Exhibit 99.1
For Further Information, Contact:
Investor Relations:
|
Corporate Communications: | |||
Todd Friedman or Stacie Bosinoff
|
Jaia Zimmerman | |||
The Blueshirt Group
|
RightNow Technologies | |||
415.217.7722
|
650.653.4441 Office | |||
todd@blueshirtgroup.com
|
650.464.8462 Cell | |||
stacie@blueshirtgroup.com
|
jzimmerman@rightnow.com |
RightNow Announces First Quarter 2011 Financial Results
Company reports recurring revenue growth of 27%.
BOZEMAN, Mont. (April 27, 2011) — RightNow® (NASDAQ: RNOW) today announced results for the first
quarter ended March 31, 2011.
First quarter 2011 financial highlights included:
| • | Total revenue was $52.3 million, an increase of 24% over Q1 2010 | ||
| • | Recurring revenue was $41.9 million, an increase of 27% over Q1 2010 | ||
| • | GAAP diluted earnings per share was $0.04 and Non-GAAP diluted earnings per share was $0.10. A reconciliation of Non-GAAP measures can be found at the back of this release. | ||
| • | Non-GAAP operating margin was 10%, an increase of 400 basis points over Q1 2010 | ||
| • | Current software backlog was $142 million, an increase of 38% over Q1 2010 |
Total revenue was $52.3 million in the first quarter of 2011, compared to $42.1 million in the
first quarter of 2010, reflecting a 24% increase. Recurring revenue in the first quarter of 2011
increased 27% to $41.9 million from $33.0 million in the first quarter of 2010.
Net income in the first quarter of 2011 was $1.4 million or $0.04 per diluted share, compared to
net income of $585,000 or $0.02 per diluted share, in the first quarter of 2010. During the first
quarter of 2011, the Company recorded a $1.8 million foreign currency gain associated with the Q-go
acquisition, which was excluded from non-GAAP net income and non-GAAP net income per share.
Non-GAAP net income in the first quarter of 2011 was $3.7 million, or $0.10 per diluted share,
compared to non-GAAP net income of $2.3 million or $0.07 per diluted share, in the first quarter of
2010.
New, renewed and expanded customer relationships during the first quarter of 2011 included
Activision, Arbor Networks, Cabela’s, CARFAX, The Container Store, CyberDefender, DeVry, Electronic
Arts, Ellie Mae Inc., Equifax, HauteLook, KLM/AirFrance, and Logitech.
“We carried strong momentum from 2010 into the first quarter, executing against our strategy by
expanding our presence with global organizations and growing our product footprint with the
acquisition of
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Q-go,” said Greg Gianforte, CEO and founder. “We are well-positioned to continue our success, as customers
recognize our unique ability to help them manage their customer experiences and demonstrate
measurable returns on their investments.”
Jeff Davison, CFO, said, “We are pleased to report 27% growth in recurring revenue and a
significant increase in operating income over the first quarter of 2010. We are leveraging our
solid execution and strong balance sheet to increase investments in sales and marketing to continue
to drive further profitable growth.”
Guidance
| • | For the full year 2011, the Company expects total revenue to be approximately $226 million, with recurring revenue growth expected to be approximately 24%. Net income per diluted share for the full year 2011 is expected to be approximately $0.06. Non-GAAP net income per diluted share, which excludes stock-based compensation, acquisition costs and amortization of acquired intangible assets, amortization of debt issuance costs, and a foreign currency gain related to the Q-go acquisition, is expected to be approximately $0.55 for the full year 2011. The Company expects approximately 36 million diluted shares outstanding for the full year 2011. | ||
| • | For the second quarter of 2011, total revenue is expected to be approximately $54 million. Second quarter net loss per diluted share is expected to be approximately $(0.02). Second quarter non-GAAP net income per diluted share, which excludes stock-based compensation, amortization of acquired intangible assets, and amortization of debt issuance costs, is expected to be approximately $0.12. The Company expects approximately 36 million diluted shares outstanding for the second quarter of 2011. |
Please refer to our “Forward-Looking Guidance Reconciliation” table for complete details on
adjustments between GAAP and non-GAAP guidance.
