SEATTLE, Oct. 3 /PRNewswire-FirstCall/ -- Isilon(R) Systems (Nasdaq:
ISLN), the leader in clustered storage, today announced preliminary results
for the third quarter of 2007 ended September 30, 2007. Based on
preliminary estimates, total revenue is expected to be in the range of
$23.2 million to $23.7 million, down approximately 6 percent to 8 percent
sequentially from the second quarter of 2007 and up approximately 30
percent to 33 percent from the same period one year ago. Previously, on the
company's second quarter conference call on July 26, 2007, the company
stated it expected total revenue in the range of $25 million to $27.5
million for the third quarter of 2007.
Based on preliminary revenue estimates for the third quarter of 2007,
Isilon expects GAAP gross margin to be in the range of 54.4 percent to 56.4
percent and non-GAAP(1) gross margin in the range of 54.6 percent to 56.6
percent. Based on preliminary revenue and gross margin estimates, Isilon
expects GAAP net loss per share to be in the range of ($0.10) to ($0.12)
and non-GAAP net loss per share to be in the range of ($0.08) to ($0.10).
Isilon management will host a conference call today at 2:00 p.m. PT (5:00
p.m. ET) to discuss the preliminary results.
"We are disappointed with our Q3 results," said Steve Goldman,
president and chief executive officer. "Despite the fact that our recent
growth rate has not been matching our expectations, continued spending by
an ever broadening range of new and existing customers underscores the
strong value proposition of Isilon clustered storage."
Isilon's preliminary third quarter results are subject to review by the
company as well as its independent auditors. The company's final results
for the third quarter of 2007 will be announced on October 25, 2007 after
the close of market.
Preliminary Results Conference Call Information
Isilon's conference call to discuss the preliminary results for the
third quarter of 2007 will be held today at 2:00 p.m. PT (5:00 p.m. ET) and
will be accessible via live webcast on the Investor Relations section of
Isilon's website at http://www.isilon.com/company/, where the webcast also
will be archived.
A recording of the conference call will be available approximately one
hour after the call is completed through 12:00 midnight ET, October 17,
2007. To listen to the recording, please dial 888-286-8010 (domestic) or
617-801-6888 (international); the passcode for the recording is 10214735.
Isilon Systems (Nasdaq: ISLN) is the worldwide leader in clustered
storage systems and software for digital content and unstructured data,
enabling enterprises to transform data into information -- and information
into breakthroughs. Isilon's award-winning family of IQ clustered storage
systems combines Isilon's OneFS operating system software with the latest
advances in industry-standard hardware to deliver modular, pay-as-you-grow,
enterprise-class storage systems. Isilon's clustered storage solutions
speed access to critical business information while dramatically reducing
the cost and complexity of storing it. Information about Isilon can be
found at http://www.isilon.com.
Safe Harbor Statement
This press release contains "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are not guarantees of future performance. These forward-looking
statements are based on management's expectations as of October 3, 2007,
and assumptions which are inherently subject to uncertainties, risks and
changes in circumstances that are difficult to predict. The use of words
such as "intends" and "expects" among others, generally identify
forward-looking statements. However, these words are not the exclusive
means of identifying such statements. Such forward-looking statements may
relate, among other things, to our expected financial and operating
results, the benefits of our products, technologies and services and our
ability to achieve our goals, plans and objectives.
Actual results and the timing and outcome of events may differ
materially from those expressed or implied in the forward-looking
statements for a variety of reasons, including, among others: risks
associated with anticipated growth in the storage of unstructured, digital
content; competitive factors, including changes in the competitive
environment, pricing pressures, sales cycle time and increased competition;
our ability to build and expand our direct sales operations and reseller
distribution channels; our ability to build sales backlogs and improve
sales linearity; general economic and industry conditions, including
expenditure trends for storage-related products; new product introductions
and our ability to develop and deliver innovative products; our ability to
provide high-quality service and support offerings; our reliance on a
limited number of suppliers and our ability to forecast demand for our
products and potential shortages or price fluctuations in our supply chain;
risks associated with international operations; and other important factors
as described in Isilon Systems, Inc.'s reports and documents filed from
time to time with the Securities and Exchange Commission, including the
factors described in the sections captioned "Risk Factors" in our most
recently submitted 10-K and 10-Q.
Except as required by law, Isilon Systems, Inc. undertakes no
obligation to update any forward-looking or other statements in this press
release, whether as a result of new information, future events or
(1) Use of Non-GAAP Financial Measures
Isilon provides non-GAAP information to enhance investors' overall
understanding of the company's current financial performance and the
company's prospects for the future and to aid in comparing current
operating results with those of past periods. The company believes the
non-GAAP measures provide useful information to management and investors by
excluding certain items that may not be indicative of Isilon's core
operating results and business outlook.
This press release includes non-GAAP gross margin and non-GAAP loss per
share. These non-GAAP measures exclude charges related to stock-based
compensation. Isilon excludes stock-based compensation expenses from its
non-GAAP measures primarily because they are non-cash expenses that Isilon
does not believe reflect core operating results. Stock-based compensation
expense is dependent on a number of factors over which management has
limited control and is not a factor management utilizes in operating the
These non-GAAP measures are not in accordance with, or an alternative
for, measures prepared in accordance with GAAP and may be different from
non-GAAP measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules or
principles. Isilon believes that non-GAAP measures have inherent
limitations in that they do not reflect all of the amounts associated with
Isilon's results of operations as determined in accordance with GAAP and
that these measures should only be used to evaluate Isilon's results of
operations in conjunction with the corresponding GAAP measures.
The table that follows provides a reconciliation of the most directly
comparable GAAP measures to the non-GAAP measures used by management.
Isilon Systems, Inc.
Reconciliation of GAAP to non-GAAP preliminary results
Net loss per
Gross margin % basic and diluted
Three Months Ended
September 30, 2007
GAAP 54.4% - 56.4% $(0.10) - $(0.12)
Stock-based compensation 0.2% - 0.2% 0.02 - 0.02
Non-GAAP 54.6% - 56.6% $(0.08) - $(0.10)
SOURCE Isilon Systems, Inc.