SAN BRUNO, Calif., Aug. 9, 2011 (GLOBE NEWSWIRE) -- In the press release issued with the same headline earlier today by Responsys, Inc. (Nasdaq:MKTG), please note that the Calculation of Non-GAAP Gross Profit, Non-GAAP Operating Income, Non-GAAP Taxes, Non-GAAP Net Income, and Non-GAAP Net Income Per Share table has been amended. The full, correct release follows:
Responsys, Inc. (Nasdaq:MKTG), the leading provider of email and cross-channel marketing solutions, today announced financial results for the quarter ended June 30, 2011.
For the second quarter of 2011, total revenue increased 56% to $33.7 million, up from $21.6 million in the second quarter of 2010.
Subscription revenue for the second quarter of 2011 was $22.9 million, up 48% as compared to $15.5 million in the second quarter of 2010. Professional services revenue was $10.7 million, up 76% as compared to $6.1 million in the second quarter of 2010.
GAAP net income for the second quarter of 2011 was $2.5 million, compared to $1.6 million in the second quarter of 2010. Diluted GAAP net income attributable to common stockholders for the second quarter of 2011 was $1.8 million, or $0.04 per share on a diluted basis. This compares to diluted GAAP net income attributable to common stockholders for the second quarter of 2010 of $124,000, or $0.01 per share on a diluted basis.
In addition to using GAAP results in evaluating Responsys' business, management believes it is useful to also measure results using non-GAAP net income, which is net income excluding stock-based compensation expense, amortization of acquired intangible assets, and their related income tax effects, as applicable. Non-GAAP net income for the second quarter of 2011 was $3.4 million, or $0.07 per share on a non-GAAP diluted basis1, as compared to $2.0 million, or $0.05 per share on a non-GAAP diluted basis1, for the second quarter of 2010. A reconciliation of the comparable GAAP to non-GAAP financial measures used in this release is included in the attached tables.
"We are pleased to deliver strong revenue and earnings that exceed our second quarter guidance," said Dan Springer, CEO and Chairman of Responsys. "Our success is driven by a number of factors, the most important being our industry-leading solutions and market leadership, which allow us to win new customers and help them create more effective interactive marketing programs. This success enables us to aggressively target this robust and growing multi-billion-dollar market."
Business Outlook
Based on information available as of August 9, 2011, Responsys is issuing guidance for the third quarter 2011 and the full year 2011 as follows:
Third quarter 2011: The Company expects third quarter revenue to be approximately $33.5 million.
Non-GAAP net income is expected to be approximately $1.5 million, or approximately $0.03 per share on a non-GAAP diluted basis1. Non-GAAP net income excludes an estimated $0.6 million in amortization of acquired intangibles, $0.7 million in stock-based compensation expense, and $0.3 million in related income tax expense.
The net income per share on a non-GAAP diluted basis1 calculation for the third quarter of 2011 is based on estimated non-GAAP diluted shares outstanding of 54.5 million.
Full year 2011: The Company expects full year 2011 revenue to be in the range of $131 million to $132 million.
Non-GAAP net income is expected to be in the range of $9 million to $10 million, or $0.18 to $0.19 per share on a non-GAAP diluted basis1. Non-GAAP net income excludes an estimated $2.3 million in amortization of acquired intangibles, $2.9 million in stock-based compensation expense, $2.2 million from the first-quarter gain from the acquisition of Eservices, and net $0.4 million related income tax expense.
The net income per share on a non-GAAP diluted basis1 calculation for the full year is based on estimated non-GAAP diluted shares outstanding of 52 million.
Non-GAAP net income for the third quarter and fiscal year 2011 assumes an effective non-GAAP tax rate of 37%.
Conference Call Information for Today, Tuesday, August 9, 2011
Responsys will host a conference call to discuss the results today at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. To access the call from the U.S., please dial (877) 548-9590, or from outside the U.S., dial (914) 495-8541. A live webcast of the call will also be available at http://investors.responsys.com/events.cfm under the Events and Presentations menu. An audio replay will be available until August 16, 2011 by calling (800) 642-1687 or (706) 645-9291 outside the U.S., using conference ID 78107450. The replay will also be available on our website at http://investors.responsys.com/.
Business Description
Responsys is the leading provider of email and cross-channel marketing solutions that enable companies to engage in relationship marketing across the interactive channels customers are embracing today—email, mobile, social and the web. With Responsys solutions, marketers can create, execute, and automate highly dynamic campaigns and lifecycle marketing programs that are designed to grow revenue, increase marketing efficiency, and strengthen customer loyalty. Responsys' New School Marketing vision, flexible on-demand application suite, and customer success-focused services aim to deliver high ROI, increased levels of automation and fast time-to-value. Founded in 1998, Responsys is headquartered in San Bruno, California and has offices throughout the world. Responsys serves world-class brands such as: American Family Mutual Insurance Company, Avis Europe, Continental Airlines, Deutsche Lufthansa, Dollar Thrifty, Lands' End, LEGO, LinkedIn, Newegg, Qantas, Southwest Airlines, and United Healthcare. For more information about Responsys, visit responsys.com.
