-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P537Ot1Yi3hMLA/5trPBTMUx7/ozpt/sPLKblWlX+VekGYkQC8lc1nGqngzB5Ai+ SQrSI1xZphFVDBYbx1rPUQ== 0001157523-07-007132.txt : 20070724 0001157523-07-007132.hdr.sgml : 20070724 20070724160126 ACCESSION NUMBER: 0001157523-07-007132 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070724 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070724 DATE AS OF CHANGE: 20070724 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Double-Take Software, Inc. CENTRAL INDEX KEY: 0001370314 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 200230046 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33184 FILM NUMBER: 07996313 BUSINESS ADDRESS: STREET 1: 257 TURNPIKE ROAD, SUITE 210 CITY: SOUTHBOROUGH STATE: MA ZIP: 01772 BUSINESS PHONE: 508-229-8810 MAIL ADDRESS: STREET 1: 257 TURNPIKE ROAD, SUITE 210 CITY: SOUTHBOROUGH STATE: MA ZIP: 01772 8-K 1 a5454996.txt DOUBLE-TAKE SOFTWARE, INC. 8-K - -------------------------------------------------------------------------------- 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 July 24, 2007 (Date of earliest event reported) Double-Take Software, Inc. (Exact Name of Registrant as Specified in its Charter) DELAWARE 001-33184 20-0230046 -------- --------- ---------- (State or other jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) entification No.) 257 TURNPIKE ROAD, SUITE 210 SOUTHBOROUGH, MASSACHUSETTS 01772 877-335-5674 --------------------------- ----- ------------ (Address of principal executive offices) (Zip Code) (Registrant's telephone number including area code) 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)) INFORMATION TO BE INCLUDED IN THE REPORT Section 2 - Financial Information Item 2.02 Results of Operations and Financial Condition. On July 24, 2007, Double-Take Software, Inc. issued a press release reporting financial results for the quarter ended June 30, 2007. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Section 9 - Financial Statements and Exhibits Item 9.01 Financial Statements and Exhibits. (d) Exhibits 99.1 Double-Take Software, Inc. press release dated July 24, 2007, announcing financial results for the quarter ended June 30, 2007. 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. Double-Take Software, Inc. Date: July 24, 2007 By: S. CRAIG HUKE ------------------------------------------- S. Craig Huke Vice President and Chief Financial Officer EXHIBIT INDEX 99.1 Double-Take Software, Inc. press release dated July 24, 2007, announcing financial results for the quarter ended June 30, 2007. EX-99.1 2 a5454996ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Double-Take Software, Inc. Announces Second Quarter 2007 Financial Results SOUTHBOROUGH, Mass.--(BUSINESS WIRE)--July 24, 2007--Double-Take Software, Inc. (NASDAQ: DBTK), a leading provider of recovery solutions, today announced its financial results for the second quarter 2007. "We had great revenue and operating income growth and are very pleased with our results in the quarter ending June 30. We continue to see solid demand for our products and continued tangible benefits within our customer base as they protect themselves against unplanned downtime. Revenue was strong, in part, due to a robust demand amongst our customers to ensure their licenses are under contract to receive recent product updates and, I believe, because of our position as a trusted provider of software for disaster recovery in the virtual market space and for full server recovery" said Dean Goodermote, Chairman of the Board and CEO of Double-Take Software. Total revenue for the quarter, which consists of software revenue, maintenance and professional services revenue, increased 36.2% to $20.0 million in the second quarter of 2007 from $14.7 million in the second quarter of 2006. Revenue for the second quarter of 2007 includes revenue from Double-Take EMEA for the entire quarter. (Double-Take EMEA, which was Double-Take Software's near exclusive distributor in Europe, was acquired by the Company on May 23, 2006). Software revenue increased 24.4% to $12.0 million in the second quarter of 2007 from $9.6 million in the second quarter of 2006. Maintenance and professional services revenue increased 58.7% to $8.0 million in the second quarter of 2007 from $5.1 million in the second quarter of 2006. Operating expenses for the second quarter of 2007 increased 35.6% to $13.9 million from $10.3 million in the second quarter of 2006. Included in the operating expenses are the following items: -- Stock option expense of $0.5 million in the second quarter of 2007 related to SFAS 123R as compared to $0.3 million in the same quarter in '06 related to SFAS 123R and the vesting of stock options for the former CEO. -- Amortization of intangible assets of $0.2 million for the second quarter of 2007 as compared to $0.1 million in the second quarter of 2006 related to the acquisition of Double Take EMEA. Income from operations was $4.0 million in the second quarter of 2007 compared to $2.1 million in the second quarter of 2006. The company recently completed an analysis of the