EX-99.1 2 y48008exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
 

Exhibit 99.1
(COMMVAULT LOGO)
Investor Relations:
Michael Picariello
CommVault
732-728-5380
ir@commvault.com
CommVault Announces Third Quarter Fiscal 2008 Financial Results
Third Quarter Fiscal 2008 Highlights Include:
  •   Revenues of $50.3 million
 
  •   Non-GAAP EBIT of $8.6 million and Non-GAAP EBIT Margin of 17.1%
 
  •   GAAP EBIT of $6.3 million and GAAP EBIT Margin of 12.5%
 
  •   Non-GAAP Diluted Earnings Per Share of $0.15
 
  •   GAAP Diluted Earnings Per Share of $0.18
OCEANPORT, N.J. – February 5, 2008 – CommVault® [NASDAQ: CVLT] today announced its financial results for the third fiscal quarter ended December 31, 2007.
N. Robert Hammer, CommVault’s chairman, president and CEO stated, “We had another record quarter as we continue to make progress in achieving our long-term strategic objectives. We made excellent progress in the quarter of increasing our market penetration related to both our emerging products as well as our core backup products. We will continue to make the necessary investment in product development, support and distribution to ensure that we remain a leading innovator of information management technologies and services.”
Total revenues in the third quarter of fiscal 2008 were a record $50.3 million, an increase of 31% over the third quarter of fiscal 2007 and 6% over the prior quarter. Software revenue in the third quarter of fiscal 2008 was $27.0 million, up 28% year-over-year and 2% sequentially. Services revenue in the third quarter of fiscal 2008 was $23.3 million, up 36% year-over-year and 12% sequentially.
Non-GAAP income from operations (EBIT) increased 51% to $8.6 million in the third quarter of fiscal 2008 compared to $5.7 million in the third quarter of the prior year. EBIT determined in accordance with GAAP was $6.3 million for the third quarter, a 48% increase from $4.2 million in the same period of the prior year.

 

 

For the third quarter of fiscal 2008, non-GAAP net income increased 49% to $6.9 million, or $0.15 per diluted share, from $4.6 million or $0.10 per diluted share in the same period of the prior year. CommVault reported GAAP net income for the quarter of $8.2 million, an increase of $3.6 million compared to the same period of the prior year. GAAP net income for the quarter includes a tax benefit of $0.9 million primarily due to the reversal of deferred tax valuation allowances in certain international jurisdictions.
Operating cash flow totaled $13.1 million for the third quarter of fiscal 2008. Total cash and cash equivalents as of December 31, 2007 were $95.1 million.
A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV included in this press release. An explanation of these measures is also included below under the heading “Use of Non-GAAP Financial Measures.”
Recent Business Highlights:
  •   Consistent with its investment strategy, CommVault announced its first software as a service product, Remote Operations Management Service (“ROMS”). ROMS is an innovative, subscription software-as-a-service (“SaaS”) offering. It is a web-based integrated support automation system that provides customers with overnight, weekend and holiday monitoring. Through a user-friendly, intuitive web dashboard, users can access and track real-time alert, trend and storage usage reports anytime, anywhere. CommVault believes that ROMS will help broaden its leadership position in providing highly-differentiated, world-class support to its customers.
 
  •   CommVault has entered into a collaborative reseller agreement with Sun Microsystems, Inc., which will allow CommVault to broaden it distribution reach and provide customers with advanced data management solutions for enterprise computing environments. Sun will distribute on a world-wide basis the CommVault SimpanaTM 7.0 data and information management software suite for companies running on Sun Microsystems 64-bit server and storage systems.
 
  •   CommVault’s Board of Directors approved a share repurchase program authorizing the repurchase of up to $40 million of its common stock over the next 12 months.

 

 

Fiscal 2008 Guidance
For the fiscal year ending March 31, 2008, CommVault currently expects:
  •   Total revenues in the range of $195 million to $196 million.
 
  •   Non-GAAP gross margins of 86.0% to 86.3%.
 
  •   Non-GAAP operating income margins of 16.7% to 17.0%.
 
