SAN CARLOS, Calif., April 2, 2009 (GLOBE NEWSWIRE) -- DemandTec, Inc. (Nasdaq:DMAN), a leading provider of on-demand optimization solutions for retailers and consumer products manufacturers, today announced financial results for the fourth quarter and fiscal year 2009 ended February 28, 2009.
"DemandTec continued to deliver value to our customers as shown in our strong fourth quarter and fiscal year 2009 results, in what was a very difficult environment. I am pleased that during our fiscal year 2009 we posted solid revenue growth, increased operating margins and generated strong free cash flow, all during a time of severe global economic challenges," said Dan Fishback, DemandTec's president and chief executive officer.
"Furthermore, we posted annual revenue growth of over 22% for fiscal year 2009 and we generated $10.7 million of free cash flow during the year, a 50% increase over our last fiscal year," added Mr. Fishback.
Fourth Quarter Financial Highlights
Revenue: Revenue was $19.3 million in the fourth quarter of fiscal year 2009, up 11% from $17.4 million in the fourth quarter of fiscal year 2008 and 2% from $19.0 million in the third quarter of fiscal year 2009.
Gross Profit: GAAP gross profit was $13.3 million in the fourth quarter of fiscal year 2009. Non-GAAP gross profit, which excludes stock-based compensation expense and amortization of purchased intangibles, was $14.0 million in the fourth quarter of fiscal year 2009, up 12% from the fourth quarter of fiscal year 2008 and representing a non-GAAP gross margin of 72.2%.
GAAP Operating and Net Loss: Loss from operations was $1.8 million in the fourth quarter of fiscal year 2009, compared to a loss from operations of $1.9 million in the fourth quarter of fiscal year 2008. Net loss attributable to common stockholders was $1.5 million, or ($0.06) per share, in the fourth quarter of fiscal year 2009, compared to net loss attributable to common stockholders of $1.2 million, or ($0.04) per share, in the fourth quarter of fiscal year 2008.
Non-GAAP Operating and Net Income: Non-GAAP income from operations, which excludes $2.1 million in stock-based compensation expense and $643,000 in amortization of purchased intangibles, was $958,000 in the fourth quarter of fiscal year 2009, compared to non-GAAP income from operations of $659,000 in the fourth quarter of fiscal year 2008. Non-GAAP net income attributable to common stockholders was $1.2 million, or $0.04 per diluted share, in the fourth quarter of fiscal year 2009, compared to non-GAAP net income attributable to common stockholders of $1.3 million, or $0.04 per diluted share, in the fourth quarter of fiscal year 2008.
Cash: Cash, cash equivalents and marketable securities at the end of the fiscal year 2009 totaled $87.9 million, an increase of approximately $2.2 million from the end of the third quarter of fiscal 2009. The increase was primarily attributable to cash generated from operations in the fourth quarter. For fiscal year 2009, the company generated $13.8 million in cash flow from operations and invested $3.1 million in capital expenditures, resulting in free cash flow of $10.7 million for the fiscal year.
Fiscal Year 2009 Financial Highlights
Revenue: Revenue was $75.0 million for the fiscal year 2009, up 22% from $61.3 million in fiscal year 2008.
Gross Profit: GAAP gross profit was $51.7 million for fiscal year 2009. Non-GAAP gross profit, which excludes stock-based compensation expense and amortization of purchased intangibles, was $54.0 million for fiscal year 2009, up 26% from fiscal year 2008 and representing a non-GAAP gross margin of 72.0%.
GAAP Operating and Net Loss: Loss from operations was $6.6 million for fiscal year 2009, compared to a loss from operations of $5.6 million for fiscal year 2008. Net loss attributable to common stockholders was $5.0 million, or ($0.18) per diluted share, for fiscal year 2009, compared to net loss attributable to common stockholders of $4.5 million, or ($0.25) per diluted share, for fiscal year 2008.
Non-GAAP Operating and Net Income: Non-GAAP income from operations, which excludes $8.0 million in stock-based compensation expense and $1.9 million in amortization of purchased intangibles, was $3.2 million for fiscal year 2009, compared to non-GAAP income from operations of $742,000 for fiscal year 2008. Non-GAAP net income attributable to common stockholders was $4.9 million, or $0.15 per diluted share, for fiscal year 2009, compared to non-GAAP net income attributable to common stockholders of $1.8 million, or $0.08 per diluted share, for fiscal year 2008.