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). 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 27, 2011
and 9:59 p.m. MT May 11, 2011 by calling (800) 642-1687 or (706) 645-9291, with Conference ID
55927048. The replay will also be available during the same time period 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, eight
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 ten 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:
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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, business
and profit growth 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, our business model;
our success in transitioning to a new President and Chief Operating Officer; 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; general economic conditions; fluctuations in foreign currency
exchange; 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;
any unanticipated ambiguities in fair value accounting standards; the amount and timing of any
stock repurchases under our stock repurchase program; 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
risks associated with our recent acquisition of Q-go, including our ability to retain and motivate
Q-go’s employees; our ability to integrate and market Q-go’s solutions to new customers; our
ability to retain Q-go’s existing customers; the speed, quality and cost of our efforts to
integrate Q-go’s solutions with our solution set; the security and reliability of Q-go’s
service; and the risks associated with forecasting the impact of Q-go on combined
financial results; the impact of potential future acquisitions, if any; and risks associated with
our offering of convertible senior notes including the potential impact on earnings per share
calculations; 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
on 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)
Consolidated Balance Sheets
(In thousands) (Unaudited)
| March 31, | Dec. 31, | |||||||
| 2011 | 2010 | |||||||
Assets |
||||||||
Cash and cash equivalents |
$ | 131,998 | $ | 181,948 | ||||
Short-term investments |
117,659 | 94,759 | ||||||
Accounts receivable |
34,558 | 39,338 | ||||||
Allowance for doubtful accounts |
(1,800 | ) | (2,021 | ) | ||||
Net receivables |
32,758 | 37,317 | ||||||
Deferred commissions |
5,461 | 5,418 | ||||||
Prepaid and other current assets |
5,406 | 4,662 | ||||||
Deferred tax assets |
3,806 | 3,801 | ||||||
Total current assets |
297,088 | 327,905 | ||||||
Property and equipment, net |
12,644 | 10,702 | ||||||
Intangible assets, net |
19,115 | 6,149 | ||||||
Goodwill |
31,953 | 7,975 | ||||||
Deferred commissions, non-current |
4,649 | 4,747 | ||||||
Other |
4,669 | 4,921 | ||||||
Deferred tax assets, non-current |
16,713 | 16,480 | ||||||
Total Assets |
$ | 386,831 | $ | 378,879 | ||||
Liabilities and Stockholders’ Equity |
||||||||
Accounts payable |
$ | 12,114 | $ | 10,463 | ||||
Commissions and bonuses payable |
4,678 | 7,137 | ||||||
Other accrued liabilities |
15,193 | 13,363 | ||||||
Current portion of deferred revenue |
86,244 | 90,350 | ||||||
Total current liabilities |
118,229 | 121,313 | ||||||
Deferred revenue, net of current portion |
1,939 | 2,969 | ||||||
Other long-term liabilities |
453 | — | ||||||
2.50% Convertible senior notes due 2030 |
175,000 | 175,000 | ||||||
Total liabilities |
295,621 | 299,282 | ||||||
Stockholders’ equity: |
||||||||
Common stock |
36 | 35 | ||||||
Additional paid-in capital |
145,359 | 136,717 | ||||||
Treasury stock, at cost |
(29,149 | ) | (29,149 | ) | ||||
Accumulated other comprehensive income |
3,533 | 1,953 | ||||||
Accumulated deficit |
(28,569 | ) | (29,959 | ) | ||||
Total stockholders’ equity |
91,210 | 79,597 | ||||||
Total Liabilities and Stockholders’ Equity |
$ | 386,831 | $ | 378,879 | ||||
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RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
Revenue: |
||||||||
Recurring revenue |
$ | 41,913 | $ | 33,025 | ||||
Professional services |
10,416 | 9,077 | ||||||
Total revenue |
52,329 | 42,102 | ||||||
Cost of revenue: |
||||||||
Recurring revenue |
7,326 | 5,879 | ||||||
Professional services |
9,410 | 7,332 | ||||||
Total cost of revenue |
16,736 | 13,211 | ||||||
Gross profit |
35,593 | 28,891 | ||||||
Operating expenses: |
||||||||
Sales and marketing |
22,550 | 18,724 | ||||||
Research and development |
5,596 | 5,132 | ||||||
General and administrative |
6,171 | 4,299 | ||||||
Total operating expenses |
34,317 | 28,155 | ||||||
Income from operations |
1,276 | 736 | ||||||
Interest and other income (expense), net |
768 | 183 | ||||||
Income before income taxes |
2,044 | 919 | ||||||
Provision for income taxes |
(654 | ) | (334 | ) | ||||
Net income |
$ | 1,390 | $ | 585 | ||||
Net income per share: |
||||||||
Basic |
$ | 0.04 | $ | 0.02 | ||||
Diluted |
$ | 0.04 | $ | 0.02 | ||||
Shares used in the computation: |
||||||||
Basic |
32,585 | 31,929 | ||||||
Diluted |
35,482 | 33,431 | ||||||
Supplemental information of stock-based
compensation expense included in: |
||||||||
Cost of recurring revenue |
$ | 204 | $ | 113 | ||||
Cost of professional services |
298 | 114 | ||||||
Sales and marketing |
977 | 751 | ||||||
Research and development |
307 | 257 | ||||||
General and administrative |
953 | 520 | ||||||
Total stock-based compensation |
$ | 2,739 | $ | 1,755 | ||||
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RightNow Technologies, Inc.
