Exhibit 99.1
Double-Take Software, Inc. Announces Second Quarter 2007 Financial
Results
SOUTHBOROUGH, Mass.--(BUSINESS WIRE)--July 24, 2007--Double-Take
Software, Inc. (NASDAQ: DBTK), a leading provider of recovery
solutions, today announced its financial results for the second
quarter 2007.
"We had great revenue and operating income growth and are very
pleased with our results in the quarter ending June 30. We continue to
see solid demand for our products and continued tangible benefits
within our customer base as they protect themselves against unplanned
downtime. Revenue was strong, in part, due to a robust demand amongst
our customers to ensure their licenses are under contract to receive
recent product updates and, I believe, because of our position as a
trusted provider of software for disaster recovery in the virtual
market space and for full server recovery" said Dean Goodermote,
Chairman of the Board and CEO of Double-Take Software.
Total revenue for the quarter, which consists of software revenue,
maintenance and professional services revenue, increased 36.2% to
$20.0 million in the second quarter of 2007 from $14.7 million in the
second quarter of 2006. Revenue for the second quarter of 2007
includes revenue from Double-Take EMEA for the entire quarter.
(Double-Take EMEA, which was Double-Take Software's near exclusive
distributor in Europe, was acquired by the Company on May 23, 2006).
Software revenue increased 24.4% to $12.0 million in the second
quarter of 2007 from $9.6 million in the second quarter of 2006.
Maintenance and professional services revenue increased 58.7% to $8.0
million in the second quarter of 2007 from $5.1 million in the second
quarter of 2006.
Operating expenses for the second quarter of 2007 increased 35.6%
to $13.9 million from $10.3 million in the second quarter of 2006.
Included in the operating expenses are the following items:
-- Stock option expense of $0.5 million in the second quarter of
2007 related to SFAS 123R as compared to $0.3 million in the
same quarter in '06 related to SFAS 123R and the vesting of
stock options for the former CEO.
-- Amortization of intangible assets of $0.2 million for the
second quarter of 2007 as compared to $0.1 million in the
second quarter of 2006 related to the acquisition of Double
Take EMEA.
Income from operations was $4.0 million in the second quarter of
2007 compared to $2.1 million in the second quarter of 2006.
The company recently completed an analysis of the valuation
allowance recorded against its deferred tax assets and concluded that
the Company should reduce the valuation allowance related to its
deferred tax assets by $4.7 million. This amount represents the
benefit that the Company has determined, in the second quarter, that
it is more likely than not to realize in future periods from
utilization of net operating loss carryforwards. Additionally, the
Company recorded a current tax expense of $1.9 million in the second
quarter. The result was a net tax benefit during the quarter of $2.8
million.
Net income attributable to common stockholders, which includes the
aforementioned deferred tax benefit, was $7.5 million, or $0.33 per
diluted share, in the second quarter of 2007 compared to net income
attributable to common stockholders of $0.1 million, or $0.02 per
diluted share, in the second quarter of 2006.
Income from operations on an adjusted, non-GAAP basis in the
second quarter of 2007 was $4.4 million, compared to $2.4 million in
the second quarter of 2006. Adjusted, non-GAAP net income before
accretion and dividends on preferred stock in the second quarter of
2007 was $8.0 million, which includes the deferred tax benefit,
compared to $2.4 million in the second 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, which includes
the effect of the deferred tax benefit, was $0.35 in the second
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, cash equivalents, and short term investments at June 30,
2007 totaled $60.9 million.
Guidance
Revenue for the third quarter of 2007 is anticipated to be in the
range of $20.2 to $20.7 million and adjusted non-GAAP operating income
is expected to be $3.8 to $4.0 million. The effective income tax rate
is expected to be approximately 35% to 40%. Non-GAAP net income per
share for the third quarter of 2007 is expected to be in the range of
$0.11 to $0.12 per share excluding the impact of stock-based
compensation charges and weighted average diluted shares are expected
to be approximately 23.4 to 23.5 million shares. Weighted average
shares are calculated using the treasury method and include
anticipated stock option grants and exercises but no other issuance of
shares.
