CommVault Announces Fourth Quarter and Fiscal 2013 Financial Results CommVault Reports Record Quarterly Revenues & Non-GAAP Earnings

Revenues of $138.3 million up 21% year over year

GAAP EBIT of $21.9 million; GAAP EPS $0.35

Non-GAAP EBIT of $31.8 million; Non-GAAP EPS $0.41

OCEANPORT, N.J., May 7, 2013 /PRNewswire/ --

Fourth Quarter and Fiscal 2013 Highlights Include:



Fourth Quarter


Fiscal 2013

GAAP Results:





Revenues


$138.3 million


$495.9 million

Income from Operations (EBIT)


$21.9 million


$80.9 million

EBIT Margin


15.8%


16.3%

Diluted Earnings Per Share


$0.35


$1.10

Cash Provided by Operations


$42.9 million


$112.7 million

 

Non-GAAP Results:





Income from Operations (EBIT)


$31.8 million


$113.1 million

EBIT Margin


23.0%


22.8%

Diluted Earnings Per Share


$0.41


$1.49






CommVault [NASDAQ: CVLT] today announced its financial results for the fourth quarter and fiscal year ended March 31, 2013. 

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N. Robert Hammer, CommVault's chairman, president and CEO stated, "Our excellent results in the fourth quarter were highlighted by record revenues, non-GAAP EBIT and operating cash flows.  Our 23% growth in software revenues in the fourth quarter compared to the prior year was driven by another quarter of record enterprise software deals (transactions greater than $100,000) and strong demand both domestically and internationally.  Our fourth quarter results concluded a strong fiscal 2013 where we achieved substantial improvements in all aspect of our business by delivering 25% software revenue growth and a 53% improvement in non-GAAP EBIT for the full fiscal year." 

Hammer added, "We are well positioned going into fiscal 2014 and expect to deliver strong double digit revenue and non-GAAP operating income growth rates.  We are particularly excited about the recent introduction of our new Simpana 10 software release.  We believe that our Simpana 10 release has taken innovation in the market to a whole new level by radically changing the way companies manage data for their mobile workforces, improve operational efficiencies and extract value from their data for better decision making."

Total revenues for the fourth quarter of fiscal 2013 were $138.3 million, an increase of 21% over the fourth quarter of fiscal 2012 and an increase of 8% over the prior quarter.  Software revenue in the fourth quarter of fiscal 2013 was $72.1 million, an increase of 23% year-over-year and 9% sequentially.  Services revenue in the fourth quarter of fiscal 2013 was $66.1 million, an increase of 20% year-over-year and 6% sequentially.

For the full fiscal year, total revenues were $495.9 million, an increase of 22% over fiscal 2012.  Software revenue for the full fiscal year was $251.5 million, an increase of 25% over fiscal 2012.  Services revenue for the full fiscal year was $244.3 million, an increase of 19% over fiscal 2012.

Income from operations (EBIT) was $21.9 million for the fourth quarter, a 58% increase from $13.9 million in the same period of the prior year.  Non-GAAP income from operations (EBIT) increased 50% to $31.8 million in the fourth quarter of fiscal 2013 compared to $21.1 million in the fourth quarter of the prior year.  On a sequential basis, non-GAAP income from operations (EBIT) increased 7% in the fourth quarter of fiscal 2013.

Income from operations (EBIT) for the full fiscal year was $80.9 million, an increase of 64% over fiscal 2012.  Non-GAAP income from operations (EBIT) increased 53% to $113.1 million in fiscal 2013 compared to $73.7 million in fiscal 2012.

For the fourth quarter of fiscal 2013, CommVault reported net income of $17.0 million, an increase of $7.1 million compared to the same period of the prior year.  Non-GAAP net income for the quarter increased 48% to $20.2 million, or $0.41 per diluted share, from $13.7 million, or $0.29 per diluted share, in the same period of the prior year. 

