Published: April 02, 2008
Isilon Systems Announces Fiscal Year 2007 Financial Results
SEATTLE, April 2, 2008 /PRNewswire-FirstCall/ -- Isilon(R) Systems
(Nasdaq: ISLN) today announced its financial results for the fiscal year ended
December 30, 2007, including the third and fourth quarters of 2007. Isilon
also announced that its Audit Committee has concluded its independent review
of the timing and treatment of revenue recognition and the Company has
completed the restatement of financial statements for certain previous
periods. The Company filed its Quarterly Report on Form 10-Q for the third
quarter of 2007 and its 2007 Annual Report on Form 10-K with the Securities
and Exchange Commission ("SEC").
Isilon today reported that revenue for the 2007 fiscal year was $89.0
million. Revenue for the third and fourth quarters of 2007 was $21.6 million
and $26.6 million, respectively.
Restatement of Prior Period Financial Statements
The Audit Committee, assisted by independent forensic accounting and legal
advisors, has completed its review of the Company's prior revenue recognition
practices. The Board of Directors, based on the recommendation of the Audit
Committee, concluded that the Company should restate its financial statements
for the fourth quarter and fiscal year ended December 31, 2006, and for the
first and second quarters of fiscal 2007 ended April 1, 2007, and July 1,
2007, respectively. A detailed description of the Audit Committee's findings
and of the restatement are included in the Company's 2007 Annual Report on
Form 10-K that was filed today.
As a result of the Audit Committee's review, the Company identified errors
in its previous recognition of revenue. To correct these errors, $7.0 million
of the $67.4 million of revenue previously recorded from the fourth quarter of
2006 through the second quarter of 2007 has been adjusted. Of the
$7.0 million of adjusted revenue, $4.0 million was reversed and will not be
recorded as revenue in any future period. The remaining $3.0 million of the
adjusted revenue was reversed, with $0.5 million and $1.5 million recognized
as revenue in the third and fourth quarters of 2007, respectively, and the
remaining $1.0 million expected to be recognized as revenue in fiscal 2008.
The following table summarizes the impact of the restatement on Isilon's
financial statements. More detailed information on the Audit Committee review
and the restatement is available in the Form 10-K that was filed with the SEC.
Summary - Income Statement Adjustments
(In thousands, except per share data)
Three Months Ended December 31, 2006
As previously reported Adjustments As restated
Total revenue $20,656 $(1,073) $19,583
Total cost of revenue 9,648 (523) 8,945
Loss from operations (2,888) (550) (3,438)
Net loss (10,409) (550) (10,959)
Net loss per common share,
basic and diluted $(0.72) $(0.03) $(0.75)
Twelve Months Ended December 31, 2006
As previously reported Adjustments As restated
Total revenue $62,279 $(1,073) $61,206
Total cost of revenue 29,331 (523) 28,808
Loss from operations (15,377) (550) (15,927)
Net loss (25,438) (550) (25,988)
Net loss per common share,
basic and diluted $(3.02) $(0.07) $(3.09)
Three Months Ended April 1, 2007
As previously reported Adjustments As restated
Total revenue $21,607 $(3,761) $17,846
Total cost of revenue 9,837 (569) 9,268
Loss from operations (4,875) (3,106) (7,981)
Net loss (3,750) (3,106) (6,856)
Net loss per common share,
basic and diluted $(0.06) $(0.05) $(0.11)
Three Months Ended July 1, 2007
As previously reported Adjustments As restated
Total revenue $25,116 $(2,205) $22,911
Total cost of revenue 11,999 (691) 11,308
Loss from operations (4,752) (1,401) (6,153)
Net loss (3,621) (1,401) (5,022)
Net loss per common share,
basic and diluted $(0.06) $(0.02) $(0.08)
Six Months Ended July 1, 2007
As previously reported Adjustments As restated
Total revenue $46,723 $(5,966) $40,757
Total cost of revenue 21,836 (1,260) 20,576
Loss from operations (9,627) (4,507) (14,134)
Net loss (7,371) (4,507) (11,878)
Net loss per common share,
basic and diluted $(0.12) $(0.07) $(0.19)
As noted in the Annual Report on Form 10-K and the Quarterly Report on
Form 10-Q filed today, a material weakness was identified as of September 30,
2007, which rendered the Company's disclosure controls and procedures
ineffective. As a result of actions taken during the quarter and fiscal year
ended December 30, 2007, it has been concluded that the material weakness has
been remediated and that the Company's internal control over financial
reporting was effective as of December 30, 2007.
