SAN CARLOS, Calif., Oct. 1, 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 second quarter of fiscal year 2010 ended August 31, 2009.
"We are pleased that our revenue and non-GAAP operating income exceeded our guidance for the quarter while our non-GAAP earnings per share were in-line with our guidance as we continued to focus on managing our business," said Dan Fishback, President and Chief Executive Officer of DemandTec. "DemandTec continues to invest and innovate. With nextGEN we deliver new integrated shopper insights, enhanced collaboration and operational efficiencies to quantify category, brand, and shopper behavior for a competitive advantage."
Financial Highlights
Revenue
* Revenue was $19.8 million in the second quarter of fiscal 2010, a
6% increase from $18.6 million in the second quarter of fiscal
2009 and a 1% increase from $19.5 million in the first quarter of
fiscal 2010.
Gross Profit
* GAAP gross profit was $13.5 million in the second quarter of
fiscal 2010, compared to gross profit of $12.8 million in the
second quarter of fiscal 2009.
* Non-GAAP gross profit, which excludes stock-based compensation
expense and amortization of purchased intangibles, was
$14.5 million, representing a non-GAAP gross margin of 73.2% in
the second quarter of fiscal 2010, compared to $13.4 million in
the second quarter of fiscal 2009, representing a non-GAAP gross
margin of 71.9%.
GAAP Operating and Net Loss
* GAAP loss from operations was $3.3 million in the second quarter
of fiscal 2010, compared to a loss from operations of
$1.9 million in the second quarter of fiscal 2009.
* GAAP net loss was $3.1 million, or ($0.11) per share in the
second quarter of fiscal 2010, compared to a GAAP net loss of
$1.6 million, or ($0.06) per share, in the second quarter of
fiscal 2009.
Non-GAAP Operating and Net Income
* Non-GAAP operating income was $606,000 in the second quarter of
fiscal 2010, which excludes $2.8 million in stock-based
compensation expense and $1.1 million in amortization of
purchased intangible assets, compared to non-GAAP operating
income of $839,000 in the second quarter of fiscal 2009.
* Non-GAAP net income was $750,000, or $0.02 per diluted share, in
the second quarter of fiscal 2010, compared to non-GAAP net
income of $1.2 million, or $0.04 per diluted share, in the second
quarter of fiscal 2009.
Balance Sheet
* Cash, cash equivalents and marketable securities at the end of
the second quarter of fiscal 2010 totaled $76.4 million, an
increase of approximately $1.1 million from the end of the first
quarter of fiscal 2010.
* The company generated $2.0 million in cash flow from operations
and invested $239,000 in capital expenditures, resulting in free
cash flow of $1.8 million in the second quarter of fiscal 2010.
Conference Call Information
DemandTec will host a conference call today, October 1, 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 866-225-8754. A replay of the conference call will be available by calling 303-590-3030 using passcode 4087009 starting at approximately 8:00 p.m. ET on Thursday, October 1, 2009 and ending on Thursday, October 8, 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 retailers and consumer products manufacturers such as Best Buy, ConAgra Foods, Delhaize America, General Mills, Giant-Carlisle, H-E-B Grocery Co., Hormel Foods, Monoprix, PETCO, Safeway, Sara Lee, The Home Depot, and WH Smith. Connected via the DemandTec TradePoint Network(TM), DemandTec customers have collaborated online with nearly 2.5 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, statements as to the plans of management for future operations, and statements as to management's beliefs regarding the market's interest in DemandTec's solutions. 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 Annual Report on Form 10-K, 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 second quarter of fiscal year 2010 results, including an estimate of non-GAAP operating income and net earnings per share for the third quarter of fiscal 2010 that excludes stock-based compensation expenses, amortization of purchased intangible assets and restructuring 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.
Condensed
Consolidated
Balance Sheets
(in thousands)
------------------
Aug. 31, Feb. 28,
2009 2009
-------- --------
(unaudited)
Current assets:
Cash and cash equivalents $ 33,669 $ 33,572
Marketable securities 34,860 46,426
Accounts receivable, net of allowances 4,553 11,000
Other current assets 3,406 4,230
-------- --------
Total current assets 76,488 95,228
-------- --------
Marketable securities, non-current 7,842 7,886
Property, equipment and leasehold improvements, net 4,238 5,429
Intangible assets 6,252 8,405
Goodwill 16,662 16,492
Other assets 575 715
-------- --------
Total assets $112,057 $134,155
======== ========
Current liabilities:
Accounts payable and accrued expenses $ 12,164 $ 12,962
Deferred revenue 39,824 46,415
Notes payable, current 434 1,720
Merger consideration payable 1,000 12,343
-------- --------
Total current liabilities 53,422 73,440
-------- --------
Deferred revenue, non-current 1,836 2,400
Other long-term liabilities 656 1,666
Stockholders' equity:
Common stock 140,004 133,348
Accumulated other comprehensive income 387 682
Accumulated deficit (84,248) (77,381)
-------- --------
Total stockholders' equity 56,143 56,649
-------- --------
Total liabilities and stockholders' equity $112,057 $134,155
======== ========
--------------------------------------
DemandTec, Inc.
