UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 24, 2011
RIGHTNOW TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in Charter)
DELAWARE | 000-31321 | 81-0503640 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
136 ENTERPRISE BOULEVARD, BOZEMAN, MT | 59718 | |||
(Address of Principal Executive Offices) | (Zip Code) |
Registrants telephone number, including area code (406) 522-4200
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
On October 24, 2011, RightNow Technologies, Inc. (the Company) issued a press release announcing its financial results for the third quarter ended September 30, 2011. A copy of the press release is furnished herewith as Exhibit 99.1.
The information contained under Item 2.02 in this report and in Exhibit 99.1 attached to this report is being furnished to the Securities and Exchange Commission and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or otherwise subject to the liability of that Section, or incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. | Financial Statements and Exhibits. |
(a) | Financial statements of business acquired. |
Not Applicable
(b) | Pro forma financial information. |
Not applicable
(c) | Shell company transactions. |
Not applicable
(d) | Exhibits. |
Exhibit |
Description of Exhibit | |
99.1 | Press Release dated October 24, 2011 announcing RightNow Technologies, Inc.s financial results for the third quarter ended September 30, 2011 (furnished herewith but not filed pursuant to Item 2.02). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RIGHTNOW TECHNOLOGIES, INC. (Registrant) | ||
Dated: October 24, 2011 | /s/ Jeffrey C. Davison | |
Jeffrey C. Davison | ||
Chief Financial Officer, Senior Vice President and Treasurer |
EXHIBIT INDEX
Exhibit |
Description of Exhibit | |
99.1 | Press Release dated October 24, 2011 announcing RightNow Technologies, Inc.s financial results for the third quarter ended September 30, 2011 (furnished herewith but not filed pursuant to Item 2.02). |
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 Reports Third Quarter 2011 Financial Results
BOZEMAN, Mont. (October 24, 2011) RightNow® (NASDAQ: RNOW) today announced results for the third quarter ended September 30, 2011.
Third quarter 2011 financial results were as follows:
Total revenue was $57.7 million in the third quarter of 2011, compared to $48.6 million in the third quarter of 2010, reflecting a 19% increase. Recurring revenue in the third quarter of 2011 increased 24% to $47.9 million from $38.6 million in the third quarter of 2010.
Net income in the third quarter of 2011 was $1.5 million, or $0.04 per diluted share, compared to net income of $2.9 million, or $0.09 per diluted share, in the third quarter of 2010. Non-GAAP net income in the third quarter of 2011 was $6.6 million, or $0.19 per diluted share, compared to non-GAAP net income of $5.1 million, or $0.15 per diluted share, in the third quarter of 2010.
Total revenue was $164.8 million for the nine months ended September 30, 2011, compared to $134.1 million for the nine months ended September 30, 2010, reflecting a 23% increase. Recurring revenue in the nine months ended September 30, 2011 increased 27% to $135.2 million from $106.4 million in the nine months ended September 30, 2010.
Net income in the nine months ended September 30, 2011 was $3.1 million, or $0.09 per diluted share, compared to net income of $4.9 million, or $0.15 per diluted share, in the nine months ended September 30, 2010. Non-GAAP net income in the nine months ended September 30, 2011 was $15.7 million, or $0.44 per diluted share, compared to non-GAAP net income of $10.6 million, or $0.32 per diluted share, in the nine months ended September 30, 2010.
Quarterly Conference Call and Financial Presentation at Analyst Day Cancelled
RightNow is cancelling the third quarter 2011 earnings conference call that was previously scheduled for Tuesday, October 25, 2011. Additionally, the Company is cancelling its financial presentation from RightNows Analyst Day at the Broadmoor Hotel, in Colorado Springs, CO on Tuesday, October 25, 2011. To access the previously announced Analyst Day webcast please visit the RightNow investor relations portion of our website.
