EX-99.1 2 c57789exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(RIGHT NOW LOGO)
For Further Information, Contact:
     
Investor Relations:
  Corporate Communications:
Todd Friedman or Stacie Bosinoff
  Chaundera Wolfe
The Blueshirt Group
  RightNow Technologies
415.217.7722
  406-556-3323 Office
todd@blueshirtgroup.com
  406-548-4892 Cell
stacie@blueshirtgroup.com
  cwolfe@rightnow.com
RightNow Technologies Announces
First Quarter 2010 Financial Results
Company reports recurring revenue growth of 27% year over year.
BOZEMAN, Mont. (April 28, 2010) — RightNow (NASDAQ: RNOW) today announced results for the first quarter ended March 31, 2010. Revenue was $42.1 million in the first quarter of 2010, compared to $36.0 million in the first quarter of 2009, reflecting 17% growth in total revenue. Recurring revenue in the first quarter of 2010 increased 27% to $33.0 million from $26.0 million in the first quarter of 2009.
Net income in the first quarter of 2010 was $585,000 or $0.02 per share, compared to net income of $1.3 million, or $0.04 per share, in the first quarter of 2009. Non-GAAP net income in the first quarter of 2010, which excludes stock-based compensation charges of $1.8 million, was $2.3 million, or $0.07 per share, compared to non-GAAP net income of $2.8 million or $0.09 per share, in the first quarter of 2009.
New, renewed and expanded customer relationships during the first quarter of 2010 included Beretta, Cabela’s, CBS Interactive, Epson, Investor’s Business Daily, Monster.com, Navy Federal Credit Union, RealNetworks, Thule, United States General Services Administration (GSA), and Zynga.
“Our CX vision for customer experience continues to resonate with customers and prospects around the world, driving continued momentum throughout our business,” stated Greg Gianforte, CEO and founder. “The Cloud Services Agreement (CSA) we announced in March is changing the way customers do business with software vendors. We believe we are the best choice for consumer facing organizations choosing to deliver an integrated customer experience across the web, social and contact center channels.”
“We are pleased to report 27% growth in recurring revenue over Q1 last year, and revenue and earnings for the first quarter in-line with our guidance,” said Jeff Davison, CFO. “We maintain our outlook for the year despite the recent decline in foreign currency exchange rates.”

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Guidance
    For the full year 2010, revenue is expected to be in the range of approximately $175 to $180 million, with recurring revenue growth of approximately 20%. Net income per share for the full year 2010 is expected to be in the range of approximately $0.15 to $0.20. Non-GAAP net income per share, which excludes stock-based compensation, is expected to be in the range of approximately $0.40 to $0.45.
 
    For the second quarter of 2010, revenue is expected to be in the range of approximately $42.5 to $43.5 million. Second quarter net income per share is expected to be in the range of $0.02 to $0.04. Second quarter non-GAAP net income per share, which excludes stock-based compensation, is expected to be in the range of approximately $0.07 to $0.09.
Quarterly Conference Call
RightNow Technologies will discuss its quarterly results today via teleconference at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time) today. To access the call, please dial (877) 638-9569, or outside the U.S. (914) 495-8536, at least five minutes prior to the 2:30 p.m. MT start time. A live webcast of the call will also be available at http://investor.rightnow.com/index.cfm under the Events & Presentations menu. An audio replay will be available between 5:30 p.m. MT April 28, 2010 and 9:59 p.m. MT May 12, 2010 by calling (800) 642-1687 or (706) 645-9291, with Conference ID 65657423. The replay will also be available on the Company’s website at http://investor.rightnow.com.
About RightNow Technologies
RightNow is helping rid the world of bad experiences one consumer interaction at a time, seven million times a day. RightNow CX, the customer experience suite, helps organizations deliver exceptional customer experiences across the web, social networks and contact centers, all delivered via the cloud. With more than eight billion customer interactions delivered, RightNow is the customer experience fabric for nearly 2,000 organizations around the globe. To learn more about RightNow, go to www.rightnow.com.
RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ is a registered trademark of The NASDAQ Stock Market LLC.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words and include, but are not limited to, statements regarding projected results of operations and management’s future strategic plans. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
The risks and uncertainties referred to above include, but are not limited to, general economic conditions; fluctuations in foreign currency exchange; our business model; our ability to develop or acquire and gain market acceptance for new products and enhancements to existing products in a cost-effective and timely manner; fluctuations in our earnings as a result of potential changes to our valuation allowance(s) on our deferred tax assets; the success of our efforts to integrate HiveLive’s personnel and processes, following