After taking the results of Q2 2007 into account, the Company is
increasing its full year revenue, operating income and earnings per
share guidance. Full-year 2007 revenue is now expected to be in the
range of $81.1 to $82.1 million. Operating income is expected to be
$15.3 to $16.0 million and adjusted, non-GAAP income per share for the
full year 2007 is expected to be in the range of $0.72 to $0.74
excluding the impact of stock based compensation charges and using an
estimated full year effective tax rate of approximately 10%. The full
year effective tax rate includes the effects of the deferred tax
benefit. Weighted average diluted shares are assumed to be
approximately 23.2 to 23.3 million shares. Weighted average shares are
calculated using the treasury method and include anticipated stock
option grants and exercises but no other issuance of 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 third 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 Friday,
July 27, 2007 at 11:59 p.m. EST. To access the audio replay, dial
888-203-1112 or 719-457-0820 and enter confirmation code 3403683. 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.
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)
June Dec 31,
30,
2007 2006
------- -------
ASSETS
Current assets:
Cash and cash equivalents $37,429 $55,170
Short term investments 23,434 -
Accounts receivable, net 14,537 12,676
Inventory - 14
Prepaid expenses and other current assets 1,702 2,210
Deferred tax assets 2,849 -
------- -------
Total current assets 79,951 70,070
Property and equipment, net 2,881 3,000
Customer relationships, net 1,766 1,993
Marketing relationships, net 1,717 1,842
Goodwill 1,820 -
Other assets 127 121
------- -------
Total assets $88,262 $77,026
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 1,480 2,217
Accrued expenses 4,708 6,845
Accrued purchase price payable - 1,425
Other liabilities 466 135
Deferred revenue 19,161 16,774
------- -------
Total current liabilities 25,815 27,396
Long-term deferred revenue, less current portion 4,073 3,977
Long-term deferred rent, less current portion 339 406
Long-term capital lease obligations, less current
portion 7 17
Stockholders' equity 58,028 45,230
------- -------
Total liabilities and stockholders' equity $88,262 $77,026
======= =======
Double-Take Software, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Six Months Ended
Ended
June 30, June 30,
--------------- ----------------
2007 2006 2007 2006
------- ------- ------- --------
Revenue:
Software licenses $11,991 $9,637 $22,381 $16,009
Maintenance and professional
services 8,021 5,055 15,556 9,362
------- ------- ------- --------
Total revenue 20,012 14,692 37,937 25,371
Cost of revenue:
Software licenses 118 811 145 815
Maintenance and professional
services 2,008 1,462 3,865 2,723
------- ------- ------- --------
Total cost of revenue 2,126 2,273 4,010 3,538
------- ------- ------- --------
Gross margin 17,886 12,419 33,927 21,833
Operating expenses:
Sales and marketing 6,845 5,620 13,748 9,950
Research and development 2,839 2,532 5,714 4,996
General and administrative 3,690 1,767 6,907 3,794
Depreciation and amortization 555 351 1,104 602
------- ------- ------- --------
Total operating expenses 13,929 10,270 27,473 19,342
------- ------- ------- --------
Income from operations 3,957 2,149 6,454 2,491
Interest income 772 70 1,415 121
Interest expense (11) (26) (30) (43)
Foreign exchange loss 6 55 5 55
------- ------- ------- --------
Income before income taxes 4,724 2,248 7,844 2,624
Income tax expense (2,768) 83 (2,586) 86
------- ------- ------- --------
Net income 7,492 2,165 10,430 2,538
Less: accretion on preferred
redeemable shares - (1,332) - (2,666)
Less: dividends on preferred
redeemable shares - (722) - (1,420)
------- ------- ------- --------
Net income (loss) attributable to
common stockholders $7,492 $111 $10,430 ($1,548)
======= ======= ======= ========
Net income (loss) attributable to
common stockholders per share:
Basic $0.36 $0.03 $0.50 ($0.41)
======= ======= ======= ========
Diluted $0.33 $0.02 $0.45 ($0.41)
======= ======= ======= ========
Weighted-average number of shares used
in per share amounts:
Basic 21,038 3,794 20,963 3,792
======= ======= ======= ========
Diluted 23,031 5,987 22,991 3,792
======= ======= ======= ========
Double-Take Software, Inc.
