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BakBone Software Generates 12% Revenue Growth and Reports Continued Profitability in the Second Quarter of Fiscal 2010
SAN DIEGO, Nov. 10 /PRNewswire-FirstCall/ -- BakBone Software, Incorporated (OTC Bulletin Board: BKBO), a leading provider of Universal Data Management solutions, today announced its financial results for the second quarter of fiscal 2010 ended September 30, 2009.
Second Quarter Fiscal 2010 financial and operational highlights include:
-- GAAP Revenues $15.2 million
-- Operating Income $0.9 million
-- Net Income $1.1 million
-- Net Income per Share $0.01
-- Total Bookings $13.6 million
"We continued to generate solid revenue growth and improved profitability," said Jim Johnson, president and CEO, BakBone. "Our GAAP results were driven by continued strong sales performance in Asia and Europe and new revenue contributions from ColdSpark as well as operational cost efficiencies in the second quarter of this fiscal year."
"The bookings related to our acquisitions are growing. In mid-June, we launched the NetVault: FASTRecover(TM) solutions, our new disk-based, real-time data protection products for Microsoft Exchange, SQL Server and Windows file systems based on Asempra's technology. We have received good customer interest in the new products and expect them to be meaningful contributors to future financial results."
"ColdSpark continues to expand its capabilities in enterprise messaging and infrastructure. In October, we released new versions of the ColdSpark SparkEngine(TM), Compliance Catalyst and MailFusion products that expand policy management and workflow integration for enterprise message management. We continue to aggressively pursue additional customers in the financial services, healthcare and other regulated industries that will benefit from the more powerful corporate compliance features offered by the ColdSpark solutions. Our relationship with the large healthcare client that we announced in August is going well and we are implementing the ColdSpark product throughout its system. We are optimistic about our prospects for additional new customers in the vertical markets we are targeting," Johnson continued.
As planned, in mid-October BakBone introduced the newest version of the Company's flagship product NetVault®: Backup and new disk-based backup and deduplication options with NetVault: SmartDisk. NetVault: SmartDisk is based on BakBone's Open Data Protection Platform, which will offer more affordable, long-term disk-based storage to customers, with features such as data deduplication.
"BakBone is continuing to execute on its growth strategy - introducing proprietary, innovative software solutions, expanding its markets and driving revenue. We are pleased with our momentum and remain optimistic about the outlook for continued financial progress this fiscal year. Recognizing that the ColdSpark business is based on large orders with somewhat unpredictable timing, we continue to expect total bookings for fiscal 2010 in the range of $62 to $64 million," Johnson concluded.
Financial Results
Total revenue grew 12% to $15.2 million in the second quarter of fiscal 2010 from $13.6 million in the second quarter of fiscal 2009. Operating income totaled $0.9 million in the second quarter of fiscal 2010 compared with an operating loss of $2.0 million in the second quarter of the prior fiscal year. The increase in operating income in the second quarter ended September 30, 2009, was the result of higher revenue and a significant reduction in general and administrative costs primarily associated with accounting and auditing fees incurred in the prior fiscal year.
The Company reported net income of $1.1 million, or $0.01 per share, in the second quarter compared with a net loss of $1.9 million, or ($0.03) per share, in the second quarter last year.
Total cash at September 30, 2009, totaled $6.5 million.
Conference Call Information
The Company has scheduled a conference call for today, November 10, 2009, at 2:00 p.m. PT to discuss the results for the quarter ended September 30, 2009. The call will be hosted by Jim Johnson, CEO of BakBone, and Steve Martin, CFO of BakBone.
To access the conference call, please dial 800-854-3238; internationally, dial 706-634-9547 (Passcode: 36174773). This call will also be webcast and can be accessed at www.bakbone.com by clicking on "Company Info" and then "Investor Relations." The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.
About BakBone Software
BakBone Software is a leader in Universal Data Management. This provides a data-centric approach to integrating data protection, centralizing policy management and managing organizations' messaging infrastructure to optimize performance, increase data availability and improve corporate compliance. Learn more about BakBone's Universal Data Management vision at www.bakbone.com or email info@bakbone.com.