Conference Call Information
DemandTec will host a conference call today, April 2, 2009, at 5:00 p.m. ET (2:00 p.m. PT) to discuss the company's financial results and financial guidance. Those interested in participating in the call should dial 800-218-4007. A replay of the conference call will be available by calling 303-590-3000 or 800-405-2236 using passcode 11128111 starting at approximately 8:00 p.m. ET on Thursday, April 2, 2009 and ending on Thursday, April 16, 2009. In addition, an archived webcast will be available on the Investor Relations page of the company's website at http://investor.demandtec.com.
About DemandTec
DemandTec (Nasdaq:DMAN) enables retailers and consumer products companies to optimize merchandising and marketing decisions, individually or collaboratively, to achieve their sales volume, revenue, and profitability objectives. DemandTec software services utilize DemandTec's science-based software platform to model and understand consumer behavior. DemandTec customers include more than 195 leading retail and consumer products manufacturers such as ACE Hardware, Advance Auto Parts, Belk, Best Buy, Bon-Ton Stores, Circle K Stores, ConAgra Foods, Delhaize America, General Mills, Giant-Carlisle, H-E-B Grocery Co, Hormel Foods, Monoprix, PETCO, Safeway, Sara Lee, Spartan Stores, The Home Depot, Toys R US and WH Smith. Connected via the DemandTec TradePoint Network(tm), DemandTec customers have collaborated online with nearly 2.2 million trade deals. For more information, please visit www.demandtec.com.
The DemandTec, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5191
Forward-Looking Statements
This press release contains forward-looking statements regarding DemandTec's expectations, hopes, plans, intentions or strategies, including statements about the company's future financial performance, financial condition or results of operations. We may, in some cases, use words such as "believes," "expects," "anticipates," "plans," "estimates," and similar expressions to identify these forward-looking statements. These forward-looking statements involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include changes in our pricing policies or those of our competitors, fluctuations in demand for our software, our ability to develop and implement in a timely manner new software and enhancements that meet customer requirements, any significant changes in the competitive dynamics of our market, including new entrants or substantial discounting of products, general economic conditions in the retail and consumer products markets, the impact of the recent global economic crisis or other adverse economic conditions, and other risks and uncertainties described more fully in our documents filed with or furnished to the Securities and Exchange Commission ("SEC"). More information about these and other risks that may impact DemandTec's business are set forth in DemandTec's Quarterly Report on Form 10-Q, as well as subsequent reports filed with the SEC. All forward-looking statements in this press release are based on information available to us as of the date hereof, and we assume no obligation to update these forward-looking statements. Any future products, features or related specifications that may be referenced in this release are for information purposes only and are not commitments to deliver any technology or enhancement. DemandTec reserves the right to modify future product plans at any time.
Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), this press release and the accompanying tables contain non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons why management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled "Use of Non-GAAP Financial Measures" as well as the related tables. We anticipate disclosing forward-looking non-GAAP financial information in our conference call to discuss our fourth quarter of fiscal year 2009 results, including an estimate of non-GAAP operating income and net earnings per share for the first quarter that excludes stock-based compensation expenses, amortization of purchased intangibles and other non-recurring charges. We cannot readily estimate our expected stock-based compensation expenses for these future periods as they depend upon such factors as our future stock price for purposes of computation.
A copy of this press release can be found on the investor relations page of DemandTec's website at www.demandtec.com.
DemandTec and the DemandTec logo are registered trademarks of DemandTec, Inc. DemandTec TradePoint Network is a trademark of DemandTec, Inc.
--------------------
DemandTec, Inc.
