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| 8-K - 8-K - COMMVAULT SYSTEMS INC | w83762e8vk.htm |
Investor Relations Contact:
Michael Picariello
CommVault
732-728-5380
ir@commvault.com
Michael Picariello
CommVault
732-728-5380
ir@commvault.com
CommVault Announces First Quarter Fiscal 2012 Financial Results
CommVault Reports Record Quarterly Revenues of $91.5 million
First Quarter Fiscal 2012 Highlights Include:
| First Quarter | ||
GAAP Results: |
||
Revenues |
$91.5 million | |
Income from Operations (EBIT) |
$10.0 million | |
EBIT Margin |
10.9% | |
Diluted Earnings Per Share |
$0.15 | |
Non-GAAP Results: |
||
Income from Operations (EBIT) |
$15.2 million | |
EBIT Margin |
16.6% | |
Diluted Earnings Per Share |
$0.21 |
OCEANPORT, N.J. — August 2, 2011 — CommVault [NASDAQ: CVLT] today announced its financial results
for the first quarter ended June 30, 2011.
N. Robert Hammer, CommVault’s chairman, president and CEO stated, “We began fiscal year 2012 with
an excellent first quarter which was highlighted by revenue growth of 38%, non-GAAP EBIT growth of
100% and operating cash flow growth of 95% over the same period a year ago. Our 38% growth in
total revenues was driven by another quarter of record enterprise software deals (transactions
greater than $100,000) and improved results across all geographies. Our first quarter results
continue to validate the strategic relevance of our Simpana 9 data and information management
software platform and our ability to penetrate large enterprise accounts. We were also successful
in making substantial investments to position the company for longer term growth while delivering
solid year over year improved profitability.
Total revenues for the first quarter of fiscal 2012 were $91.5 million, an increase of 38% over the
first quarter of fiscal 2011 and an increase of 2% over the prior quarter. Software revenue in the
first quarter of fiscal 2012 was $43.8 million, an increase of
55% year-over-year and remained relatively flat sequentially. Services revenue in the first quarter of
fiscal 2012 was $47.7 million, increases of 26% year-over-year and 5% sequentially.
Income
from operations (EBIT) was $10.0 million for the first quarter, a 173% increase from $3.7
million in the same period of the prior year. Non-GAAP income from operations (EBIT) increased
100% to $15.2 million in the first quarter of fiscal 2012 compared to $7.6 million in the first
quarter of the prior year. On a sequential basis, Non-GAAP income from operations (EBIT) decreased
12% in the first quarter of fiscal 2012.
For the first quarter of fiscal 2012, CommVault reported net income of $7.0 million, an increase of
$3.5 million compared to the same period of the prior year. Non-GAAP net income for the quarter
increased 94% to $9.8 million, or $0.21 per diluted share, from $5.1 million, or $0.11 per diluted
share, in the same period of the prior year.
Operating cash flow totaled $31.1 million for the first quarter of fiscal 2012 compared to $15.9
million in the first quarter of fiscal 2011. Total cash and short-term investments were $254.2
million as of June 30, 2011 compared to $218.3 million as of March 31, 2011.
A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV
included in this press release. An explanation of these measures is also included below under the
heading “Use of Non-GAAP Financial Measures.”
Recent Business Highlights:
| • | On July 5, 2011, CommVault announced it had won the 2011 Microsoft Server Platform Partner of the Year Award. CommVault was honored among a global field of top Microsoft partners for demonstrating excellence in innovation and implementation of customer solutions based on Microsoft technology. | ||
| • | On May 31, 2011, CommVault announced that it had entered into a global OEM agreement with NetApp under which NetApp will integrate elements of CommVault’s industry leading Simpana® 9 software with NetApp SnapShot™ and replication technology, under the NetApp SnapProtect® brand. |
| • | On May 26, 2011, CommVault announced that it its Simpana® 9 software had been named the winner of the Backup and Recovery category in the Best of TechEd 2011 awards program produced by Penton Media’s Windows IT Pro, SQL Server Magazine, DevPro Connections and SharePoint Pro. |
Use of Non-GAAP Financial Measures
CommVault has provided in this press release the following non-GAAP financial measures: non-GAAP
income from operations, non-GAAP income from operations margin, non-GAAP net income and non-GAAP
diluted earnings per share. This selected financial information has not been prepared in
accordance with GAAP. CommVault uses these non-GAAP financial measures internally to understand,
manage and evaluate its business and make operating decisions. In addition, CommVault believes
these non-GAAP operating measures are useful to investors, when used as a supplement to GAAP
financial measures, in evaluating CommVault’s ongoing operational performance. CommVault believes
that the use of these non-GAAP financial measures provide an additional tool for investors to use
in evaluating ongoing operating results and trends, and in comparing its financial results with
other companies in CommVault’s industry, many of which present similar non-GAAP financial measures
to the investment community.
