EX-99.1 2 a06-22646_1ex99d1.htm EX-99

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

 

Katie O’Connell

The Blueshirt Group

 

RightNow Technologies

415.217.7722

 

925.674.1487 Desk

todd@blueshirtgroup.com

 

510.304.3707 Cell

stacie@blueshirtgroup.com

 

koconnell@rightnow.com

 

RIGHTNOW TECHNOLOGIES REPORTS

THIRD QUARTER 2006 FINANCIAL RESULTS

BOZEMAN, MONT. (October 25, 2006)¾RightNow® Technologies, Inc. (NASDAQ: RNOW), today announced results for the third quarter ended September 30, 2006.  RightNow reported its 35th consecutive quarter of revenue growth, with third quarter consolidated revenue of $30.1 million, an increase of 30 percent from the third quarter of 2005.

The net loss in the third quarter of 2006 was $(0.5) million or $(0.02) per diluted share, compared to net income of $2.3 million, or $0.07 per diluted share, in the third quarter of 2005.   Third quarter 2006 non-GAAP net income per diluted share was $0.02, which excludes stock-based compensation charges of $1.1 million.

1




Revenue for the nine month period ended September 30, 2006 was $81.6 million, or 30 percent more than the comparable 2005 period.  The net loss for the nine months ended September 30, 2006 was $(2.7) million, or $(0.08) per diluted share, as compared to net income of $4.7 million, or $0.14 per diluted share, for the nine months ended September 30, 2005.  Results for the nine months ended September 30, 2006 include $(0.11) per diluted share of stock-based compensation charges.

RightNow added more than 80 new customers and handled more than 260 million customer interactions during the third quarter.  New, renewed and expanded customer relationships during the third quarter of 2006 included the Assessments and Qualifications Alliance, eHarmony, EPA Office of Environmental Education, Group Health Cooperative, Minnesota State Colleges and Universities, MTD Products, Northrup Grumman, T-Mobile Austria, and YP.com.

“The third quarter was an outstanding quarter for RightNow across many accounts,” stated Greg Gianforte, founder and CEO.  “Solid execution in our public sector business and with large enterprises drove record bookings and our 35th consecutive quarter of revenue growth.  During the quarter, we held our largest ever users’ conference where we launched RightNow 8 and received overwhelmingly positive customer reviews.  Our track record of success and high customer satisfaction demonstrates that we continue to set the standard for mission critical On Demand CRM.”

Susan Carstensen, CFO, added, “Record bookings of $45.5 million in the third quarter bring our year-to-date bookings to $116 million, or 51% more than the similar period last year.  Our deferred revenue balance topped $100 million for the first time, and our 2006 year-to-date cash from operations of $22.7 million is more than double that of the comparable 2005 period.”

2




 

Guidance

 

·                  For the fourth quarter of 2006, revenue is anticipated to be in the range of $31 to $31.5 million.  The fourth quarter net income (loss) per diluted share is expected to be in the range of $(0.02) to $0.00 cents.  Excluding the effect of stock-based compensation, fourth quarter non-GAAP net income per diluted share is expected to be in the range of $0.02 to $0.04 cents.  These forecasts result in full year 2006 revenue guidance in the range of approximately $113 million, net (loss) per share in the range of $(0.10) to $(0.08) and non-GAAP net income per diluted share in the range of $0.05 to $0.07.

·                  For the full year 2007, the Company expects revenue in the range of $143 to $148 million.  The Company expects recurring revenue to grow approximately 40 percent.  Perpetual license revenue in absolute dollars is expected to decrease and is expected to make up approximately 14 to 17 percent of total revenue.  Net income per share is expected to be in the range of $0.11 to $0.16 cents.  Excluding the effect of stock-based compensation, non-GAAP net income per diluted share for the year is expected to be in the range of $0.30 to $0.35 cents. The Company intends to further discuss its guidance and anticipated business model and related changes in today’s 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 25, 2006. To access the call, please dial (800) 289-0572, 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 on the company Web site at www.shareholder.com/rnow/, under the Investor Webcasts menu, from 5:30 p.m. (MT) on October 25, 2006 until 10:00 p.m. (MT) November 8, 2006.   You may also access a replay of today’s call by dialing (719) 457-0820 or (888) 203-1112 with the replay passcode 7149272.

3




 

About RightNow Technologies, Inc.

RightNow (NASDAQ: RNOW) is leading the industry beyond CRM to high-impact Customer Experience Management solutions.  More than 1,700 companies around the world turn to RightNow to drive a superior customer experience across the frontlines of their business.  As a win on service strategy becomes a business imperative, experience management solutions are increasingly recognized as a core driver of business success. 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 Global 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 in a cost-effective and timely manner; the timing and success of our RightNow 8 product release; the gain or loss of key customers; our ability to successfully retain customers of Salesnet, Inc. and to integrate Salesnet’s products and processes following our recent acquisition of that company; competitive pressures; our ability to expand operations; fluctuations in our earnings as a result of the impact of stock-based compensation expense; 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; 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 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

4




 

RightNow Technologies, Inc.