valuation allowance recorded against its deferred tax assets and concluded that the Company should reduce the valuation allowance related to its deferred tax assets by $4.7 million. This amount represents the benefit that the Company has determined, in the second quarter, that it is more likely than not to realize in future periods from utilization of net operating loss carryforwards. Additionally, the Company recorded a current tax expense of $1.9 million in the second quarter. The result was a net tax benefit during the quarter of $2.8 million. Net income attributable to common stockholders, which includes the aforementioned deferred tax benefit, was $7.5 million, or $0.33 per diluted share, in the second quarter of 2007 compared to net income attributable to common stockholders of $0.1 million, or $0.02 per diluted share, in the second quarter of 2006. Income from operations on an adjusted, non-GAAP basis in the second quarter of 2007 was $4.4 million, compared to $2.4 million in the second quarter of 2006. Adjusted, non-GAAP net income before accretion and dividends on preferred stock in the second quarter of 2007 was $8.0 million, which includes the deferred tax benefit, compared to $2.4 million in the second quarter of 2006. Dividend and accretion charges occurred until our Initial Public Offering in December 2006 when all preferred shares were converted into common shares. Adjusted, non-GAAP net income per diluted share, which includes the effect of the deferred tax benefit, was $0.35 in the second quarter of 2007. We calculate these adjusted non-GAAP income measures by excluding the effects in the respective periods of the non-cash SFAS 123R and other stock-based compensation expenses described as components of Operating Expenses above. An explanation of these non-GAAP financial measures and a reconciliation of these measures to GAAP results are provided in the tables included in this press release, and these measures should only be viewed together with the reconciliation and the further explanation given under "Non-GAAP Financial Measures" below. Cash, cash equivalents, and short term investments at June 30, 2007 totaled $60.9 million. Guidance Revenue for the third quarter of 2007 is anticipated to be in the range of $20.2 to $20.7 million and adjusted non-GAAP operating income is expected to be $3.8 to $4.0 million. The effective income tax rate is expected to be approximately 35% to 40%. Non-GAAP net income per share for the third quarter of 2007 is expected to be in the range of $0.11 to $0.12 per share excluding the impact of stock-based compensation charges and weighted average diluted shares are expected to be approximately 23.4 to 23.5 million shares. Weighted average shares are calculated using the treasury method and include anticipated stock option grants and exercises but no other issuance of shares. After taking the results of Q2 2007 into account, the Company is increasing its full year revenue, operating income and earnings per share guidance. Full-year 2007 revenue is now expected to be in the range of $81.1 to $82.1 million. Operating income is expected to be $15.3 to $16.0 million and adjusted, non-GAAP income per share for the full year 2007 is expected to be in the range of $0.72 to $0.74 excluding the impact of stock based compensation charges and using an estimated full year effective tax rate of approximately 10%. The full year effective tax rate includes the effects of the deferred tax benefit. Weighted average diluted shares are assumed to be approximately 23.2 to 23.3 million shares. Weighted average shares are calculated using the treasury method and include anticipated stock option grants and exercises but no other issuance of shares. See "Non-GAAP Financial Measures" and "Important Note to Investors" below Non-GAAP Financial Measures Double-Take Software, Inc. has provided in this press release adjusted financial information that has not been prepared in accordance with generally accepted accounting principles, or GAAP. These non-GAAP financial measures are identified above as "adjusted, non-GAAP" measures. Double-Take Software, Inc. uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to, but not as a substitute for, GAAP measures, in evaluating the Company's operational performance. Double-Take Software, Inc. believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating operating results and trends, and in comparing its financial results with other companies in Double-Take Software, Inc.'s industry, many of which present similar non-GAAP financial measures to investors. The historical non-GAAP financial measures presented above exclude the following item required to be included by GAAP: non-cash stock-based compensation charges. The Company's expectations for adjusted, non-GAAP income and income per share for the third quarter of 2007 and full-year 2007 exclude the impact of stock-based compensation charges, the amount and significance of which, because of the information and assumptions underlying those charges, cannot readily be determined at this time. 