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our acquisition of that entity; the risk of asset impairment associated with the acquisition of HiveLive; the gain or loss of key customers; competitive pressures and other similar factors such as the availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; our ability to expand or contract operations, manage expenses and grow profitability; the rate at which our present and future customers adopt our existing and future products and services; fluctuations in our operating results including our revenue mix and our rate of growth; fluctuations in backlog; the risk that our investments in partner relationships and additional employees will not achieve expected results; interruptions or delays in our hosting operations; breaches of our security measures; our ability to protect our intellectual property from infringement, and to avoid infringing on the intellectual property rights of third parties; the credit markets and potential impact on the recoverability of our portfolio of auction rate securities; our ability to sell auction rate securities under a put option with our broker; any unanticipated ambiguities in fair value accounting standards; fluctuations in our operating results from the impact of stock-based compensation expense; our ability to manage and expand our partner relationships; our ability to hire, retain and motivate our employees and manage our growth; the impact of potential future acquisitions, if any; and various other factors. Further information on potential factors that could affect our financial results is included in our Annual Report on Form 10-K, quarterly reports of Form 10-Q, and in other filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date they are made. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.
FRNOW

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RightNow Technologies, Inc.
Consolidated Balance Sheets

(In thousands) (Unaudited)
                 
    March 31,     Dec 31,  
    2010     2009  
Assets
               
Cash and cash equivalents
  $ 43,114     $ 41,546  
Short-term investments
    55,293       54,977  
Accounts receivable
    29,723       31,850  
Term receivables, current
    1,762       2,417  
Allowance for doubtful accounts
    (1,794 )     (1,914 )
 
           
Net receivables
    29,691       32,353  
Deferred commissions
    5,828       6,394  
Prepaid and other current assets
    3,792       2,434  
 
           
Total current assets
    137,718       137,704  
 
           
 
               
Property and equipment, net
    10,154       10,122  
Term receivables, non-current
    810       1,105  
Intangible assets, net
    11,669       11,141  
Deferred commissions, non-current
    3,457       3,461  
Other
    1,055       902  
 
           
Total Assets
  $ 164,863     $ 164,435  
 
           
 
               
Liabilities and Stockholders’ Equity
               
Accounts payable
  $ 7,442     $ 5,427  
Commissions and bonuses payable
    4,964       6,271  
Other accrued liabilities
    12,525       11,146  
Current debt
    10       22  
Current portion of deferred revenue
    68,103       74,446  
 
           
Total current liabilities
    93,044       97,312  
 
           
 
               
Deferred revenue, net of current portion
    27,592       26,881  
 
               
Stockholders’ equity:
               
Common stock
    34       34  
Additional paid-in capital
    115,680       112,439  
Treasury stock, at cost
    (15,007 )     (15,007 )
Accumulated other comprehensive income
    1,284       1,125  
Accumulated deficit
    (57,764 )     (58,349 )
 
           
Total stockholders’ equity
    44,227       40,242  
 
           
Total Liabilities and Stockholders’ Equity
  $ 164,863     $ 164,435  
 
           

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RightNow Technologies, Inc.
Consolidated Operating Statements

(In thousands, except per share amounts) (Unaudited)
                 
    Three Months Ended  
    March 31,  
    2010     2009  
Revenue:
               