These non-GAAP financial measures should be considered as a supplement to, and not as a substitute
for or superior to, 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, which are provided in Table IV included in this press release.
Non-GAAP income from operations and non-GAAP income from operations margin. These non-GAAP
financial measures exclude noncash stock-based compensation charges and additional FICA and related
payroll tax expense incurred by CommVault when employees exercise in the money stock options or
vest in restricted stock awards. CommVault believes that these non-GAAP financial measures are
useful metrics for management and investors because they compare
CommVault’s core operating results over multiple periods. When evaluating the performance of CommVault’s operating
results and developing short and long term plans, CommVault does not consider such expenses.
Although noncash stock-based compensation and the additional FICA and related payroll tax expenses
are necessary to attract and retain employees, CommVault places its primary emphasis on stockholder
dilution as compared to the accounting charges related to such equity compensation plans. In
addition, because of the varying available valuation methodologies, subjective assumptions such as
volatility outside CommVault’s control and the variety of awards that companies can issue,
CommVault believes that providing non-GAAP financial measures that exclude noncash stock-based
compensation expense and the additional FICA and related payroll tax expenses incurred on stock
option exercises and vesting of restricted stock awards allow investors to make meaningful
comparisons between CommVault’s operating results and those of other companies.
There are a number of limitations related to the use of non-GAAP income from operations and
non-GAAP income from operations margin. The most significant limitation is that these non-GAAP
financial measures exclude certain operating costs, primarily related to noncash stock-based
compensation, which is of a recurring nature. Noncash stock-based compensation has been, and will
continue to be for the foreseeable future, a significant recurring expense in CommVault’s operating
results. In addition, noncash stock-based compensation is an important part of CommVault’s
employees’ compensation and can have a significant impact on their performance. Lastly, the
components CommVault excludes in its non-GAAP financial measures may differ from the components
that its peer companies exclude when they report their non-GAAP financial measures.
CommVault’s management generally compensates for limitations described above related to the use of
non-GAAP financial measures by providing investors with a reconciliation of the non-GAAP financial
measure to the most directly comparable GAAP financial measure. Further, CommVault management uses
non-GAAP financial measures only in addition to, and in conjunction with, results presented in
accordance with GAAP.
Non-GAAP net income and non-GAAP diluted EPS. Non-GAAP net income excludes noncash stock-based
compensation and the additional FICA and related payroll tax expenses incurred by CommVault when
employees exercise in the money stock options or vest in restricted stock awards, which are
discussed above, as well as applies a non-GAAP effective tax rate of 36% in fiscal 2012 and 34% in
fiscal 2011.
CommVault anticipates that in any given quarter its non-GAAP tax rate may be either higher or lower
than the GAAP tax rate as evidenced by historical fluctuations. The GAAP tax rate for the first
quarter of fiscal 2012 was 31% and the GAAP tax rate for the first quarter of fiscal 2011 was 7%.
On an annual basis, the GAAP tax rate over the past five fiscal years was 42% for fiscal 2011, 43%
for fiscal 2010, 44% for fiscal 2009, 23% for fiscal 2008 and (241%) for fiscal 2007. In addition,
CommVault’s cash tax rate has been significantly lower than its GAAP tax rate for the past three
fiscal years. The cash tax rate over the past three fiscal years is estimated to be 11% for fiscal
2011, approximately 10% for fiscal 2010 and approximately 13% for fiscal 2009. CommVault expects
that its cash tax rate will remain lower than its GAAP tax rate in fiscal 2012. CommVault defines
its cash tax rate as the total amount of cash income taxes payable for the fiscal year divided by
consolidated GAAP pre-tax income.
CommVault
measured itself to non-GAAP tax rates of 34% in fiscal 2011 and 36% in fiscal 2012. CommVault believes that the use of a
non-GAAP tax rate is a useful measure as it allows management and investors to compare its
operating results on a more consistent basis over the multiple periods presented in its earnings
release without the impact of significant variations in the tax rate as more fully described above.
It is also more reflective of the increase in the cash tax rate as it approaches the GAAP tax rate
over the next one to two fiscal years. Non-GAAP EPS is derived from non-GAAP net income divided by
the weighted average shares outstanding on a fully diluted basis.
CommVault considers non-GAAP net income and non-GAAP diluted EPS useful metrics for CommVault
management and its investors for the same basic reasons that CommVault uses non-GAAP income from
operations and non-GAAP income from operations margin. In addition, the same limitations as well as
management actions to compensate for such limitations described above also apply to CommVault’s use
of non-GAAP net income and non-GAAP EPS.
