Exhibit 99.1
Double-Take Software, Inc. Announces Third Quarter 2007 Financial Results
SOUTHBOROUGH, Mass.--(BUSINESS WIRE)--Oct. 25, 2007--Double-Take
Software, Inc. (NASDAQ: DBTK), a leading provider of recovery
solutions, today announced its financial results for the third quarter
2007.
"We are very pleased with our financial and operational
performance for the third quarter. Both income and sales were above
our expectations and we have made great progress in our R&D and
marketing efforts, particularly in the area of developing capabilities
to continuously redeploy full systems across wide areas for physical
and virtual environments," said Dean Goodermote, Chairman of the Board
and CEO of Double-Take Software, Inc.
Total revenue for the quarter, which consists of software revenue,
maintenance and professional services revenue, increased 29.8% to
$21.3 million in the third quarter of 2007 from $16.4 million in the
third quarter of 2006.
Software revenue increased 23.3% to $12.6 million in the third
quarter of 2007 from $10.2 million in the third quarter of 2006.
Maintenance and professional services revenue increased 40.6% to $8.7
million in the third quarter of 2007 from $6.2 million in the third
quarter of 2006.
Operating expenses for the third quarter of 2007 increased 28.1%
to $14.7 million from $11.5 million in the third quarter of 2006.
Included in operating expenses are the following items:
-- Stock option expense of $1.1 million in the third quarter of
2007 compared to $0.5 million in 2006.
-- Amortization of intangible assets related to the acquisition
of Double-Take EMEA of $0.2 million for the third quarter of
2007 and 2006.
Income from operations was $4.6 million in the third quarter of
2007 compared to $2.7 million in the third quarter of 2006.
The Company recorded a tax expense of $2.1 million in the third
quarter of 2007 compared to $0.3 million in the third quarter of 2006.
Net income attributable to common stockholders was $3.3 million,
or $0.14 per diluted share, in the third quarter of 2007 compared to
net income attributable to common stockholders of $0.4 million, or
$0.07 per diluted share, in the third quarter of 2006.
Income from operations on an adjusted, non-GAAP basis in the third
quarter of 2007 was $5.8 million, compared to $3.2 million in the
third quarter of 2006. Adjusted, non-GAAP net income before accretion
and dividends on preferred stock in the third quarter of 2007 was $4.0
million, compared to $3.0 million in the third 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 $0.17 in the
third 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 net of the related
income taxes. 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 September
30, 2007 totaled $67.4 million.
In connection with the follow-on offering completed in August, the
Company and its executive officers, directors and certain stockholders
agreed not to sell any of their shares (aggregating a total
of approximately 3.8 million shares), with certain exceptions, until
the expiration of a 90 day lock-up period. However, as provided in the
lock-up agreements, the issuance of the Company's earnings
announcement has extended the original lock-up period. Consequently,
the lock-up period will end on November 11, 2007.
Guidance
Revenue for the fourth quarter of 2007 is anticipated to be in the
range of $23.1 to $23.6 million and adjusted non-GAAP operating income
is expected to be $5.3 to $5.5 million. The effective income tax rate
for the fourth quarter is expected to be approximately 35% to 40% and
non-GAAP net income per share is expected to be in the range of $0.15
to $0.16 per share excluding the impact of stock-based compensation
charges. Weighted average diluted shares using the treasury method are
expected to be approximately 23.2 to 23.3 million shares.
After taking the results of the third quarter of 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 $82.3 to $82.8 million. Non-GAAP
operating income is expected to be $18.3 to $18.5 million and
adjusted, non-GAAP income per share for the full year 2007 is expected
to be in the range of $0.81 to $0.82 excluding the impact of stock
based compensation charges and using an estimated full year effective
tax rate of approximately 10% to 12%. The full year effective tax rate
includes the effects of the deferred tax benefit recorded during Q2
2007. Weighted average diluted shares using the treasury method are
assumed to be approximately 23.1 to 23.2 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 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 Tuesday,
October 30, 2007 at 11:59 p.m. EDT. To access the audio replay, dial
888-203-1112 or 719-457-0820 and enter confirmation code 4057563. 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) 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)
Sept. 30, Dec 31,
2007 2006
----------- ----------
ASSETS
Current assets:
Cash and cash equivalents $38,845 $55,170
Short term investments 28,561 -
Accounts receivable, net 16,068 12,676
Inventory - 14
Prepaid expenses and other current assets 2,751 2,210
Deferred tax assets 2,849 -
----------- ----------
Total current assets 89,074 70,070
Property and equipment, net 3,274 3,000
Customer relationships, net 1,653 1,993
Marketing relationships, net 1,655 1,842
Goodwill 3,059 -
Other assets 150 121
----------- ----------
Total assets $98,865 $77,026
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 1,273 2,217
Accrued expenses 4,425 6,845
Accrued purchase price payable - 1,425
Other liabilities 360 135
Deferred revenue 21,284 16,774
----------- ----------
Total current liabilities 27,342 27,396
Long-term deferred revenue, less current
portion 4,463 3,977
Long-term deferred rent, less current portion 306 406
Long-term capital lease obligations, less
current portion 3 17
Stockholders' equity 66,751 45,230
----------- ----------
Total liabilities and stockholders' equity $98,865 $77,026
=========== ==========