Consolidated Balance Sheets

(In thousands) (Unaudited)

 

 

Sep 30,

 

Dec 31,

 

 

 

2006

 

2005

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

38,114

 

$

40,874

 

Short-term investments

 

36,906

 

23,314

 

 

 

 

 

 

 

Accounts receivable

 

25,347

 

25,462

 

Term receivables, current

 

22,587

 

15,376

 

Allowance for doubtful accounts

 

(3,225

)

(2,209

)

Net receivables

 

44,709

 

38,629

 

Prepaid & other current assets

 

2,874

 

1,993

 

Total current assets

 

122,603

 

104,810

 

 

 

 

 

 

 

Property and equipment, net

 

8,470

 

6,451

 

Term receivables, non-current

 

22,193

 

10,697

 

Intangible assets, net

 

9,187

 

1,487

 

Other

 

115

 

231

 

Total Assets

 

$

162,568

 

$

123,676

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Accounts payable

 

$

2,420

 

$

2,308

 

Commissions and bonuses payable

 

4,001

 

2,910

 

Other accrued liabilities

 

6,171

 

5,733

 

Current portion of long-term debt

 

35

 

30

 

Current portion of deferred revenue

 

59,218

 

48,673

 

Total current liabilities

 

71,845

 

59,654

 

 

 

 

 

 

 

Long-term debt, less current portion

 

113

 

117

 

Deferred revenue, net of current portion

 

43,402

 

19,250

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

32

 

32

 

Additional paid-in capital

 

83,428

 

78,312

 

Accumulated other comprehensive loss

 

(250

)

(401

)

Accumulated deficit

 

(36,002

)

(33,288

)

Total stockholders’ equity

 

47,208

 

44,655

 

Total Liabilities Stockholders’ Equity

 

$

162,568

 

$

123,676

 

 

5




 

RightNow Technologies, Inc.

Consolidated Operating Statements

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

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

Software, hosting and support

 

$

23,754

 

$

18,005

 

$

63,700

 

$

48,743

 

Professional services

 

6,334

 

5,149

 

17,927

 

13,831

 

Total revenue

 

30,088

 

23,154

 

81,627

 

62,574

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

Software, hosting and support

 

3,667

 

2,253

 

9,597

 

6,593

 

Professional services

 

4,969

 

3,026

 

14,014

 

8,601

 

Total cost of revenue

 

8,636

 

5,279

 

23,611

 

15,194

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

21,452

 

17,875

 

58,016

 

47,380

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Sales and marketing

 

16,535

 

11,248

 

45,113

 

31,262

 

Research and development

 

3,740

 

2,937

 

10,346

 

7,524

 

General and administrative

 

2,333

 

1,627

 

7,098

 

4,623

 

Total operating expenses

 

22,608

 

15,812

 

62,557

 

43,409

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

(1,156

)

2,063

 

(4,541

)

3,971

 

 

 

 

 

 

 

 

 

 

 

Interest and other income, net

 

740

 

440

 

2,180

 

1,063

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

(416

)

2,503

 

(2,361

)

5,034

 

Provision for income taxes

 

(103

)

(160

)

(353

)

(331

)

Net income (loss)

 

$

(519

)

$

2,343

 

$

(2,714

)

$

4,703

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.02

)

$

0.08

 

$

(0.08

)

$

0.16

 

Diluted

 

$

(0.02

)

$

0.07

 

$

(0.08

)

$

0.14

 

 

 

 

 

 

 

 

 

 

 

Shares used in the computation:

 

 

 

 

 

 

 

 

 

Basic

 

32,316

 

30,802

 

32,144

 

30,287

 

Diluted

 

32,316

 

33,667

 

32,144

 

33,541

 

 

 

 

 

 

 

 

 

 

 

Supplemental information of stock-based compensation expense included in:

 

 

 

 

 

 

 

 

 

Cost of software, hosting and support

 

$

52

 

$

 

$

145

 

$

 

Cost of professional services

 

124

 

 

358

 

 

Sales and marketing

 

529

 

 

1,430

 

 

Product development

 

230

 

 

622

 

 

General and administrative

 

179

 

 

1,020

 

 

Total stock-based compensation

 

$

1,114

 

$

 

$

3,575

 

$

 

 

6




 

RightNow Technologies, Inc.

