* Total Revenue of $18.5 million * 5th Consecutive Quarter of Record Revenue; Up 44% YOY and 50% YTD * Operating Expenses Moderating
PASADENA, Calif., Aug. 14, 2007 (PRIME NEWSWIRE) -- Guidance Software, Inc. (Nasdaq:GUID), The World Leader in Digital Investigations(tm), today announced record revenue results for its second quarter ended June 30, 2007.
John Colbert, Chief Executive Officer of Guidance Software stated, "We are pleased with the results of our second quarter, which was highlighted by our fifth consecutive quarter of record revenue. We continue to execute on our business plans and strategies, including the launch last month of our next generation software release of eDiscovery Suite 2.1."
Total revenue in the second quarter of fiscal 2007 was a record $18.5 million, an increase of $5.7 million, or 44%, from the second quarter of 2006. Product revenue in the second quarter of fiscal 2007 was $10.3 million, up 48% year-over-year. Services and maintenance revenue in the second quarter of fiscal 2007 was $8.2 million, up 39% year-over-year. Deferred revenue as of June 30, 2007 was $23.0 million, compared to $16 million as of June 30, 2006, a 48% increase.
For the second quarter of fiscal 2007, GAAP net loss for the quarter was $1.0 million, or $.04 per share, compared to $1.1 million, or $0.6 per share for the same period of the prior year. Excluding share-based compensation, non-GAAP net income increased $1.1 million to $0.1 million, or $0.01 per diluted share, from a loss of $1.0 million, or $0.05 per diluted share, in the same period of the prior year. Share-based compensation in the second quarter of fiscal 2007 was $1.1 million, up $0.9 million year-over-year.
"In addition to our revenue performance, we are pleased that our non-GAAP net income increased in the second quarter. In addition, as a result of our continued efforts to build leverage in our business model we were able to attain profitability on a non-GAAP basis for the first time as a public company," commented Frank Sansone, Chief Financial Officer of Guidance Software.
Conference Call Information:
The Company will host a conference call today at 2:00 p.m. pacific time, 5:00 p.m. eastern time to discuss its quarterly results. Participants should call (800) 811-8824 (North America) or (913) 981-4903 (International). Attendees should dial in at least 10 minutes prior to the conference call.
A webcast and replay of the call may also be found on the Internet through Guidance Software's Investor Relations web site at http://investors.guidancesoftware.com. A replay of the call will be available by calling (719) 457-0820, passcode 7601964, available from 8:00 p.m. eastern time, August 14, through midnight August 20.
Forward Looking Statements:
This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from current expectations. There can be no assurance that demand for the company's products will continue at current or greater levels, or that the company will continue to grow revenues, or be profitable. There are also risks that the company's pursuit of providing network security and eDiscovery technology might not be successful, or that if successful, it will not materially enhance the company's financial performance; that the company could fail to retain key employees; that changes in customer requirements and other general economic and political uncertainties could impact the company's relationship with its customers; and that delays in product development, competitive pressures or technical difficulties could impact timely delivery of next-generation products; and other risks and uncertainties that are described from time to time in Guidance Software's periodic reports and registration statements filed with the Securities and Exchange Commission. The company specifically disclaims any responsibility for updating these forward-looking statements.
About Guidance Software:
Guidance Software is recognized worldwide as the industry leader in digital investigative solutions. Its EnCase(r) platform provides the foundation for government, corporate and law enforcement organizations to conduct thorough and effective computer investigations of any kind, such as intellectual property theft, incident response, compliance auditing and responding to eDiscovery requests -- all while maintaining the forensic integrity of the data. There are more than 20,000 licensed users of the technology, and thousands of investigators and corporate security personnel attend Guidance Software's forensic methodology training annually. Validated by numerous courts worldwide, EnCase software is also frequently honored with top security awards and recognition from eWEEK, SC Magazine and Network Computing, as well as the Socha-Gelbmann survey.
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Guidance Software, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2007 2006 2007
-------- -------- -------- --------
Revenues:
Product revenue $ 6,953 $ 10,293 $ 13,156 $ 20,381
Services and maintenance
revenue 5,920 8,241 10,888 15,749
-------- -------- -------- --------
Total revenues 12,873 18,534 24,044 36,130
-------- -------- -------- --------
Cost of revenues:
Cost of product revenue 547 656 1,024 1,401
Cost of services and
maintenance revenue 3,139 4,703 5,747 9,216
-------- -------- -------- --------
Total cost of revenues 3,686 5,359 6,771 10,617
-------- -------- -------- --------
Gross profit 9,187 13,175 17,273 25,513
-------- -------- -------- --------
Operating expenses:
Selling and marketing 6,434 8,036 11,542 16,728
Research and development 1,734 2,195 3,186 4,243
General and administrative 1,762 3,478 3,473 6,568
Depreciation 432 816 792 1,515
-------- -------- -------- --------
Total operating expenses 10,362 14,525 18,993 29,054
-------- -------- -------- --------
Operating loss (1,175) (1,350) (1,720) (3,541)
-------- -------- -------- --------
Other income 35 409 86 769
Income tax provision 6 25 22 50
-------- -------- -------- --------
Net loss $ (1,146) $ (966) $ (1,656) $ (2,822)
======== ======== ======== ========
Net loss per share $ (0.06) $ (0.04) $ (0.08) $ (0.13)
======== ======== ======== ========
Shares used in per share
calculation - diluted 19,345 22,425 19,903 22,357
======== ======== ======== ========
Share based compensation
expense was allocated as
follows:
Cost of product revenue 1 23 1 46
Cost of service and
maintenance revenue 26 180 37 344
Selling and marketing 56 436 76 679
Research and development 11 145 14 276
General and administrative 66 308 94 635
-------- -------- -------- --------
Total share-based
compensation expense 160 1,092 222 1,980
======== ======== ======== ========
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Supplemental Financial Data
(See Note)
------------------------------
Non-GAAP net income (loss)
excluding share-based
compensation expense $ (986) $ 126 $ (1,434) $ (842)
Non-GAAP net income (loss) per
share excluding share-based
compensation expense $ (0.05) $ 0.01 $ (0.07) $ (0.04)
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Guidance Software, Inc.