  •   Non-GAAP diluted EPS in the range of $0.56 per share to $0.58 per share using an effective tax rate of approximately 28% and a weighted average diluted share count of approximately 45.5 million to 46.0 million.
 
  •   An actual cash tax rate will be approximately 10% based on current assumptions.
The non-GAAP gross margin percentages above exclude approximately $0.2 million related to noncash stock-based compensation charges. The non-GAAP diluted EPS guidance excludes approximately $0.12 per share to $0.14 per share of noncash stock-based compensation charges, net of non-GAAP income tax benefits of approximately $0.05 per share, and any additional FICA expense that will be incurred by CommVault when employees exercise in the money stock options.
Use of Non-GAAP Financial Measures
CommVault has provided in this press release selected financial information that has not been prepared in accordance with GAAP. CommVault uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, when used as a supplement to GAAP measures, in evaluating CommVault’s ongoing operational performance. CommVault believes that the use of these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in CommVault’s industry, many of which present similar non-GAAP financial measures to the investment community.
The non-GAAP financial results discussed above excludes noncash stock-based compensation charges, additional FICA expense incurred by CommVault when employees exercise in the money stock options and accretion of preferred stock dividends. In addition, the non-GAAP financial results apply an effective tax rate of 28%

 

 

in fiscal 2008 and 25% starting in the second quarter of fiscal 2007, which resulted in an estimated effective tax rate of approximately 20% for fiscal 2007.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which are provided in Table IV included in this press release.
Conference Call Information
CommVault will host a conference call today, February 5, 2008, at 5:00 p.m. EST to discuss its financial results. To access this call, dial 800-591-6942 (domestic) or 617-614-4909 (international). Additionally, a live web cast of the conference call will be hosted under “Webcasts and Presentations” located under the “Investor Relations” section on CommVault’s Web site www.commvault.com.
An archived web cast of this conference call will also be available on the “Investor Relations” section of CommVault’s Web site, www.commvault.com.
About CommVault
A singular vision — a belief in a better way to address current and future data management needs - guides CommVault in the development of Singular Information Management® solutions for high-performance data protection, universal availability and simplified management of data on complex storage networks. CommVault’s exclusive single-platform architecture gives companies unprecedented control over data growth, costs and risk. CommVault’s Simpana™ software suite of products was designed to work together seamlessly from the ground up, sharing a single code and common function set, to deliver superlative Data Protection, Archive, Replication, Search and Resource Management capabilities. More companies every day join those who have discovered the unparalleled efficiency, performance, reliability, and control only CommVault can offer. Information about CommVault is available at www.commvault.com. CommVault’s corporate headquarters is located in Oceanport, New Jersey in the United States. (cvlt-f)
Safe Harbor Statement
This press release contains forward-looking statements, including statements regarding financial projections, which are subject to risks and uncertainties, such as competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, general economic conditions and others. Statements regarding CommVault’s beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation

 

 

Reform Act of 1995. Actual results may differ materially from anticipated results. CommVault does not undertake to update its forward-looking statements.
©1999 — 2008 CommVault Systems, Inc. All rights reserved. CommVault, CommVault and logo, the “CV” logo, CommVault Systems, Solving Forward, SIM, Singular Information Management, Simpana, CommVault Galaxy, Unified Data Management, QiNetix, Quick Recovery, QR, CommNet, GridStor, Vault Tracker, InnerVault, Quick Snap, QSnap, Recovery Director, CommServe, and CommCell, are trademarks or registered trademarks of CommVault Systems, Inc. All other third party brands, products, service names, trademarks, or registered service marks are the property of and used to identify the products or services of their respective owners. All specifications are subject to change without notice.