2007 Financial Summary: Third Quarter, Fourth Quarter and Full Year
In addition to disclosing financial measures prepared in accordance with
Generally Accepted Accounting Principles (GAAP), this press release contains
non-GAAP financial measures. For a description of these non-GAAP financial
measures, including the reasons why management uses each measure, the inherent
limitations of non-GAAP measures and reconciliations to the most directly
comparable GAAP financial measures, please see the section of the accompanying
tables titled "Use of Non-GAAP Financial Measures" as well as the related
tables that follow it.
Financial statements for each period are included at the end of this press
release. Data refers to periods in 2007 unless noted and includes the effect
of the restatement.
-- Revenue for the third quarter was $21.6 million and for the fourth
quarter was $26.6 million. Revenue for fiscal 2007 was $89.0 million,
compared with $61.2 million for fiscal 2006.
-- Gross margin for the third quarter was 55.7 percent and for the fourth
quarter was 52.7 percent. Gross margin for fiscal 2007 was
52.0 percent, compared with 52.9 percent in 2006. On a non-GAAP
basis, gross margin for fiscal 2007 was 52.1 percent, compared with
53.0 percent for 2006.
-- Loss from operations for the third quarter was $8.3 million and for
the fourth quarter was $8.8 million. Loss from operations for fiscal
2007 was $31.2 million, compared with $16.0 million in fiscal 2006.
On a non-GAAP basis, loss from operations for the third quarter was
$7.0 million, and for the fourth quarter was $7.5 million. Non-GAAP
loss from operations for fiscal 2007 was $27.2 million, compared with
$15.3 million in fiscal 2006.
-- Net loss for the third quarter was $7.2 million, or $0.12 per share,
and for the fourth quarter was $7.9 million, or $0.13 per share. Net
loss for fiscal 2007 was $26.9 million, or $0.44 per share, based on
61.5 million shares outstanding. This compares with net loss for
fiscal 2006 of $26.0 million, or $3.09 per share, based on 8.4 million
shares outstanding. On a non-GAAP basis, net loss for the third
quarter was $5.9 million, or $0.10 per share, and for the fourth
quarter was $6.6 million, or $0.11 per share. Non-GAAP net loss for
fiscal 2007 was $23.0 million, or $0.37 per share, based on
61.5 million shares outstanding. This compares with non-GAAP net loss
for fiscal 2006 of $16.9 million, or $0.34 per share, based on
49.6 million shares outstanding.
-- At December 31, 2007, cash, cash equivalents and marketable securities
were $85.9 million, compared with $99.9 million at the end of 2006,
and the company had no outstanding debt.
Operating results in the fourth quarter of 2007 were impacted by
$1.5 million in professional fees and expenses related to the Audit
Committee's independent review. In completing the Audit Committee review, the
Company expects additional fees and expenses in the range of $2.5 million to
$3.0 million in the first quarter of 2008.
Status of NASDAQ Listing
As previously announced, the Company received a notice from The NASDAQ
Stock Market stating that the company is not in compliance with NASDAQ's
Marketplace Rule 4310(c)(14) because the Company had not timely filed its
periodic report for the quarter ended September 30, 2007, with the SEC. With
the conclusion of the Company's financial restatement and filing of the
Company's Form 10-Q for the quarter ended September 30, 2007, and Form 10-K
for fiscal year 2007, the Company believes that it has now regained compliance
with the requirements for continued listing on The NASDAQ Stock Market.
Conference Call
Isilon management will host a conference call on Thursday, April 3, 2008,
at 2:00 p.m. PT (5:00 p.m. ET) to discuss Isilon's financial results. The
live conference call will be available via the Internet on the Investor
Relations section of Isilon's website at http://www.isilon.com/company/, where
it will be archived. In addition, the live conference call will be accessible
by telephone at 800-573-4840 or 617-224-4326, passcode 18920202.
A recording of the conference call will be available approximately two
hours after the call ends until 9:00 p.m. PT (12:00 midnight ET), April 17,
2008, by dialing 888-286-8010 or 617-801-6888; the passcode is 74885106.
