EX-99 2 exh_991.htm EXHIBIT 99.1
Exhibit 99.1
 

 
 
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
925.270.6107 Cell
stacie@blueshirtgroup.com
koconnell@rightnow.com
 
 
RightNow Technologies Announces
Second Quarter 2009 Financial Results
 
Company Reports Q2 GAAP EPS of $0.00 and Non-GAAP EPS of $0.09
 
BOZEMAN, Mont. (July 29, 2009) — RightNow® Technologies, Inc. (NASDAQ: RNOW) today announced results for the second quarter ended June 30, 2009.  Total revenue in the second quarter of 2009 was $36.3 million, compared to $35.2 million in the second quarter of 2008.  Net income in the second quarter of 2009 was $36,000, or $0.00 per share, compared to a net loss of $(3.1) million, or $(0.09) per share, in the second quarter of 2008.  Non-GAAP net income in the second quarter of 2009, which excludes stock-based compensation charges of $2.7 million, was $2.8 million, or $0.09 per share, as compared to Non-GAAP net loss of $(1.2) million, or $(0.04) per share, in the second quarter of 2008.
 
Revenue for the six months ended June 30, 2009 was $72.4 million, compared to $68.1 million for the comparable period in 2008.  Net income for the six months ended June 30, 2009 was $1.3 million, or $0.04 per share, as compared to a net loss of $(6.5) million, or $(0.19) per share, for the comparable period in 2008.  Non-GAAP net income for the six months ended June 30, 2009, which excludes stock-based compensation charges of $4.3 million, was $5.6 million, or $0.17 per share, as compared to Non-GAAP net loss of $(3.4) million, or $(0.10) per share, for the comparable period in 2008.
 
New, renewed and expanded customer relationships during the second quarter of 2009 included Belkin, Bowne, Figi’s, Husqvarna, Jackson Hewitt, K2 Network, The Ladders.com, NetScout, Snapfish and TD Banknorth.
 
“In the second quarter we delivered strong revenue, earnings ahead of guidance and closed a record ten deals over one million dollars,” stated Greg Gianforte, CEO and Founder.  “We believe RightNow is creating momentum in the marketplace as we help new and existing customers lower costs and retain customers in the current economy.  Our success is being driven by our focus on consumer oriented organizations and our ability to deliver complete multichannel solutions to meet their unique needs.”
 
“We are pleased with a third consecutive quarter of GAAP profitability, which was driven by recurring revenue growth and continued expense management,” said Jeff Davison, CFO, “and we are raising earnings guidance for the full year.”
 
 
·  
For the full year 2009, revenue is expected to be in the range of $147 to $151 million. Net income per share for the full year 2009 is expected to be in the range of $0.06 to $0.10 compared to previous guidance of $(0.02) to $0.03.
 
·  
Non-GAAP net income per share for the full year 2009, which excludes stock-based compensation, is expected to be in the range of $0.29 to $0.33 compared to previous guidance of $0.20 to $0.25.
 
·  
For the third quarter of 2009, revenue is expected to be in the range of $37 to $38 million.  Third quarter net income per share is expected to be in the range of $0.00 to $0.02. Third quarter non-GAAP net income per share, which excludes stock-based compensation, is expected to be in the range of $0.06 to $0.08.
 
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 (888) 312-9852, or outside the U.S. (719) 325-2114, 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 Investor Webcasts menu. An audio replay will be available between 5:30 p.m. MT on July 29, 2009 and 9:59 p.m. MT August 12, 2009 by calling (888) 203-1112 or (719) 457-0820, with passcode 5324517. The replay will also be available on our website at http://investor.rightnow.com/events.cfm.

 
About RightNow Technologies
 
RightNow (NASDAQ: RNOW) delivers the high-impact technology solutions and services organizations need to cost-efficiently deliver a consistently superior customer experience across their frontline service, sales and marketing touch-points. Approximately 1,900 corporations and government agencies worldwide depend on RightNow to achieve their strategic objectives and better meet the needs of those they serve. RightNow is headquartered in Bozeman, Montana.  For more 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 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, risks associated with general economic conditions; fluctuations in foreign currency exchange; our business model; our ability to develop or acquire, and gain market acceptance for, new products in a cost-effective and timely manner; the gain or loss of key customers; competitive pressures; our ability to expand or contract operations and to grow profitability; 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; our ability to manage and expand our partner relationships; any unanticipated ambiguities in fair value accounting standards; and our ability to expand, retain and motivate our employees.  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
 
