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| 8-K - SOURCEFIRE, INC. 8-K - SOURCEFIRE INC | a6623600.htm |
Exhibit 99.1
Sourcefire Announces Fourth Quarter & Full Year 2010 Results
COLUMBIA, Md.--(BUSINESS WIRE)--February 23, 2011--Sourcefire, Inc. (Nasdaq:FIRE)
Fourth Quarter 2010:
- Revenue: $38.0 million, an increase of 8% year-over-year
- GAAP Net Income: $4.4 million, or $0.15 per diluted share
- Adjusted Net Income: $5.0 million, or $0.17 per diluted share
Full Year 2010:
- Revenue: $130.6 million, an increase of 26% year-over-year
- GAAP Net Income: $20.0 million, or $0.69 per diluted share
- Adjusted Net Income: $15.4 million, or $0.53 per diluted share
Sourcefire, Inc. (Nasdaq:FIRE), the creator of Snort® and a leader in intelligent cybersecurity solutions, today announced financial results for its fiscal fourth quarter and full year ended December 31, 2010.
"2010 was another strong year for Sourcefire. We grew revenue 26 percent driven by significant gains in both our Commercial and International businesses, as well as an increase in the contribution from our partner channels," said John Burris, CEO of Sourcefire. "We look forward to 2011 and the roll out of our expanded security platform including our Next Generation Firewall and our endpoint control solution, Immunet. These solutions are complementary with our industry leading IPS, providing our customers with better protection and significantly expanding our addressable market."
Financial Summary
- Total Revenues - Revenues for 4Q10 were $38.0 million compared to $35.3 million in 4Q09, an increase of 8%. Revenues for the twelve months ended December 31, 2010 were $130.6 million compared to $103.5 million for 2009, an increase of 26%.
-
GAAP Net Income - Net income was $4.4 million for 4Q10, or
$0.15 per diluted share, on the basis of generally accepted accounting
principles (GAAP), compared with GAAP net income of $6.7 million, or
$0.23 per diluted share, in 4Q09.
GAAP net income for the twelve months ended December 31, 2010 was $20.0 million, or $0.69 per diluted share, compared with GAAP net income of $8.9 million, or $0.32 per diluted share, for 2009. - Adjusted Net Income - Adjusted net income for 4Q10, which excludes stock-based compensation expense and costs related to the Immunet acquisition and includes an assumed tax rate of 35%, was $5.0 million, or $0.17 per diluted share. This compares to adjusted net income in 4Q09, which excludes stock-based compensation expense and includes an assumed tax rate of 35%, of $5.6 million, or $0.19 per diluted share. Adjusted net income for the twelve months ended December 31, 2010, which excludes stock-based compensation expense, costs related to the Immunet acquisition and the benefit from the release of the valuation allowance on the Company’s deferred tax asset and includes an assumed tax rate of 35%, was $15.4 million, or $0.53 per diluted share. This compares to adjusted net income for 2009, which excludes stock-based compensation expense and includes an assumed tax rate of 35%, of $10.0 million, or $0.36 per diluted share.
- Balance Sheet - As of December 31, 2010, the Company's cash, cash equivalents and investments totaled $153.7 million.
Recent Company Highlights
Global Expansion & Channel Development
- Increased channel-influenced revenue worldwide to 39%, up from 23% in 2009.
- Increased 2010 international revenues to $32.8 million, up 38% over 2009.
- Increased 2010 U.S. commercial revenues to $65.0 million, up 31% over 2009.
- Increased 2010 U.S. federal sector revenues to $32.8 million, up 9% over 2009.
Innovation & Recognition
- Acquired Immunet, a leading provider of advanced cloud-based anti-malware technologies. The acquisition expands Sourcefire's security solutions portfolio - adding an advanced cloud platform for delivery of malware protection - and extends the Company's real-time detection and prevention leadership to the cloud.
- Positioned as a Leader in the Gartner, Inc. “Magic Quadrant for Network Intrusion Prevention Systems.”
- Announced plans for expansion into the Next- Generation Firewall (NGFW) market and introduced three new Defense Center Awareness Bundles for Next-Generation Intrusion Prevention System (NGIPS). The combined solutions will provide organizations comprehensive threat protection - securing the perimeter, data center and cloud.
- Sourcefire Intrusion Prevention System (IPS) achieved Common Criteria certification, verifying its ability to address the stringent security requirements of the Federal Government.
