Exhibit 99.1
Sourcefire(R) Announces 2007 Third Quarter Results
Third Quarter 2007 Revenues Grow Over 36% from Year Ago Level;
Gross Margin Remains Strong at 77%
COLUMBIA, Md.--(BUSINESS WIRE)--Nov. 6, 2007--Open source innovator and
Snort(R) creator, Sourcefire, Inc. (Nasdaq:FIRE), a leader in network intrusion
prevention, today announced financial results for its third fiscal quarter ended
September 30, 2007.
Commenting on the third quarter results, Wayne Jackson, Sourcefire's
Chairman and CEO stated, "We are pleased with our sales execution this quarter,
securing 34 six-figure transactions and 86 repeat customer purchases. Also this
quarter, we introduced the latest version of the Sourcefire 3D(TM) System,
released two new products, completed our acquisition of ClamAV, expanded into
the Australian market and made great progress toward the release of our
innovative 10 gigabit solution."
Financial Highlights
-- Total Revenues - Revenues for the third quarter of 2007 were $14.8
million, compared to $10.9 million in the third quarter of 2006, an
increase of 36%. Revenues for the nine months ended September 30, 2007
were $36.5 million, compared to $28.9 million for the same period last
year, an increase of 26%.
-- Gross Profit - Gross profit for the third quarter of 2007 increased
36% to $11.3 million, or 77% of revenues, compared to $8.3 million, or
77% of revenues, in the third quarter of 2006. Gross profit for the
nine months ended September 30, 2007 increased 29% to $28.4 million,
or 78% of revenues, compared to $22.0 million, or 76% of revenues, for
the same period last year.
-- Net Income/Loss - On the basis of generally accepted accounting
principles (GAAP), the Company's net loss for the third quarter of
2007 was $2.8 million, compared with net income of $0.2 million in the
third quarter of 2006. GAAP net loss for the nine months ended
September 30, 2007 was $6.4 million, compared with a GAAP net loss of
$2.9 million for the same period last year. The GAAP net loss for the
third quarter of 2007 and the nine months ended September 30, 2007
included a charge of $2.9 million for in-process research and
development costs related to the acquisition of ClamAV, with no such
charges in the same period in 2006. The GAAP earnings per share effect
of this charge was $0.12 per share in the third quarter and $0.15 per
share for the nine months ended September 30, 2007.
-- Net Loss Attributable to Common Stockholders - GAAP net loss
attributable to common stockholders, which includes the accretion of
our preferred stock up until the time of our initial public offering,
was approximately $2.8 million in the third quarter of 2007, or a loss
of $0.12 per share, compared with GAAP net loss attributable to common
stockholders of $0.9 million, or a loss of $0.27 per share, in the
third quarter of 2006. GAAP net loss attributable to common
stockholders for the nine months ended September 30, 2007 was $7.3
million, or a loss of $0.38 per share, compared with a GAAP net loss
attributable to common stockholders of $5.6 million, or a loss of
$1.67 per share, for the same period last year.
-- Balance Sheet - As of September 30, 2007 total cash, cash equivalents
and held to maturity investments totaled $103.3 million.
Non-GAAP Measures
In evaluating the operating performance of its business, Sourcefire's
management excludes certain charges and credits that are required by GAAP. These
non-GAAP results provide useful information to both management and investors by
excluding expenses which we believe may not be indicative of the Company's core
operating results. These items share one or more of the following
characteristics: they are unusual and Sourcefire does not expect them to recur
in the ordinary course of its business; they do not involve the expenditure of
cash; or they are unrelated to the ongoing operation of the business in the
ordinary course. These measures should be considered in addition to results
prepared in accordance with GAAP, but should not be considered a substitute for,
or superior to, GAAP results. The non-GAAP measures included in this press
release have been reconciled to the nearest GAAP measure.
-- Adjusted Net Income/Loss - Adjusted net income, which excludes
stock-based compensation expense, the charge for in-process research
and development costs related to the acquisition of ClamAV and
amortization of acquired intangibles, was $0.8 million, or $0.03 per
share, in the third quarter of 2007, compared to an adjusted net
income of $0.3 million, or $0.10 per share, in the third quarter of
2006. Adjusted net loss was $1.6 million, or a loss of $0.08 per
share, in the nine months ended September 30, 2007, compared to an
adjusted net loss of $2.6 million, or a loss of $0.78 per share, for
the same period last year.
Recent Company Highlights
-- Acquired ClamAV - With nearly 1 million unique IP addresses
downloading ClamAV malware updates daily across more than 120 mirrors
in 38 countries, ClamAV is one of the most broadly adopted open source
security projects worldwide. ClamAV is comparable in quality and
coverage to leading commercial anti-virus solutions and was recently
named a finalist in the "Best Tool or Utility for SysAdmins" at the
Sourceforge.net 2007 Community Choice Awards.