Double-Take Software, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
----------------- ----------------
2007 2006 2007 2006
----------------- ----------------
Revenue:
Software licenses $12,612 $10,231 $34,993 $26,240
Maintenance and professional
services 8,695 6,185 24,251 15,547
----------------- ----------------
Total revenue 21,307 16,416 59,244 41,787
Cost of revenue:
Software licenses 71 514 216 1,329
Maintenance and professional
services 1,927 1,703 5,792 4,426
----------------- ----------------
Total cost of revenue 1,998 2,217 6,008 5,755
----------------- ----------------
Gross profit 19,309 14,199 53,236 36,032
Operating expenses:
Sales and marketing 6,935 5,641 20,683 15,591
Research and development 3,042 2,753 8,756 7,749
General and administrative 4,100 2,577 11,007 6,371
Depreciation and amortization 603 492 1,707 1,094
----------------- ----------------
Total operating expenses 14,680 11,463 42,153 30,805
----------------- ----------------
Income from operations 4,629 2,736 11,083 5,227
Other income, net 734 90 2,124 223
----------------- ----------------
Income before income taxes 5,363 2,826 13,207 5,450
Income tax expense (benefit) 2,055 317 (531) 403
----------------- ----------------
Net income 3,308 2,509 13,738 5,047
Less: accretion on preferred
redeemable shares - (1,334) - (4,000)
Less: dividends on preferred
redeemable shares - (743) - (2,163)
----------------- ----------------
Net income (loss) attributable to
common stockholders $3,308 $432 $13,738 ($1,116)
================= ================
Net income (loss) attributable to
common stockholders per share:
Basic $0.15 $0.11 $0.65 ($0.29)
================= ================
Diluted $0.14 $0.07 $0.60 ($0.29)
================= ================
Weighted-average number of shares
used in per share amounts:
Basic 21,525 3,796 21,152 3,794
================= ================
Diluted 23,052 6,222 22,950 3,794
================= ================
Double-Take Software, Inc.
Consolidated Statements of Cash Flows
(In thousands, except per share data)
(Unaudited)
Nine months ended
September 30,
2007 2006
------------------
Cash flows from operating activities:
Net Income $13,738 $5,047
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 1,179 848
Amortization of intangible assets 528 249
Provision for doubtful accounts (9) 150
Stock option expense 1,895 1,185
Deferred income taxes (2,849) -
Issuance of Series C Preferred shares to
management - 102
Changes in:
Accounts receivable (3,044) (315)
Prepaid expenses and other assets (201) 37
Inventories 14 1,257
Other assets (22) (3)
Accounts payable and accrued expenses (3,753) (5,961)
Other liabilities 270 (208)
Deferred revenue 4,458 3,009
------------------
Net cash provided by operating activities $12,204 $5,397
------------------
Cash flows from investing activities:
Purchase of property and equipment (1,438) (1,232)
Purchase of short term investments (44,556) -
Sales of short term investments 15,995 -
Earn-out payments on acquisition of Double-Take
EMEA (4,484) (1,200)
------------------
Cash flows used in investing activities (34,483) (2,432)
Cash flows from financing activities:
Proceeds from public offering, net of expenses 1,127 (880)
Proceeds from exercise of stock options 1,188 6
Excess tax benefits from stock based compensation 3,706 -
Payments on capital lease obligation (14) (6)
------------------
Net cash provided by (used in) financing activities 6,007 (880)
Effect of exchange rate changes on cash and cash
equivalents (53) 12
Net increase (decrease) in cash and cash equivalents (16,272) 2,085
Cash and cash equivalents - beginning of period 55,170 8,341
------------------
Cash and cash equivalents - end of period $38,845 $10,438
==================
Double-Take Software, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- --------------
2007 2006 2007 2006
-------------- --------------
Non-GAAP financial measures and
reconciliation:
GAAP income from operations $4,629 $2,736 $11,083 $5,227
Add: noncash stock option expense (1) 1,140 167 1,895 316
Add: noncash stock option expense for
former CEO (2) - 319 - 869
-------------- --------------
Non-GAAP income from operations $5,769 $3,222 $12,978 $6,412
============== ==============
GAAP net income prior to accretion and
dividends on convertible preferred
shares $3,308 $2,509 $13,738 $5,047
Add: noncash stock option expense, net
of income taxes (1) 676 167 1,431 316
Add: noncash stock option expense for
former CEO (2) - 319 - 869
-------------- --------------
Non-GAAP net income prior to accretion
and dividends on convertible preferred
shares in 2006 $3,984 $2,995 $15,169 $6,232
============== ==============
Non-GAAP income per share (3):
Basic $0.19 $0.72
======= =======
Diluted $0.17 $0.66
======= =======
Weighted-average number of shares used
in per share amounts:
Basic 21,525 21,152
======= =======
Diluted 23,052 22,950
======= =======
Footnotes to Adjustments
- ----------------------------------------
(1) Represents noncash stock compensation charge associated with stock
option grants as follows:
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- --------------
2007 2006 2007 2006
-------------- --------------
Stock option expense by line item:
Cost of maintenance and
professional services $62 $27 $129 $51
Sales and marketing 165 53 309 104
Research and development 85 62 183 115
General and administrative 828 25 1,274 46
-------------- --------------
$1,140 $167 $1,895 $316
============== ==============
(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 September
30, 2006, non-GAAP income per share excluding stock based
compensation but including accretion and dividends on preferred
shares would have been $0.15 per share. For the nine months ended
September 30, 2006, non-GAAP income per share excluding stock based
compensation but including accretion and dividends of preferred
shares would have been $0.02 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