The Responsys, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=9558
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures including non-GAAP operating income, non-GAAP net income, and non-GAAP net income per share on a diluted basis1. Non-GAAP operating income, non-GAAP net income, and non-GAAP net income per share on a diluted basis1 exclude the amortization of acquired intangible assets, stock-based compensation expense, and the gain on the acquisition of Eservices. Non-GAAP net income per share on a diluted basis1 is not adjusted for the impact of unamortized stock-based compensation on the computation of diluted shares under GAAP. The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods and uses these measures in financial reports prepared for management and the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors.
The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of the Company presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which is included in this press release, and not to rely on any single financial measure to evaluate the Company's business.
Forward Looking Statements
The financial projections under Business Outlook, and statements regarding our revenue growth, market opportunity, the momentum of the business and other forward-looking statements included in this presentation, reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties include: our ability to acquire and retain customers; whether customers purchase additional functionality and increase their usage; pricing pressures and competitive factors; the uncertain impact of overall global economic conditions, including on customers, prospective customers and partners, renewal rates and length of sales cycles; the fact that the market for cross-channel marketing solutions is at an early stage of development and may not develop as rapidly as we anticipate; risks related to the integration of acquisitions, including retaining customers and employees, unforeseen liabilities and managing geographically-dispersed operations; competitive factors; outages or security breaches; our ability to develop, and market acceptance of, new products and services; the impact of any discovered product defects; our ability to manage our growth, both domestically and internationally; our ability to successfully expand our sales force and its effectiveness; our ability to maintain profitability; and other risks detailed from time to time in our SEC reports including, but not limited to, our most recent quarterly report on Form 10-Q. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
_______________________
1 Non-GAAP net income per share on a non-GAAP diluted basis is derived by dividing non-GAAP net income by non-GAAP diluted weighted-average shares outstanding. The non-GAAP diluted weighted-average shares outstanding was computed to give effect to the conversion of the Series A, Series B, Series C, Series D, and Series E convertible preferred stock using the as-if converted method into common shares as though the conversion had occurred as of the beginning of the period. The conversion of the Series A, Series B, Series C, Series D, and Series E convertible preferred stock occurred on April 27, 2011, after our public offering.
| Responsys, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (Unaudited; in thousands) | ||
| As of June 30, | As of December 31, | |
| 2011 | 2010 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 82,394 | $ 13,884 |
| Short-term investments | 2,010 | – |
| Accounts receivable, net | 20,712 | 18,101 |
| Deferred taxes | 7,301 | 7,288 |
| Prepaid expenses and other current assets | 3,833 | 5,347 |
| Total current assets | 116,250 | 44,620 |
| Property and equipment – net | 15,149 | 10,822 |
| Goodwill | 14,579 | 1,301 |
| Intangible assets – net | 4,533 | 529 |
| Deferred taxes – noncurrent | 2,054 | 5,190 |
| Investment in unconsolidated affiliates | 120 | 8,057 |
| Other assets | 299 | 1,381 |
| Total assets | $ 152,984 | $ 71,900 |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable | $ 2,704 | $ 1,162 |
| Accrued compensation | 4,979 | 3,516 |
| Other accrued liabilities | 2,833 | 3,866 |
| Current portion of capital lease obligations | 999 | 387 |
| Current portion of deferred revenue | 7,333 | 8,642 |
| Total current liabilities | 18,848 | 17,573 |
| Capital lease obligations | 1,564 | – |
| Deferred revenue – noncurrent | 393 | 382 |
| Other long-term liabilities | 840 | 770 |
