EX-99.1 2 a05-18826_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

40 Enterprise Boulevard

PO Box 9300

Bozeman, MT 59718-9300

406.522.4200 P

406.522.4227 F

 

FOR IMMEDIATE RELEASE

 

For Further Information, Contact:

 

Investor Relations:

Corporate Communications:

Todd Friedman or Stacie Bosinoff

Jason Treu

The Blueshirt Group

RightNow Technologies

415.217.5869/5868

972.232.3977 Desk

todd@blueshirtgroup.com

214.893.3096 Cell

Stacie@blueshirtgroup.com

jtreu@rightnow.com

 

RIGHTNOW TECHNOLOGIES REPORTS

THIRD QUARTER 2005 FINANCIAL RESULTS

 

BOZEMAN, MONT. (October 24, 2005)¾RightNow® Technologies, Inc. (NASDAQ: RNOW), a leading provider of on demand CRM software solutions, today announced results for the third quarter ended September 30, 2005.  RightNow reported consolidated revenue of $23.2 million for the third quarter of 2005, an increase of 41 percent from the third quarter of 2004. This represents the 31st consecutive quarter of revenue growth for RightNow.

 

Net income in the third quarter of 2005 was $2.3 million, or $0.07 per diluted share, compared to net income of $1.4 million, or $0.05 per diluted share, in the third quarter of 2004.

 

For the nine months ended September 30, 2005, RightNow reported revenue of $62.6 million and diluted earnings per share of $0.14, as compared to year-ago revenue of $44 million and diluted earnings per share of $0.08.

 


 

At September 30, 2005 deferred revenue totaled $63.8 million, or 43 percent more than one year earlier.  Cash from operations for the nine months ended September 30, 2005 was $11.1 million as compared to $3.4 million for the similar period of 2004.

 

“The CRM market is undergoing revolutionary change, as companies both large and small are realizing the benefits that on demand solutions deliver,” Greg Gianforte, founder and chief executive officer of RightNow, said.  “Not only is on demand a disruptive force in all IT departments, but the product confusion created by the Oracle/PeopleSoft/JD Edwards/Retek/Siebel combination has created a leadership and technology vacuum among large enterprises looking to adopt CRM solutions that RightNow is uniquely capable of filling.

 

“RightNow’s record revenue in the third quarter was driven by the strength and scalability of our product suite, which is gaining momentum across a diverse universe of industries and companies.  We are especially encouraged by our success establishing beachheads in large businesses, and then earning the right to expand those deployments through our award-winning technology and unmatched focus on customer satisfaction.  We believe that our growth thus far in 2005 is a result of our unique focus and willingness to be accountable for our customers’ success, and we are optimistic about our growth opportunities for the rest of 2005 and beyond.”

 

RightNow added more than 90 new customers in the third quarter of 2005.  New, renewed and expanded customer relationships during the quarter included Aflac, Department of Homeland Security, Enterprise Rent-A-Car, Nationwide Building Society, Sage UK Ltd, Telstra Mobiles, and the University of New Mexico.

 

“Our business model continues to draw strength from our industry-leading customer retention rate of more than 90%, which drives higher profitability and allows us to reach a wider potential audience through strong customer referrals.  We ended the quarter with more than 1,400 active customers, notable especially for the growing number of large enterprise customers in the mix. Our year-to-date operating cash flow

 


 

has also increased by more than 220% over the prior year,” Susan Carstensen, chief financial officer of RightNow, said.

 

Guidance

 

•                  For the fourth quarter of 2005, assuming a target mix of 50% to 60% recurring revenue, 20% to 25% perpetual revenue, and 20% to 25% professional services revenue, total revenue is expected to be in the range of $23 to $24 million.  EPS is expected to be in the range of $0.02 to $0.04 cents.

 

•                  For the full year 2005, revenue is expected to be in the range of $85.5 to $86.5 million, and EPS in the range of $0.16 to $0.18 cents.

 

•                  The Company will provide 2006 guidance in its quarterly conference call.