Consolidated
Balance Sheets
(in thousands)
--------------------
Feb. 28, Feb. 29,
2009 2008
--------- ---------
(unaudited)
Current assets:
Cash and cash equivalents $ 33,572 $ 43,257
Marketable securities 46,426 30,547
Accounts receivable, net of allowances 11,000 18,227
Other current assets 4,230 4,161
--------- ---------
Total current assets 95,228 96,192
--------- ---------
Marketable securities, non-current 7,886 2,085
Property, equipment and leasehold
improvements, net 5,429 5,139
Intangible assets 8,405 3,761
Goodwill 16,492 5,290
Other assets 715 1,329
--------- ---------
Total assets $ 134,155 $ 113,796
========= =========
Current liabilities:
Accounts payable and accrued expenses $ 12,955 $ 6,969
Deferred revenue 46,415 44,006
Merger consideration payable 12,343 --
Other current liabilities 1,727 478
--------- ---------
Total current liabilities 73,440 51,453
--------- ---------
Deferred revenue, non-current 2,400 11,369
Other long-term liabilities 1,666 677
Stockholders' equity:
Common stock 133,348 122,725
Accumulated other comprehensive income 682 --
Accumulated deficit (77,381) (72,428)
--------- ---------
Total stockholders' equity 56,649 50,297
--------- ---------
Total liabilities and stockholders' equity $ 134,155 $ 113,796
========= =========
------------------------------------------
DemandTec, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
------------------------------------------
Three Three
Year Year Months Months
Ended Ended Ended Ended
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2009 2008 2009 2008
--------- --------- --------- ---------
(unaudited) (unaudited)(unaudited)
Revenue $ 75,005 $ 61,270 $ 19,330 $ 17,404
Cost of revenue 23,331 20,444 5,996 5,546
--------- --------- --------- ---------
Gross profit 51,674 40,826 13,334 11,858
--------- --------- --------- ---------
Operating expenses:
Research and development 26,787 22,445 7,015 6,709
Sales and marketing 20,343 17,290 5,093 4,974
General and
administrative 9,888 6,292 2,555 1,938
Amortization of purchased
intangible assets 1,241 360 490 89
--------- --------- --------- ---------
Total operating expenses 58,259 46,387 15,153 13,710
--------- --------- --------- ---------
Loss from operations (6,585) (5,561) (1,819) (1,852)
Other income, net 1,585 1,542 228 821
--------- --------- --------- ---------
Loss before provision
(benefit) for income taxes (5,000) (4,019) (1,591) (1,031)
Provision (benefit) for
income taxes (47) 455 (48) 136
--------- --------- --------- ---------
Net loss (4,953) (4,474) (1,543) (1,167)
Accretion to redemption
value of preferred stock -- 13 -- --
--------- --------- --------- ---------
Net loss attributable to
common stockholders (4,953) (4,487) (1,543) (1,167)
Net loss per share - basic
and diluted $ (0.18) $ (0.25) $ (0.06) $ (0.04)
========= ========= ========= =========
Weighted shares used
in per share
calculation,
basic and diluted 27,372 17,612 27,922 26,332
------------------------------------------
DemandTec, Inc.
Consolidated Statements of Cash Flows
(in thousands)
------------------------------------------
Three Three
Year Year Months Months
Ended Ended Ended Ended
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2009 2008 2009 2008
--------- --------- --------- ---------
(unaudited) (unaudited) (unaudited)
Operating activities:
Net loss $ (4,953) $ (4,474) $ (1,543) $ (1,167)
Adjustments to reconcile
net loss to net cash
provided by operating
activities:
Depreciation 2,930 1,929 781 539
Stock-based
compensation expense 7,979 5,335 2,134 2,270
Amortization of
warrants issued in
conjunction with debt -- 64 -- --
Amortization and
revaluation to fair
value of warrants
issued in conjunction
with debt -- 119 -- --
Amortization of
purchased intangible
assets 1,851 968 643 241
Amortization of
financing costs 20 93 8 --
Charge on early
extinguishment
of debt -- 504 -- --
Provision for accounts
receivable (40) 98 -- (28)
Other 286 (81) 79 (14)
Changes in operating
assets and liabilities:
Accounts receivable 7,706 (3,927) 1,751 (657)
Prepaid expenses and
other current assets (233) (1,149) (118) (488)
Deferred commissions 1,261 (317) 417 (203)
Other assets 135 (341) 501 (261)
Accounts payable and
accrued expenses 1,586 (2,161) (1,786) (320)
Accrued compensation 2,363 1,392 1,960 336
Deferred revenue (7,078) 13,203 (1,804) 2,777
--------- --------- --------- ---------
Net cash provided by
operating activities 13,813 11,255 3,023 3,025
--------- --------- --------- ---------
Investing activities:
Acquisition of
TradePoint, net of
cash received -- (1,358) -- (33)