Consolidated Statements of Cash Flow
(In thousands) (Unaudited)
Consolidated Statements of Cash Flow
(In thousands) (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
Operating activities: |
||||||||
Net income |
$ | 1,390 | $ | 585 | ||||
Non-cash adjustments: |
||||||||
Depreciation and amortization |
2,802 | 2,065 | ||||||
Stock-based compensation |
2,739 | 1,755 | ||||||
Provision for losses on accounts receivable |
20 | 50 | ||||||
Foreign currency gain on acquisition |
(1,819 | ) | — | |||||
Changes in operating accounts, net of business acquisitions: |
||||||||
Receivables |
8,029 | 2,449 | ||||||
Prepaid and other current assets |
(342 | ) | (1,499 | ) | ||||
Deferred commissions |
140 | 445 | ||||||
Accounts payable |
885 | 2,045 | ||||||
Commissions and bonuses payable |
(2,512 | ) | (1,243 | ) | ||||
Other accrued liabilities |
609 | 1,511 | ||||||
Deferred revenue |
(8,428 | ) | (4,614 | ) | ||||
Other |
(16 | ) | (39 | ) | ||||
Cash provided by operating activities |
3,497 | 3,510 | ||||||
Investing activities: |
||||||||
Net change in investments |
(22,886 | ) | (342 | ) | ||||
Acquisition of property and equipment |
(3,117 | ) | (1,640 | ) | ||||
Intangible asset additions |
(1,491 | ) | (1,034 | ) | ||||
Business acquisition, net of cash acquired |
(33,837 | ) | — | |||||
Cash used in investing activities |
(61,331 | ) | (3,016 | ) | ||||
Financing activities: |
||||||||
Proceeds from issuance of common stock |
5,311 | 1,159 | ||||||
Excess tax benefit of stock options exercised |
591 | 327 | ||||||
Payments on current and long-term debt |
(240 | ) | (12 | ) | ||||
Cash provided by financing activities |
5,662 | 1,474 | ||||||
Effect of foreign exchange rates on cash and cash equivalents |
2,222 | (400 | ) | |||||
Increase (decrease) in cash and cash equivalents |
(49,950 | ) | 1,568 | |||||
Cash and cash equivalents at beginning of period |
181,948 | 41,546 | ||||||
Cash and cash equivalents at end of period |
$ | 131,998 | $ | 43,114 | ||||
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RightNow Technologies, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measurements
(Amounts in thousands, except per share amounts) (Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
Income from operations as reported |
$ | 1,276 | $ | 736 | ||||
Income from operations as a % of total revenue (operating margin) |
2 | % | 2 | % | ||||
Add stock-based compensation (“SBC”) |
2,739 | 1,755 | ||||||
Add Q-go acquisition costs |
415 | — | ||||||
Add amortization expense of acquired intangible assets |
731 | — | ||||||
Non-GAAP income from operations |
$ | 5,161 | $ | 2,491 | ||||
Non-GAAP income from operations as a % of total revenue
(Non-GAAP operating margin) |
10 | % | 6 | % | ||||
Net income as reported |
$ | 1,390 | $ | 585 | ||||
Add stock-based compensation (“SBC”) |
2,739 | 1,755 | ||||||
Add Q-go acquisition costs |
415 | — | ||||||
Add amortization expense of acquired intangible assets |
731 | — | ||||||
Add amortization of debt issuance expense |
254 | — | ||||||
Less foreign currency gain |
(1,819 | ) | — | |||||
Non-GAAP Net income |
$ | 3,710 | $ | 2,340 | ||||
Net income per share, as reported (basic) |
$ | 0.04 | $ | 0.02 | ||||
Net income per share, as reported (diluted) |
$ | 0.04 | $ | 0.02 | ||||
Non-GAAP Net income per share (basic) |
$ | 0.11 | $ | 0.07 | ||||
Non-GAAP Net income per share (diluted) |
$ | 0.10 | $ | 0.07 | ||||
Shares outstanding (basic), as reported |
32,585 | 31,929 | ||||||
Shares outstanding (diluted), as reported |
35,482 | 33,431 | ||||||
Forward-Looking Guidance Reconciliation
| Non- | ||||||||||||||||||||||||||||