For the full fiscal year, CommVault reported net income of $53.2 million, an increase of $21.3 million compared to fiscal 2012.  Non-GAAP net income for the full fiscal year increased 51% to $71.9 million, or $1.49 per diluted share, from $47.6 million, or $1.01 per diluted share, in fiscal 2012.

Operating cash flow totaled $42.9 million for the fourth quarter of fiscal 2013 compared to $30.1 million in the fourth quarter of fiscal 2012.  For the full fiscal year, operating cash flow was $112.7 million, an increase of 13% compared to $100.0 million for fiscal 2012.  Total cash and short-term investments were $435.9 million as of March 31, 2013 compared to $300.2 million as of March 31, 2012.  There were no share repurchases during the fourth quarter of fiscal 2013, which still leaves $102.8 million remaining in the existing repurchase plan available through March 31, 2014.

A reconciliation of GAAP to non-GAAP results has been provided in Financial Statement Table IV included in this press release.  An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."

Recent Business Highlight:

  • On February 25, 2013, CommVault announced the release of its Simpana 10 software suite.  Simpana 10 extends CommVault's data protection and archiving leadership to deliver secure, self-service access from mobile devices, speed the adoption of cloud computing and extract value from Big Data.  Simpana 10 includes major technology advancements such as Enhanced IntelliSnap™ snapshot management; Simpana OnePass™ with Exchange; tighter integration with Microsoft Hyper-V, VMware vSphere 5.1 and vCloud Director 5.1; workflow automation; fourth-generation parallel deduplication; and customizable web-based reporting, dashboards and cloud-based analytics. 

Use of Non-GAAP Financial Measures

CommVault has provided in this press release the following non-GAAP financial measures:  non-GAAP income from operations, non-GAAP income from operations margin, non-GAAP net income and non-GAAP diluted earnings per share.  This selected financial information has not been prepared in accordance with GAAP.  CommVault uses these non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions.  In addition, CommVault believes these non-GAAP operating measures are useful to investors, when used as a supplement to GAAP financial measures, in evaluating CommVault's ongoing operational performance.  CommVault believes that the use of these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in CommVault's industry, many of which present similar non-GAAP financial measures to the investment community.   

These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for or superior to, financial information prepared in accordance with GAAP.   Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which are provided in Table IV included in this press release.

Non-GAAP income from operations and non-GAAP income from operations margin.  These non-GAAP financial measures exclude noncash stock-based compensation charges and additional FICA and related payroll tax expense incurred by CommVault when employees exercise in the money stock options or vest in restricted stock awards.  CommVault believes that these non-GAAP financial measures are useful metrics for management and investors because they compare CommVault's core operating results over multiple periods.  When evaluating the performance of CommVault's operating results and developing short and long term plans, CommVault does not consider such expenses.  Although noncash stock-based compensation and the additional FICA and related payroll tax expenses are necessary to attract and retain employees, CommVault places its primary emphasis on stockholder dilution as compared to the accounting charges related to such equity compensation plans.  In addition, because of the varying available valuation methodologies, subjective assumptions such as volatility outside CommVault's control and the variety of awards that companies can issue, CommVault believes that providing non-GAAP financial measures that exclude noncash stock-based compensation expense and the additional FICA and related payroll tax expenses incurred on stock option exercises and vesting of restricted stock awards allow investors to make meaningful comparisons between CommVault's operating results and those of other companies. 

There are a number of limitations related to the use of non-GAAP income from operations and non-GAAP income from operations margin.  The most significant limitation is that these non-GAAP financial measures exclude certain operating costs, primarily related to noncash stock-based compensation, which is of a recurring nature.  Noncash stock-based compensation has been, and will continue to be for the foreseeable future, a significant recurring expense in CommVault's operating results.  In addition, noncash stock-based compensation is an important part of CommVault's employees' compensation and can have a significant impact on their performance.  Lastly, the components CommVault excludes in its non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP financial measures.  

CommVault's management generally compensates for limitations described above related to the use of non-GAAP financial measures by providing investors with a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Further, CommVault management uses non-GAAP financial measures only in addition to, and in conjunction with, results presented in accordance with GAAP.