- Selected for the fourth consecutive year to the Deloitte Technology Fast 500. The Deloitte Fast 500 program lists the fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America based on their percentage revenue growth over a five-year period.
First Quarter 2011 Outlook
Based on information as of February 23, 2011, Sourcefire expects revenue for the first quarter of 2011 in the range of $28.7 million to $30.7 million, net loss per share in the range of ($0.02) to ($0.04) and, on an adjusted basis, net income per diluted share in the range of $0.01 to $0.03. Sourcefire's expectation of adjusted net income per share excludes stock-based compensation expense of $3.1 million to $3.3 million and amortization of acquired intangible assets and acquisition-related costs of approximately $1.1 million and includes an assumed 35% tax rate.
Non-GAAP Measures
Adjusted Net Income, Adjusted Net Income per Share, Adjusted Income from Operations and Adjusted Income from Operations as a Percentage of Revenue: 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 (i) stock-based compensation, which does not involve the expenditure of cash, and (ii) items that Sourcefire believes may not be indicative of the Company's operating performance, because either they are unusual and Sourcefire does not expect them to recur in the ordinary course of its business or they are unrelated to the ongoing operation of the business in the ordinary course. For all of 2011 the Company expects that non-GAAP results will continue to be adjusted to reflect the effect of an assumed tax rate of 35%. Sourcefire believes this adjustment provides useful information to both management and investors because it is expected to normalize and approximate the Company’s full year GAAP tax rate.
Free Cash Flow: Sourcefire defines free cash flow as net cash provided by operating activities minus capital expenditures. The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the purchase of property and equipment, can be used for strategic opportunities, including investing in the business, making strategic acquisitions and strengthening the balance sheet.
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 in the table following the financial statements attached to this press release.
Conference Call and Webcast
On Wednesday, February 23, 2011 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: 888-396-2298
Calling from other countries: 617-847-8708
Pass code: 45372115
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), is a world leader in intelligent cybersecurity solutions. Sourcefire is transforming the way Global 2000 organizations and government agencies manage and minimize network security risks. Sourcefire’s IPS, Real-time Network Awareness and Real-time Adaptive Security solutions equip 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 50 awards and accolades. Today, the name Sourcefire has grown synonymous with innovation and network security intelligence. For more information about Sourcefire, please visit http://www.sourcefire.com.
SOURCEFIRE®, Sourcefire IPS™, SNORT®, RAZORBACK™, the Sourcefire logo, the Snort and Pig logo, SECURITY FOR THE REAL WORLD™, SOURCEFIRE DEFENSE CENTER®, SOURCEFIRE 3D®, RNA®, RUA®, DAEMONLOGGER™, CLAMAV®, Immunet™ and certain other trademarks and logos are trademarks or registered trademarks of Sourcefire, Inc. in the United States and other countries. Other company, product and service names may be trademarks or service marks of others.
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 expectations regarding financial results for the first quarter of 2011, the Company's future profitability and the Company’s plans for the introduction of new products.
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 the outlook for the first quarter of 2011 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 U.S. Securities and Exchange Commission. Sourcefire, Inc. undertakes no obligation to update any forward-looking statements.