| GAAP | Adjustment | GAAP | ||||||||||||||||||||||||||
Second quarter ending June 30, 2011 |
||||||||||||||||||||||||||||
Net income (approximately) |
$ | (650) | [a] | 3,600 | [b] | — | [c] | 950 | [d] | 250 | $ | 4,150 | ||||||||||||||||
Net income per share (approximately) |
$ | (0.02 | ) | $ | 0.12 | |||||||||||||||||||||||
Shares (diluted) |
36,000 | 36,000 | ||||||||||||||||||||||||||
Year ending December 31, 2011 |
||||||||||||||||||||||||||||
Net income (approximately) |
$ | 2,000 | [a] | 14,500 | [b] | 400 | [c] | 3,600 | [d] | 1,000 | [e] | (1,800 | ) | $ | 19,700 | |||||||||||||
Net income per share (approximately) |
$ | 0.06 | $ | 0.55 | ||||||||||||||||||||||||
Shares (diluted) |
36,000 | 36,000 | ||||||||||||||||||||||||||
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| [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. | |
| [b] | Estimated acquisition costs associated with Q-go. | |
| [c] | Estimated amortization expense of acquired intangible assets. | |
| [d] | Estimated debt issuance amortization expenses. | |
| [e] | Estimated foreign currency gain associated with acquisition of Q-go. |
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.
During the first quarter of 2011, we recorded a $1.8 million foreign currency gain related to our
acquisition of Q-go.
In calculating non-GAAP income from operations, net income and net income per share, management
excluded stock-based compensation expenses, acquisition costs and amortization associated with
acquired intangible assets, debt amortization expenses, and the foreign gain associated with our
acquisition of Q-go (debt amortization expense was not included and foreign currency was not
excluded from non-GAAP income from operations because these amounts were not recorded as operating
income), to facilitate its review of the comparability of the Company’s operating performance on a
period-to-period basis because such expenses and gain are not, in management’s view, 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 financial measures have limitations as an analytical tool, and readers should
not consider these measures in isolation or as substitutes for GAAP operating income, net income
and 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.
In the future, we also expect to incur additional acquisition costs and amortization associated
with acquired intangible assets and we anticipate excluding these expenses in the future
presentation of our non-GAAP financial measures. These acquired intangible assets will be
considered for impairment, but will be considered a static expense,
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one that is not typically
affected by operations during any particular period. Lastly, we anticipate excluding amortization
of debt issuance costs from our future presentation of our non-GAAP financial measures as these
costs are non-cash expenses that are not considered part of ongoing operating results when
assessing the performance of our business, and RightNow believes that doing so facilitates
comparisons to its historical operating results and to the results of other companies in our
industry.
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 future GAAP financial measures reflecting the exclusion of
stock-based compensation expenses, amortization of acquired intangible assets, and amortization of
debt issuance costs 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 its use of non-GAAP financial measures by presenting
comparable GAAP with equal or greater prominence. 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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