Non-GAAP net income and non-GAAP diluted EPS.  Non-GAAP net income excludes noncash stock-based compensation and the additional FICA and related payroll tax expenses incurred by CommVault when employees exercise in the money stock options or vest in restricted stock awards, which are discussed above, as well as applies a non-GAAP effective tax rate of 37% in fiscal 2013 and 36% in fiscal 2012. 

CommVault anticipates that in any given quarter its non-GAAP tax rate may be either higher or lower than the GAAP tax rate as evidenced by historical fluctuations.  The GAAP tax rate for the fourth quarter of fiscal 2013 was 23% and the GAAP tax rate for the fourth quarter of fiscal 2012 was 30%.  On an annual basis, the GAAP tax rate over the past six fiscal years was 35% for fiscal 2013, 36% for fiscal 2012, 42% for fiscal 2011, 43% for fiscal 2010, 44% for fiscal 2009, and 23% for fiscal 2008.  In addition, CommVault's cash tax rate has been significantly lower than its GAAP tax rate in recent fiscal years.  The cash tax rate for fiscal 2013 is estimated to be approximately 12% and the cash tax rate over the prior three fiscal years is estimated to be approximately 14% for fiscal 2012, approximately 11% for fiscal 2011 and approximately 10% for fiscal 2010.  CommVault expects that its cash tax rate will remain lower than its GAAP tax rate through fiscal 2014 and into fiscal 2015.  CommVault defines its cash tax rate as the total amount of cash income taxes payable for the fiscal year divided by consolidated GAAP pre-tax income.

CommVault measured itself to non-GAAP tax rates of 36% in fiscal 2012 and 37% in fiscal 2013 and anticipates that it will measure itself to a non-GAAP tax rate of 37% in fiscal 2014.  CommVault believes that the use of a non-GAAP tax rate is a useful measure as it allows management and investors to compare its operating results on a more consistent basis over the multiple periods presented in its earnings release without the impact of significant variations in the tax rate as more fully described above.  It is also more reflective of the increase in the cash tax rate as it approaches the GAAP tax rate over the next one to two fiscal years.  Non-GAAP EPS is derived from non-GAAP net income divided by the weighted average shares outstanding on a fully diluted basis. 

CommVault considers non-GAAP net income and non-GAAP diluted EPS useful metrics for CommVault management and its investors for the same basic reasons that CommVault uses non-GAAP income from operations and non-GAAP income from operations margin. In addition, the same limitations as well as management actions to compensate for such limitations described above also apply to CommVault's use of non-GAAP net income and non-GAAP EPS.

Conference Call Information

CommVault will host a conference call today, May 7, 2013, at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss its financial results.  To access this call, dial 888-895-5479 (domestic) or 847-619-6250 (international).  Investors can also access the webcast by visiting www.commvault.com. The live webcast and replay will be hosted under "Investor Events" located under the "Investor Relations" section of the website. An archived webcast of this conference call will also be available following the call.

About CommVault

A singular vision – a belief in a better way to address current and future data management needs – guides CommVault in the development of Singular Information Management® solutions for high-performance data protection, universal availability and simplified management of data on complex storage networks. CommVault's exclusive single-platform architecture gives companies unprecedented control over data growth, costs and risk. CommVault's Simpana® software suite of products was designed to work together seamlessly from the ground up, sharing a single code and common function set, to deliver superlative Data Protection, Archive, Replication, Search and Resource Management capabilities. More companies every day join those who have discovered the unparalleled efficiency, performance, reliability, and control only CommVault can offer. Information about CommVault is available at www.commvault.com. CommVault's corporate headquarters is located in Oceanport, New Jersey in the United States.

Safe Harbor Statement

This press release may contain forward-looking statements, including statements regarding financial projections, which are subject to risks and uncertainties, such as competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, general economic conditions and others.  Statements regarding CommVault's beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.  All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Actual results may differ materially from anticipated results.  CommVault does not undertake to update its forward-looking statements. The development and timing of any product release as well as any of its features or functionality remain at our sole discretion.

