23.0 to 23.2 million shares.
After taking the results of Q1 2007 into account, the Company
expects full-year 2007 revenue to be in the range of $78.5 to $80.5
million. Operating income is expected to be $12.8 to $14.8 million and
adjusted, non-GAAP income per share for full year 2007 is expected to
be in the range of $0.56 to $0.62 excluding the impact of stock based
compensation charges and using an estimated effective tax rate of
approximately 10% and weighted average diluted shares assumed to be
approximately 23.5 to 24 million. The effective tax rate for Q2 and
for all of 2007 will be evaluated and possibly revised throughout the
year if the allowance currently recorded against the deferred tax
assets is reduced or eliminated.
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 second quarter of 2007 and full-year 2007 exclude 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 our website at
www.doubletake.com. For those who are unable to participate in the
live conference call, an audio replay will be available until Monday,
April 30, 2007 at 11:59 p.m. EST. To access the audio replay, dial
888-203-1112 or 719-457-0820 and enter confirmation code 3244416. 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 90 days.
Annual Meeting
The 2007 Annual Meeting of Stockholders of Double-Take Software
will take place at 10:00 AM, local time, on May 8, 2007 in
Indianapolis, Indiana.
About Double-Take(R) Software, Inc.
Headquartered in Southborough, Massachusetts, Double-Take(R)
Software (NASDAQ: DBTK - News) provides software for accessible and
affordable data protection for Microsoft(R) Windows(R) applications.
For more information, please visit www.doubletake.com.
Important Note to Investors
Statements made in this press release regarding Double-Take
Software that are not historical facts are forward-looking statements
based on current expectations, assumptions, estimates and projections
about Double-Take Software and the industry. These forward-looking
statements are subject to risks and uncertainties that could cause
actual future events or results to differ materially from such
statements. Forward-looking statements can be identified by words such
as "anticipate", "believe", "could", "estimate", "expect" "intend",
"may", "should" "will" and "would". These forward-looking statements
include, without limitation, statements under the heading "Guidance"
above. Actual results could differ materially from those expressed or
implied by these forward-looking statements as a result of various
factors, including the various risks described in the "Risk Factors"
section and elsewhere in the Company's Annual Report on Form 10-K for
the year ended December 31, 2006 filed with the Securities and
Exchange Commission on March 30, 2007. The Company undertakes no
obligation to update publicly any forward-looking statements for any
reason, even if new information becomes available or other events
occur in the future.
(C) Double-Take Software, Inc. All rights reserved. Double-Take is
a registered trademark of Double-Take Software, Inc. Microsoft,
Windows, and the Windows logo are trademarks or registered trademarks
of Microsoft Corporation in the United States and/or other countries.
Double-Take Software, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
March 31, Dec 31,
2007 2006
--------- --------
ASSETS
Current assets:
Cash and cash equivalents $56,651 $55,170
Accounts receivable, net 11,971 12,676
Inventory - 14
Prepaid expenses and other current assets 1,622 2,210
--------- --------
Total current assets 70,244 70,070
Property and equipment, net 2,845 3,000
Customer relationships, net 1,880 1,993
Marketing relationships, net 1,779 1,842
Goodwill 102 -
Other assets 118 121
--------- --------
Total assets $76,968 $77,026
========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 1,143 2,217
Accrued expenses 5,055 6,845
Accrued purchase price payable - 1,425
Other liabilities 180 135
Deferred revenue 17,273 16,774
--------- --------
Total current liabilities 23,651 27,396
Long-term deferred revenue, less current portion 4,264 3,977
Long-term deferred rent, less current portion 372 406
Long-term capital lease obligations, less current
portion 12 17
Stockholders' equity 48,669 45,230
--------- --------
Total liabilities and stockholders' equity $76,968 $77,026
========= ========
Double-Take Software, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months
Ended
March 31,
-----------------
2007 2006
-------- --------
Revenue:
Software licenses $10,390 $6,372
Maintenance and professional services 7,535 4,307
-------- --------
Total revenue 17,925 10,679
Cost of revenue:
Software licenses 27 4
Maintenance and professional services 1,857 1,261
-------- --------
Total cost of revenue 1,884 1,265
-------- --------
Gross margin 16,041 9,414
Operating expenses:
Sales and marketing 6,903 4,330
Research and development 2,875 2,464
General and administrative 3,217 2,027
Depreciation and amortization 549 251
-------- --------
Total operating expenses 13,544 9,072
-------- --------
Income from operations 2,497 342
Interest income 643 51
Interest expense (19) (17)
Foreign exchange loss (1) -
-------- --------
Income before income taxes 3,120 376
Income tax expense 182 3
-------- --------
Net income 2,938 373
Less: accretion on preferred redeemable shares - (1,334)
Less: dividends on preferred redeemable shares - (698)
-------- --------
Net income (loss) attributable to common stockholders $2,938 ($1,659)
======== ========
Net income (loss) attributable to common stockholders
per share:
Basic $0.14 ($0.44)
======== ========
Diluted $0.13 ($0.44)
======== ========
Weighted-average number of shares used in per share
amounts:
Basic 20,888 3,791
======== ========
Diluted 22,946 3,791
======== ========
Double-Take Software, Inc.