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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:
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, managements 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 managements 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, the proposed merger between RightNow and Oracle; 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; 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 prior and future acquisitions; 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)
Sept. 30, 2011 |
Dec. 31, 2010 |
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Assets |
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Cash and cash equivalents |
$ | 108,299 | $ | 181,948 | ||||
Short-term investments |
133,152 | 94,759 | ||||||
Accounts receivable |
39,364 | 39,338 | ||||||
Allowance for doubtful accounts |
(1,467 | ) | (2,021 | ) | ||||
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Net receivables |
37,897 | 37,317 | ||||||
Deferred commissions |
6,257 | 5,418 | ||||||
Prepaid and other current assets |
5,447 | 4,662 | ||||||
Deferred tax assets |
3,801 | 3,801 | ||||||
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Total current assets |
294,853 | 327,905 | ||||||
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Property and equipment, net |
13,603 | 10,702 | ||||||
Intangible assets, net |
18,234 | 6,149 | ||||||
Goodwill |
29,825 | 7,975 | ||||||
Deferred commissions, non-current |
4,907 | 4,747 | ||||||
Other |
5,012 | 4,921 | ||||||
Deferred tax assets, non-current |
17,510 | 16,480 | ||||||
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Total Assets |
$ | 383,944 | $ | 378,879 | ||||
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Liabilities and Stockholders Equity |
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Accounts payable |
$ | 6,949 | $ | 10,463 | ||||
Commissions and bonuses payable |
5,489 | 7,137 | ||||||
Other accrued liabilities |
16,796 | 13,363 | ||||||
Current portion of deferred revenue |
94,889 | 90,350 | ||||||
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Total current liabilities |
124,123 | 121,313 | ||||||
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Deferred revenue, net of current portion |
2,256 | 2,969 | ||||||
Deferred tax liability, non-current |
1,003 | | ||||||
Other long-term liabilities |
405 | | ||||||
2.50% Convertible senior notes due 2030 |
175,000 | 175,000 | ||||||
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Total liabilities |
302,787 | 299,282 | ||||||
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Stockholders equity: |
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Common stock |
36 | 35 | ||||||
Additional paid-in capital |
161,389 | 136,717 | ||||||
Treasury stock, at cost |
(55,031 | ) | (29,149 | ) | ||||
Accumulated other comprehensive income |
1,606 | 1,953 | ||||||
Accumulated deficit |
(26,843 | ) | (29,959 | ) | ||||
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Total stockholders equity |
81,157 | 79,597 | ||||||
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Total Liabilities and Stockholders Equity |
$ | 383,944 | $ | 378,879 | ||||
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RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenue: |
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Recurring revenue |
$ | 47,924 | $ | 38,613 | $ | 135,246 | $ | 106,368 | ||||||||
Professional services |
9,749 | 9,980 | 29,572 | 27,781 | ||||||||||||
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Total revenue |
57,673 | 48,593 | 164,818 | 134,149 | ||||||||||||
Cost of revenue: |
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Recurring revenue |
9,042 | 5,923 | 24,114 | 17,754 | ||||||||||||
Professional services |
8,679 | 8,395 | 27,500 | 23,105 | ||||||||||||
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Total cost of revenue |
17,721 | 14,318 | 51,614 | 40,859 | ||||||||||||
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Gross profit |
39,952 | 34,275 | 113,204 | 93,290 | ||||||||||||
Operating expenses: |
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Sales and marketing |
24,685 | 20,006 | 72,148 | 57,507 | ||||||||||||
Research and development |
5,143 | 5,160 | 16,320 | 15,089 | ||||||||||||
General and administrative |
5,986 | 4,975 | 18,534 | 13,598 | ||||||||||||
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Total operating expenses |
35,814 | 30,141 | 107,002 | 86,194 | ||||||||||||
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Income from operations |
4,138 | 4,134 | 6,202 | 7,096 | ||||||||||||
Interest and other income (expense), net |
(1,253 | ) | 454 | (1,601 | ) | 656 | ||||||||||
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Income before income taxes |
2,885 | 4,588 | 4,601 | 7,752 | ||||||||||||
Provision for income taxes |
(1,353 | ) | (1,693 | ) | (1,485 | ) | (2,868 | ) | ||||||||
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Net income |
$ | 1,532 | $ | 2,895 | $ | 3,116 | $ | 4,884 | ||||||||
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Net income per share: |
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Basic |
$ | 0.05 | $ | 0.09 | $ | 0.09 | $ | 0.15 | ||||||||
Diluted |
$ | 0.04 | $ | 0.09 | $ | 0.09 | $ | 0.15 | ||||||||
Shares used in the computation: |
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Basic |
33,001 | 32,128 | 32,921 | 32,020 | ||||||||||||
Diluted |
35,652 | 33,659 | 35,750 | 33,515 | ||||||||||||
Supplemental information of Non-GAAP reconciling items included in: |
||||||||||||||||
Cost of recurring revenue |
$ | 989 | $ | 127 | $ | 2,766 | $ | 357 | ||||||||
Cost of professional services |
531 | 128 | 1,405 | 364 | ||||||||||||
Sales and marketing |
1,661 | 818 | 4,276 | 2,295 | ||||||||||||
Research and development |
488 | 254 | 1,280 | 751 | ||||||||||||
General and administrative |
1,151 | 875 | 3,950 | 1,951 | ||||||||||||
Interest and other income (expense, net) |
253 | | (1,059 | ) | | |||||||||||
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Total Non-GAAP reconciling items (pre-tax) |
$ | 5,073 | $ | 2,202 | $ | 12,618 | $ | 5,718 | ||||||||
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RightNow Technologies, Inc.