About Isilon Systems
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(R) 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 for Forward Looking Statements
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 concerning our future
financial and operating results, the benefits of our products, technologies
and services, and our ability to achieve our goals, plans and objectives.
These statements are not guarantees of future performance, but are based on
management's expectations as of the date of this press release and assumptions
that are inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict. The use of words such as
"intend" and "expect," among others, generally identify forward-looking
statements but are not the exclusive means of identifying such statements.
Forward-looking statements involve risks, uncertainties, and assumptions. If
the risks or uncertainties ever materialize, or the assumptions prove
incorrect, our actual results may differ materially from those expressed or
implied by our forward-looking statements. There can be no assurances that
forward-looking statements will be achieved. Important factors that could
cause actual results to differ materially from those indicated in
forward-looking statements include the following: 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,
macroeconomic factors affecting theUnited States. These and other important
risk factors and assumptions are described in detail in our 2007 Annual Report
on Form 10-K and other periodic reports filed with the Securities and Exchange
Commission. The Company makes no commitment to revise or update any
forward-looking statements in order to reflect subsequent events or
circumstances.
Isilon Systems, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended Nine Months Ended
September October September October
30, 2007 1, 2006 30, 2007 1, 2006
(in thousands, except per share data)
Revenue:
Product $17,627 $15,506 $52,197 $36,214
Services 4,016 2,280 10,203 5,409
Total revenue 21,643 17,786 62,400 41,623
Cost of revenue:
Product 7,059 7,464 24,365 17,549
Services (1) 2,524 978 5,794 2,314
Total cost of revenue 9,583 8,442 30,159 19,863
Gross profit 12,060 9,344 32,241 21,760
Operating expenses:
Research and development (1) 5,374 4,404 14,778 11,858
Sales and marketing (1) 11,282 6,704 30,111 17,205
General and administrative (1) 3,687 2,116 9,769 5,186
Total operating expenses 20,343 13,224 54,658 34,249
Loss from operations (8,283) (3,880) (22,417) (12,489)
Other income (expense), net
Interest income and other 1,141 54 3,472 48
Interest expense - (438) - (894)
Warrant revaluation expense - (690) - (1,634)
Total other income (expense), net 1,141 (1,074) 3,472 (2,480)
Loss before income tax expense (7,142) (4,954) (18,945) (14,969)
Income tax expense (41) (60) (116) (60)
Net loss $(7,183) $(5,014) $(19,061) $(15,029)
Net loss per common share, basic
and diluted $(0.12) $(0.70) $(0.31) $(2.36)
Shares used in computing basic and
diluted net loss per common
share 61,771 7,172 61,217 6,381
(1) Includes stock-based
compensation as follows:
Cost of revenue $48 $10 92 11
Research and development 167 58 488 96
Sales and marketing 509 84 1,059 116
General and administrative 522 34 1,081 82
Isilon Systems, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
As of
December 31,
September 30, 2006
2007 Restated
ASSETS
Current assets:
Cash and cash equivalents $57,306 $99,899
Marketable securities 34,781 -
Trade receivables, net of
allowances of $228 and $501,
respectively 18,604 23,248
Inventories 6,808 4,125
Other current assets 6,372 2,304
Total current assets 123,871 129,576
Property and equipment, net 10,528 7,158
Total assets $134,399 $136,734
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $13,156 $6,777
Accrued liabilities 2,079 3,249
Accrued compensation and related
benefits 4,630 3,463
Deferred revenue and customer
deposits 11,124 7,568
Total current liabilities 30,989 21,057
Deferred revenue, net of current
portion 5,213 3,284
Deferred rent, net of current
portion 3,454 2,186
Total liabilities 39,656 26,527
Stockholders' equity:
Common stock 1 1
Additional paid-in capital 189,590 185,947
Accumulated other comprehensive
loss (129) (83)
Accumulated deficit (94,719) (75,658)
Total stockholders' equity 94,743 110,207
Total liabilities and stockholders'
equity $134,399 $136,734
Isilon Systems, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
Nine Months Ended
September 30, October 1,
2007 2006
(in thousands)