 
 

 
RightNow Technologies, Inc.
Consolidated Balance Sheets
(In thousands) (Unaudited)

   
June 30,
   
Dec 31,
 
   
2009
   
2008
 
Assets
           
Cash and cash equivalents
  $ 46,987     $ 51,405  
Short-term investments
    42,808       34,412  
Accounts receivable
    31,670       36,770  
Term receivables, current
    4,107       5,752  
Allowance for doubtful accounts
    (1,910 )     (2,277 )
Net receivables
    33,867       40,245  
Deferred commissions
    5,663       5,381  
Prepaid and other current assets
    2,152       2,150  
Total current assets
    131,477       133,593  
                 
Long-term investments
    4,792       4,963  
Property and equipment, net
    9,775       10,141  
Term receivables, non-current
    2,159       3,547  
Intangible assets, net
    5,738       6,399  
Deferred commissions, non-current
    2,830       2,840  
Other
    811       854  
Total Assets
  $ 157,582     $ 162,337  
                 
Liabilities and Stockholders’ Equity
               
Accounts payable
  $ 5,952     $ 5,058  
Commissions and bonuses payable
    4,958       5,665  
Other accrued liabilities
    11,895       11,165  
Current portion of long-term debt
    45       46  
Current portion of deferred revenue
    75,972       77,584  
Total current liabilities
    98,822       99,518  
                 
Long-term debt, less current portion
    --       22  
Deferred revenue, net of current portion
    28,112       35,614  
                 
Stockholders’ equity:
               
Common stock
    34       34  
Additional paid-in capital
    107,282       102,662  
Treasury stock, at cost
    (15,007 )     (13,209 )
Accumulated other comprehensive income
    1,260       1,916  
Accumulated deficit
    (62,921 )     (64,220 )
Total stockholders’ equity
    30,648       27,183  
Total Liabilities and Stockholders’ Equity
  $ 157,582     $ 162,337  
 
 
 
 

 
RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)

   
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
Revenue:
                       
   Software, hosting and support
  $ 27,424     $ 25,573     $ 53,469     $ 50,129  
   Professional services
    8,916       9,648       18,908       17,990  
   Total revenue
    36,340       35,221       72,377       68,119  
                                 
Cost of revenue:
                               
Software, hosting and support
    4,954       5,043       9,903       10,078  
Professional services
    6,346       7,810       13,354       15,095  
Total cost of revenue
    11,300       12,853       23,257       25,173  
                                 
Gross profit
    25,040       22,368       49,120       42,946  
                                 
Operating expenses:
                               
Sales and marketing
    16,008       17,627       30,871       34,445  
Research and development
    5,051       4,507       9,807       8,993  
General and administrative
    4,207       3,890       7,653       7,406  
Total operating expenses
    25,266       26,024       48,331       50,844  
                                 
Income (loss) from operations
    (226 )     (3,656 )     789       (7,898 )
                                 
Interest and other income, net
    351       519       752       1,457  
                                 
Income (loss) before income taxes
    125       (3,137 )     1,541       (6,441 )
Benefit (provision) for income taxes
    (89 )     5       (242 )     (87 )
Net income (loss)
  $ 36     $ (3,132 )   $ 1,299     $ (6,528 )
                                 
Net income (loss) per share:
                               
Basic
  $ 0.00     $ (0.09 )   $ 0.04     $ (0.19 )
Diluted
  $ 0.00     $ (0.09 )   $ 0.04     $ (0.19 )
                                 
Shares used in the computation:
                               
Basic
    31,677       33,582       31,730       33,557  
Diluted
    32,160       33,582       32,207       33,557  
                                 
Supplemental information of stock-based compensation expense included in:
                               
Cost of software, hosting and support
  $ 142     $ 79     $ 238     $ 156  
Cost of professional services
    209       165       342       318  
Sales and marketing
    952       595       1,574       1,133  
Research and development
    377       242       639       477  
General and administrative
    1,056       816       1,459       1,079  
Total stock-based compensation
  $ 2,736     $ 1,897     $ 4,252     $ 3,163  

 
 

 
RightNow Technologies, Inc.
Consolidated Statements of Cash Flow
(In thousands) (Unaudited)

   
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
Operating activities:
                       