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. A reconciliation of historic non-GAAP financial measures presented above to GAAP results has been provided in the financial statement tables included in this press release. Conference Call Information Double-Take Software, Inc. will discuss these financial results in a conference call at 4:30 p.m. EDT, today. The public is invited to listen to a live web cast of Double-Take Software, Inc.'s conference call on the investor relations section of our website at www.doubletake.com. For those who are unable to participate in the live conference call, an audio replay will be available until Friday, July 27, 2007 at 11:59 p.m. EST. To access the audio replay, dial 888-203-1112 or 719-457-0820 and enter confirmation code 3403683. A web cast replay of the call will be available on the investor relations section at www.doubletake.com approximately two hours after the conclusion of the call and will remain available for 90 days. About Double-Take(R) Software, Inc. Headquartered in Southborough, Massachusetts, Double-Take(R) Software (NASDAQ: DBTK - News) provides software for accessible and affordable data protection for Microsoft(R) Windows(R) applications. For more information, please visit www.doubletake.com. Important Note to Investors Statements made in this press release regarding Double-Take Software that are not historical facts are forward-looking statements based on current expectations, assumptions, estimates and projections about Double-Take Software and the industry. These forward-looking statements are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Forward-looking statements can be identified by words such as "anticipate", "believe", "could", "estimate", "expect" "intend", "may", "should" "will" and "would". These forward-looking statements include, without limitation, statements under the heading "Guidance" above. Actual results could differ materially from those expressed or implied by these forward-looking statements as a result of various factors, including the various risks described in the "Risk Factors" section and elsewhere in the Company's Annual Report on Form 10-K for the year ended December 31, 2006 filed with the Securities and Exchange Commission on March 30, 2007. The Company undertakes no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future. (C) Double-Take Software, Inc. All rights reserved. Double-Take is a registered trademark of Double-Take Software, Inc. Microsoft, Windows, and the Windows logo are trademarks or registered trademarks of Microsoft Corporation in the United States and/or other countries. Double-Take Software, Inc. Condensed Consolidated Balance Sheets (in thousands) (Unaudited) June Dec 31, 30, 2007 2006 ------- ------- ASSETS Current assets: Cash and cash equivalents $37,429 $55,170 Short term investments 23,434 - Accounts receivable, net 14,537 12,676 Inventory - 14 Prepaid expenses and other current assets 1,702 2,210 Deferred tax assets 2,849 - ------- ------- Total current assets 79,951 70,070 Property and equipment, net 2,881 3,000 Customer relationships, net 1,766 1,993 Marketing relationships, net 1,717 1,842 Goodwill 1,820 - Other assets 127 121 ------- ------- Total assets $88,262 $77,026 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 1,480 2,217 Accrued expenses 4,708 6,845 Accrued purchase price payable - 1,425 Other liabilities 466 135 Deferred revenue 19,161 16,774 ------- ------- Total current liabilities 25,815 27,396 Long-term deferred revenue, less current portion 4,073 3,977 Long-term deferred rent, less current portion 339 406 Long-term capital lease obligations, less current portion 7 17 Stockholders' equity 58,028 45,230 ------- ------- Total liabilities and stockholders' equity $88,262 $77,026 ======= ======= Double-Take Software, Inc. Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Six Months Ended Ended June 30, June 30, --------------- ---------------- 2007 2006 2007 2006 ------- ------- ------- -------- Revenue: Software licenses $11,991 $9,637 $22,381 $16,009 Maintenance and professional services 8,021 5,055 15,556 9,362 ------- ------- ------- -------- Total revenue 20,012 14,692 37,937 25,371 Cost of revenue: Software licenses 118 811 145 815 Maintenance and professional services 2,008 1,462 3,865 2,723 ------- ------- ------- -------- Total cost of revenue 2,126 2,273 4,010 3,538 ------- ------- ------- -------- Gross margin 17,886 12,419 33,927 21,833 Operating expenses: Sales and marketing 6,845 5,620 13,748 9,950 Research and development 2,839 2,532 5,714 4,996 General and administrative 3,690 1,767 6,907 3,794 Depreciation and amortization 555 351 1,104 602 ------- ------- ------- -------- Total operating expenses 13,929 10,270 27,473 19,342 ------- ------- ------- -------- Income from operations 3,957 2,149 6,454 2,491 Interest income 772 70 1,415 121 Interest expense (11) (26) (30) (43) Foreign exchange loss 6 55 5 55 ------- ------- ------- -------- Income before income taxes 4,724 2,248 7,844 2,624 Income tax expense (2,768) 83 (2,586) 86 ------- ------- ------- -------- Net income 7,492 2,165 10,430 