Cash flows from operating
activities
Net loss $(19,061) $(15,029)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 3,835 3,006
Realized gain on sale of marketable
securities - (14)
Non-cash interest expense - 222
Amortization of discount on marketable
securities (83) -
Stock-based compensation expense 2,720 305
Loss on disposal of property and equipment - 80
Warrant revaluation expense - 1,634
Changes in operating assets and liabilities:
Accounts receivable, net 4,604 (11,305)
Inventories (2,683) (1,473)
Other current assets (3,859) (178)
Accounts payable 7,046 5,013
Accrued liabilities, compensation
payable and deferred rent 134 1,714
Deferred revenue 5,485 4,946
Net cash used in operating activities (1,862) (11,079)
Cash flows from investing activities
Purchases of property and equipment (5,675) (3,872)
Purchases of marketable securities (48,333) (691)
Proceeds from sales and maturities
of marketable securities 13,695 2,508
Proceeds from sale of property and equipment - 21
Net cash used in investing activities (40,313) (2,034)
Cash flows from financing activities
Proceeds from issuance of preferred stock - 9,945
Proceeds from issuance of common
stock, option exercises 424 652
Proceeds from issuance of common
stock, employee stock purchase plan 365 -
Proceeds from notes payable - 36,724
Repurchases of unvested common stock (78) -
Payment of offering costs (1,135) (803)
Payments of notes payable and
capital lease obligations - (26,396)
Net cash (used in) provided by
financing activities (424) 20,122
Effect of exchange rate changes
on cash and cash equivalents 6 1
Net (decrease) increase in cash
and cash equivalents (42,593) 7,010
Cash and cash equivalents at beginning
of period 99,899 10,853
Cash and cash equivalents at end
of period $57,306 $17,863
Isilon Systems, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended Twelve Months Ended
December December December December
30, 2007 31, 2006 30, 2007 31, 2006
Restated Restated
(in thousands, except per share data)
Revenue:
Product $22,237 $16,923 $74,434 $53,137
Services 4,361 2,660 14,564 8,069
Total revenue 26,598 19,583 88,998 61,206
Cost of revenue:
Product 9,396 7,637 33,761 25,186
Services (1) 3,181 1,308 8,975 3,622
Total cost of revenue 12,577 8,945 42,736 28,808
Gross profit 14,021 10,638 46,262 32,398
Operating expenses:
Research and development (1) 5,125 4,666 19,903 16,524
Sales and marketing (1) 12,484 7,185 42,595 24,390
General and administrative (1) 5,176 2,225 14,945 7,411
Total operating expenses 22,785 14,076 77,443 48,325
Loss from operations (8,764) (3,438) (31,181) (15,927)
Other income (expense), net
Interest income and other 998 182 4,470 230
Interest expense - (857) - (1,751)
Warrant revaluation expense - (6,797) - (8,431)
Total other income (expense), net 998 (7,472) 4,470 (9,952)
Loss before income tax expense (7,766) (10,910) (26,711) (25,879)
Income tax expense (105) (49) (221) (109)
Net loss $(7,871) $(10,959) $(26,932) $(25,988)
Net loss per common share, basic
and diluted $(0.13) $(0.75) $(0.44) $(3.09)
Shares used in computing basic
and diluted net loss per
common share 62,404 14,550 61,514 8,423
(1) Includes stock-based
compensation as follows:
Cost of revenue $57 $13 $149 $24
Research and development 214 64 702 160
Sales and marketing 542 82 1,601 198
General and administrative 445 176 1,526 258
Isilon Systems, Inc.
Condensed Consolidated Balance Sheets
As of
December 30, December 31,
2007 2006
Restated
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $38,999 $99,899
Marketable securities 46,862 -
Trade receivables, net of
allowances of $324 and $501,
respectively 20,152 23,248
Inventories 9,430 4,125
Other current assets 5,524 2,304
Total current assets 120,967 129,576
Property and equipment, net 10,571 7,158
Total assets $131,538 $136,734
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $10,962 $6,777
Accrued liabilities 5,182 3,249
Accrued compensation and related
benefits 5,180 3,463
Deferred revenue 12,392 7,568
Total current liabilities 33,716 21,057
Deferred revenue, net of current
portion 5,819 3,284
Deferred rent, net of current
portion 3,414 2,186
Total liabilities 42,949 26,527
Commitments and contingencies
Stockholders' equity:
Common stock 1 1
Additional paid-in capital 191,254 185,947
Accumulated other comprehensive
loss (76) (83)
Accumulated deficit (102,590) (75,658)
Total stockholders' equity 88,589 110,207
Total liabilities and stockholders'
equity $131,538 $136,734
Isilon Systems, Inc.
