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.
(Logo:
http://photos.prnewswire.com/prnh/20120501/529254 )
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
info@commtouch.com.
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
ron.ela@commtouch.com
US Investor Relations Contact
Ehud Helft / Kenny Green
CCG Investor Relations
Tel: (US) +1-646-201-9246
(Int'l) +972-3-607-4717
commtouch@ccgisrael.com
Israel Investor Relations Contact
Iris Lubitch
EffectiveIR
Tel: +972-3-5664007
Iris@EffectiveIR.co.il
SOURCE Commtouch