Consolidated Statements of Cash Flow
(In thousands) (Unaudited)
Three Months Ended September 30, |
Nine Months Ended September 30, |
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2011 | 2010 | 2011 | 2010 | |||||||||||||
Operating activities: |
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Net income |
$ | 1,532 | $ | 2,895 | $ | 3,116 | $ | 4,884 | ||||||||
Non-cash adjustments: |
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Depreciation and amortization |
3,574 | 1,812 | 9,694 | 5,749 | ||||||||||||
Impairment of internally developed software |
809 | 809 | ||||||||||||||
Stock-based compensation |
3,841 | 2,202 | 10,568 | 5,718 | ||||||||||||
Provision for losses on accounts receivable |
25 | 50 | 66 | 131 | ||||||||||||
Foreign currency gain related to acquisition |
| | (1,819 | ) | | |||||||||||
Changes in operating accounts, net of business acquisitions: |
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Receivables |
5,360 | (963 | ) | 2,379 | (1,424 | ) | ||||||||||
Prepaid and other current assets |
(618 | ) | 552 | (175 | ) | (1,316 | ) | |||||||||
Deferred commissions |
(324 | ) | (263 | ) | (979 | ) | 726 | |||||||||
Accounts payable |
238 | 566 | (4,175 | ) | 3,710 | |||||||||||
Commissions and bonuses payable |
(510 | ) | 1,451 | (1,667 | ) | (122 | ) | |||||||||
Other accrued liabilities |
(1,439 | ) | 382 | 2,351 | 2,946 | |||||||||||
Deferred revenue |
(1,839 | ) | (2,887 | ) | 1,268 | (7,661 | ) | |||||||||
Other |
658 | 176 | (210 | ) | 157 | |||||||||||
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Cash provided by operating activities |
11,307 | 5,973 | 21,226 | 13,498 | ||||||||||||
Investing activities: |
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Net change in investments |
971 | 6,935 | (38,326 | ) | 23,700 | |||||||||||
Acquisition of property and equipment |
(2,476 | ) | (1,639 | ) | (7,624 | ) | (5,475 | ) | ||||||||
Intangible asset additions |
(1,836 | ) | (1,120 | ) | (4,919 | ) | (3,459 | ) | ||||||||
Business acquisitions, net of cash acquired |
| | (33,837 | ) | | |||||||||||
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Cash provided by (used in) investing activities |
(3,341 | ) | 4,176 | (84,706 | ) | 14,766 | ||||||||||
Financing activities: |
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Purchase of treasury stock |
(25,882 | ) | | (25,882 | ) | | ||||||||||
Proceeds from issuance of common stock |
4,416 | 3,068 | 12,792 | 4,636 | ||||||||||||
Excess tax benefit of stock options exercised |
865 | 1,491 | 1,314 | 2,621 | ||||||||||||
Payments on debt |
(11 | ) | | (271 | ) | (22 | ) | |||||||||
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Cash provided by (used in) financing activities |
(20,612 | ) | 4,559 | (12,047 | ) | 7,235 | ||||||||||
Effect of foreign exchange rates on cash and cash equivalents |
(847 | ) | 1,808 | 1,878 | 683 | |||||||||||
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Increase (decrease) in cash and cash equivalents |
(13,493 | ) | 16,516 | (73,649 | ) | 36,182 | ||||||||||
Cash and cash equivalents at beginning of period |
121,792 | 61,212 | 181,948 | 41,546 | ||||||||||||
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Cash and cash equivalents at end of period |
$ | 108,299 | $ | 77,728 | $ | 108,299 | $ | 77,728 | ||||||||
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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 September 30, |
Nine Months Ended September 30, |
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2011 | 2010 | 2011 | 2010 | |||||||||||||
Income from operations as reported |
$ | 4,138 | $ | 4,134 | $ | 6,202 | $ | 7,096 | ||||||||
Income from operations as a % of total revenue (operating margin) |
7 | % | 9 | % | 4 | % | 5 | % | ||||||||
Non-GAAP reconciling items (pre-tax) |
