BEDFORD, Mass., Nov. 5, 2008 (GLOBE NEWSWIRE) -- SoundBite Communications, Inc. (Nasdaq:SDBT) today announced its financial results for the third quarter of 2008. Third quarter revenues were $10.6 million, an increase of 5% from the same quarter in 2007. GAAP loss per share was $0.10 versus a loss per share of $0.44 in the same quarter of 2007.
"The 25% year over year growth experienced in first-party revenues demonstrated our further penetration in this market, where SoundBite's hosted, multi-channel platform is being used for both collections and a growing number of proactive customer communications," stated Peter Shields, president and CEO of SoundBite Communications. "Our third-party revenues, however, continued to be impacted by pricing pressure and a challenging economy, including a weakened consumer environment."
Shields continued, "During the third quarter, we executed strategic plans aimed at growth in first party and the stabilization of third party. We completed a sales realignment in order to focus on our key vertical markets and deliver expertise in the consultative sales process we recently implemented. To support our efforts to stabilize the third party in the near term, in September we announced our Agent Portal product, which is designed to assist our third-party clients by increasing agent productivity and offering greater visibility into campaign activity and individual agent performance. In addition, we met our goal of converting to a 100% VoIP backbone to increase efficiencies and offer expanded services to our clients. We believe these activities, as well as remaining highly focused on our strategic vision, will position us well for future success."
Quarterly Results
Gross margin for the third quarter of 2008 was 60.8% versus 64.1% in the third quarter of 2007. Operating expenses were $8.2 million in the third quarter of 2008 and as a percentage of revenues were 77.3% versus 62.9% in the year-earlier period. Included in the operating expenses for the third quarter of 2008 were $208,000 related to the impairment of goodwill and $43,000 related to amortization of intangible assets associated with purchase price allocation from the Company's acquisition of Mobile Collect.
Net loss under GAAP was $1.5 million for the third quarter of 2008 versus $277,000 in the third quarter of 2007. GAAP loss per share for the third quarter of 2008 was $0.10 versus $0.44 in the same quarter of 2007.
GAAP net loss in the third quarter of 2008 included stock-based compensation expense of $243,000, a charge of $208,000 resulting from the impairment of goodwill, and amortization of intangibles of $43,000. GAAP net loss in the third quarter of 2007 included charges of $435,000 related to vacating an operating lease, $389,000 related to the revaluation of warrants, and stock based compensation of $89,000. (See the table below for a breakdown of stock-based compensation expense by operating statement line item.)
In the fourth quarter of 2008, SoundBite restructured its organization to align its operating costs with short term revenue expectations. These actions affected 16 personnel, or approximately 10% of its organization. As a result of this workforce reduction, the Company expects annual operating expenses for 2009 will approximately reflect the reduced operating expense run rate of the fourth quarter of 2008. The headcount reduction affected most areas of the company except for engineering and network operations. SoundBite does not believe that this action will have an impact on product development or customer satisfaction.
Other Highlights of the Quarter
* Released Agent Portal: a new feature designed to reduce hold time and increase agent productivity. * Completed the migration of its Intelligent Communications Platform to 100% Voice over Internet Protocol (VoIP), in order to help provide clients with reliable, scalable outbound and inbound communications worldwide.
Fourth Quarter 2008 Guidance
For the fourth quarter of 2008, SoundBite currently projects GAAP revenues in the range of $10.1 million to $11.1 million and gross margin in the range of 59% to 61%. The projection for pro forma operating loss is in the range of $1.1 million to $1.9 million. Excluded from the pro forma operating loss projection are stock based compensation of approximately $250,000 and amortization of intangibles of $43,000. GAAP interest income is projected to be approximately $195,000. The basic weighted average share count is expected to be 15.5 million for the fourth quarter of 2008. SoundBite expects GAAP capital expenditures to be approximately $450,000 and depreciation expense to be approximately $740,000.
Webcast and Teleconference Information
The company will host a conference call today at 5:00 p.m. ET to discuss its financial results. A live and archived webcast of the event will be available at http://ir.soundbite.com/events.cfm. A live dial-in is available domestically at 877-718-5107 and internationally at 719-325-4798. A replay of the call will be available two hours after the live call until 11:59 p.m. ET on November 19, 2008 and can be accessed by dialing 888-203-1112 for domestic callers and 719-457-0820 for international callers and entering passcode 6340693.
About SoundBite Communications
SoundBite Communications provides on-demand, integrated multi-channel communications solutions that enable clients to achieve superior business results. Building on its foundation as a leading provider of automated voice messaging services, SoundBite offers integrated voice, text and email messaging solutions that help clients deliver the right message, to the right customer, using the right channel, at the right time. Organizations in industries such as collections, financial services, retail, telecom and media, and utilities rely on the SoundBite Intelligent Communications Platform to send over a billion messages annually for collections, customer care, and sales and marketing applications. For more information, visit http://www.SoundBite.com.
Forward-Looking Statement
This is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained in this press release, including statements made in the third paragraph of this press release and statements under "Fourth Quarter 2008 Guidance" are based upon SoundBite's historical performance and its current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by SoundBite, its management or any other person that the future plans, estimates or expectations contemplated by SoundBite will be achieved. These forward-looking statements represent SoundBite's expectations as of the date of this press release. Subsequent events may cause these expectations to change, and SoundBite disclaims any obligation to update the forward-looking statements in the future. Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including: slower than anticipated development of the market for automated voice messaging services; defects in SoundBite's platform, disruptions in its service or errors in its execution; discontinued or decreased use of SoundBite's service by its clients, which are not subject to minimum purchase requirements for any reason, including market conditions and regulatory developments; and the occurrence of events adversely affecting the collection agencies industry or in-house collection departments, which account for a significant portion of SoundBite's revenues. These and other factors, including the factors set forth under the caption "Item 1A. Risk Factors" in SoundBite's most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission, could cause SoundBite's performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
SoundBite is a registered service mark of SoundBite Communications, Inc.