Conference Call Information
CommVault will host a conference call today, August 2, 2011, at 8:30 a.m. Eastern Time (5:30 a.m.
Pacific Time) to discuss its financial results. To access this call, dial 866-578-5784 (domestic)
or 617-213-8056 (international). Investors can also access the webcast by visiting
www.commvault.com. The live webcast and replay will be hosted under “Investor Events” located under
the “Investor Relations” section of the website. An archived webcast of this conference call will
also be available following the call.
About CommVault
A singular vision — a belief in a better way to address current and future data and information
management needs — guides CommVault in the development of Singular Information Management®
solutions for high-performance data protection, universal availability and simplified management of
data on complex storage networks. CommVault’s exclusive single-platform architecture gives
companies unprecedented control over data growth, costs and risk. CommVault’s Simpana® software
modules were designed to work together seamlessly from the ground up, sharing a single code and
common function set, to deliver superlative Data Backup, Archive, Replication, Search and Resource
Management capabilities. More companies every day join those who have discovered the unparalleled
efficiency, performance, reliability, and control only CommVault can offer. Information about
CommVault is available at www.commvault.com. CommVault’s corporate headquarters is located in
Oceanport, New Jersey in the United States.
Safe Harbor Statement
This press release contains forward-looking statements, including statements regarding financial
projections, which are subject to risks and uncertainties, such as competitive factors,
difficulties and delays inherent in the development, manufacturing, marketing and sale of software
products and related services, general economic conditions and others. Statements regarding
CommVault’s beliefs, plans, expectations or intentions regarding the future are forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section
21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are
made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Actual results may differ materially from anticipated results. CommVault does not undertake
to update its forward-looking statements.
CommVault, CommVault and logo, the “CV” logo, CommVault Systems, Solving Forward, SIM, Singular
Information Management, Simpana, CommVault Galaxy, Unified Data Management, QiNetix, Quick
Recovery, QR, CommNet, Farline, GridStor, Vault Tracker, InnerVault, Quick Snap, QSnap, Recovery
Director, CommServe, CommCell, SnapProtect, ROMS and CommValue, are trademarks or registered
trademarks of CommVault Systems, Inc. All other third party brands, products, service names,
trademarks, or registered service marks are the property of and used to identify the products or
services of their respective owners. All specifications are subject to change without notice.
Table I
CommVault Systems, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2011 | 2010 | |||||||
Revenues: |
||||||||
Software |
$ | 43,801 | $ | 28,295 | ||||
Services |
47,726 | 38,005 | ||||||
Total revenues |
91,527 | 66,300 | ||||||
Cost of revenues: |
||||||||
Software |
617 | 556 | ||||||
Services |
11,426 | 8,964 | ||||||
Total cost of revenues |
12,043 | 9,520 | ||||||
Gross margin |
79,484 | 56,780 | ||||||
Operating expenses: |
||||||||
Sales and marketing |
49,758 | 35,826 | ||||||
Research and development |
9,271 | 8,640 | ||||||
General and administrative |
9,417 | 7,749 | ||||||
Depreciation and amortization |
1,025 | 895 | ||||||
Income from operations |
10,013 | 3,670 | ||||||
Interest expense |
(26 | ) | (27 | ) | ||||
Interest income |
165 | 119 | ||||||
Income before income taxes |
10,152 | 3,762 | ||||||
Income tax expense |
3,113 | 264 | ||||||
Net income |
$ | 7,039 | $ | 3,498 | ||||
Net income per common share: |
||||||||
Basic |
$ | 0.16 | $ | 0.08 | ||||
Diluted |
$ | 0.15 | $ | 0.08 | ||||
Weighted average common shares outstanding: |
||||||||
Basic |
44,171 | 43,168 | ||||||
Diluted |
47,268 | 46,098 | ||||||
Table II
CommVault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
(In thousands)
(Unaudited)
| June 30, | March 31, | |||||||
| 2011 | 2011 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 251,011 | $ | 217,170 | ||||
Short-term investments |
3,146 | 1,150 | ||||||
Trade accounts receivable, net |
59,789 | 73,891 | ||||||
Prepaid expenses and other current assets |