-- General Availability of Sourcefire 3D(TM) System 4.7 - announced the
availability of the Sourcefire 3D(TM) System version 4.7 release,
affording customers with the industry's first-ever Adaptive IPS. While
traditional IPS vendors have subscribed to a "one size fits all"
model, the 3D System 4.7 release sets Sourcefire apart, enabling
customers to optimize the security and performance of their IPS
systems based on the actual network assets they are protecting.
-- General Availability of Sourcefire RUA(TM) - Real-time User Awareness
links user identity to security and compliance events.
-- General Availability of Sourcefire NetFlow Analysis - which extends
the reach of Sourcefire's Network Behavior Analysis (NBA) solution to
corners of the network where Sourcefire RNA(TM) (Real-time Network
Awareness) Sensors do not exist.
-- Increased International Footprint with Australian Expansion -
announced that the company is expanding its presence in Australia as
part of a strategy to support the growing international demand for the
company's innovative security solutions.
Full Year 2007 Outlook
Based on information as of November 5, 2007, Sourcefire is reiterating its
revenue guidance for the full year of 2007 in the range of $55 million to $58
million and providing adjusted net income per share guidance in the range of
$0.04 to $0.13, for the fiscal year ending December 31, 2007. Basic net loss per
share on a GAAP basis attributable to common stockholders is now expected to be
in the range of $0.17 to $0.26, for the fiscal year ending December 31, 2007,
which now includes the $2.9 million charge for in-process research and
development costs related to the acquisition of ClamAV, or $0.14 per share on an
annualized basis. These estimates exclude any other extraordinary items.
Conference Call and Webcast
On Tuesday, November 6, 2007 at 5:00 p.m. Eastern Time, Sourcefire will
host a conference call to review these results. A listen-only web cast of the
session will be available at http://investor.sourcefire.com. Those wishing to
participate in the live session should use the following numbers to dial in:
Calling from the United States or Canada: 866-272-9941
Calling from other countries: 617-213-8895
Pass code: 72723188
An online replay will be available at http://investor.sourcefire.com
following the completion of the live call and will remain available for at least
90 days.
About Sourcefire
Sourcefire, Inc. (Nasdaq:FIRE), Snort creator and open source innovator, is
a world leader in Enterprise Threat Management (ETM) solutions. Sourcefire is
transforming the way Global 2000 organizations and government agencies manage
and minimize network security risks with its 3D Approach - Discover, Determine,
Defend - to securing real networks. The Sourcefire 3D(TM) System is the first to
unify IPS, NBA, NAC and Vulnerability Assessment technologies under the same
management console. This ETM approach equips customers with an efficient and
effective layered security defense - protecting network assets before, during
and after an attack. Through the years, Sourcefire has been consistently
recognized for its innovation and industry leadership by customers, media and
industry analysts alike - with more than 30 awards and accolades. Today, the
names Sourcefire and founder Martin Roesch have grown synonymous with innovation
and network security intelligence. For more information about Sourcefire, please
visit http://www.sourcefire.com.
SOURCEFIRE(R), SNORT(R), the Sourcefire logo, the Snort and Pig logo,
SECURITY FOR THE REAL WORLD(TM), SOURCEFIRE DEFENSE CENTER(TM), SOURCEFIRE
3D(TM), RNA(TM), DAEMONLOGGER(TM) and certain other trademarks and logos are
trademarks or registered trademarks of Sourcefire, Inc. in the United States and
other countries.
Cautionary Language Concerning Forward-Looking Statements
The statements contained in this release that are not historical facts are
"forward-looking statements" (as such term is defined in the Private Securities
Litigation Reform Act of 1995) that involve risks and uncertainties. These
statements include our expectations regarding our financial results. Management
cautions the reader that these forward-looking statements are only predictions
and are subject to a number of both known and unknown risks and uncertainties,
and actual results, performance, and/or achievements of Sourcefire, Inc. may
differ materially from the future results, performance, and/or achievements
expressed or implied by these forward-looking statements as a result of a number
of factors. These factors include, without limitation, the fact that our outlook
for the full year of 2007 and the fourth quarter of 2007 could change, and also
include, without limitation, those risks and uncertainties described from time
to time in the reports filed by Sourcefire, Inc. with the Securities and
Exchange Commission. Sourcefire, Inc. undertakes no obligation to update any
forward-looking statements.
Sourcefire, Inc.