| Total liabilities | 21,645 | 18,725 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Convertible preferred stock | – | 62,028 |
| Common stock | 5 | 1 |
| Additional paid-in capital | 149,079 | 12,860 |
| Accumulated deficit | (18,163) | (22,765) |
| Accumulated other comprehensive income (loss) | 418 | 1,051 |
| Total stockholders' equity | 131,339 | 53,175 |
| Total liabilities and stockholders' equity | $ 152,984 | $ 71,900 |
| Responsys Inc. | ||||
| Condensed Consolidated Statements of Income | ||||
| (Unaudited; in thousands, except per share data) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Revenue: | ||||
| Subscription | $ 22,948 | $ 15,479 | $ 43,933 | $ 30,332 |
| Professional services | 10,715 | 6,097 | 19,872 | 10,625 |
| Total revenue | 33,663 | 21,576 | 63,805 | 40,957 |
| Cost of revenue: | ||||
| Subscription | 6,532 | 4,884 | 13,046 | 9,205 |
| Professional services | 9,401 | 4,426 | 17,650 | 8,673 |
| Total cost of revenue | 15,933 | 9,310 | 30,696 | 17,878 |
| Gross profit | 17,730 | 12,266 | 33,109 | 23,079 |
| Operating expenses: | ||||
| Research and development | 3,054 | 2,628 | 6,447 | 4,790 |
| Sales and marketing | 7,842 | 5,025 | 15,877 | 9,764 |
| General and administrative | 2,511 | 1,936 | 5,056 | 3,623 |
| Gain on acquisition | – | – | (2,220) | – |
| Total operating expenses | 13,407 | 9,589 | 25,160 | 18,177 |
| Operating income | 4,323 | 2,677 | 7,949 | 4,902 |
| Other income (expense): | ||||
| Interest income | 11 | – | 14 | – |
| Interest expense | (38) | (7) | (44) | (14) |
| Other income (expense), net | (52) | (63) | 84 | (274) |
| Total other income (expense) | (79) | (70) | 54 | (288) |
| Income before income taxes | 4,244 | 2,607 | 8,003 | 4,614 |
| Provision for income taxes | (1,734) | (984) | (3,363) | (1,861) |
| Equity in net loss in unconsolidated affiliates | (32) | – | (38) | – |
| Net income | $ 2,478 | $ 1,623 | $ 4,602 | $ 2,753 |
| Net income attributable to common stockholders: | ||||
| Basic | $ 1,718 | $ 85 | $ 1,641 | $ 60 |
| Diluted | $ 1,774 | $ 124 | $ 1,845 | $ 88 |
| Net income per share attributable to common stockholders: | ||||
| Basic | $ 0.05 | $ 0.01 | $ 0.07 | $ 0.01 |
| Diluted | $ 0.04 | $ 0.01 | $ 0.06 | $ 0.01 |
| Shares used in computation of net income per share attributable to common stockholders: | ||||
| Basic | 36,452 | 8,575 | 23,104 | 8,506 |
| Diluted | 43,639 | 14,432 | 30,549 | 14,246 |
| Responsys Inc. | ||||
| Calculation of Non-GAAP Gross Profit, Non-GAAP Operating Income, Non-GAAP Taxes, Non-GAAP Net Income, and Non-GAAP Net Income Per Share | ||||
| (Unaudited; in thousands, except per share data) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Gross profit: | ||||
| GAAP gross profit | ||||
| Subscription | $ 16,416 | $ 10,595 | $ 30,887 | $ 21,127 |
| Professional services | 1,314 | 1,671 | 2,222 | 1,952 |
| Total GAAP gross profit | 17,730 | 12,266 | 33,109 | 23,079 |
| Add back: | ||||
| Stock-based compensation | ||||
| Subscription | 53 | 63 | 138 | 134 |
| Professional services | 144 | 41 | 232 | 78 |
| Total non-GAAP gross profit | $ 17,927 | $ 12,370 | $ 33,479 | $ 23,291 |
| Operating income: | ||||
| GAAP operating income | $ 4,323 | $ 2,677 | $ 7,949 | $ 4,902 |
| Add back: | ||||
| Amortization of intangible assets | 601 | 54 | 1,172 | 117 |
| Stock-based compensation | 621 | 508 | 1,302 | 1,044 |
| Deduct: | ||||
| Gain on acquisition | -- | -- | (2,220) | -- |
| Total non-GAAP operating income | $ 5,545 | $ 3,239 | $ 8,203 | $ 6,063 |
| Income before income taxes: | ||||
| GAAP income before income taxes | $ 4,244 | $ 2,607 | $ 8,003 | $ 4,614 |
| Add back: | ||||
| Amortization of intangible assets | 601 | 54 | 1,172 | 117 |
| Stock-based compensation | 621 | 508 | 1,302 | 1,044 |
| Deduct: | ||||
| Gain on acquisition | -- | -- | (2,220) | -- |
| Total non-GAAP income before taxes | $ 5,466 | $ 3,169 | $ 8,257 | $ 5,775 |
| Provision for income taxes: | ||||
| GAAP provision for income taxes | $ (1,734) | $ (984) | $ (3,363) | $ (1,861) |
| Tax effect from: | ||||
| Amortization of intangible assets | (186) | (22) | (364) | (47) |
| Stock-based compensation | (116) | (147) | (244) | (303) |
| Gain on acquisition | -- | -- | 888 | -- |
| Total non-GAAP provision for income taxes | $ (2,036) | $ (1,153) | $ (3,083) | $ (2,211) |
| Net income: | ||||
| GAAP net income | $ 2,478 | $ 1,623 | $ 4,602 | $ 2,753 |
| Add back: | ||||
