Commtouch Reports Results for the First Quarter of 2012
SUNNYVALE, California, May 2, 2012 /PRNewswire/ --
Revenue Increases 7% Year-Over-Year to $5.9 Million, Setting a First Quarter Record
GAAP Net Income Increases 18% Year-Over-Year to $1.2 Million
Non-GAAP Net Income Increases 14% Year-Over-Year to $1.6 Million
Management Conference Call to Outline Evolution of Growth Strategy
Commtouch® (NASDAQ: CTCH), a leading cloud-based Internet security provider, today announced its first quarter financial results, for the period ending March 31, 2012.
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First Quarter 2012 Financial Highlights:
- Revenues for the first quarter of 2012 increased by 7% to $5.9 million, compared to $5.5 million in the first quarter of 2011, setting a first quarter record.
- Net income for the first quarter of 2012 in accordance with US Generally Accepted Accounting Principles (US GAAP) was $1.2 million, compared to net income of $1.0 million in the same period last year.
- GAAP earnings per diluted share for the first quarter of 2012 were $0.05, compared to $0.04 in the same period last year.
- Non-GAAP net income for the first quarter of 2012 was $1.6 million, compared to $1.4 million in the first quarter of 2011.
- Non-GAAP earnings per diluted share for the first quarter of 2012 were $0.06, compared to $0.06 for the first quarter of 2011.
- Deferred Revenues (long-term and short-term) as of March 31, 2012 were $3.8 million compared to $3.8 million in deferred revenues as of December 31, 2011.
- Cash as of March 31, 2012 was $22.0 million, compared to $20.9 million as of December 31, 2011.
- Operating cash flow for the first quarter of 2012 was $1.2 million, compared to operating cash flow of $1.1 million in the first quarter of 2011. During the first quarter of 2012, options were exercised for approximately $0.1 million.
"Commtouch's first quarter 2012 financial results reflect the continued strength of our innovative IT security technologies while delivering year-over-year growth across our key financial metrics including revenue, gross margin, net income and operating cash flows," said Shlomi Yanai, Commtouch's chief executive officer.
"Over the past few months, we have been re-defining our long-term strategy and vision to take our business to the next level. Our recent enhancements to the management team reflect the initial steps that we have already taken. Our updated vision focuses on the evolution of Commtouch from a technology company, providing class leading technologies, into a solutions provider of white label cloud-driven 'security as a service' offerings. This evolution, from technologies towards solutions for our valued OEM and service provider customers, is built upon continuing to grow our core business while making material investments in the coming year that are aimed at developing and deploying complementary value added solutions to set the stage for accelerated long-term growth. We believe the combination of continued revenue expansion, ongoing customer acquisition, strong cash flow generation, and our newly evolved vision for growth puts us in a very strong position," concluded Mr. Yanai.
For information regarding the non-GAAP financial measures discussed in this release, please see "Use of Non-GAAP Financial Information" and "Reconciliation of Non-GAAP to GAAP Financial Information."
First Quarter 2012 Business Highlights:
- Commtouch appointed Mickey Avram as VP of Sales Operations, Brett Wilson as VP of Products and Haniel Ilouz as VP of Global Engineering, all top leaders in their respective fields.
- Commtouch announced the availability of its enhanced Antivirus for Email offering using a unique dual-detection approach to ensure malware identification from the zero-hour of an outbreak through any stage of the malware lifecycle.
- ZyXEL Communications, a leading provider of secure broadband networking, Internet connectivity, home entertainment and routing products, integrated Commtouch's cloud-based Anti-Spam and Web Filtering offerings into its Unified Security Gateway product line. ZyXEL also announced a software upgrade for its Unified Threat Management series, adding Commtouch's cloud-based Anti-Spam and Web Filtering offerings.
- Hostopia, a leading provider of Web services for small-to-medium sized businesses, implemented Commtouch's Outbound Spam Protection.
- Parallels, a worldwide leader in virtualization and automation software, deployed Commtouch's Outbound Spam Protection as a fully integrated module within Parallels Plesk Panel. The offering was launched during the Parrallels Summit 2012 in Orlando, an event that attracts a global audience of over 1,200 leading participants from across the cloud and hosting industry.
Business Outlook
The company is reaffirming its expectation that full year 2012 revenue will grow by a double-digit percentage rate over full year 2011 levels. Based on a higher level of investment the company is making in the areas of research and development, sales, and marketing to support the development and deployment of Commtouch's next generation solutions, non-GAAP net income for full year 2012 is expected to be at, or above, $5.0 million.
The above outlook is as of the date of this release, and the company undertakes no obligation to update its estimates in the future.
