* Thirty-Five Percent Fiscal Year Revenue Growth From Continuing Operations * Fiscal Year EPS of $0.13 * Fiscal Year Non-GAAP EPS of $0.11 From Continuing Operations
FREMONT, Calif., Aug. 28, 2007 (PRIME NEWSWIRE) -- SourceForge, Inc. (Nasdaq:LNUX), the leader in IT community-driven media and e-commerce, today announced financial results for its fourth quarter and fiscal year ended July 31, 2007.
For the year ended July 31, 2007, total revenue from continuing operations grew 35% to $45.6 million, compared to $33.7 million for the year ended July 31, 2006. For the fourth quarter of fiscal 2007, revenue from continuing operations grew 29% to $10.1 million, as compared to revenue from continuing operations of $7.8 million for the fourth fiscal quarter of fiscal 2006.
For the year ended July 31, 2007, excluding the effects of discontinued operations, the company's net income from continuing operations on a GAAP basis was $6.0 million, or $0.09 per share, compared to GAAP net income from continuing operations of $3.9 million, or $0.06 per share, for the year ended July 31, 2006. On a GAAP basis, the fourth quarter of fiscal 2007 income from continuing operations was $0.7 million, or $0.01 per share, compared to fourth quarter of fiscal 2006 GAAP income from continuing operations of $1.2 million, or $0.02 per share. On a GAAP basis, the fourth quarter of fiscal 2007 net income was $0.6 million, or $0.01 per share, compared to fourth quarter of fiscal 2006 GAAP net income of $0.7 million, or $0.01 per share.
Non-GAAP income from continuing operations for fiscal 2007 was $7.4 million, or $0.11 per share, compared to non-GAAP income from continuing operations of $4.4 million, or $0.07 per share, for fiscal 2006. A reconciliation of income from continuing operations as reported to non-GAAP income from continuing operations is included in this release. Non-GAAP income from continuing operations for the fourth quarter of fiscal 2007 was $1.3 million, or $0.02 per share, compared to non-GAAP income from continuing operations of $1.3 million, or $0.02 per share, for the fourth quarter of fiscal 2006.
Cash and investments balance at the end of the fiscal year was $57.6 million.
"This marks the second consecutive year of profitability for SourceForge," said Ali Jenab, president and CEO. "Our media properties continue to connect advertisers with the most influential and tech-savvy buyers, a business we expect to continue to grow rapidly. Our e-commerce team continues to execute with the precision of a seasoned mass retailer, delivering incremental revenue that complements our media strategy. And our technology team continues to drive innovation that puts SourceForge at the forefront of today's changing media landscape."
A conference call and audio webcast will be held at 2:00 p.m. PT or 5:00 p.m. ET on August 28, 2007 and may be accessed by calling 877-407-0782 or 201-689-8567. Replays of both the telephonic audio and audio webcast will be available for 60 days on the company's corporate web site at www.sourceforge.com. To access the conference call replay, dial 877-660-6853 or 201-612-7415, referencing replay account 286 and call ID 251542.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, SourceForge also reports non-GAAP financial results. Non-GAAP income from continuing operations and non-GAAP earnings per share from continuing operations reflect income from continuing operations and exclude stock-based compensation expense and amortization of intangible assets. These non-GAAP financial results are provided to enhance the user's overall understanding of SourceForge's current financial performance and prospects for the future. Specifically, SourceForge believes the non-GAAP results provide useful information to both management and investors by excluding certain expenses that SourceForge believes are not indicative of its core operating results and stock-based compensation. SourceForge considers its core operating results to include revenue recorded in a particular period and the related expenses that are intended to directly drive operating income during that period. In addition, because SourceForge has historically reported non-GAAP results to the investment community, SourceForge believes the inclusion of non-GAAP numbers provides consistency in financial reporting. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The method SourceForge uses to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a substitute for results prepared in accordance with accounting principles generally accepted in the United States.
These non-GAAP financial results are derived from GAAP income from continuing operations by excluding the amortization of intangible assets and stock-based compensation expenses. Amortization of other intangible assets is excluded from SourceForge's GAAP financial measures because it represents a non-cash expense that has no effect on current or future period cash flows or operations of SourceForge. With respect to stock-based compensation, SourceForge recognizes expenses associated with the granting of stock options to employees using valuation methodologies that require management to make assumptions about SourceForge's common stock (such as expected future stock price volatility), the anticipated duration of outstanding stock options and the rate at which SourceForge recognizes the corresponding stock-based compensation expense over the course of future fiscal periods. While other forms of SourceForge expense (such as cash compensation, inventory costs and real estate costs) are reasonably correlated to SourceForge's underlying business and such costs are incurred principally or wholly in the particular fiscal period being reported, stock-based compensation expense is not reasonably correlated to the particular fiscal period in question but rather is based on expected future events that have no relationship (and in certain instances, an inverse relationship) with how well SourceForge currently operates its business.
These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of SourceForge's operations that, when viewed with our GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of SourceForge's underlying operational results and trends in our performance. Further, SourceForge believes that the financial analysts who regularly follow and report on SourceForge and the business sector in which SourceForge competes exclude items such as these when analyzing performance relative to our guidance, as well as their financial performance estimates and the performance of other sector participants, and in projecting future financial results.
About SourceForge, Inc.
SourceForge's media and e-commerce web sites connect millions of influential technology professionals and enthusiasts each day. Combining user-developed content, online marketplaces and e-commerce, SourceForge is the global technology community's nexus for information exchange, goods for geeks, and open source software distribution and services. SourceForge's network of web sites serves more than 32 million unique visitors each month* and includes: SourceForge.net, Slashdot, ThinkGeek, Linux.com, freshmeat.net, ITManagersJournal and NewsForge. For more information or to view the media kit online, visit www.sourceforge.com. (*Source: Google Analytics and Omniture, July 2007.)