Acquisition of
Connect3, net of
cash received 257 -- 257 --
Purchases of property,
equipment, and
leasehold improvements (3,117) (4,127) (823) (1,151)
Purchase of marketable
securities (82,500) (86,583) (12,695) (29,931)
Maturities of
marketable securities 60,820 58,393 15,600 42,643
Purchase of intangible
assets (1,500) -- (500) --
Removal of cash
restriction 200 -- -- --
--------- --------- --------- ---------
Net cash provided by
(used in) investing
activities (25,840) (33,675) 1,839 11,528
--------- --------- --------- ---------
Financing activities:
Proceeds from issuance
of common stock, net
of repurchases 2,603 374 284 92
Net cash proceeds from
initial public
offering -- 57,631 -- 20
Decrease in liability
associated with
offering costs -- -- -- (166)
Payments on line of
credit -- (3,000) -- --
Payments on notes
payable (8) (10,400) -- --
--------- --------- --------- ---------
Net cash provided by
financing activities 2,595 44,605 284 (54)
--------- --------- --------- ---------
Effect of exchange rate
changes on cash and
cash equivalents (253) 36 (57) (4)
--------- --------- --------- ---------
Net increase (decrease)
in cash and cash
equivalents (9,685) 22,221 5,089 14,495
Cash and cash equivalents
at beginning of period 43,257 21,036 28,483 28,762
--------- --------- --------- ---------
Cash and cash equivalents
at end of period $ 33,572 $ 43,257 $ 33,572 $ 43,257
========= ========= ========= =========
Supplemental information:
Cash paid for interest $ 65 $ 956 $ 56 $ --
========= ========= ========= =========
Cash paid for income
taxes $ 157 $ 320 $ (51) $ 120
========= ========= ========= =========
Reclassification of
preferred stock warrant
from liability to
additional paid-in
capital $ -- $ 714 $ -- $ --
========= ========= ========= =========
Conversion of preferred
stock to common stock
and additional paid-in
capital $ -- $ 51,144 $ -- $ --
========= ========= ========= =========
------------------------------------------
DemandTec, Inc.
Reconciliation of GAAP to Non-GAAP
Financial Measures
(in thousands, except per share data)
(unaudited)
------------------------------------------
Three Three
Year Year Months Months
Ended Ended Ended Ended
Feb. 28, Feb. 29, Feb. 28, Feb. 29,
2009 2008 2009 2008
--------- --------- --------- ---------
GAAP cost of revenue $ 23,331 $ 20,444 $ 5,996 $ 5,546
Deduct:
Stock-based compensation (1,712) (1,261) (469) (422)
Amortization of purchased
intangible assets (610) (608) (153) (152)
--------- --------- --------- ---------
Non-GAAP cost of revenue $ 21,009 $ 18,575 $ 5,374 $ 4,972
========= ========= ========= =========
GAAP gross profit $ 51,674 $ 40,826 $ 13,334 $ 11,858
Add back:
Stock-based compensation 1,712 1,261 469 422
Amortization of purchased
intangible assets 610 608 153 152
--------- --------- --------- ---------
Non-GAAP gross profit $ 53,996 $ 42,695 $ 13,956 $ 12,432
========= ========= ========= =========
GAAP gross margin 68.9% 66.6% 69.0% 68.1%
Add back:
Stock-based compensation 2.3% 2.1% 2.4% 2.5%
Amortization of purchased
intangible assets 0.8% 1.0% 0.8% 0.8%
--------- --------- --------- ---------
Non-GAAP gross margin 72.0% 69.7% 72.2% 71.4%
========= ========= ========= =========
GAAP research and
development expense $ 26,787 $ 22,445 $ 7,015 $ 6,709
Deduct stock-based
compensation (2,261) (1,824) (580) (997)
--------- --------- --------- ---------
Non-GAAP research and
development expense $ 24,526 $ 20,621 $ 6,435 $ 5,712
========= ========= ========= =========
GAAP sales and marketing
expense $ 20,343 $ 17,290 $ 5,093 $ 4,974
Deduct stock-based
compensation (2,263) (1,367) (564) (537)
--------- --------- --------- ---------
Non-GAAP sales and
marketing expense $ 18,080 $ 15,923 $ 4,529 $ 4,437
========= ========= ========= =========
GAAP general and
administrative expense $ 9,888 $ 6,292 $ 2,555 $ 1,938
Deduct stock-based
compensation (1,743) (883) (521) (314)
--------- --------- --------- ---------
Non-GAAP general and
administrative expense $ 8,145 $ 5,409 $ 2,034 $ 1,624
========= ========= ========= =========
GAAP total operating
expense $ 58,259 $ 46,387 $ 15,153 $ 13,710
Deduct:
Stock-based compensation (6,267) (4,074) (1,665) (1,848)
Amortization of purchased
intangible assets (1,241) (360) (490) (89)
--------- --------- --------- ---------
Non-GAAP total operating
expense $ 50,751 $ 41,953 $ 12,998 $ 11,773
========= ========= ========= =========
GAAP loss from operations $ (6,585) $ (5,561) $ (1,819) $ (1,852)
Add back stock-based
compensation and
amortization of
purchased intangible
assets 9,830 6,303 2,777 2,511