 

 

Table I
CommVault Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    December 31,     December 31,  
    2007     2006     2007     2006  
Revenues:
                                
Software
   $ 26,994     $ 21,132     $ 77,630     $ 60,180  
Services
     23,304       17,198       64,063       48,310  
 
                        
Total revenues
     50,298       38,330       141,693       108,490  
 
                                
Cost of revenues:
                                
Software
     648       528       1,651       1,191  
Services
     6,315       5,102       17,775       14,459  
 
                        
Total cost of revenues
     6,963       5,630       19,426       15,650  
 
                        
Gross margin
     43,335       32,700       122,267       92,840  
 
                                
Operating expenses:
                                
Sales and marketing
     23,420       17,379       67,735       48,958  
Research and development
     6,818       5,851       19,944       17,369  
General and administrative
     6,010       4,470       17,266       13,734  
Depreciation and amortization
     795       753       2,217       1,832  
 
                        
Income from operations
     6,292       4,247       15,105       10,947  
 
                                
Interest expense
     —       (167 )     (114 )     (184 )
Interest income
     998       665       2,701       1,865  
 
                        
Income before income taxes
     7,290       4,745       17,692       12,628  
 
                                
Income tax benefit (expense)
     908       (111 )     (3,077 )     (222 )
 
                        
 
                                
Net income
     8,198       4,634       14,615       12,406  
 
                                
Less: accretion of preferred stock dividends
     —       —       —       (2,818 )
Less: accretion of fair value of preferred stock upon conversion
     —       —       —       (102,745 )
 
                        
Net income (loss) attributable to common stockholders
   $ 8,198     $ 4,634     $ 14,615     $ (93,157 )
 
                        
 
                                
Net income (loss) attributable to common stockholders per share:
                                
Basic
   $ 0.19     $ 0.11     $ 0.34     $ (3.44 )
 
                        
Diluted
   $ 0.18     $ 0.10     $ 0.32     $ (3.44 )
 
                        
 
                                
Weighted average shares used in computing per share amounts:
                                
Basic
     43,518       41,676       42,991       27,052  
 
                        
 
                                
Diluted
     46,136       46,164       45,593       27,052  
 
                        

 

 

Table II
CommVault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
                 
    December 31,     March 31,  
    2007     2007  
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 95,108     $ 65,001  
Trade accounts receivable, net
     33,786       22,044  
Prepaid expenses and other current assets
     3,685       3,657  
Deferred tax assets
     9,618       9,616  
 
            
Total current assets
     142,197       100,318  
 
                
Deferred tax assets, net
     45,550       42,543  
Property and equipment, net
     5,492       4,624  
Other assets
     851       554  
 
            
Total assets
   $ 194,090     $ 148,039  
 
            
 
                
Liabilities and stockholders’ equity
                
Current liabilities:
                
Accounts payable
   $ 1,672     $ 1,500  
Accrued liabilities
     19,039       20,215  
Term loan
     —       7,500  
Deferred revenue
     46,237       36,214  
 
            
Total current liabilities
     66,948       65,429  
 
                
Deferred revenue, less current portion
     6,130       4,284  
Other liabilities
     6,323       4  
 
                
Total stockholders’ equity
     114,689       78,322  
 
            
Total liabilities and stockholders’ equity
   $ 194,090     $ 148,039  
 
            

 

 

Table III
CommVault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                 
    Nine Months Ended  
    December 31,  
    2007     2006  
Cash flows from operating activities
                
Net income
   $ 14,615     $ 12,406  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     2,326       2,045  
Noncash stock-based compensation
     6,233       4,326  
Excess tax benefits from stock-based compensation
     (4,497 )     —  
Deferred income taxes
     (3,647 )     —  
 
                
Changes in operating assets and liabilities:
                
Accounts receivable
     (10,935 )     (3,499 )
Prepaid expenses and other current assets
     313       (323 )
Other assets
     (182 )     (160 )
Accounts payable
     122       (316 )
Accrued liabilities
     8,239       3,442  
Deferred revenue and other liabilities
     10,807       4,588  
 
            
Net cash provided by operating activities
     23,394       22,509  
 
                
Cash flows from investing activities
                
Purchase of property and equipment
     (3,083 )     (3,148 )
 
            
Net cash used in investing activities
     (3,083 )     (3,148 )
 