Consolidated Statements of Cash Flows
(In thousands, except per share data)
(Unaudited)
Six months ended
June 30,
2007 2006
-------- -------
Cash flows from operating activities:
Net Income $10,430 $2,538
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 752 529
Amortization of intangible assets 352 73
Provision for doubtful accounts 231 100
Stock option expense 755 670
Deferred income taxes (2,849) -
Issuance of Series C Preferred shares to
management - 107
Changes in:
Accounts receivable (1,975) 1,410
Prepaid expenses and other assets 611 (346)
Inventories 14 886
Other assets (4) (11)
Accounts payable and accrued expenses (3,035) (5,020)
Other liabilities 343 51
Deferred revenue 2,318 1,826
-------- -------
Net cash provided by (used in) operating activities $7,943 $2,813
-------- -------
Cash flows from investing activities:
Purchase of property and equipment (628) (824)
Purchase of short term investments (23,434) -
Earn-out payments on acquisition of Double-Take
EMEA (3,245) 327
-------- -------
Cash flows from investing activities (27,307) (497)
Cash flows from financing activities:
Expenses from initial public offering (113) -
Proceeds from exercise of stock options 693 6
Excess tax benefits from stock based compensation 1,089 -
Payments on capital lease obligation (11) (1)
-------- -------
Net cash provided by financing activities 1,658 5
Effect of exchange rate changes on cash and cash
equivalents (35) (14)
Net increase in cash and cash equivalents (17,706) 2,321
Cash and cash equivalents - beginning of period 55,170 8,341
-------- -------
Cash and cash equivalents - end of period $37,429 $10,648
======== =======
Double-Take Software, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
------------- --------------
2007 2006 2007 2006
------ ------ ------- ------
Non-GAAP financial measures and
reconciliation:
GAAP income (loss) from operations $3,957 $2,149 $6,454 $2,491
Add: noncash stock option expense
(1) 483 102 755 149
Add: noncash stock option expense
for former CEO (2) - 151 - 550
------ ------ ------- ------
Non-GAAP income from operations $4,440 $2,402 $7,209 $3,190
====== ====== ======= ======
GAAP net income prior to accretion and
dividends on convertible preferred shares$7,492 $2,165 $10,430 $2,538
Add: noncash stock option expense
(1) 483 102 755 149
Add: noncash stock option expense
for former CEO (2) - 151 - 550
------ ------ ------- ------
Non-GAAP net income prior to accretion and
dividends on convertible preferred shares
in 2006 $7,975 $2,418 $11,185 $3,237
====== ====== ======= ======
Non-GAAP income per share (3):
Basic $0.38 $0.53
====== =======
Diluted $0.35 $0.49
====== =======
Weighted-average number of shares used in
per share amounts:
Basic 21,038 20,963
====== =======
Diluted 23,031 22,991
====== =======
Footnotes to Adjustments
- ------------------------------------------
(1) Represents noncash stock compensation charge
associated with stock option grants as follows:
Three Months Six Months
Ended Ended
June 30, June 30,
------------- --------------
2007 2006 2007 2006
------ ------ ------- ------
Stock option expense by line item:
Cost of maintenance and
professional services $46 $16 $67 $24
Sales and marketing 93 33 144 51
Research and development 69 34 98 53
General and administrative 275 19 446 21
------ ------ ------- ------
$483 $102 $755 $149
====== ====== ======= ======
(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. For the three months ended June 30,
2006, non-GAAP income per share excluding stock based compensation
but including accretion and dividends on preferred shares would have
been $0.06 per share. For the six months ended June 30, 2006, non-
GAAP loss per share excluding stock based compensation but including
accretion and dividends of preferred shares would have been ($0.22)
per share.
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