SourceForge, SourceForge.net, Slashdot, freshmeat, and ThinkGeek are registered trademarks of SourceForge, Inc. in the United States and other countries. All other trademarks or product names are property of their respective owners.
NOTE REGARDING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations, and involve risks and uncertainties. Forward-looking statements contained herein include statements regarding growth strategies and prospects for SourceForge's online media and e-commerce businesses. Actual results may differ materially from those expressed or implied in such forward-looking statements due to various factors, including: SourceForge's ability to attract and retain qualified personnel; success in designing and offering innovative online advertising programs; decreases or delays in online advertising spending; SourceForge's ability to achieve and sustain higher levels of revenue; SourceForge's ability to protect and defend its intellectual property rights; rapid technological and market change; unforeseen expenses that SourceForge may incur in future quarters; and competition with, and pricing pressures from larger and/or more established competitors. Investors should consult SourceForge's filings with the Securities and Exchange Commission, www.sec.gov, including the risk factors sections of its Annual Report on Form 10-K for the fiscal year ended July 31, 2006, and the Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2007, for further information regarding these and other risks of SourceForge's business. All forward-looking statements included in this press release are based upon information available to SourceForge as of the date hereof, and SourceForge does not assume any obligations to update such statements or the reasons why actual results could differ materially from those projected in such statements.
SourceForge, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
July 31, July 31,
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2007 2006 2007 2006
------- ------- ------- -------
Online Media revenue $ 4,893 $ 3,953 $17,496 $13,242
E-commerce revenue 5,186 3,881 28,103 20,416
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Net revenue 10,079 7,834 45,599 33,658
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Online Media cost of revenue 1,249 990 4,733 3,732
E-commerce cost of revenue 3,878 3,072 21,200 15,605
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Cost of revenue 5,127 4,062 25,933 19,337
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Gross margin 4,952 3,772 19,666 14,321
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Operating expenses:
Sales and marketing 1,824 1,100 6,108 4,426
Research and development 1,011 809 3,771 3,013
General and administrative 2,110 1,341 6,439 4,504
Amortization of intangible
assets 1 1 4 4
------- ------- ------- -------
Total operating expenses 4,946 3,251 16,322 11,947
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Operating income from
continuing operations 6 521 3,344 2,374
Interest and other income,
net 700 652 2,611 1,549
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Income from continuing
operations 706 1,173 5,955 3,923
Income (loss) from
discontinued operations (105) (454) 2,773 7,061
------- ------- ------- -------
Net income $ 601 $ 719 $ 8,728 $10,984
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Earnings per share from
continuing operations:
Basic $ 0.01 $ 0.02 $ 0.09 $ 0.06
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Diluted $ 0.01 $ 0.02 $ 0.09 $ 0.06
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Earnings (loss) per share
from discontinued
operations:
Basic $ 0.00 $ (0.01) $ 0.04 $ 0.11
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Diluted $ 0.00 $ (0.01) $ 0.04 $ 0.11
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Earnings per share:
Basic $ 0.01 $ 0.01 $ 0.13 $ 0.18
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Diluted $ 0.01 $ 0.01 $ 0.13 $ 0.17
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Shares used in computing
earnings per share:
Basic 67,807 63,634 66,254 62,328
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Diluted 69,353 67,166 68,489 64,704
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SourceForge, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
July 31, July 31,
------------------ ------------------
2007 2006 2007 2006
------- ------- ------- -------
Reconciliation of net
income as reported to
non-GAAP net income:
Income from continuing
operations - as reported $ 706 $ 1,173 $ 5,955 $ 3,923
Non cash charges:
Stock-based compensation
expense included in COGS 36 5 101 25
Stock-based compensation
expense included in Op Ex. 525 140 1,342 410
Amortization of intangible
assets 1 1 4 4
------- ------- ------- -------
Non-GAAP income from
continuing operations $ 1,268 $ 1,319 $ 7,402 $ 4,362
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Non-GAAP earnings per
share from continuing
operations:
Basic $ 0.02 $ 0.02 $ 0.11 $ 0.07
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Diluted $ 0.02 $ 0.02 $ 0.11 $ 0.07
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Shares used in computing
non-GAAP per share
amounts:
Basic 67,807 63,634 66,254 62,328
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Diluted 69,353 67,166 68,489 64,704
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SourceForge, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
(unaudited)
July 31, July 31,
2007 2006
------- -------
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $42,769 $51,891
Accounts receivable, net 5,309 2,843
Inventories 2,052 1,091
Prepaid expenses and other current assets 1,529 863
Current assets of discontinued operations 92 2,718
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Total current assets 51,751 59,406
Property and equipment, net 2,640 546
Long-term investments, including long-term
restricted cash 14,871 2,152
Other assets 7,601 1,027
Non-current assets of discontinued operations -- 81
------- -------
Total assets $76,863 $63,212
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,348 $ 1,096
Accrued restructuring liabilities 1,781 1,592
Deferred revenue, current portion 733 293
Accrued liabilities and other 2,786 2,378
Current liabilities of discontinued operations -- 2,782
------- -------
Total current liabilities 7,648 8,141
Accrued restructuring liabilities, net of current
portion 3,267 4,515
Other long-term liabilities 854 1,114
Non-current liabilities of discontinued operations -- 64
------- -------
Total liabilities 11,769 13,834
------- -------
Stockholders' equity:
Common stock 69 65
Additional paid-in capital 797,418 790,433
Accumulated other comprehensive gain (26) (25)
Accumulated deficit (732,367) (741,095)
------- -------
Total stockholders' equity 65,094 49,378
------- -------
Total liabilities and stockholders' equity $76,863 $63,212
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