9,811 | 8,476 | ||||||
Deferred tax assets, net |
12,527 | 12,043 | ||||||
Total current assets |
336,284 | 312,730 | ||||||
Deferred tax assets, net |
21,610 | 21,736 | ||||||
Property and equipment, net |
6,859 | 6,400 | ||||||
Other assets |
2,126 | 1,633 | ||||||
Total assets |
$ | 366,879 | $ | 342,499 | ||||
Liabilities and stockholders’ equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 2,191 | $ | 1,658 | ||||
Accrued liabilities |
34,487 | 33,475 | ||||||
Deferred revenue |
103,071 | 98,217 | ||||||
Total current liabilities |
139,749 | 133,350 | ||||||
Deferred revenue, less current portion |
15,036 | 14,695 | ||||||
Other liabilities |
6,707 | 6,324 | ||||||
Total stockholders’ equity |
205,387 | 188,130 | ||||||
Total liabilities and stockholders’ equity |
$ | 366,879 | $ | 342,499 | ||||
Table III
CommVault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
(In thousands)
(Unaudited)
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2011 | 2010 | |||||||
Cash flows from operating activities |
||||||||
Net income |
$ | 7,039 | $ | 3,498 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities: |
||||||||
Depreciation and amortization |
1,063 | 923 | ||||||
Noncash stock-based compensation |
4,451 | 3,585 | ||||||
Excess tax benefits from stock-based compensation |
(1,602 | ) | (554 | ) | ||||
Deferred income taxes |
(1,491 | ) | (448 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Trade accounts receivable |
14,487 | 11,372 | ||||||
Prepaid expenses and other current assets |
(1,312 | ) | (2,071 | ) | ||||
Other assets |
(473 | ) | (254 | ) | ||||
Accounts payable |
527 | 880 | ||||||
Accrued liabilities |
3,532 | (1,707 | ) | |||||
Deferred revenue |
4,516 | 1,735 | ||||||
Other liabilities |
356 | (1,040 | ) | |||||
Net cash provided by operating activities |
31,093 | 15,919 | ||||||
Cash flows from investing activities
|
||||||||
Purchase of short term investments |
(3,146 | ) | (2,501 | ) | ||||
Proceeds from maturity of short-term investments |
1,150 | — | ||||||
Purchase of property and equipment |
(1,518 | ) | (773 | ) | ||||
Net cash used in investing activities |
(3,514 | ) | (3,274 | ) | ||||
Cash flows from financing activities |
||||||||
Repurchase of common stock |
— | (12,905 | ) | |||||
Proceeds from the exercise of stock options |
4,202 | 4,409 | ||||||
Excess tax benefits from stock-based compensation |
1,602 | 554 | ||||||
Net cash provided by (used in) financing activities |
5,804 | (7,942 | ) | |||||
Effects of exchange rate — changes in cash |
458 | (1,331 | ) | |||||
Net increase in cash and cash equivalents |
33,841 | 3,372 | ||||||
Cash and cash equivalents at beginning of period |
217,170 | 169,518 | ||||||
Cash and cash equivalents at end of period |
$ | 251,011 | $ | 172,890 | ||||
Table IV
CommVault Systems, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2011 | 2010 | |||||||
Non-GAAP financial measures and reconciliation: |
||||||||
GAAP income from operations |
$ | 10,013 | $ | 3,670 | ||||
Noncash stock-based compensation (1) |
4,451 | 3,585 | ||||||
FICA expense on stock option exercises and
vesting on restricted stock awards (2) |
750 | 341 | ||||||
Non-GAAP income from operations |
$ | 15,214 | $ | 7,596 | ||||
GAAP net income |
$ | 7,039 | $ | 3,498 | ||||
Noncash stock-based compensation (1) |
4,451 | 3,585 | ||||||
FICA expense on stock option exercises and
vesting on restricted stock awards (2) |
750 | 341 | ||||||
Non-GAAP provision for income taxes adjustment (3) |
(2,414 | ) | (2,350 | ) | ||||
Non-GAAP net income |
$ | 9,826 | $ | 5,074 | ||||
Diluted weighted average shares outstanding |
47,268 | 46,098 | ||||||
Non-GAAP diluted net income per share |
$ | 0.21 | $ | 0.11 | ||||
Footnotes — Adjustments
| (1) | Represents noncash stock-based compensation charges associated with stock options and restricted stock units granted as follows: |
| Three Months Ended June 30, | ||||||||
| 2011 | 2010 | |||||||
Cost of services revenue |
$ | 102 | $ | 101 | ||||
Sales and marketing |
2,093 | 1,599 | ||||||
Research and development |
475 | 407 | ||||||
General and administrative |
1,781 | 1,478 | ||||||
Stock-based compensation expense |
$ | 4,451 | $ | 3,585 | ||||
| (2) | Represents additional FICA and related payroll tax expenses incurred by CommVault when employees exercise in the money stock options or vest in restricted stock awards. | |
| (3) | The provision for income taxes is adjusted to reflect CommVault’s estimated non-GAAP effective tax rate of approximately 36% in fiscal 2012 and 34% in fiscal 2011. |