Note to Unaudited Condensed Consolidated Statements of Operations
This press release and its attachments include the non-GAAP financial
measures of net loss before share-based compensation expense and
non-GAAP income (loss) per share, which are reconciled to net loss
and net loss per share, respectively, which we believe are the most
comparable GAAP measures. We use these non-GAAP financial measures
for internal managerial purposes, when publicly providing our
business outlook, and to facilitate period-to-period comparisons.
We describe limitations specific to each non-GAAP financial measure
below.
Management generally compensates for limitations in the use of
non-GAAP financial measures by relying on comparable GAAP financial
measures and providing investors with a reconciliation of the
non-GAAP financial measures only in addition to and in conjunction
with results presented in accordance with GAAP. We believe that
these non-GAAP financial measures reflect an additional way of
viewing aspects of our operations that, when viewed with our GAAP
results, provide a more complete understanding of factors and trends
affecting our business. These non-GAAP measures should be considered
as a supplement to, and not as a substitute for, or superior to,
loss from operations and net loss per share calculated in accordance
with GAAP.
Non-GAAP net income (loss) is defined as net income (loss) excluding
compensation expenses required to be recorded by Statement of
Financial Accounting Standard No. 123 (revised 2004), "Share-Based
Payment" ("SFAS 123R") for equity awards to employees and directors.
Management and the Board of Directors believe it is useful in
evaluating the Company's and its management teams' and business
units' performance during a particular time period to review the
supplemental non-GAAP financial measures, which excludes expenses
related to share-based compensation, because these costs are
generally fixed at the time an award is granted, are then expensed
over several years and generally cannot be changed or influenced by
management once granted. Accordingly, our operational managers are
evaluated based on the operating expenses exclusive of share-based
compensation expenses and including such charges would hamper
investors' ability to evaluate the performance of our management in
the manner in which the Company's management evaluates performance.
Additionally, we believe it is useful in measuring the Company's
performance to exclude expenses related to FAS 123R equity expense
because it enables comparability with prior period information.
Accordingly, management and the Board of Directors do not consider
these costs for purposes of evaluating the performance of the
business, and they exclude such costs when evaluating the
performance of the Company, its business units and its management
teams and when making decisions to allocate resources among the
Company's business units.
Guidance Software, Inc.
Reconciliation of GAAP Net Loss and GAAP Net Loss Per Share to
Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per Share
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2007 2006 2007
-------- -------- -------- --------
GAAP Net loss $ (1,146) $ (966) $ (1,656) $ (2,822)
======== ======== ======== ========
Share-based compensation
expense as measured using
the fair value method under
SFAS 123R 160 1,012 222 1,900
Payroll taxes on employee
stock options and
restricted stock grants -- 80 -- 80
-------- -------- -------- --------
Total share-based
compensation expense 160 1,092 222 1,980
Non-GAAP Net income (loss)
excluding share-based
compensation expense $ (986) $ 126 $ (1,434) $ (842)
======== ======== ======== ========
GAAP Net income (loss) per
share - diluted $ (0.06) $ (0.04) $ 0.08 $ (0.16)
======== ======== ======== ========
Non-GAAP Net income (loss)
per share excluding
share-based compensation
expense per share
- diluted $ (0.05) $ 0.01 $ (0.07) $ (0.04)
======== ======== ======== ========
Shares used in per share
calculations - diluted 19,345 23,749 19,903 22,357
======== ======== ======== ========
Guidance Software, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31, June 30,
2006 2007
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 8,041 $ 7,106
Marketable debt securities 24,694 24,723
Trade receivables, net 17,513 17,990
Prepaid expenses, inventory and other current
assets 2,064 2,573
-------- --------
Total current assets 52,312 52,392
Property and equipment, net 6,526 10,383
Other assets 507 561
-------- --------
Total assets $ 59,345 $ 63,336
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,494 $ 4,278
Accrued expenses 3,974 4,923
Capital leases 942 542
Deferred revenues 18,123 20,528
-------- --------
Total current liabilities 28,533 30,271
-------- --------
Long-term liabilities:
Rent incentives 1,537 2,335
Capital leases 488 537
Deferred revenues 2,098 2,445
-------- --------
Total long-term liabilities 4,123 5,317
Stockholders' equity:
Common stock 22 23
Additional paid-in capital 36,330 40,293
Accumulated other comprehensive income (17) 30
Accumulated deficit (9,646) (12,598)
-------- --------
Total stockholders' equity 26,689 27,748
-------- --------
Total liabilities and stockholders' equity $ 59,345 $ 63,336
-------- --------