Condensed Consolidated Statements of Cash Flows
Year Ended
December 30, December 31,
2007 2006
Restated
(in thousands)
Cash flows from operating activities
Net loss $(26,932) $(25,988)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 5,337 4,169
Realized gain on sale of marketable
securities - (14)
Non-cash interest expense - 646
Amortization of discount on marketable
securities (182) -
Stock-based compensation expense 3,978 640
Loss on disposal of property and equipment - 76
Warrant revaluation expense - 8,431
Changes in operating assets and liabilities:
Accounts receivable, net 3,056 (15,386)
Inventories (5,305) (1,167)
Other current assets (3,032) (1,810)
Accounts payable 4,914 3,201
Accrued liabilities, compensation
payable and deferred rent 3,857 2,134
Deferred revenue 7,359 7,768
Net cash used in operating activities (6,950) (17,300)
Cash flows from investing activities
Purchases of property and equipment (7,284) (5,340)
Purchases of marketable securities (71,581) (691)
Proceeds from sales and maturities
of marketable securities 24,995 2,508
Proceeds from sale of property and equipment - 32
Net cash used in investing activities (53,870) (3,491)
Cash flows from financing activities
Proceeds from issuance of preferred stock - 9,945
Proceeds from issuance of common stock 782 108,801
Proceeds from issuance of common
stock, employee stock purchase plan 365 -
Proceeds from notes payable - 54,524
Repurchases of unvested common stock (94) -
Payment of offering costs (1,135) (1,376)
Payments of notes payable and
capital lease obligations - (62,061)
Net cash (used in) provided by
financing activities (82) 109,833
Effect of exchange rate changes
on cash and cash equivalents 2 4
Net (decrease) increase in cash
and cash equivalents (60,900) 89,046
Cash and cash equivalents at beginning
of year 99,899 10,853
Cash and cash equivalents at end
of year $38,999 $99,899
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 loss from operations, non-GAAP net
loss, and non-GAAP loss per share. Non-GAAP loss from operations excludes
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 business. Isilon excludes warrant revaluation expenses from
its non-GAAP measures because they are non-recurring, non-cash expenses that
Isilon does not believe are reflective of core operating results. Upon the
closing of Isilon's initial public offering, outstanding warrants were no
longer subject to revaluation and their fair value was permanently
reclassified to stockholders' equity. Isilon includes the effect of the
conversion of convertible preferred shares into common shares as of the later
of the beginning of the period or the date of issuance in non-GAAP basic and
diluted weighted average shares outstanding used to calculate non-GAAP net
loss per share. Isilon believes giving effect to the preferred stock
conversion assists investors and management in assessing period over period
results. The company's preferred shares were converted into common shares as
of December 20, 2006, the closing day of its initial public offering.
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 tables that follow provide 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 results
(in thousands, except percentages and per share data)
Operating Expenses
Research General
Gross and Sales and
margin develop and adminis-
% -ment marketing trative Total
Three Months Ended
September 30, 2007
GAAP 55.7% $5,374 $11,282 $3,687 $20,343
Adjustments:
Stock-based compensation 0.2% (167) (509) (522) (1,198)
Non-GAAP 55.9% $5,207 $10,773 $3,165 $19,145
October 1, 2006
GAAP 52.5% $4,404 $6,704 $2,116 $13,224
Adjustments:
Stock-based compensation 0.1% (58) (84) (34) (176)
Warrant revaluation expense - - - - -
Incremented weighted-
average shares(1)
Non-GAAP 52.6% $4,346 $6,620 $2,082 $13,048
Nine Months Ended
September 30, 2007
GAAP 51.7% $14,778 $30,111 $9,769 $54,658
Adjustments:
Stock-based compensation 0.1% (488) (1,059) (1,081) (2,628)