Consolidated Statements of Operations (Unaudited)
(amounts in thousands, except share and per share information)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------- -------------------------
2007 2006 2007 2006
Revenue:
Products $ 9,403 $ 6,927 $ 21,103 $ 18,390
Technical
support and
professional
services 5,403 3,940 15,418 10,544
------------ ------------ ------------ ------------
Total revenue 14,806 10,867 36,521 28,934
------------ ------------ ------------ ------------
Cost of revenue:
Products 2,665 1,813 5,809 4,931
Technical
support and
professional
services 800 725 2,277 2,016
------------ ------------ ------------ ------------
Total cost of
revenue 3,465 2,538 8,086 6,947
------------ ------------ ------------ ------------
Gross profit 11,341 8,329 28,435 21,987
Operating expenses:
Research and
development 2,895 2,082 8,076 6,334
Sales and
marketing 6,746 4,929 18,563 14,512
General and
administrative 2,540 1,103 7,288 3,587
Depreciation and
amortization 427 306 1,177 912
In-process
research and
development 2,947 - 2,947 -
------------ ------------ ------------ ------------
Total
operating
expenses 15,555 8,420 38,051 25,345
------------ ------------ ------------ ------------
Loss from
operations (4,214) (91) (9,616) (3,358)
Other income
(expense):
Interest and
investment
income 1,417 294 3,351 447
Interest expense - (20) (35) (61)
Other income
(expense) 3 22 (9) 56
------------ ------------ ------------ ------------
Total other income
(expense) 1,420 296 3,307 442
------------ ------------ ------------ ------------
Income (loss)
before income
taxes (2,794) 205 (6,309) (2,916)
Income tax expense (50) - (120)
------------ ------------ ------------ ------------
Net income (loss) (2,844) 205 (6,429) (2,916)
Accretion of
preferred stock - (1,131) (870) (2,687)
------------ ------------ ------------ ------------
Net loss
attributable to
common
stockholders $ (2,844) $ (926) $ (7,299) $ (5,603)
============ ============ ============ ============
Net loss
attributable to
common
stockholders per
share:
Basic and
diluted $ (0.12) $ (0.27) $ (0.38) $ (1.67)
Weighted average
shares outstanding
used in computing
per share amounts:
Basic and
diluted 24,218,634 3,392,526 19,027,750 3,360,099
Note: Compensation cost under SFAS 123(R) for the three and nine
months ended September 30, 2007 and 2006 is included in the
consolidated
Statements of Operations as follows (in thousands):
(unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------- -------------------------
2007 2006 2007 2006
Cost of sales
(product) $ 11 $ - $ 16 $ -
Cost of sales
(services) 38 - 50 -
------------ ------------ ------------ ------------
Stock-based
compensation
expense
included in
cost of
sales 49 - 66 -
Research and
development 88 20 257 43
Sales and
marketing 300 55 755 119
General and
administrative 282 67 833 120
------------ ------------ ------------ ------------
Stock-based
compensation
included in
operating
expenses 670 142 1,845 282
------------ ------------ ------------ ------------
Total stock-
based
compensation $ 719 $ 142 $ 1,911 $ 282
============ ============ ============ ============
Sourcefire, Inc.
Consolidated Balance Sheets
(amounts in thousands, except share and per share data)
September 30 December 31
2007 2006
------------ ------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 27,217 $ 13,029
Held to maturity investments 70,204 12,385
Accounts receivable, net allowance for
doubtful accounts of $147 in 2007 and
$166 in 2006 13,920 16,507
Inventory 3,164 2,099
Prepaid expenses and other current
assets 2,981 919
------------ ------------
Total current assets 117,486 44,939
Property and equipment, net 3,848 2,546
Intangible assets, net 624 -
Held-to-maturity investments, less current
portion 5,916 908
Restricted cash 1,000 -
Other assets 329 1,559
------------ ------------
Total assets $ 129,203 $ 49,952
============ ============
Liabilities, convertible preferred stock
and stockholders' equity (deficit)
Current liabilities:
Accounts payable 1,936 3,081
Accrued compensation and related
expenses 1,979 1,783
Other accrued expenses 1,170 1,312
Current portion of deferred revenue 13,362 11,735
Current portion of long-term debt - 675
Other current liabilities 721 501
------------ ------------
Total current liabilities 19,168 19,087
Deferred revenue, less current portion 2,526 2,380
Long-term debt, less current portion - 637
Other long-term liabilities 83 -
------------ ------------
Total liabilities 21,777 22,104
Commitments and contingencies
Series A convertible preferred stock,
$0.001 par value; 2,495,410 shares
authorized at December 31, 2006, 2,475,410
shares issued and outstanding at December
31, 2006; aggregate liquidation preference
of $14,093 at December 31, 2006, no shares
authorized, issued or outstanding at
September 30, 2007 - 10,308
Warrants to purchase Series A convertible
preferred stock - 25
Series B convertible preferred stock,
$0.001 par value; 7,132,205 shares
authorized, issued and outstanding at
December 31, 2006; aggregate liquidation
preference of $19,947 at December 31,
2006; no shares authorized, issued or
outstanding at September 30, 2007 - 14,265
Series C convertible preferred stock,
$0.001 par value; 5,404,043 shares
authorized, issued and outstanding at
December 31, 2006; aggregate liquidation
preference of $26,050 at December 31,
2006; no shares authorized, issued or
outstanding at September 30, 2007 - 18,270
Series D convertible preferred stock,
$0.001 par value; 3,264,449 shares
authorized, issued and outstanding at
December 31, 2006; aggregate liquidation
preference of $29,847 at December 31,
2006; no shares authorized, issued or
outstanding at September 30, 2007 - 23,879
------------ ------------
Total convertible preferred stock - 66,747
Stockholders' equity (deficit):
Preferred stock, $0.001 par value;
20,000,000 shares authorized; no shares
issued and outstanding at September 30,
2007 and December 31, 2006 - -
Common stock, $0.001 par value;
240,000,000 shares authorized;
24,464,116 and 3,491,764 shares issued
and outstanding at September 30, 2007
and December 31, 2006, respectively 24 3
Additional paid-in capital 152,733 -
Accumulated deficit (45,331) (38,902)
------------ ------------
Total stockholders' equity (deficit) 107,426 (38,899)
------------ ------------
Total liabilities, convertible preferred
stock and stockholders' equity (deficit) $ 129,203 $ 49,952
============ ============
Sourcefire, Inc.