SOUNDBITE COMMUNICATIONS, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share amounts)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30,
------------- -------------
2008 2007 2008 2007
---- ---- ---- ----
Revenues $ 10,613 $ 10,067 $ 32,556 $ 28,166
Cost of
revenues (1) 4,155 3,619 12,555 10,479
----------- ----------- ----------- -----------
Gross profit 6,458 6,448 20,001 17,687
----------- ----------- ----------- -----------
Operating
expenses:
Research and
development
(1) 1,283 883 3,834 2,758
Sales and
marketing (1) 4,659 3,754 13,500 10,609
General and
administrative
(1) 2,050 1,700 7,969 4,052
Impairment of
goodwill 208 -- 208 --
----------- ----------- ----------- -----------
Total
operating
expenses 8,200 6,337 25,511 17,419
----------- ----------- ----------- -----------
Operating income
(loss) (1,742) 111 (5,510) 268
Other income
(expense):
Interest income 233 57 798 192
Interest expense -- (56) -- (201)
Gain on
litigation
settlement -- -- 4,600 --
Warrant charge
for change
in fair
value -- (389) -- (947)
----------- ----------- ----------- -----------
Total other
income
(expense),
net 233 (388) 5,398 (956)
----------- ----------- ----------- -----------
Net loss (1,509) (277) (112) (688)
Accretion of
preferred
stock -- (11) -- (33)
----------- ----------- ----------- -----------
Net loss
attributable
to common
stockholders $ (1,509) $ (288) (112) $ (721)
=========== =========== =========== ===========
Net loss per
common
share
attributable
to common
stockholders:
Basic and
diluted $ (0.10) $ (0.44) $ (0.01) $ (1.13)
Weighted average
common shares
outstanding:
Basic and
diluted 15,439,546 657,155 15,328,768 638,987
(1) Amounts include stock-based compensation expense, as follows:
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, September 30,
------------- -------------
2008 2007 2008 2007
---- ---- ---- ----
Cost of revenues $ 11 $ 1 $ 22 $ 3
Research and
development 25 5 60 12
Sales and
marketing 108 35 276 83
General and
administrative 99 48 240 122
----------- ----------- ----------- -----------
$ 243 $ 89 $ 598 $ 220
=========== =========== =========== ===========
SOUNDBITE COMMUNICATIONS, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share amounts)
Sept. 30, Dec. 31,
2008 2007
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 38,317 $ 35,674
Accounts receivable, net of allowance for
doubtful accounts of $193 and $176 at
September 30, 2008 and December 31, 2007,
respectively 6,603 7,261
Prepaid expenses and other current assets 1,000 1,309
--------- ---------
Total current assets 45,920 44,244
--------- ---------
Property and equipment, net 4,872 6,096
Intangible assets, net 249 --
Other assets 41 149
--------- ---------
Total assets $ 51,082 $ 50,489
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,142 $ 457
Accrued expenses 3,201 3,867
--------- ---------
Total liabilities 4,343 4,324
--------- ---------
Stockholders' equity:
Common stock, $0.001 par value -- 75,000,000
shares authorized; 15,676,942 shares issued
and 15,481,557 shares outstanding at
September 30, 2008; 15,420,888 shares issued
and 15,225,503 shares outstanding at
December 31, 2007 16 15
Additional paid-in capital 66,426 65,720
Treasury stock, at cost --195,385 shares at
September 30, 2008 and December 31, 2007 (132) (132)
Accumulated other comprehensive income (loss) (17) 4
Accumulated deficit (19,554) (19,442)
--------- ---------
Total stockholders' equity 46,739 46,165
--------- ---------
Total liabilities and stockholders' equity $ 51,082 $ 50,489
========= =========
SOUNDBITE COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
-------------------
2008 2007
---- ----
Cash flows from operating activities:
Net loss $ (112) $ (688)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation of property and equipment 2,582 2,055
Amortization of intangible assets 101 --
Provision for doubtful accounts 17 101
Change in carrying value of preferred stock
warrant liability -- 947
Stock-based compensation 598 220
Impairment of goodwill 208 --
(Gain) loss on disposal of equipment (15) 132
Change in operating assets and liabilities, net
of effect of acquisition:
Accounts receivable 691 (820)
Prepaid expenses and other current assets 309 (2,744)
Other assets 108 --
Accounts payable 762 1,947
Accrued expenses (666) 909
-------- --------
Net cash provided by operating activities 4,583 2,059
-------- --------
Cash flows from investing activities:
Proceeds received from sale of equipment 21 --
Acquisition of business (611) --
Purchases of property and equipment (1,442) (2,837)
-------- --------
Net cash used in investing activities (2,032) (2,837)
-------- --------
Cash flows from financing activities:
Proceeds from equipment and bank line of credit -- 2,345
Repayments of equipment and bank line of credit -- (3,546)
Proceeds from exercise of stock options 109 16
-------- --------
Net cash provided by (used in) financing
activities 109 (1,185)
-------- --------
Effect of exchange rate changes on cash and cash
equivalents (17) --
-------- --------
Net increase (decrease) in cash and cash
equivalents 2,643 (1,963)
Cash and cash equivalents, beginning of period 35,674 7,251
-------- --------
Cash and cash equivalents, end of period $ 38,317 $ 5,288
======== ========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest $ -- $ 213
======== ========
Supplemental disclosure of non-cash investing
and financing activities:
Accretion of redeemable convertible preferred
stock $ -- $ 33
======== ========
Property and equipment, included in accounts
payable $ 5 $ 1,058
======== ========
(SDBT:F)