Non-GAAP 51.8% $14,290 $29,052 $8,688 $52,030
October 1, 2006
GAAP 52.3% $11,858 $17,205 $5,186 $34,249
Adjustments:
Stock-based compensation - $(96) $(116) $(82) $(294)
Warrant revaluation expense - - - - -
Incremented weighted-
average shares(1)
Non-GAAP 52.3% $11,762 $17,089 $5,104 $33,955
Shares used
in computing Net loss
basic and per
diluted net common
loss per share,
Loss from Net common basic and
operations loss share diluted
Three Months Ended
September 30, 2007
GAAP $(8,283) $(7,183) 61,771 $(0.12)
Adjustments:
Stock-based compensation 1,246 1,246
Non-GAAP $(7,037) $(5,937) 61,771 $(0.10)
October 1, 2006
GAAP $(3,880) $(5,014) 7,172 $(0.70)
Adjustments:
Stock-based compensation 186 186
Warrant revaluation expense - 690
Incremented weighted-average
shares(1) 43,177
Non-GAAP $(3,694) $(4,138) 50,349 $(0.08)
Nine Months Ended
September 30, 2007
GAAP $(22,417) $(19,061) 61,217 $(0.31)
Adjustments:
Stock-based compensation 2,720 2,720
Non-GAAP $(19,697) $(16,341) 61,217 $(0.27)
October 1, 2006
GAAP $(12,489) $(15,029) 6,381 $(2.36)
Adjustments:
Stock-based compensation $305 $305
Warrant revaluation expense - $1,634
Incremented weighted-average
shares(1) 42,252
Non-GAAP $(12,184) $(13,090) 48,633 $(0.27)
(1) Equals the effect of the conversion of convertible preferred shares to
common shares as of the later of their issuance or the beginning of
the applicable period. The Company's preferred shares were converted
into common shares as of December 20, 2006.
Isilon Systems, Inc.
Reconciliation of GAAP to non-GAAP results
(in thousands, except percentages and per share data)
Operating Expenses
Research General
Gross and Sales and
margin develop and adminis-
% -ment marketing trative Total
Three Months Ended
December 30, 2007
GAAP 52.7% $5,125 $12,484 $5,176 $22,785
Adjustments:
Stock-based compensation 0.2% (214) (542) (445) (1,201)
Non-GAAP 52.9% $4,911 $11,942 $4,731 $21,584
December 31, 2006, Restated
GAAP 54.3% $4,666 $7,185 $2,225 $14,076
Adjustments:
Stock-based compensation 0.1% (64) (82) (176) (322)
Warrant revaluation expense - - - - -
Incremented weighted-
average shares(1)
Non-GAAP 54.4% $4,602 $7,103 $2,049 $13,754
Twelve Months Ended
December 30, 2007
GAAP 52.0% $19,903 $42,595 $14,945 $77,443
Adjustments:
Stock-based compensation 0.1% (702) (1,601) (1,526) (3,829)
Non-GAAP 52.1% $19,201 $40,994 $13,419 $73,614
December 31, 2006 Restated
GAAP 52.9% $16,524 $24,390 $7,411 $48,325
Adjustments:
Stock-based compensation 0.1% $(160) $(198) $(258) $(616)
Warrant revaluation expense - - - - -
Incremented weighted-
average shares(1)
Non-GAAP 53.0% $16,364 $24,192 $7,153 $47,709
Shares used
in computing Net loss
basic and per
diluted net common
loss per share,
Loss from Net common basic and
operations loss share diluted
Three Months Ended
December 30, 2007
GAAP $(8,764) $(7,871) 62,404 $(0.13)
Adjustments:
Stock-based compensation 1,258 1,258
Non-GAAP $(7,506) $(6,613) $62,404 $(0.11)
December 31, 2006
GAAP $(3,438) $(10,959) 14,550 $(0.75)
Adjustments:
Stock-based compensation 335 335
Warrant revaluation expense - 6,797
Incremented weighted-average
shares(1) 37,760
Non-GAAP $(3,103) $(3,827) 52,310 $(0.07)
Twelve Months Ended
December 30, 2007
GAAP $(31,181) $(26,932) 61,514 $(0.44)
Adjustments:
Stock-based compensation 3,978 3,978
Non-GAAP $(27,203) $(22,954) 61,514 $(0.37)
December 31, 2006
GAAP $(15,927) $(25,988) 8,423 $(3.09)
Adjustments:
Stock-based compensation $640 $640
Warrant revaluation expense - $8,431
Incremented weighted-average
shares(1) 41,134
Non-GAAP $(15,287) $(16,917) 49,557 $(0.34)
(1) Equals the effect of the conversion of convertible preferred shares
to common shares as of the later of their issuance or the beginning
of the applicable period. The Company's preferred shares were
converted into common shares as of December 20, 2006.
SOURCE Isilon Systems
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