--------- --------- --------- ---------
Non-GAAP income from
operations $ 3,245 $ 742 $ 958 $ 659
========= ========= ========= =========
GAAP net loss
attributable to common
stockholders $ (4,953) $ (4,487) $ (1,543) $ (1,167)
Add back stock-based
compensation and
amortization of
purchased intangible
assets 9,830 6,303 2,777 2,511
--------- --------- --------- ---------
Non-GAAP net income
attributable to common
stockholders $ 4,877 $ 1,816 $ 1,234 $ 1,344
========= ========= ========= =========
GAAP net loss per share,
diluted $ (0.18) $ (0.25) $ (0.06) $ (0.04)
Add back stock-based
compensation and
amortization of
purchased intangible
assets $ 0.33 $ 0.33 $ 0.10 $ 0.08
--------- --------- --------- ---------
Non-GAAP net income
per share, diluted $ 0.15 $ 0.08 $ 0.04 $ 0.04
========= ========= ========= =========
GAAP weighted shares
outstanding, diluted 27,372 17,612 27,922 26,332
Add back dilutive effect
of common stock
equivalents on non-GAAP
net income basis 4,372 5,502 4,009 5,992
--------- --------- --------- ---------
Non-GAAP weighted shares
outstanding, diluted 31,744 23,114 31,931 32,324
========= ========= ========= =========
GAAP cash flow from
operations $ 13,813 $ 11,253 $ 3,023 $ 3,025
Deduct purchases of
property, equipment
and leasehold
improvements (3,117) (4,127) (823) (1,151)
--------- --------- --------- ---------
Non-GAAP free cash flow $ 10,696 $ 7,126 $ 2,200 $ 1,874
========= ========= ========= =========
Use of Non-GAAP Financial Measures
The accompanying press release dated April 2, 2009 contains non-GAAP financial measures. The above table reconciles the non-GAAP financial measures in the press release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP measures include non-GAAP cost of revenue, gross profit, gross margin, operating expenses, income from operations, net income, net income per share amounts, weighted average shares outstanding and free cash flow.
Our non-GAAP financial measures generally exclude costs and expenses for (i) amortization of purchased intangibles and (ii) stock-based compensation:
Amortization of Purchased Intangible Assets. In accordance with GAAP, we amortize intangible assets acquired in connection with our company and technology acquisitions over the estimated useful lives of the assets. In the case of in-process research and development costs, there is no estimated useful life and, as such, we amortize these costs in full upon the closing of the related acquisition. We exclude the amortization of purchased intangible assets from our non-GAAP financial measures because they (i) result from prior acquisitions, rather than the ongoing operating performance of our business, and (ii) absent additional acquisitions, are expected to decline over time as the remaining carrying amounts of these assets are amortized. We believe excluding these costs helps investors compare our financial performance with that of other companies with different acquisition histories. However, we recognize that amortization costs provide a helpful measure of the financial impact and performance of prior acquisitions and consider our non-GAAP financial measures in conjunction with our GAAP financial results that include amortization costs.
Stock-Based Compensation Expenses. We exclude stock-based compensation expense associated with equity incentives granted to employees, non-employees and non-executive directors in our non-GAAP financial measures. While stock-based compensation is a significant component of our expenses, we believe that investors may wish to exclude the effects of stock-based compensation expense in comparing our financial performance with that of other companies.
Non-GAAP financial measures should not be considered as a substitute for, or superior to, GAAP financial measures, which should be considered as the primary financial metrics for evaluating our financial performance. Significantly, non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. Instead, they are based on subjective determinations by management designed to supplement our GAAP financial measures. They are subject to a number of important limitations and should be considered only in conjunction with our consolidated financial statements prepared in accordance with GAAP. In addition, our non-GAAP financial measures differ from GAAP measures with the same names, may vary over time and may differ from non-GAAP financial measures with the same or similar names used by other companies. Accordingly, investors should exercise caution when evaluating our non-GAAP financial measures.