| Amortization of intangible assets | 601 | 54 | 1,172 | 117 |
| Stock-based compensation | 621 | 508 | 1,302 | 1,044 |
| Deduct: | ||||
| Gain on acquisition | -- | -- | (2,220) | -- |
| Income tax effect of non-GAAP items | (302) | (169) | 281 | (350) |
| Total non-GAAP net income | $ 3,398 | $ 2,016 | $ 5,137 | $ 3,564 |
| Non-GAAP net income per share1 | ||||
| Basic | $ 0.08 | $ 0.05 | $ 0.12 | $ 0.09 |
| Diluted | $ 0.07 | $ 0.05 | $ 0.10 | $ 0.08 |
| Shares used in computing non-GAAP net income per share: | ||||
| Basic shares: | ||||
| Weighted-average common shares used in computing basic net income per common share | 36,452 | 8,575 | 23,104 | 8,506 |
| Less: weighted-average preferred shares outstanding due to conversion upon IPO | (21,542) | -- | (10,831) | -- |
| Conversion of preferred shares | 30,159 | 30,159 | 30,159 | 30,159 |
| Weighted-average shares outstanding used in calculating non-GAAP basic net income per share | 45,069 | 38,734 | 42,432 | 38,665 |
| Diluted shares: | ||||
| Weighted-average shares outstanding used in calculating non-GAAP diluted net income per common share | 43,639 | 14,432 | 30,549 | 14,246 |
| Less: weighted-average preferred shares outstanding due to conversion upon IPO | (21,542) | -- | (10,831) | -- |
| Conversion of preferred shares | 30,159 | 30,159 | 30,159 | 30,159 |
| Weighted-average shares outstanding used in calculating non-GAAP diluted net income per share | 52,256 | 44,591 | 49,877 | 44,405 |
1 Non-GAAP net income per share on a non-GAAP diluted basis is derived by dividing non-GAAP net income by non-GAAP diluted weighted-average shares outstanding. The non-GAAP diluted weighted-average shares outstanding was computed to give effect to the conversion of the Series A, Series B, Series C, Series D, and Series E convertible preferred stock using the as-if converted method into common shares as though the conversion had occurred as of the beginning of the period.
| Responsys, Inc. | ||||
| Stock-Based Compensation Expense | ||||
| (Unaudited; in thousands) | ||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Cost of revenue | $ 197 | $ 104 | $ 370 | $ 212 |
| Research and development | 111 | 78 | 207 | 160 |
| Sales and marketing | 108 | 134 | 287 | 275 |
| General and administrative | 205 | 192 | 438 | 397 |
| Total costs and expenses | $ 621 | $ 508 | $ 1,302 | $ 1,044 |
| Responsys, Inc. | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (Unaudited; in thousands) | ||
| Six Months Ended June 30, | ||
| 2011 | 2010 | |
| Cash flows from operating activities: | ||
| Net income | $ 4,602 | $ 2,753 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Provision for bad debts | (60) | 217 |
| Depreciation and amortization | 4,559 | 2,574 |
| Stock-based compensation | 1,302 | 1,044 |
| Gain on acquisition | (2,220) | – |
| Deferred tax assets | 2,619 | 1,539 |
| Equity in net loss of unconsolidated affiliates | 38 | – |
| Changes in operating assets and liabilities - net of business acquired: | ||
| Accounts receivable | (429) | (3,209) |
| Prepaid expenses and other current assets | (516) | (390) |
| Other assets | (52) | (27) |
| Accounts payable | 538 | 1,048 |
| Accrued compensation | 839 | (609) |
| Other accrued liabilities | 230 | 1,429 |
| Deferred revenue | (1,547) | 2,520 |
| Other long-term liabilities | (63) | 17 |
| Net cash provided by operating activities | 9,840 | 8,906 |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (3,738) | (3,800) |
| Addition of capitalized software development costs | (304) | (338) |
| Business acquisition, net of cash received | (6,101) | (325) |
| Purchase of investments | (2,010) | – |
| Investment in unconsolidated affiliates | (381) | – |
| Net cash used in investing activities | (12,534) | (4,463) |
| Cash flows from financing activities: | ||
| Proceeds from issuance of common shares | 495 | 78 |
| Proceeds from initial public offering, net | 72,182 | – |
| Proceeds from early exercise of stock options | 157 | – |
| Payments of offering costs | (1,469) | (405) |
| Principal payments on capital lease obligations | (222) | (195) |
| Net cash provided by (used in) financing activities | 71,143 | (522) |
| Effect of foreign exchange rate changes on cash and cash equivalents | 61 | (18) |
| Net increase in cash and cash equivalents | 68,510 | 3,903 |
| Cash and cash equivalents at beginning of period | 13,884 | 15,750 |
| Cash and cash equivalents at end of period | $ 82,394 | $ 19,653 |