Consolidated Statements of Cash Flows (Unaudited)
(amounts in thousands)
Nine Months Ended September 30
------------------------------
2007 2006
Operating activities
Net loss $ (6,429) $ (2,916)
Adjustments to reconcile net loss to
net cash (used in) provided by
operating activities:
Depreciation and amortization 1,202 934
Provision for doubtful accounts (1) -
Amortization of unearned
compensation - 15
Stock-based compensation 1,911 267
Amortization of (premium) discount
on held-to-maturity investments (933) 5
Write-off of acquired in-process
research and development costs 2,947 -
Changes in operating assets and
liabilities:
Accounts receivable 2,588 2,430
Inventory (1,065) (659)
Prepaid expenses and other assets (1,871) (360)
Accounts payable (1,145) (104)
Accrued expenses 54 1,657
Deferred revenue 1,773 664
Other current liabilities 303 (21)
-------------- --------------
Net cash (used in) provided by
operating activities (666) 1,912
Investing activities
Purchase of property and equipment (2,494) (815)
Purchase of held-to-maturity
investments (95,895) (1,401)
Proceeds from maturities of held-to-
maturity investments 34,000 2,000
Cash paid for acquisition of ClamAV,
including direct acquisition cost of
$81 (3,581) -
Cash held in escrow related to
acquisition of ClamAV (1,000) -
-------------- --------------
Net cash used in investing activities (68,970) (216)
Financing activities
Borrowings of long-term debt 113 383
Repayments of long-term debt (1,424) (403)
Proceeds from issuance of Series D
Redeemable Convertible Preferred
Stock, net of offering costs - 22,921
Proceeds from issuance of common stock,
net of underwriters' discount of
$6,495 86,288 -
Proceeds from exercise of stock options 214 142
Payment of equity offering costs (1,367) (708)
-------------- --------------
Net cash provided by financing
activities 83,824 22,335
-------------- --------------
Net increase in cash and cash
equivalents 14,188 24,031
Cash and cash equivalents at beginning
of period 13,029 1,106
-------------- --------------
Cash and cash equivalents at end of
period $ 27,217 $ 25,137
============== ==============
Sourcefire, Inc.
Reconciliation of Non-GAAP Measures to GAAP (Unaudited)
(amounts in thousands, except share and per share information)
Three Months Ended Nine Months Ended
September 30 September 30
------------------------- -------------------------
2007 2006 2007 2006
Reconciliation to
adjusted net
income (loss):
Net income
(loss) (2,844) 205 (6,429) (2,916)
Stock-based
compensation
expense 719 142 1,911 282
In-process
research and
development 2,947 - 2,947 -
Amortization of
acquired
intangibles 10 - 10 -
------------ ------------ ------------ ------------
Adjusted net
income (loss) $ 832 $ 347 $ (1,561) $ (2,634)
============ ============ ============ ============
Adjusted net
income (loss)
per share -
basic $ 0.03 $ 0.10 $ (0.08) $ (0.78)
Weighted
average number
of shares -
basic 24,218,634 3,392,526 19,027,750 3,360,099
CONTACT: Sourcefire, Inc.
Investor Contact:
Tania Almond
Investor Relations Officer
410-423-1919
tania.almond@sourcefire.com
or
Media Contact:
Welz & Weisel Communications
Tony Welz
Principal
703-218-3555 x226
tony@w2comm.com