Consolidated Statements of Cash Flows
(In thousands, except per share data)
(Unaudited)
Three months
ended
March 31,
2007 2006
-------- --------
Cash flows from operating activities:
Net Income $2,938 $373
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 373 251
Amortization of intangible assets 176 -
Provision for doubtful accounts (13) 50
Stock option expense 272 418
Issuance of restricted shares - -
Issuance of Series C Preferred shares to management - 107
Changes in:
Accounts receivable 782 750
Prepaid expenses and other assets 635 85
Inventories 18 -
Other assets 4 (58)
Accounts payable and accrued expenses (2,926) (4,618)
Other liabilities 53 -
Deferred revenue 691 497
-------- --------
Net cash provided by (used in) operating activities $3,003 $(2,145)
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (212) (448)
Earn-out payments on acquisition of Double-Take EMEA (1,527) -
-------- --------
Cash flows from investing activities (1,739) (448)
Cash flows from financing activities:
Expenses from initial public offering (113) -
Proceeds from exercise of stock options 473 2
Payments on capital lease obligation (5) -
-------- --------
Net cash provided by financing activities 355 2
Effect of exchange rate changes on cash and cash
equivalents (138) -
Net increase in cash and cash equivalents 1,619 (2,591)
Cash and cash equivalents - beginning of period 55,170 8,341
-------- --------
Cash and cash equivalents - end of period $56,651 $5,750
======== ========
Double-Take Software, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months
Ended
March 31,
-------------
2007 2006
------- -----
Non-GAAP financial measures and reconciliation:
GAAP income (loss) from operations $2,497 $342
Add: noncash stock option expense (1) 272 47
Add: noncash stock option expense for former CEO (2) - 399
------- -----
Non-GAAP income from operations $2,769 $788
======= =====
GAAP net income prior to accretion and dividends on
convertible preferred shares $2,938 $373
Add: noncash stock option expense (1) 272 47
Add: noncash stock option expense for former CEO (2) - 399
------- -----
Non-GAAP net income prior to accretion and dividends on
convertible preferred shares in 2006 $3,210 $819
======= =====
Non-GAAP income per share (3):
Basic $0.15
=======
Diluted $0.14
=======
Weighted-average number of shares used in per share
amounts:
Basic 20,888
=======
Diluted 22,946
=======
Footnotes to Adjustments
- ---------------------------------------------------------
(1) Represents noncash stock compensation charge
associated with stock option grants as follows:
Three Months
Ended
March 31,
-------------
2007 2006
------- -----
Stock option expense by line item:
Cost of maintenance and professional services $21 $8
Sales and marketing 51 18
Research and development 29 19
General and administrative 171 2
------- -----
$272 $47
======= =====
(2) Represents noncash stock-based compensation charges
associated with vesting options for the former CEO.
(3) Presentation of non-GAAP net loss per share prior to
accretion and dividends on preferred shares for 2006 has
not been made because the effect would be anti-dilutive.
Non-GAAP loss per share would have been ($0.32)
excluding stock-based compensation but including
accretion and dividends on preferred shares.
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
Investor Relations
investor@doubletake.com