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Add stock-based compensation (SBC) |
3,854 | 2,202 | 10,581 | 5,718 | ||||||||||||
Add Q-go acquisition costs |
| | 415 | | ||||||||||||
Add amortization expense of acquired intangible assets |
966 | | 2,681 | | ||||||||||||
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Non-GAAP income from operations |
$ | 8,958 | $ | 6,336 | $ | 19,879 | $ | 12,814 | ||||||||
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Non-GAAP income from operations as a % of total revenue (Non-GAAP operating margin) |
16 | % | 13 | % | 12 | % | 10 | % | ||||||||
Net income as reported |
$ | 1,532 | $ | 2,895 | $ | 3,116 | $ | 4,884 | ||||||||
Non-GAAP reconciling items (pre-tax) |
||||||||||||||||
Add stock-based compensation (SBC) |
3,854 | 2,202 | 10,581 | 5,718 | ||||||||||||
Add Q-go acquisition costs |
| | 415 | | ||||||||||||
Add amortization expense of acquired intangible assets |
966 | | 2,681 | | ||||||||||||
Add amortization of debt issuance expense |
253 | | 760 | | ||||||||||||
Less foreign currency gain |
| | (1,819 | ) | | |||||||||||
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Non-GAAP Net income |
$ | 6,605 | $ | 5,097 | $ | 15,734 | $ | 10,602 | ||||||||
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Net income per share, as reported (basic) |
$ | 0.05 | $ | 0.09 | $ | 0.09 | $ | 0.15 | ||||||||
Net income per share, as reported (diluted) |
0.04 | 0.09 | 0.09 | 0.15 | ||||||||||||
Non-GAAP Net income per share (basic) |
0.20 | 0.16 | 0.48 | 0.33 | ||||||||||||
Non-GAAP Net income per share (diluted) |
0.19 | 0.15 | 0.44 | 0.32 | ||||||||||||
Shares outstanding (basic), as reported |
33,001 | 32,128 | 32,921 | 32,020 | ||||||||||||
Shares outstanding (diluted), as reported |
35,652 | 33,659 | 35,750 | 33,515 |
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About Non-GAAP Financial Measures
Non-GAAP net income, operating margin 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, operating margin 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 Companys 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 Companys 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 income from operations, operating margin, net income and net income per share, management excluded stock-based compensation expenses, acquisition costs and amortization associated with acquired intangible assets and debt amortization expenses (debt amortization expense was not included in non-GAAP income from operations because the amount was not recorded as operating income), to facilitate its review of the comparability of the Companys operating performance on a period-to-period basis because such expenses and gain are not, in managements view, related to the Companys 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.
During the first quarter of 2011, we recorded a $1.8 million foreign currency gain related to our acquisition of Q go. This gain was excluded from our nine months ended September 30, 2011 non-GAAP net income and net income per share calculations (the gain was not included in non-GAAP income from operations because the amount was not recorded to operating income).
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, operating margin and net income per share also facilitate a comparison of RightNows 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, 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.
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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 Companys 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 Companys 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, operating margin 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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