 

Quarterly Conference Call

 

RightNow Technologies will discuss its quarterly results via teleconference at 4:30 p.m. (ET)/2:30 p.m. (MT) today, October 24, 2005. To access the call, please dial (800) 810-0924 at least five minutes prior to the start time.  An audio webcast of the call will also be available at www.shareholder.com/rnow/medialist.cfm. A replay of today’s conference call will be available by calling (888) 203-1112, or on the company Web site at www.rightnow.com, under the Investor Webcasts menu, by 5:30 p.m. (MT) on October 24, 2005.  The replay will be available through Monday, November 7, 2005.

 

Historical Financial and Supplementary Information

 

Current quarter consolidated financial statements are included with this press release.  To view the company’s historical quarterly consolidated financial statements and supplementary data, please visit www.rightnow.com.

 


 

About RightNow Technologies, Inc.

RightNow (NASDAQ: RNOW) provides organizations with industry-leading on demand CRM solutions to build customer-focused businesses. RightNow’s acclaimed technology, comprehensive services and commitment to customer success deliver high returns on investment for its customers.  More than 1,400 organizations worldwide use RightNow solutions including British Airways, British Telecom, Cisco Systems, Continental Tire North America, John Deere, Nikon and the Social Security Administration.  Founded in 1997, RightNow is headquartered in Bozeman, Montana, with additional offices in North America, Europe and Asia. For further information, please visit www.rightnow.com.

 

RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ is a registered trademark of the NASDAQ Stock Market.

 

-30-

 

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, risks associated with our business model; our ability to develop or acquire, and gain market acceptance for new products, including our new sales and marketing and voice automation products, in a cost-effective and timely manner; the gain or loss of key customers; competitive pressures; our ability to expand operations; fluctuations in our operating results due to changes in our mix of revenues, and our rate of growth; 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 the intellectual property rights of third parties; and our ability to expand, retain and motivate our employees and manage our growth. 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 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

 


 

RightNow Technologies, Inc.

Consolidated Balance Sheets

(In thousands) (Unaudited)

 

 

 

Sep 30,
2005

 

Dec 31,
2004

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

39,594

 

$

18,944

 

Short-term investments

 

20,883

 

31,188

 

Accounts receivable

 

21,968

 

16,939

 

Term receivables, current

 

14,105

 

10,090

 

Allowance for doubtful accounts

 

(1,960

)

(1,581

)

Net receivables

 

34,113

 

25,448

 

Prepaid expenses

 

1,771

 

1,255

 

Total current assets

 

96,361

 

76,835

 

 

 

 

 

 

 

Property and equipment, net

 

5,597

 

4,393

 

Term receivables, non-current

 

10,801

 

5,756

 

Intangible assets, net

 

1,631

 

1,113

 

Other

 

261

 

212

 

 

 

 

 

 

 

Total Assets

 

$

114,651

 

$

88,309

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Accounts payable

 

$

2,018

 

$

1,720

 

Commissions and bonuses payable

 

3,344

 

2,648

 

Other accrued liabilities

 

5,617

 

3,715

 

Current portion of long-term debt

 

29

 

—

 

Current portion of deferred revenue

 

45,694

 

36,020

 

Total current liabilities

 

56,702

 

44,103

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

125

 

—

 

Deferred revenue, net of current portion

 

18,058

 

13,105

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

31

 

29

 

Warrants

 

107

 

291

 

Additional paid-in capital

 

76,339

 

72,367

 

Accumulated other comprehensive income (loss)

 

(433

)

(605

)

Accumulated deficit

 

(36,278

)

(40,981

)

Total stockholders’ equity

 

39,766

 

31,101

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

114,651

 

$

88,309

 

 


 

RightNow Technologies, Inc.