Recurring revenue
  $ 33,025     $ 26,045  
Professional services
    9,077       9,992  
 
           
Total revenue
    42,102       36,037  
 
               
Cost of revenue:
               
Recurring revenue
    5,879       4,949  
Professional services
    7,332       7,008  
 
           
Total cost of revenue
    13,211       11,957  
 
           
 
               
Gross profit
    28,891       24,080  
 
               
Operating expenses:
               
Sales and marketing
    18,724       14,863  
Research and development
    5,132       4,756  
General and administrative
    4,299       3,446  
 
           
Total operating expenses
    28,155       23,065  
 
           
 
               
Income from operations
    736       1,015  
 
               
Interest and other income, net
    183       401  
 
           
 
               
Income before income taxes
    919       1,416  
Provision for income taxes
    (334 )     (153 )
 
           
Net income
  $ 585     $ 1,263  
 
           
 
               
Net income per share:
               
Basic
  $ 0.02     $ 0.04  
Diluted
  $ 0.02     $ 0.04  
 
               
Shares used in the computation:
               
Basic
    31,929       31,784  
Diluted
    33,431       32,249  
 
               
Supplemental information of stock-based compensation expense included in:
               
Cost of software, hosting and support
  $ 113     $ 96  
Cost of professional services
    114       133  
Sales and marketing
    751       622  
Research and development
    257       262  
General and administrative
    520       403  
 
           
Total stock-based compensation
  $ 1,755     $ 1,516  
 
           

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RightNow Technologies, Inc.
Consolidated Statements of Cash Flow

(In thousands) (Unaudited)
                 
    Three Months Ended  
    March 31,  
    2010     2009  
Operating activities:
               
Net income
  $ 585     $ 1,263  
Non-cash adjustments:
               
Depreciation and amortization
    2,065       1,887  
Stock-based compensation
    1,755       1,516  
Provision for losses on accounts receivable
    50       57  
Changes in operating accounts:
               
Receivables
    2,449       13,569  
Prepaid and other current assets
    (1,499 )     (126 )
Deferred commissions
    445       525  
Accounts payable
    2,045       (1,107 )
Commissions and bonuses payable
    (1,243 )     (2,553 )
Other accrued liabilities
    1,511       (716 )
Deferred revenue
    (4,614 )     (9,429 )
Other
    (39 )      
 
           
Cash provided by operating activities
    3,510       4,886  
 
               
Investing activities:
               
Net change in investments
    (342 )     (2,251 )
Acquisition of property and equipment
    (1,640 )     (684 )
Intangible asset additions
    (1,034 )      
 
           
Cash used in investing activities
    (3,016 )     (2,935 )
 
               
Financing activities:
               
Proceeds from issuance of common stock
    1,159       78  
Common stock repurchase
          (1,798 )
Excess tax benefit of stock options exercised
    327       89  
Payments on current and long-term debt, respectively
    (12 )     (12 )
 
           
Cash provided (used) by financing activities
    1,474       (1,643 )
 
               
Effect of foreign exchange rates on cash and cash equivalents
    (400 )     (251 )
 
           
 
               
Increase in cash and cash equivalents
    1,568       57  
 
               
Cash and cash equivalents at beginning of period
    41,546       51,405  
 
           
Cash and cash equivalents at end of period
  $ 43,114     $ 51,462  
 
           

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RightNow Technologies, Inc.
Reconciliation of Non-GAAP Measurements

(Amounts in thousands, except per share amounts) (Unaudited)
Earnings Per Share Reconciliation
                 
    Three Months Ended  
    March 31,  
    2010     2009  
Net income as reported
  $ 585     $ 1,263  
Add stock-based compensation (“SBC”)
    1,755       1,516  
 
           
Net income before SBC
  $ 2,340     $ 2,779  
 
               
Net income per share, as reported (basic and diluted)
  $ 0.02     $ 0.04  
Net income per share, before SBC (basic and diluted)
  $ 0.07     $ 0.09  
 