2,538 Less: accretion on preferred redeemable shares - (1,332) - (2,666) Less: dividends on preferred redeemable shares - (722) - (1,420) ------- ------- ------- -------- Net income (loss) attributable to common stockholders $7,492 $111 $10,430 ($1,548) ======= ======= ======= ======== Net income (loss) attributable to common stockholders per share: Basic $0.36 $0.03 $0.50 ($0.41) ======= ======= ======= ======== Diluted $0.33 $0.02 $0.45 ($0.41) ======= ======= ======= ======== Weighted-average number of shares used in per share amounts: Basic 21,038 3,794 20,963 3,792 ======= ======= ======= ======== Diluted 23,031 5,987 22,991 3,792 ======= ======= ======= ======== Double-Take Software, Inc. Consolidated Statements of Cash Flows (In thousands, except per share data) (Unaudited) Six months ended June 30, 2007 2006 -------- ------- Cash flows from operating activities: Net Income $10,430 $2,538 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 752 529 Amortization of intangible assets 352 73 Provision for doubtful accounts 231 100 Stock option expense 755 670 Deferred income taxes (2,849) - Issuance of Series C Preferred shares to management - 107 Changes in: Accounts receivable (1,975) 1,410 Prepaid expenses and other assets 611 (346) Inventories 14 886 Other assets (4) (11) Accounts payable and accrued expenses (3,035) (5,020) Other liabilities 343 51 Deferred revenue 2,318 1,826 -------- ------- Net cash provided by (used in) operating activities $7,943 $2,813 -------- ------- Cash flows from investing activities: Purchase of property and equipment (628) (824) Purchase of short term investments (23,434) - Earn-out payments on acquisition of Double-Take EMEA (3,245) 327 -------- ------- Cash flows from investing activities (27,307) (497) Cash flows from financing activities: Expenses from initial public offering (113) - Proceeds from exercise of stock options 693 6 Excess tax benefits from stock based compensation 1,089 - Payments on capital lease obligation (11) (1) -------- ------- Net cash provided by financing activities 1,658 5 Effect of exchange rate changes on cash and cash equivalents (35) (14) Net increase in cash and cash equivalents (17,706) 2,321 Cash and cash equivalents - beginning of period 55,170 8,341 -------- ------- Cash and cash equivalents - end of period $37,429 $10,648 ======== ======= Double-Take Software, Inc. Reconciliation of GAAP to Non-GAAP Financial Measures (In thousands, except per share data) (Unaudited) Three Months Six Months Ended Ended June 30, June 30, ------------- -------------- 2007 2006 2007 2006 ------ ------ ------- ------ Non-GAAP financial measures and reconciliation: GAAP income (loss) from operations $3,957 $2,149 $6,454 $2,491 Add: noncash stock option expense (1) 483 102 755 149 Add: noncash stock option expense for former CEO (2) - 151 - 550 ------ ------ ------- ------ Non-GAAP income from operations $4,440 $2,402 $7,209 $3,190 ====== ====== ======= ====== GAAP net income prior to accretion and dividends on convertible preferred shares$7,492 $2,165 $10,430 $2,538 Add: noncash stock option expense (1) 483 102 755 149 Add: noncash stock option expense for former CEO (2) - 151 - 550 ------ ------ ------- ------ Non-GAAP net income prior to accretion and dividends on convertible preferred shares in 2006 $7,975 $2,418 $11,185 $3,237 ====== ====== ======= ====== Non-GAAP income per share (3): Basic $0.38 $0.53 ====== ======= Diluted $0.35 $0.49 ====== ======= Weighted-average number of shares used in per share amounts: Basic 21,038 20,963 ====== ======= Diluted 23,031 22,991 ====== ======= Footnotes to Adjustments - ------------------------------------------ (1) Represents noncash stock compensation charge associated with stock option grants as follows: Three Months Six Months Ended Ended June 30, June 30, ------------- -------------- 2007 2006 2007 2006 ------ ------ ------- ------ Stock option expense by line item: Cost of maintenance and professional services $46 $16 $67 $24 Sales and marketing 93 33 144 51 Research and development 69 34 98 53 General and administrative 275 19 446 21 ------ ------ ------- ------ $483 $102 $755 $149 ====== ====== ======= ====== (2) Represents noncash stock-based compensation charges associated with vesting options for the former CEO. (3) Presentation of non-GAAP net loss per share prior to accretion and dividends on preferred shares for 2006 has not been made because the effect would be anti-dilutive. For the three months ended June 30, 2006, non-GAAP income per share excluding stock based compensation but including accretion and dividends on preferred shares would have been $0.06 per share. For the six months ended June 30, 2006, non- GAAP loss per share excluding stock based compensation but including accretion and dividends of preferred shares would have been ($0.22) per share. CONTACT: Double-Take Software, Inc. S. Craig Huke, 317-572-1857 Chief Financial Officer investor@doubletake.com or Sapphire Investor Relations, LLC Erica Mannion, 212-766-1800 Investor Relations investor@doubletake.com -----END PRIVACY-ENHANCED MESSAGE-----