©1999-2013 CommVault Systems, Inc. All rights reserved. CommVault, CommVault and logo, the "CV" logo, CommVault Systems, Solving Forward, SIM, Singular Information Management, Simpana, Simpana OnePass, CommVault Galaxy, Unified Data Management, QiNetix, Quick Recovery, QR, CommNet, GridStor, Vault Tracker, InnerVault, Quick Snap, QSnap, Recovery Director, CommServe, CommCell, IntelliSnap, ROMS, and CommValue are trademarks or registered trademarks of CommVault Systems, Inc. All other third party brands, products, service names, trademarks, or registered service marks are the property of and used to identify the products or services of their respective owners. All specifications are subject to change without notice.

 

 


Table I

CommVault Systems, Inc.


Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)



Three Months Ended

March 31,


Year Ended

March 31,


2013


2012


2013


2012













Revenues:












Software

$

72,145


$

58,753


$

251,508


$

201,800

Services


66,129



55,261



244,342



204,839

Total revenues


138,274



114,014



495,850



406,639













Cost of revenues:












Software


765



696



2,863



2,747

Services


17,091



13,984



62,089



50,660

Total cost of revenues


17,856



14,680



64,952



53,407













Gross margin


120,418



99,334



430,898



353,232













Operating expenses:












Sales and marketing


71,062



61,901



247,696



219,025

Research and development


12,607



10,987



47,356



39,936

General and administrative


13,551



11,452



50,119



40,619

Depreciation and amortization


1,299



1,109



4,832



4,353













Income from operations


21,899



13,885



80,895



49,299

Interest expense


-



-



-



(57)

Interest income


263



237



1,059



750













Income before income taxes


22,162



14,122



81,954



49,992

Income tax expense


5,177



4,280



28,745



18,052













Net income

$

16,985


$

9,842


$

53,209


$

31,940













Net income per common share:












Basic

$

0.37


$

0.22


$

1.17


$

0.72

Diluted

$

0.35


$

0.21


$

1.10


$

0.68













Weighted average common shares outstanding:












Basic


46,257



44,413



45,463



44,089

Diluted


49,117



47,390



48,330



47,201













 

 


Table II

CommVault Systems, Inc.


Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)



March 31,


March 31,


2013


2012







Assets






Current assets:






Cash and cash equivalents

$

433,964


$

297,088

Short-term investments


1,948



3,146

Trade accounts receivable, net


85,033



67,793

Prepaid expenses and other current assets


15,225



12,606

Deferred tax assets, net


19,328



14,717

Total current assets


555,498



395,350







Deferred tax assets, net


21,166



23,861

Property and equipment, net


21,112



9,137

Other assets


7,078



4,340

Total assets

$

604,854


$

432,688







Liabilities and stockholders' equity






Current liabilities:






Accounts payable

$

3,860


$

1,847

Accrued liabilities


55,577



45,888

Deferred revenue


152,967



125,314

Total current liabilities


212,404



173,049







Deferred revenue, less current portion


31,303



22,059

Other liabilities


7,130



7,596







Total stockholders' equity


354,017



229,984

Total liabilities and stockholders' equity

$

604,854


$

432,688

 

 

Table III

CommVault Systems, Inc.


Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



Three Months Ended

March 31,


Year Ended

March 31,


2013


2012


2013


2012













Cash flows from operating activities












Net income

$

16,985


$

9,842


$

53,209


$

31,940

Adjustments to reconcile net income to net cash

  provided by operating activities: 












Depreciation and amortization


1,334



1,135



4,939



4,484

Noncash stock-based compensation


9,037



6,382



30,098



21,426

Excess tax benefits from stock-based

  compensation


(4,966)



(8,983)



(23,080)



(16,009)

Deferred income taxes


(4,207)



(4,628)



(2,094)



(4,993)













Changes in operating assets and liabilities:












Trade accounts receivable


(14,504)



(2,301)



(17,939)



5,419

Prepaid expenses and other current assets


(36)



(2,387)



(2,684)



(4,198)

Other assets


(251)



(525)



(1,844)



(3,720)

Accounts payable


1,201



(993)



2,036



204

Accrued liabilities


14,847



17,615



32,358



29,038

Deferred revenue


24,091



15,372



38,041



35,599

Other liabilities


(650)



(412)



(357)



810

Net cash provided by operating activities


42,881



30,117



112,683



100,000













Cash flows from investing activities












Purchase of short-term investments


-



-



(1,948)



(3,146)

Proceeds from maturity of short-term investments


-



-



3,146



1,150

Purchases for corporate campus headquarters


(7,665)



-



(9,209)



-

Purchase of property and equipment


(3,759)



(1,379)



(7,821)



(5,796)

Net cash used in investing activities


(11,424)



(1,379)



(15,832)



(7,792)













Cash flows from financing activities












Repurchase of common stock


-



-



-



(45,639)

Proceeds from the exercise of stock options


4,051



4,109



18,128



18,123

Excess tax benefits from stock-based compensation


4,966



8,983



23,080



16,009

Net cash provided by (used in) financing activities


9,017



13,092



41,208



(11,507)













Effects of exchange rate — changes in cash


(1,808)



1,252



(1,183)



(783)













Net increase in cash and cash equivalents


38,666



43,082



136,876



79,918

Cash and cash equivalents at beginning of period


395,298



254,006



297,088



217,170













Cash and cash equivalents at end of period

$

433,964


$

297,088


$

433,964


$

297,088

























 

 

Table IV


CommVault Systems, Inc.


Reconciliation of GAAP to Non-GAAP Financial Measures

(In thousands, except per share data)

(Unaudited)



 

Three Months Ended

March 31,


Year Ended

March 31,


2013


2012


2013


2012













Non-GAAP financial measures and

reconciliation:












GAAP income from operations

$

21,899


$

13,885


$

80,895


$

49,299

Noncash stock-based compensation (1)


9,037



6,382



30,098



21,426

FICA and related payroll tax expense

  on stock option exercises and vesting

  on restricted stock awards (2)


851



866



2,096



2,964

Non-GAAP income from operations

$

31,787


$

21,133


$

113,089


$

73,689













GAAP net income

$

16,985


$

9,842


$

53,209


$

31,940

Noncash stock-based compensation (1)


9,037



6,382



30,098



21,426

FICA and related payroll tax expense

  on stock option exercises and vesting

  on restricted stock awards (2)


851



866



2,096



2,964

Non-GAAP provision for income taxes

  adjustment (3)


(6,682)



(3,414)



(13,490)



(8,726)

Non-GAAP net income

$

20,191


$

13,676


$

71,913


$

47,604













Diluted weighted average shares

outstanding


49,117



47,390



48,330



47,201













Non-GAAP diluted net income per

share

$

0.41


$

0.29


$

1.49


$

1.01

 

Footnotes - Adjustments


(1) Represents noncash stock-based compensation charges associated with stock options and restricted stock units granted as follows:


Three Months Ended

March 31,


Year Ended

March 31,


2013


2012


2013


2012













Cost of services revenue

$

304


$

313


$

963


$

648

Sales and marketing


3,917



2,692



13,508



9,818

Research and development


906



709



3,020



2,270

General and administrative


3,910



2,668



12,607



8,690

Stock-based compensation expense

$

9,037


$

6,382


$

30,098


$

21,426


(2) Represents additional FICA and related payroll tax expenses incurred by CommVault when employees exercise in the money stock options or vest in restricted stock awards.


(3) The provision for income taxes is adjusted to reflect CommVault's estimated non-GAAP effective tax rate of approximately 37% in fiscal 2013 and 36% in fiscal 2012.

 

SOURCE CommVault



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