| Sourcefire, Inc. | |||||||||||||||
| Consolidated Statements of Operations | |||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||
| Revenue: | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Products | $ | 23,642 | $ | 23,787 | $ | 78,436 | $ | 62,585 | |||||||
| Technical support and professional services | 14,327 | 11,484 | 52,136 | 40,880 | |||||||||||
| Total revenue | 37,969 | 35,271 | 130,572 | 103,465 | |||||||||||
| Cost of revenue: | |||||||||||||||
| Products | 5,809 | 4,911 | 20,000 | 15,641 | |||||||||||
| Technical support and professional services | 2,051 | 1,818 | 6,828 | 6,379 | |||||||||||
| Total cost of revenue | 7,860 | 6,729 | 26,828 | 22,020 | |||||||||||
| Gross profit | 30,109 | 28,542 | 103,744 | 81,445 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 5,506 | 5,313 | 18,789 | 16,256 | |||||||||||
| Sales and marketing | 14,309 | 11,036 | 48,735 | 36,498 | |||||||||||
| General and administrative | 4,414 | 4,322 | 18,814 | 16,761 | |||||||||||
| Depreciation and amortization | 917 | 1,181 | 3,375 | 3,647 | |||||||||||
| Total operating expenses | 25,146 | 21,852 | 89,713 | 73,162 | |||||||||||
| Income from operations | 4,963 | 6,690 | 14,031 | 8,283 | |||||||||||
| Other income, net | 46 | 168 | 125 | 926 | |||||||||||
| Income before income taxes | 5,009 | 6,858 | 14,156 | 9,209 | |||||||||||
| Provision (benefit) for income taxes | 605 | 193 | (5,821 | ) | 331 | ||||||||||
| Net income | $ | 4,404 | $ | 6,665 | $ | 19,977 | $ | 8,878 | |||||||
| Net income per share - basic | $ | 0.16 | $ | 0.25 | $ | 0.72 | $ | 0.34 | |||||||
| Net income per share - diluted | $ | 0.15 | $ | 0.23 | $ | 0.69 | $ | 0.32 | |||||||
| Weighted average shares outstanding used in computing per share amounts: | |||||||||||||||
| Basic | 28,065,622 | 26,973,700 | 27,670,356 | 26,458,273 | |||||||||||
| Diluted | 29,077,439 | 28,882,258 | 28,896,246 | 27,987,115 | |||||||||||
| Stock-based compensation expense for the three and twelve months ended December 31, 2010 and 2009 is included in the Consolidated Statements of Operations as follows (in thousands): | |||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Cost of revenue (product) | $ | 52 | $ | 30 | $ | 186 | $ | 84 | |||||||
| Cost of revenue (services) | 105 | 57 |
366 |
171 | |||||||||||
| Stock-based comp expense included in cost of revenue | 157 | 87 | 552 | 255 | |||||||||||
| Research and development | 370 | 293 | 1,418 | 995 | |||||||||||
| Sales and marketing | 976 | 606 | 3,589 | 1,921 | |||||||||||
| General and administrative | 965 | 759 | 3,790 | 3,000 | |||||||||||
| Stock-based comp included in operating expenses | 2,311 | 1,658 | 8,797 | 5,916 | |||||||||||
| Total stock-based compensation expense | $ | 2,468 | $ | 1,745 | $ | 9,349 | $ | 6,171 | |||||||
| Sourcefire, Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (in thousands) | ||||||
| December 31, | December 31, | |||||
| 2010 | 2009 | |||||
| Assets | (unaudited) | (unaudited) | ||||
| Cash and cash equivalents | $ 54,410 | $ 53,071 | ||||
| Investments | 99,309 | 70,149 | ||||
| Accounts receivable, net | 37,250 | 32,771 | ||||
| Inventory | 5,235 | 4,414 | ||||
| Deferred tax assets | 7,717 | 63 | ||||
| Prepaid expenses and other current assets | 3,793 | 4,365 | ||||
| Property and equipment, net | 9,235 | 7,447 | ||||
| Goodwill | 15,135 | - | ||||
| Intangible assets, net | 6,830 | - | ||||
| Other long-term assets | 2,160 | 1,887 | ||||
| Total assets | $ 241,074 | $ 174,167 | ||||
| Liabilities | ||||||
| Accounts payable and accrued expenses | $ 14,925 | $ 10,945 | ||||
| Deferred revenue | 46,422 | 34,177 | ||||
| Other liabilities | 13,643 | 556 | ||||
| Total liabilities | 74,990 | 45,678 | ||||
| Stockholders' Equity | ||||||
| Common stock | 27 | 26 | ||||
| Additional paid-in capital | 187,789 | 170,157 | ||||
| Accumulated deficit | (21,739) | (41,716) | ||||
| Accumulated other comprehensive income | 7 | 22 | ||||
| Total stockholders' equity | 166,084 | 128,489 | ||||
| Total liabilities and stockholders' equity | $ 241,074 | $ 174,167 | ||||
| Sourcefire, Inc. | ||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||
| (in thousands) | ||||||||||
| Twelve Months Ended December 31, | ||||||||||
| 2010 | 2009 | |||||||||
| (unaudited) | (unaudited) | |||||||||