Consolidated Operating Statements

(In thousands, except per share amounts) (Unaudited)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

Revenue:

 

 

 

 

 

 

 

 

 

Software, hosting and support

 

$

18,005

 

$

12,976

 

$

48,743

 

$

35,405

 

Professional services

 

5,149

 

3,450

 

13,831

 

8,640

 

Total revenue

 

23,154

 

16,426

 

62,574

 

44,045

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Software, hosting and support

 

2,253

 

1,729

 

6,593

 

4,944

 

Professional services

 

3,026

 

1,979

 

8,601

 

4,862

 

Total cost of revenue

 

5,279

 

3,708

 

15,194

 

9,806

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

17,875

 

12,718

 

47,380

 

34,239

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing

 

11,248

 

8,055

 

31,262

 

22,940

 

Research and development

 

2,937

 

2,028

 

7,524

 

5,640

 

General and administrative

 

1,627

 

1,164

 

4,623

 

3,333

 

Total operating expenses

 

15,812

 

11,247

 

43,409

 

31,913

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

2,063

 

1,471

 

3,971

 

2,326

 

 

 

 

 

 

 

 

 

 

 

Interest and other income (expense), net

 

440

 

30

 

1,063

 

(80

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

2,503

 

1,501

 

5,034

 

2,246

 

Provision for income taxes

 

(160

)

(61

)

(331

)

(92

)

Net income

 

$

2,343

 

$

1,440

 

$

4,703

 

$

2,154

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

$

0.06

 

$

0.16

 

$

0.12

 

Diluted

 

$

0.07

 

$

0.05

 

$

0.14

 

$

0.08

 

 

 

 

 

 

 

 

 

 

 

Shares used in the computation:

 

 

 

 

 

 

 

 

 

Basic

 

30,802

 

23,734

 

30,287

 

17,963

 

Diluted

 

33,667

 

30,671

 

33,541

 

27,519

 

 


 

RightNow Technologies, Inc.

Consolidated Statements of Cash Flows

(In thousands) (Unaudited)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2005

 

2004

 

2005

 

2004

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

2,343

 

$

1,440

 

$

4,703

 

$

2,154

 

Non-cash adjustments:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

892

 

746

 

2,462

 

2,081

 

Provision for losses on accounts receivable

 

216

 

349

 

260

 

551

 

Deferred income taxes

 

94

 

—

 

218

 

—

 

Changes in operating accounts:

 

 

 

 

 

 

 

 

 

Receivables

 

(6,072

)

(5,366

)

(14,340

)

(11,094

)

Prepaid expenses

 

(609

)

(344

)

(586

)

(1,141

)

Accounts payable

 

(373

)

217

 

405

 

367

 

Commissions and bonuses payable

 

807

 

102

 

732

 

598

 

Other accrued liabilities

 

1,444

 

315

 

2,023

 

1,183

 

Deferred revenue

 

6,523

 

3,694

 

15,283

 

9,217

 

Other

 

(17

)

(90

)

(109

)

(498

)

Cash provided by operating activities

 

5,248

 

1,063

 

11,051

 

3,418

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

Net change in short-term investments

 

3,298

 

(25,943

)

10,303

 

(25,943

)

Acquisition of property and equipment

 

(1,124

)

(1,004

)

(3,272

)

(2,623

)

Acquisition of intangible assets

 

(23

)

(95

)

(1,035

)

(501

)

Other

 

8

 

—

 

8

 

1

 

Cash provided (used) by investing activities

 

2,159

 

(27,042

)

6,004

 

(29,066

)

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from long-term debt

 

162

 

—

 

162

 

1,675

 

Proceeds from issuance of common stock:

 

 

 

 

 

 

 

 

 

Initial public offering, less offering costs

 

—

 

41,462

 

—

 

40,687

 

Employee stock options and stock purchase plan

 

1,767

 

105

 

3,572

 

306

 

Repurchase of common stock

 

—

 

—

 

—

 

(2

)

Payments on long-term debt

 

(8

)

(2,713

)

(8

)

(3,573

)

Cash provided by financing activities

 

1,921

 

38,854

 

3,726

 

39,093

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rates on cash and cash equivalents

 

(26

)

19

 

(131

)

1

 

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

9,302

 

12,894

 

20,650

 

13,446

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

30,292

 

8,912

 

18,944

 

8,360

 

Cash and cash equivalents at end of period

 

$

39,594

 

$

21,806

 

$

39,594

 

$

21,806