                
Cash flows from financing activities
                
Proceeds from the exercise of stock options
     8,108       343  
Net proceeds from follow-on public offering of common stock
     4,315       —  
Excess tax benefits from stock-based compensation
     4,497       —  
Repayments on term loan
     (7,500 )     (6,250 )
Proceeds from term loan
     —       15,000  
Payments to Series A through E preferred stockholders upon conversion to common stock
     —       (101,833 )
Net proceeds from initial public offering and concurrent private placement
     —       82,242  
 
            
Net cash provided by (used in) financing activities
     9,420       (10,498 )
 
                
Effects of exchange rate — changes in cash
     376       (408 )
 
            
 
                
Net increase in cash and cash equivalents
     30,107       8,455  
Cash and cash equivalents at beginning of period
     65,001       48,039  
 
            
 
                
Cash and cash equivalents at end of period
   $ 95,108     $ 56,494  
 
            

 

 

Table IV
CommVault Systems, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    December 31,     December 31,  
    2007     2006     2007     2006  
Non-GAAP financial measures and reconciliation:
                                
GAAP income from operations
   $ 6,292     $ 4,247     $ 15,105     $ 10,947  
Noncash stock-based compensation (1)
     2,207       1,445       6,233       4,326  
FICA expense on stock option exercises (2)
     112       —       504       —  
 
                        
 
                                
Non-GAAP income from operations
   $ 8,611     $ 5,692     $ 21,842     $ 15,273  
 
                        
 
                                
GAAP net income (loss) attributable to common stockholders
   $ 8,198     $ 4,634     $ 14,615     $ (93,157 )
Noncash stock-based compensation (1)
     2,207       1,445       6,233       4,326  
FICA expense on stock option exercises (2)
     112       —       504       —  
Accretion of preferred stock dividends (3)
     —       —       —       2,818  
Accretion of fair value of preferred stock upon conversion (4)
     —       —       —       102,745  
Non-GAAP provision for income taxes adjustment (5)
     (3,598 )     (1,437 )     (3,763 )     (2,866 )
 
                        
Non-GAAP net income attributable to common stockholders
   $ 6,919     $ 4,642     $ 17,589     $ 13,866  
 
                        
 
                                
GAAP diluted weighted average shares outstanding
     46,136       46,164       45,593       27,052  
Conversion of Series A through E preferred stock
     —       —       —       4,122  
Conversion of Series AA, BB and CC preferred stock
     —       —       —       6,305  
Dilutive effect of stock options and warrants
     —       —       —       3,713  
 
                        
Non-GAAP diluted weighted average shares outstanding
     46,136       46,164       45,593       41,192  
 
                        
 
                                
Non-GAAP diluted net income per share
   $ 0.15     $ 0.10     $ 0.39     $ 0.34  
 
                        

 

 

Footnotes — Adjustments
 
(1)   Represents noncash stock-based compensation charges associated with stock options and restricted stock units granted as follows:
                                 
    Three Months Ended     Nine Months Ended  
    December 31,     December 31,  
    2007     2006     2007     2006  
Cost of services revenue
   $ 44     $ 24     $ 119     $ 75  
Sales and marketing
     1,073       701       2,990       1,978  
Research and development
     304       182       884       564  
General and administrative
     786       538       2,240       1,709  
 
                        
Total noncash stock-based compensation expense
   $ 2,207     $ 1,445     $ 6,233     $ 4,326  
 
                        
 
(2)   Represents additional FICA expenses incurred by CommVault when employees exercise in the money stock options.
 
(3)   Represents accretion of preferred stock dividends due on CommVault’s Series A through E cumulative redeemable convertible preferred stock prior to its conversion to common stock on September 27, 2006.
 
(4)   Represents accretion of fair value of Series A through E cumulative redeemable convertible preferred stock upon conversion to common stock on September 27, 2006.
 
(5)   The provision for income taxes is adjusted to reflect CommVault’s estimated non-GAAP effective tax rate of approximately 28% in fiscal 2008 and 25% starting in the second quarter of fiscal 2007 which resulted in an estimated effective tax rate of approximately 20% for fiscal 2007.