| Net income | $ | 19,977 | $ | 8,878 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities | 16,448 | 11,281 | ||||||||
| Net cash provided by operating activities | 36,425 | 20,159 | ||||||||
| Net cash used in investing activities | (43,353 | ) | (11,504 | ) | ||||||
| Net cash provided by financing activities | 8,267 | 4,648 | ||||||||
| Net increase in cash and cash equivalents | 1,339 | 13,303 | ||||||||
| Cash and cash equivalents at beginning of period | 53,071 | 39,768 | ||||||||
| Cash and cash equivalents at end of period | $ | 54,410 | $ | 53,071 | ||||||
| Sourcefire, Inc. | |||||||||||||||||
| Reconciliation of Non-GAAP Measures to GAAP | |||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Reconciliation of adjusted income from operations: | |||||||||||||||||
| GAAP income from operations | $ | 4,963 | $ | 6,690 | $ | 14,031 | $ | 8,283 | |||||||||
| Stock-based compensation expense | 2,468 | 1,745 | 9,349 | 6,171 | |||||||||||||
| Acquisition-related costs | 235 | - | 235 | - | |||||||||||||
| Adjusted income from operations | $ | 7,666 | $ | 8,435 | $ | 23,615 | $ | 14,454 | |||||||||
| Adjusted income from operations as % of total revenue | 20.2 | % | 23.9 | % | 18.1 | % | 14.0 | % | |||||||||
| Reconciliation of adjusted net income: | |||||||||||||||||
| GAAP net income | $ | 4,404 | $ | 6,665 | $ | 19,977 | $ | 8,878 | |||||||||
| Stock-based compensation expense | 2,468 | 1,745 | 9,349 | 6,171 | |||||||||||||
| Release of the valuation allowance | - | - | (7,613 | ) | - | ||||||||||||
| Acquisition-related costs | 235 | - | 235 | - | |||||||||||||
| Income tax adjustment* | (2,094 | ) | (2,818 | ) | (6,516 | ) | (5,052 | ) | |||||||||
| Adjusted net income** | $ | 5,013 | $ | 5,592 | $ | 15,432 | $ | 9,997 | |||||||||
| Adjusted net income per share - basic | $ | 0.18 | $ | 0.21 | $ | 0.56 | $ | 0.38 | |||||||||
| Adjusted net income per share - diluted | $ | 0.17 | $ | 0.19 | $ | 0.53 | $ | 0.36 | |||||||||
| Weighted average number of shares - basic | 28,065,622 | 26,973,700 | 27,670,356 | 26,458,273 | |||||||||||||
| Weighted average number of shares - diluted | 29,077,439 | 28,882,258 | 28,896,246 | 27,987,115 | |||||||||||||
| * Income tax adjustment is used to adjust the GAAP provision for income taxes to a Non-GAAP provision for income taxes utilizing an estimated tax rate of 35%. | |||||||||||||||||
| **Adjusted net income for the three and twelve months ended December 31, 2009 has been revised to reflect an income tax adjustment in order to conform with the current year presentation. | |||||||||||||||||
| Reconciliation of net cash provided by operating activities to free cash flow: | |||||||||||||||||
| Twelve Months Ended December 31, | |||||||||||||||||
| 2010 | 2009 | ||||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||
| Net cash provided by operating activities | $ | 36,425 | $ | 20,159 | |||||||||||||
| Purchase of property and equipment | (5,403 | ) | (2,500 | ) | |||||||||||||
| Free cash flow | $ | 31,022 | $ | 17,659 | |||||||||||||
| Sourcefire, Inc. | ||||||||||||
| Supplemental Operating Data | ||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Number of deals in excess of $500,000 | 12 | 11 | 36 | 34 | ||||||||
| Number of deals in excess of $100,000 | 82 | 73 | 240 | 195 | ||||||||
| Number of new 3D customers | 120 | 88 | 376 | 275 | ||||||||
| Number of full-time employees at end of period | 351 | 307 | 351 | 307 | ||||||||
| Revenue Composition by Geography: | ||||||||||||
| United States | 72 | % | 80 | % | 75 | % | 77 | % | ||||
| International | 28 | % | 20 | % | 25 | % | 23 | % | ||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||
| Revenue Composition by Business Distribution: | ||||||||||||
| Existing customer product revenue | 38 | % | 55 | % | 37 | % | 47 | % | ||||
| New customer product revenue | 24 | % | 13 | % | 23 | % | 14 | % | ||||
| Recurring support services revenue | 35 | % | 30 | % | 37 | % | 36 | % | ||||
| Professional services revenue | 3 | % | 2 | % | 3 | % | 3 | % | ||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||
CONTACT:
Media Contact:
Welz & Weisel Communications
Tony
Welz, 703-218-3555 x226
Principal
tony@w2comm.com
or
Investor
Contact:
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Senior Vice
President
Staci.Mortenson@icrinc.com