Condensed Consolidated Statements
of Operations
(in thousands, except per share data)
(unaudited)
--------------------------------------
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Revenue $ 19,796 $ 18,632 $ 39,341 $ 36,686
Cost of revenue 6,300 5,846 13,004 11,501
-------- -------- -------- --------
Gross profit 13,496 12,786 26,337 25,185
-------- -------- -------- --------
Operating expenses:
Research and development 7,997 6,610 16,153 13,113
Sales and marketing 5,414 5,239 10,845 10,411
General and administrative 2,786 2,497 5,160 4,671
Restructuring charges -- -- 278 --
Amortization of purchased
intangible assets 588 331 1,177 420
-------- -------- -------- --------
Total operating expenses 16,785 14,677 33,613 28,615
-------- -------- -------- --------
Loss from operations (3,289) (1,891) (7,276) (3,430)
Other income, net 152 335 436 920
-------- -------- -------- --------
Loss before provision for
income taxes (3,137) (1,556) (6,840) (2,510)
Provision for income taxes 8 12 27 92
-------- -------- -------- --------
Net loss $ (3,145) $ (1,568) $ (6,867) $ (2,602)
======== ======== ======== ========
Net loss per share - basic
and diluted $ (0.11) $ (0.06) $ (0.24) $ (0.10)
======== ======== ======== ========
Weighted shares used in per
share calculation, basic
and diluted 28,535 27,204 28,346 26,951
--------------------------------------
DemandTec, Inc.
Condensed Consolidated Statements
of Cash Flows
(in thousands)
(unaudited)
--------------------------------------
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
Operating activities:
Net loss $ (3,145) $ (1,568) $ (6,867) $ (2,602)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation 783 736 1,551 1,408
Stock-based compensation
expense 2,842 2,246 5,260 4,035
Amortization of purchased
intangible assets 1,053 484 2,108 725
Other 27 170 14 131
Changes in operating assets
and liabilities:
Accounts receivable (345) 175 6,395 6,121
Other current assets 708 (224) 660 (291)
Other assets (275) (1,206) (5) (881)
Accounts payable and accrued
expenses (783) 2,088 486 3,213
Accrued compensation 926 1,643 (1,072) 1,064
Deferred revenue 198 (1,283) (7,155) (5,265)
-------- -------- -------- --------
Net cash provided by
operating activities 1,989 3,261 1,375 7,658
-------- -------- -------- --------
Investing activities:
Acquisition of Connect3 (1,201) -- (12,544) --
Purchases of property,
equipment, and leasehold
improvements (239) (401) (481) (1,484)
Purchase of marketable
securities (9,401) (17,040) (28,390) (36,054)
Maturities of marketable
securities 13,500 13,400 40,000 30,720
Purchase of intangible assets -- (200) -- (200)
Change in restricted cash -- -- -- 200
-------- -------- -------- --------
Net cash provided by (used in)
investing activities 2,659 (4,241) (1,415) (6,818)
-------- -------- -------- --------
Financing activities:
Proceeds from issuance of
common stock, net of
repurchases 544 557 1,387 1,596
Payments on notes payable -- -- (1,286) (8)
-------- -------- -------- --------
Net cash provided by financing
activities 544 557 101 1,588
-------- -------- -------- --------
Effect of exchange rate changes
on cash and cash equivalents 19 (199) 36 (189)
-------- -------- -------- --------
Net increase (decrease) in cash
and cash equivalents 5,211 (622) 97 2,239
Cash and cash equivalents at
beginning of period 28,458 46,118 33,572 43,257
-------- -------- -------- --------
Cash and cash equivalents at
end of period $ 33,669 $ 45,496 $ 33,669 $ 45,496
======== ======== ======== ========
--------------------------------------
DemandTec, Inc.