<p>Safe HarborThis press release contains forward-looking statements including, without limitation, statements regarding anticipated revenue and bookings growth and market developments that involve risks, uncertainties, assumptions and other factors, which, if they do not materialize or prove correct, could cause BakBone's results to differ materially from historical results, or those expressed or implied by such forward-looking statements. The potential risks and uncertainties may include, but are not limited to: risks that the anticipated benefits of the acquisitions will not be achieved; risks that the integrations will take longer, cost more or result in more management distraction than anticipated; risks that future resale of the shares issued in the acquisitions will have an adverse impact on the trading price of the BakBone common shares; the ongoing weak economic and market conditions that could continue to lead to reduced spending on information technology products; competition in our target markets; potential capital needs; management of future growth and expansion; the development, implementation and execution of the Company's Universal Data Management strategic vision; risk of third-party claims of infringement; protection of proprietary information; customer acceptance of the Company's existing and newly introduced products and fee structures; the success of BakBone's brand development efforts; risks associated with strategic alliances; reliance on distribution channels; product concentration; need to develop new and enhanced products; potential product defects; our ability to hire and retain qualified employees and key management personnel; and risks associated with changes in domestic and international market conditions and the entry into and development of international markets for the Company's products. Our forward-looking statements should be considered in the context of these and other risk factors disclosed in our most recent report filed with the Securities and Exchange Commission, which may be found at www.sec.gov, as well as those risk factors disclosed in our current report filed with the relevant Canadian securities regulators, which is available on SEDAR at www.sedar.com. All future written and oral forward-looking statements made by us or on our behalf are also subject to these factors. BakBone assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made, other than as required under applicable securities laws.
BakBone®, BakBone Software®, NetVault®, Application Plugin Module(TM), BakBone logo®, Integrated Data Protection(TM), NetVault: SmartDisk(TM), Asempra®, FASTRecover(TM), ColdSpark® and SparkEngine(TM) are all trademarks or registered trademarks of BakBone Software, Inc., in the United States and/or in other countries. All other brands, products or service names are or may be trademarks, registered trademarks or service marks of, and used to identify, products or services of their respective owners.
Investor Contact: Corporate Contact: Media Contact:
Doug Sherk / Jenifer Steve Martin Amber Winans
Kirtland
415-896-6820 858-795-7525 858-795-7584
jkirtland@evcgroup.com IR@bakbone.com amber.winans@bakbone.com
(Logo: http://www.newscom.com/cgi-bin/prnh/20031120/SDBAKLOGO)
BAKBONE SOFTWARE INCORPORATED
Condensed Consolidated Balance Sheets
(in thousands)
Fiscal Period Ended
-------------------
(unaudited)
September 30, March 31,
2009 2009
ASSETS
Current assets:
Cash and cash equivalents $6,461 $8,398
Restricted cash 51 264
Accounts receivable, net 8,783 9,646
Prepaid and other assets 1,443 1,159
----- -----
Total current assets 16,738 19,467
Property and equipment, net 2,512 2,713
Intangible assets, net 8,128 824
Trademarks 400 -
Goodwill 14,007 7,615
Other assets 972 939
--- ---
Total assets $42,757 $31,558
======= =======
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued
liabilities $9,570 $9,603
Current portion of acquisition
consideration payable 2,265 -
Current portion of
deferred revenue 44,772 44,081
------ ------
Total current liabilities 56,607 53,684
Deferred revenue, excluding
current portion 47,359 47,684
Acquisition consideration payable,
excluding current portion 4,402 -
Other liabilities 1,123 1,337
----- -----
Total liabilities 109,491 102,705
------- -------
Shareholders' deficit (66,734) (71,147)
------- -------
Total liabilities and shareholders' deficit $42,757 $31,558
======= =======
BAKBONE SOFTWARE INCORPORATED
Condensed Consolidated Statements of Operations
(in thousands)
(unaudited)
Three months ended Six months ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
Restated (1) Restated (1)
---- ------------ ---- ------------
Revenues:
License and
service $15,230 $13,587 $30,420 $27,258
Other - - 1,500 -
--- --- ----- ---
Total revenues 15,230 13,587 31,920 27,258
Cost of revenues 1,742 1,816 3,214 3,648
----- ----- ----- -----
Gross profit 13,488 11,771 28,706 23,610
------ ------ ------ ------
Operating expenses:
Sales and
marketing 6,542 6,723 13,174 14,301
Research and
development 3,258 2,867 6,393 6,024
General and
administrative 2,768 4,206 7,120 7,984
----- ----- ----- -----
Total operating
expenses 12,568 13,796 26,687 28,309
------ ------ ------ ------
Operating
income (loss) 920 (2,025) 2,019 (4,699)
Other non-operating
income (expense) 248 142 (135) (360)
--- --- ---- ----
Income (loss)
before income
taxes 1,168 (1,883) 1,884 (5,059)
Provision for income
taxes 37 61 62 147
--- --- --- ---
Net income (loss) $1,131 $(1,944) $1,822 $(5,206)
====== ======= ====== =======
Net income (loss) per
common share:
Basic $0.01 $(0.03) $0.02 $(0.08)
===== ====== ===== ======
Diluted $0.01 $(0.03) $0.02 $(0.08)
===== ====== ===== ======
Weighted-average common
shares outstanding:
Basic 86,644 64,633 81,723 64,619
====== ====== ====== ======
Diluted 104,661 64,633 99,817 64,619
======= ====== ====== ======
(1) As discussed in the Company's Annual Report on Form 10-K for the year
ended March 31, 2009, the Company restated its consolidated financial
statements for each of the first three quarters in fiscal 2009, in
accordance with Staff Accounting Bulletin No. 108, Considering the Effect
of Prior Year Misstatements When Quantifying Misstatements in the Current
Year Financial Statements, to correct errors in such consolidated
financial statements that would have had a material effect on the
financial statements for the three and twelve months ended March 31, 2009
if not corrected. The Company does not believe that these adjustments are
material to any of the restated periods.
BAKBONE SOFTWARE INCORPORATED
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six months ended September 30,
------------------------------
2009 2008
Restated (1)
---- ------------
Cash flows from operating activities:
Net income (loss) $1,822 $(5,206)
Adjustments to reconcile net income (loss)
to net cash (used in)
provided by operating activities:
Depreciation and amortization 1,203 828
Non-cash interest expense 284 -
Operating expenses funded by
financing arrangement 213 -
Provision for bad debt 142 -
Stock-based compensation 20 195
Loss on disposal of
capital assets 6 11
Other changes in assets
and liabilities (4,863) 4,471
------ -----
Net cash (used in) provided by
operating activities (1,173) 299
------ ---
Cash flows from investing activities:
Cash paid for acquisitions, net
of cash received (1,014) -
Capital expenditures (161) (901)
Release of restricted cash 325 227
--- ---
Net cash used in
investing activities (850) (674)
---- ----
Cash flows from financing activities:
Payments on capital
lease obligations (214) (157)
Payments on long-term
debt obligations (326) (226)
---- ----
Net cash used in
financing activities (540) (383)
---- ----
Effect of exchange rates on cash and
cash equivalents 626 (620)
--- ----
Net decrease in cash and
cash equivalents (1,937) (1,378)
Cash and cash equivalents,
beginning of period 8,398 9,496
----- -----
Cash and cash equivalents,
end of period $6,461 $8,118
====== ======
BAKBONE SOFTWARE INCORPORATED
Reconciliation of Bookings to U.S. GAAP Revenue (2)
(unaudited, in thousands)
Three months ended Six months ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues sourced from current
period bookings:
Total bookings for
the period $13,561 $13,950 $27,130 $28,303
Bookings deferred
into subsequent periods (12,460) (13,046) (23,167) (26,534)
------- ------- ------- -------
Revenues from current period
bookings 1,101 904 3,963 1,769
Revenues sourced from prior
period bookings: 14,129 12,683 27,957 25,489
------ ------ ------ ------
Total revenues recognized in
the period $15,230 $13,587 $31,920 $27,258
======= ======= ======= =======
(2) We define bookings as the gross dollars invoiced through the sale of
software licenses, maintenance contracts and professional services. We
utilize bookings information as an operations measure, but it is not
intended to replace U.S. GAAP accounting. Under the ratable revenue
recognition method, license bookings are recognized as revenue over the
appropriate period (generally three to five years). In general, variations
in revenues period-over-period are affected by the amortization of current
and prior period license bookings. Accordingly, we believe that trends in
current and historical bookings are key factors in analyzing our operating
results.
SOURCE BakBone Software, Incorporated