Net income (loss)
  $ 36     $ (3,132 )   $ 1,299     $ (6,528 )
Non-cash adjustments:
                               
Depreciation and amortization
    1,726       1,943       3,613       3,886  
Stock-based compensation
    2,736       1,897       4,252       3,163  
Provision for losses on accounts receivable
    30       26       87       115  
Changes in operating accounts:
                               
Receivables
    (5,171 )     4,062       8,398       11,509  
Prepaid expenses
    19       5       (107 )     (443 )
Deferred commissions
    (602 )     (809 )     (77 )     (1,213 )
Accounts payable
    1,937       (174 )     830       1,584  
Commissions and bonuses payable
    1,743       742       (810 )     (781 )
Other accrued liabilities
    1,162       (83 )     446       451  
Deferred revenue
    (2,038 )     4,001       (11,467 )     567  
Other
    503       96       503       (66 )
Cash provided by operating activities
    2,081       8,574       6,967       12,244  
                                 
Investing activities:
                               
Net change in short-term investments
    (6,059 )     748       (8,310 )     (1,222 )
Acquisition of property and equipment
    (1,846 )     (1,524 )     (2,530 )     (3,033 )
Other
    5       (12 )     5       (27 )
Cash used in investing activities
    (7,900 )     (788 )     (10,835 )     (4,282 )
                                 
Financing activities:
                               
Proceeds from issuance of common stock
    151       234       229       648  
Excess tax benefit of stock options exercised
    48       (53 )     137       --  
Common stock repurchased
    --       --       (1,798 )     --  
Payments on long-term debt
    (11 )     (11 )     (23 )     (22 )
Cash provided (used) by financing activities
    188       170       (1,455 )     626  
                                 
Effect of foreign exchange rates on cash and cash equivalents
    1,156       234       905       512  
                                 
Increase (decrease) in cash and cash equivalents
    (4,475 )     8,190       (4,418 )     9,100  
                                 
Cash and cash equivalents at beginning of period
    51,462       44,591       51,405       43,681  
Cash and cash equivalents at end of period
  $ 46,987     $ 52,781     $ 46,987     $ 52,781  
 
 
 

 
RightNow Technologies, Inc.
Reconciliation of Non-GAAP Measurements
(Amounts in thousands, except per share amounts) (Unaudited)
 
 
Diluted Earnings Per Share Reconciliation

   
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2009
   
2008
   
2009
   
2008
 
Net income (loss) as reported
  $ 36     $ (3,132 )   $ 1,299     $ (6,528 )
Add stock-based compensation (“SBC”)
    2,736       1,897       4,252       3,163  
Net income (loss) before SBC
  $ 2,772     $ (1,235 )   $ 5,551     $ (3,365 )
                                 
Net income (loss) per share, as reported (basic and diluted)
  $ 0.00     $ (0.09 )   $ 0.04     $ (0.19 )
Net income (loss) per share, before SBC (basic and diluted)
  $ 0.09     $ (0.04 )   $ 0.17     $ (0.10 )
                                 
Shares outstanding (basic), as reported
    31,677       33,582       31,730       33,557  
Shares outstanding (diluted), excluding the effect of SBC
    32,160       33,582       32,207       33,557  
 
 
Forward-Looking Guidance Reconciliation
 
   
GAAP Guidance
       
Non-GAAP Guidance
 
   
From
   
To
   
Adjustment
 
From
   
To
 
Third quarter ending September 30, 2009
                             
Net income
  $ --     $ 700     $ 1,800 [a]   $ 1,800     $ 2,500  
Net income per share
  $ 0.00     $ 0.02             $ 0.06     $ 0.08  
Shares (diluted)
    32,500       32,500               32,500       32,500  
                                         
Year ending December 31, 2009
                                       
Net income
  $ 1,800     $ 3,100     $ 7,700 [a]   $ 9,500     $ 10,800  
Net income per share
  $ 0.06     $ 0.10             $ 0.29     $ 0.33  
Shares (diluted)
    32,500       32,500               32,500       32,500  
 
[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.
 
About Non-GAAP Financial Measures
 

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 (loss) and net income (loss) 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, 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 (loss) and net income (loss) 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 (loss) and net income (loss) per share have limitations as an analytical tool, and readers should not consider these measures in isolation or as substitutes for GAAP net income (loss) and GAAP net income (loss) 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 (loss) and net income (loss) 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 (loss) and net income (loss) 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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