Use of Non-GAAP Measures
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: share based compensation expenses, amortization and impairment of acquired intangible assets, deferred taxes, acquisition related costs and adjustments to earnout obligation related to the Command antivirus acquisition. The purpose of such adjustments is to give an indication of the company's performance exclusive of non-cash charges and other items that are considered by management to be outside of the company's core operating results. The company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP. Company management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions.
These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. The company believes this adjustment is useful to investors as a measure of the ongoing performance of our business. The company believes these non-GAAP financial measures provide consistent and comparable measures to help investors understand the company's current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it important to make these non-GAAP adjustments available to investors.
Financial Results Conference Call
The company has scheduled a conference call later today, May 2, 2012 at 10:00 a.m. ET to review the first quarter 2012 operational and financial highlights as well as walk through a strategic overview of the evolution of the Company's growth strategy.
To participate in the call, please dial one of the following access numbers ten minutes prior to the start time of the call:
US Dial-in Number: 1-888-407-2553
Israel Dial-in Number: 03-918-0610
International Dial-in Number: +972-3-918-0610
at:
10:00 a.m. Eastern Time, 7:00 a.m. Pacific Time,
3:00 p.m. UK Time, 5:00 p.m. Israel Time
The call will be simultaneously webcast live from a link on Commtouch's website at http://www.commtouch.com.
For those unable to listen to the live call, a replay of the call will be available from the day after the call in the investor relations section of Commtouch's website.
About Commtouch
Commtouch® (NASDAQ: CTCH) safeguards the world's leading security companies and service providers with cloud-based Internet security services. Real-time threat intelligence from Commtouch's GlobalView™ Cloud powers its Web filtering, email security and antivirus solutions, protecting thousands of organizations and hundreds of millions of users worldwide. Information about Commtouch can be found at http://www.commtouch.com or by writing to [email protected].
Recurrent Pattern Detection, RPD, Zero-Hour and GlobalView are trademarks, and Commtouch, Authentium, Command Antivirus and Command Anti-malware are registered trademarks, of Commtouch. U.S. Patent No. 6,330,590 is owned by Commtouch. All other trademarks are the property of their respective owners.
This press release contains forward-looking statements, including projections about our business, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense, and statements including words such as "expect," "plan," "estimate," "anticipate," or "believe" are forward-looking statements. These statements are based on information available to us at the time of the release; we assume no obligation to update any of them. The statements in this release, including the company's expectation of double digit growth for 2012, are not guarantees of future performance and actual results could differ materially from our current expectations as a result of numerous factors, including business conditions and growth or deterioration in the Internet market, commerce and the general economy, both domestic as well as international; fewer than expected new-partner relationships; competitive factors, including pricing pressures; technological developments, and products offered by competitors; the ability of our OEM partners to successfully penetrate markets with products integrated with Commtouch technology; a slower than expected acceptance rate for our newer product offerings; availability of qualified staff; and technological difficulties and resource constraints encountered in developing new products, as well as those risks described in the text of this press release and the company's Annual Reports on Form 20-F and reports on Form 6-K, which are available through http://www.sec.gov.
COMMTOUCH SOFTWARE LTD. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In US$ thousands, except per share amounts) Three months ended March 31 ------------------------- 2012 2011 --------- --------- Unaudited Unaudited Revenues $5,896 $5,515 Cost of revenues 1,052 1,010 --------- --------- Gross profit 4,844 4,505 --------- --------- Operating expenses: Research and development 1,270 1,247 Sales and marketing 1,142 1,391 General and administrative 1,331 893 --------- --------- Total operating expenses 3,743 3,531 --------- --------- Operating profit 1,101 974 Financial expenses , net (23) 14 --------- --------- Income before taxes 1,124 960 Income taxes , net (85) (61) --------- --------- Net income attributable to ordinary and equivalently participating shareholders $1,209 $1,021 ========= ========= Earning per share- basic $0.05 $0.04 ========= ========= Earning per share- diluted $0.05 $0.04 ========= ========= Weighted average number of shares outstanding: Basic 24,163 23,506 ========= ========= Diluted 24,889 24,752 ========= =========