Reconciliation of GAAP to Non-GAAP
Financial Measures
(in thousands, except per share data)
(unaudited)
--------------------------------------
Three Months Ended Six Months Ended
August 31, August 31,
------------------ ------------------
2009 2008 2009 2008
-------- -------- -------- --------
GAAP cost of revenue $ 6,300 $ 5,846 $ 13,004 $ 11,501
Deduct:
Stock-based compensation (523) (465) (941) (854)
Amortization of purchased
intangible assets (465) (153) (931) (305)
-------- -------- -------- --------
Non-GAAP cost of revenue $ 5,312 $ 5,228 $ 11,132 $ 10,342
======== ======== ======== ========
GAAP gross profit $ 13,496 $ 12,786 $ 26,337 $ 25,185
Add back:
Stock-based compensation 523 465 941 854
Amortization of purchased
intangible assets 465 153 931 305
-------- -------- -------- --------
Non-GAAP gross profit $ 14,484 $ 13,404 $ 28,209 $ 26,344
======== ======== ======== ========
GAAP gross margin 68.2% 68.6% 66.9% 68.7%
Add back:
Stock-based compensation 2.6% 2.5% 2.4% 2.3%
Amortization of purchased
intangible assets 2.4% 0.8% 2.4% 0.8%
-------- -------- -------- --------
Non-GAAP gross margin 73.2% 71.9% 71.7% 71.8%
======== ======== ======== ========
GAAP research and development
expense $ 7,997 $ 6,610 $ 16,153 $ 13,113
Deduct stock-based compensation (948) (580) (1,804) (1,172)
-------- -------- -------- --------
Non-GAAP research and
development expense $ 7,049 $ 6,030 $ 14,349 $ 11,941
======== ======== ======== ========
GAAP sales and marketing
expense $ 5,414 $ 5,239 $ 10,845 $ 10,411
Deduct stock-based compensation (652) (771) (1,271) (1,211)
-------- -------- -------- --------
Non-GAAP sales and marketing
expense $ 4,762 $ 4,468 $ 9,574 $ 9,200
======== ======== ======== ========
GAAP general and administrative
expense $ 2,786 $ 2,497 $ 5,160 $ 4,671
Deduct stock-based compensation (719) (430) (1,244) (798)
-------- -------- -------- --------
Non-GAAP general and
administrative expense $ 2,067 $ 2,067 $ 3,916 $ 3,873
======== ======== ======== ========
GAAP total operating expense $ 16,785 $ 14,677 $ 33,613 $ 28,615
Deduct:
Stock-based compensation (2,319) (1,781) (4,319) (3,181)
Restructuring charges -- -- (278) --
Amortization of purchased
intangible assets (588) (331) (1,177) (420)
-------- -------- -------- --------
Non-GAAP total operating
expense $ 13,878 $ 12,565 $ 27,839 $ 25,014
======== ======== ======== ========
GAAP loss from operations $ (3,289) $ (1,891) $ (7,276) $ (3,430)
Add back stock-based
compensation, restructuring
charges, and amortization of
purchased intangible assets 3,895 2,730 7,646 4,760
-------- -------- -------- --------
Non-GAAP income from
operations $ 606 $ 839 $ 370 $ 1,330
======== ======== ======== ========
GAAP net loss $ (3,145) $ (1,568) $ (6,867) $ (2,602)
Add back stock-based
compensation, restructuring
charges and amortization of
purchased intangible assets 3,895 2,730 7,646 4,760
-------- -------- -------- --------
Non-GAAP net income $ 750 $ 1,162 $ 779 $ 2,158
======== ======== ======== ========
GAAP net loss per share,
diluted $ (0.11) $ (0.06) $ (0.24) $ (0.10)
Non-GAAP net income per share,
diluted $ 0.02 $ 0.04 $ 0.02 $ 0.07
GAAP weighted shares
outstanding, diluted 28,535 27,204 28,346 26,951
Add back dilutive effect of
common stock equivalents on
non-GAAP net income basis 4,085 4,709 4,004 4,680
-------- -------- -------- --------
Non-GAAP weighted shares
outstanding, diluted 32,620 31,913 32,350 31,631
======== ======== ======== ========
GAAP cash flow from operations $ 1,989 $ 3,261 $ 1,375 $ 7,658
Deduct purchases of property,
equipment and leasehold
improvements (239) (401) (481) (1,484)
-------- -------- -------- --------
Non-GAAP free cash flow $ 1,750 $ 2,860 $ 894 $ 6,174
======== ======== ======== ========
Use of Non-GAAP Financial Measures
The accompanying press release dated October 1, 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 exclude costs and expenses for (i) amortization of purchased intangibles, (ii) stock-based compensation and (iii) restructuring charges.
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. 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.
Restructuring Charges. We have excluded restructuring charges associated with a reduction in our workforce as a result of synergies gained through our acquisition of Connect3 Systems, Inc., and with an office closure, from our non-GAAP financial measures for the six months ended August 31, 2009. We have excluded expenses associated with these actions because they are non-recurring and because we believe investors may wish to exclude the effects of these actions in evaluating our financial performance for the quarter.
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.