               
Shares outstanding (basic), as reported
    31,929       31,784  
Shares outstanding (diluted), as reported
    33,431       32,249  
Forward-Looking Guidance Reconciliation
                                         
    GAAP Guidance             Non-GAAP Guidance  
    From     To     Adjustment     From     To  
Second quarter ending June 30, 2010
                                       
Net income
  $ 525     $ 1,200     $ 2,000 [a]     $ 2,525     $ 3,200  
Net income per share
  $ 0.02     $ 0.04             $ 0.07     $ 0.09  
Shares (diluted)
    34,000       34,000               34,000       34,000  
 
                                       
Year ending December 31, 2010
                                       
Net income
  $ 5,050     $ 6,800     $ 8,400 [a]     $ 13,450     $ 15,200  
Net income per share
  $ 0.15     $ 0.20             $ 0.40     $ 0.45  
Shares (diluted)
    34,000       34,000               34,000       34,000  
 
[a]   Estimated stock-based compensation expense to be recorded for the periods indicated in accordance with FASB Accounting Standards Codification, Topic 718, Compensation-Stock Compensation, which is effective for periods beginning January 1, 2006.
About Non-GAAP Financial Measures
Non-GAAP net income and diluted net income per share are supplemental measures of our performance that are not required by, or presented in accordance with GAAP. These non-GAAP financial measures are not intended to be used in isolation and should not be considered a substitute for net income and net income per share or any other performance measure determined in accordance with GAAP. We present non-GAAP net income and net income per share because we consider each to be an important supplemental measure of our performance.
Management uses these non-GAAP financial measures to make operational decisions, evaluate the Company’s performance, prepare forecasts and determine compensation. Further, management believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance when planning, forecasting and analyzing future periods. Our stock-based compensation expenses are expected to vary depending on the number of new grants issued, changes in our stock price, stock market volatility, expected option lives and risk-free rates of return, all of which are difficult to estimate. In calculating non-GAAP net income and net income per share, management excludes stock-based compensation expenses to facilitate its review of the comparability of the Company’s operating performance on a period-to-period basis because such expenses are not, in management’s view,

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related to the Company’s ongoing operating performance. Management uses this view of its operating performance for purposes of comparison with its business plan and individual operating budgets and resource allocation.
Management further believes that these non-GAAP financial measures are useful to investors in providing greater transparency to the information used by management in its operational decision making. We believe that the use of non-GAAP net income and net income per share also facilitate a comparison of RightNow’s underlying operating performance with that of other companies in our industry, which use similar non-GAAP financial measures to supplement their GAAP results.
Calculating non-GAAP net income and net income per share have limitations as an analytical tool, and readers should not consider these measures in isolation or as substitutes for GAAP net income and GAAP net income per share. In the future, we expect to incur additional stock-based compensation expenses and the exclusion of these expenses in the presentation of our non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Investors and potential investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool, which include:
    Other companies inside and outside of our industry may calculate non-GAAP net income and net income per share differently than we do, limiting their usefulness as a comparative tool; and
 
    The Company’s income tax expense or benefit will be ultimately based on its GAAP taxable income and actual tax rates in effect, which may differ significantly from the effective tax rate used in our non-GAAP financial measures.
In addition, the adjustments to our GAAP financial measures reflect the exclusion of stock-based compensation expenses that are recurring and will be reflected in the Company’s financial results for the foreseeable future. The Company compensates for these limitations by providing specific information regarding the GAAP amount excluded from the non-GAAP financial measures. The Company further compensates for the limitations of our use of non-GAAP financial measures by presenting comparable GAAP measures more prominently. The Company evaluates the non-GAAP financial measures together with the most directly comparable GAAP financial measures.
Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within this press release with our GAAP net income and net income per share. For more information, see the consolidated operating statements and reconciliation of non-GAAP measurements contained in this press release.
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