COMMTOUCH SOFTWARE LTD. RECONCILIATION OF SELECTED GAAP MEASURES TO NON GAAP MEASURES (In US$ thousands, except per share amounts) Three months ended March 31 ------------------------- 2012 2011 --------- --------- Unaudited Unaudited GAAP operating profit $1,101 $974 Stock-based compensation (1) 364 297 Amortization and impairment of intangible assets (2) 101 129 Adjustment to earnout obligation (3) - - --------- --------- Non-GAAP operating profit $1,566 $1,400 ========= ========= GAAP net income $1,209 $1,021 Stock-based compensation (1) 364 297 Amortization and impairment of intangible assets (2) 101 129 Adjustment to earnout obligation (3) 28 - Income taxes (4) (116) (61) --------- --------- Non-GAAP net income $1,586 $1,386 ========= ========= GAAP earnings per share $0.05 $0.04 Stock-based compensation (1) 0.01 0.01 Amortization and impairment of intangible assets (2) 0.004 0.005 Adjustment to earnout obligation (3) 0.001 - Income taxes (4) (0.005) (0.002) --------- --------- Non-GAAP earnings per share $0.06 $0.06 ========= ========= Numbers of shares used in computing Non-GAAP earnings per share (diluted) 24,889 24,752 (1) Stock-based compensation Cost of revenues $9 $6 Research and development 67 75 Sales and marketing 88 95 General and administrative 200 121 --------- --------- $364 $297 ========= ========= (2) Amortization and impairment of intangible assets Cost of revenues $48 $49 Sales and marketing 53 80 --------- --------- $101 $129 ========= ========= (3) Adjustment to earnout obligation Financial expenses (income), net $28 - General and administrative - - --------- --------- $28 - ========= ========= (4) Income taxes Deferred tax asset - tax benefit (116) (61) --------- --------- ($116) ($61) ========= =========
COMMTOUCH SOFTWARE LTD. CONDENSED CONSOLIDATED BALANCE SHEETS March 31 December 31 --------- --------- 2012 2011 --------- --------- Unaudited Audited In US$ thousands Assets: Current Assets: Cash and cash equivalents $22,038 $20,868 Trade receivables 3,373 2,838 Deferred income taxes 2,041 1,996 Prepaid expenses and other accounts receivable 306 463 --------- --------- Total current assets 27,758 26,165 --------- --------- Long-term lease deposits 40 40 Severance pay fund 1,055 1,031 Property and equipment, net 882 885 Deferred income taxes 2,960 2,889 Intangible assets, net 3,404 3,505 Goodwill 3,792 3,792 Investment in affiliate 1,227 1,227 --------- --------- Total assets 41,118 39,534 ========= ========= Liabilities and Shareholders' Equity Current Liabilities: Accounts payable 383 551 Employees and payroll accruals 1,246 1,215 Accrued expenses and other liabilities 609 628 Other short term liabilities 3,400 3,372 Deferred revenues 2,921 3,058 --------- --------- Total current liabilities 8,559 8,824 --------- --------- Deferred revenues 851 694 Accrued severance pay 1,212 1,192 --------- --------- Total liabilities 2,063 1,886 --------- --------- Shareholders' equity 30,496 28,824 --------- --------- Total liabilities and shareholders' equity $41,118 $39,534 ========= =========
COMMTOUCH SOFTWARE LTD. CONDENSED CONSOLIDATED CASH FLOW DATA (In US$ thousands) Three months ended March 31 ------------------------ 2012 2011 ------- ------- Cash flow from operating activities Unaudited Unaudited Net income $1,209 $1,021 Adjustments: Depreciation 151 136 Compensation related to options issued to employees 364 280 Amortization amd impairment of intangible assets 101 129 Capital gain from sale of fixed assets - - Changes in assets and liabilities: (Increase) decrease in trade receivables (535) 9 Increase in deferred taxes (116) (61) Decrease in prepaid expenses and other receivables 157 46 (Decrease) in accounts payable (183) (213) Increase in employees and payroll accruals, accrued expenses and other liabilities 40 52 Increase (decrease) in deferred revenues 20 (310) (Decrease) increase in accrued severance pay, net (4) 13 --------- -------- Net cash provided by operating activities 1,204 1,102 Cash from investing activities Change in long - term lease deposits - 11 Purchase of property and equipment (133) (119) Net cash used in investing activities (133) (108) --------- -------- Cash flows from financing activities Proceeds from options and warrants exercised 99 - --------- -------- Net cash provided by financing activities 99 - Increase in cash and cash equivalents 1,170 994 Cash and cash equivalents at the beginning of the period 20,868 13,432 --------- -------- Cash and cash equivalents at the end of the period $22,038 $14,426 ========= ========
Company Contact
Ron Ela
Chief Financial Officer
Tel: (US) +1-650-864-2291
(Int'l) +972-9-8636813
[email protected]
US Investor Relations Contact
Ehud Helft / Kenny Green
CCG Investor Relations
Tel: (US) +1-646-201-9246
(Int'l) +972-3-607-4717
[email protected]
Israel Investor Relations Contact
Iris Lubitch
EffectiveIR
Tel: +972-3-5664007
[email protected]
SOURCE Commtouch
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