Consolidated Statements of Cash Flow

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

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(519

)

$

2,343

 

$

(2,714

)

$

4,703

 

Non-cash adjustments:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

1,556

 

892

 

3,998

 

2,462

 

Stock-based compensation

 

1,114

 

 

3,575

 

 

Provision for losses on accounts receivable

 

292

 

216

 

51

 

260

 

Changes in operating accounts:

 

 

 

 

 

 

 

 

 

Receivables

 

(8,117

)

(6,072

)

(16,529

)

(14,340

)

Prepaid expenses

 

(225

)

(609

)

(384

)

(586

)

Accounts payable

 

(808

)

(373

)

(64

)

405

 

Commissions and bonuses payable

 

932

 

807

 

967

 

732

 

Other accrued liabilities

 

392

 

1,444

 

201

 

2,023

 

Deferred revenue

 

15,184

 

6,523

 

33,509

 

15,283

 

Other

 

(8

)

77

 

99

 

109

 

Cash provided by operating activities

 

9,793

 

5,248

 

22,709

 

11,051

 

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

 

Net change in short-term investments

 

(1,638

)

3,300

 

(13,527

)

10,305

 

Acquisition of property and equipment

 

(1,020

)

(1,124

)

(4,930

)

(3,272

)

Business acquisitions

 

43

 

(11

)

(8,688

)

(1,023

)

Other

 

 

(6

)

(10

)

(6

)

Cash provided (used) by investing activities

 

(2,615

)

2,159

 

(27,155

)

6,004

 

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from long-term debt

 

 

162

 

 

162

 

Proceeds from issuance of common stock

 

363

 

1,767

 

1,362

 

3,572

 

Payments on long-term debt

 

(9

)

(8

)

(23

)

(8

)

Cash provided by financing activities

 

354

 

1,921

 

1,339

 

3,726

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rates on cash and cash equivalents

 

36

 

(26

)

347

 

(131

)

 

 

 

 

 

 

 

 

 

 

Increase (decrease) in cash and cash equivalents

 

7,568

 

9,302

 

(2,760

)

20,650

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

30,546

 

30,292

 

40,874

 

18,944

 

Cash and cash equivalents at end of period

 

$

38,114

 

$

39,594

 

$

38,114

 

$

39,594

 

 

7




 

RightNow Technologies, Inc.

Reconciliation of Non-GAAP Measurements

 (Amounts in thousands, except per share amounts) (Unaudited)

Diluted Earnings Per Share Reconciliation

 

Three Months
Ended Sep 30,
2006

 

Nine Months
Ended Sep 30,
2006

 

Net (loss) as reported

 

$

(519

)

$

(2,714

)

Add stock-based compensation (“SBC”)

 

1,114

 

3,575

 

Net income (loss) before SBC

 

$

595

 

$

861

 

 

 

 

 

 

 

Diluted net (loss) per share, as reported

 

$

(0.02

)

$

(0.08

)

Diluted net income (loss) per share, before SBC

 

0.02

 

0.03

 

 

 

 

 

 

 

Diluted shares outstanding, as reported

 

32,316

 

32,144

 

Diluted shares outstanding, excluding the effect of SBC

 

33,926

 

33,953

 

 

Forward-Looking Guidance Reconciliation

 

 

GAAP Guidance

 

 

 

Non-GAAP Guidance

 

 

 

From

 

To

 

Adjustment

 

From

 

To

 

Fourth quarter ending December 31, 2006

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(600

)

$

100

 

$

1,300

(a)

$

700

 

$

1,400

 

Diluted EPS

 

$

(0.02

)

$

0.00

 

 

 

$

0.02

 

$

0.04

 

Diluted shares

 

32,500

 

34,300

 

1,800

(b)

34,300

 

34,300

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ending December 31, 2006

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(3,300

)

$

(2,600

)

4,900

(a)

$

1,600

 

$

2,300

 

Diluted EPS

 

$

(0.10

)

$

(0.08

)

 

 

$

0.05

 

$

0.07

 

Diluted shares

 

32,300

 

32,300

 

1,800

(b)

34,100

 

34,100

 

 

 

 

 

 

 

 

 

 

 

 

 

Year ending December 31, 2007

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,800

 

$

5,800

 

$

6,800

(a)

$

10,600

 

$

12,600

 

Diluted EPS

 

$

0.11

 

$

0.16

 

 

 

$

0.30

 

$

0.35

 

Diluted shares

 

35,500

 

35,500

 

 

35,500

 

35,500

 

 


(a) Estimated stock-based compensation expense to be recorded for the periods indicated in accordance with Statement of Financial Accounting Standards No. 123R, Share-Based Payments, (“SFAS 123R”) which is effective for periods beginning January 1, 2006.  Periods prior to 2006 do not include stock-based compensation expense.

(b) Estimated adjustment for the dilutive effect of outstanding common stock equivalents.

About Non-GAAP Financial Measures

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.  These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies.

RightNow’s management believes that these non-GAAP financial measures provide meaningful supplemental information regarding RightNow’s operating results because they facilitate the comparison of results for future periods with results from past periods.  RightNow adopted SFAS 123R on January 1, 2006 using the modified prospective method.  Results of prior periods have not been restated to conform with the 2006 presentation.  We believe the calculation of diluted net income per share, calculated without stock-based compensation expense, provides a meaningful comparison to our diluted net income per share figures reported for 2005 and prior years.