Published: April 30, 2008
RightNow Technologies Announces First Quarter 2008 Financial Results
BOZEMAN, Mont., April 30 /PRNewswire-FirstCall/ -- RightNow(R)
Technologies, Inc. (Nasdaq: RNOW), today announced results for the first
quarter ended March 31, 2008. Total revenue in the first quarter of 2008 was
$32.9 million, a 28% increase over $25.7 million in the first quarter of 2007.
Net loss in the first quarter of 2008 was $(3.4) million or $(0.10) per share,
compared to a net loss of $(6.0) million, or $(0.18) per share, in the first
quarter of 2007. Non-GAAP net loss per share in the first quarter of 2008,
which excludes stock-based compensation charges of $1.3 million, was $(0.06),
compared to $(0.14) in the first quarter of 2007.
New, renewed and expanded customer relationships during the first quarter
of 2008 included Applied Biosystems, Cabela's, Concur, Corel, eHarmony, Guthy
Renker, Hawaiian Airlines, Nike China, Reader's Digest, Scholastic, Telstra
BigPond, and Vodafone.
"With first quarter revenue and earnings ahead of guidance we are off to a
great start to the year," stated Greg Gianforte, founder and CEO. "Our
customers tell us that the ease of use and rapid deployment of RightNow 8
enables them to quickly generate return on investment from our solutions.
RightNow 8 leverages our competitive edge in solution innovation and we
believe this is creating new opportunities around the world to grow our
business."
"Our strategy to land new business quickly and then expand throughout
large organizations is driving more predictable, recurring revenue growth,"
said Jeff Davison, CFO. "Our international business contributed more than 30%
of revenue in the first quarter of 2008, which demonstrates our global
presence and the multi-lingual capabilities of RightNow 8. We remain positive
about the growth opportunities we see in 2008 and are raising our full year
guidance to reflect our strong first quarter performance."
Guidance
* For the full year 2008, the Company expects revenue in the range of
$136 to $141 million, with recurring revenue growth of approximately
25%.
* Net loss per share for the full year 2008 is expected to be in the
range of $(0.32) to $(0.25). Non-GAAP net loss per share, which
excludes stock-based compensation, is expected to be in the range of
$(0.12) to $(0.05).
* Cash from operations for the full year 2008 is expected to be in the
range of $25 to $30 million.
* For the second quarter of 2008, revenue is anticipated to be in the
range of $34 to $35 million. The second quarter net loss per share is
expected to be in the range of $(0.12) to $(0.10). Non-GAAP net loss
per share, which excludes stock-based compensation, is expected to be
in the range of $(0.07) to $(0.05).
Quarterly Conference Call
RightNow Technologies will discuss its quarterly results via
teleconference at 2:30 p.m. Mountain Time (4:30 p.m. Eastern Time.) To access
the call, please dial 877-419-6600, or outside the U.S. 719-325-4908, at least
five minutes prior to the 2:30 p.m. MT start time. A live webcast of the call
will also be available at http://www.shareholder.com/rnow under the Investor
Webcasts menu. An audio replay will be available between 5:30 p.m. MT
April 30, 2008 and 9:59 p.m. MT May 14, 2008 by calling 888-203-1112 or
719-457-0820, with passcode 4964096. The replay will also be available on our
website at http://www.shareholder.com/rnow.
About RightNow Technologies
RightNow (Nasdaq: RNOW) delivers the high-impact technology solutions and
services organizations need to cost-efficiently deliver a consistently
superior customer experience across their frontline service, sales and
marketing touch-points. Approximately 1,800 corporations and government
agencies worldwide depend on RightNow to achieve their strategic objectives
and better meet the needs of those they serve. RightNow is headquartered in
Bozeman, Montana. For more information, please visit http://www.rightnow.com.
RightNow is a registered trademark of RightNow Technologies, Inc. NASDAQ
is a registered trademark of the NASDAQ Stock Market.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995:
All statements included in this press release, other than statements or
characterizations of historical fact, are forward-looking statements. These
forward-looking statements are based on our current expectations, estimates
and projections about our industry, management's beliefs, and certain
assumptions made by us, all of which are subject to change. Forward-looking
statements can often be identified by words such as "anticipates," "expects,"
"intends," "plans," "predicts," "believes," "seeks," "estimates," "may,"
"will," "should," "would," "could," "potential," "continue," "ongoing,"
similar expressions, and variations or negatives of these words and include,
but are not limited to, statements regarding projected results of operations
and management's future strategic plans. These forward-looking statements are
not guarantees of future results and are subject to risks, uncertainties and
assumptions that could cause our actual results to differ materially and
adversely from those expressed in any forward-looking statement.
The risks and uncertainties referred to above include, but are not limited
to, risks associated with our business model; our ability to develop or
acquire, and gain market acceptance for, new products in a cost-effective and
timely manner; the market success of our RightNow 8 product; the gain or loss
of key customers; competitive pressures; our ability to expand operations;
fluctuations in our earnings as a result of the impact of stock-based
compensation expense; interruptions or delays in our hosting operations;
breaches of our security measures; our ability to protect our intellectual
property from infringement, and to avoid infringing on the intellectual
property rights of third parties; our ability to manage and expand our partner
relationships; and our ability to expand, retain and motivate our employees
and manage our growth. Further information on potential factors that could
affect our financial results is included in our Annual Report on Form 10-K,
quarterly reports of Form 10-Q, and in other filings with the Securities and
Exchange Commission. The forward-looking statements in this release speak
only as of the date they are made. We undertake no obligation to revise or
update publicly any forward-looking statement for any reason.
FRNOW
RightNow Technologies, Inc.
Consolidated Balance Sheets
(In thousands) (Unaudited)
March 31, Dec 31,
2008 2007
Assets
Cash and cash equivalents $44,591 $43,681
Short-term investments 36,585 52,644
Accounts receivable 27,503 29,480
Term receivables, current 9,616 13,069
Allowance for doubtful accounts (2,056) (1,918)
Net receivables 35,063 40,631
Deferred commissions 3,485 3,336
Prepaid and other current assets 3,288 2,643
Total current assets 123,012 142,935
Long-term investments 17,810 --
Property and equipment, net 10,807 10,856
Term receivables, non-current 8,059 9,859
Intangible assets, net 7,606 7,996
Deferred commissions, non-current 1,962 1,680
Other 448 460
Total Assets $169,704 $173,786
Liabilities and Stockholders' Equity
Accounts payable $6,148 $4,386
Commissions and bonuses payable 3,531 5,044
Other accrued liabilities 11,998 11,404
Current portion of long-term debt 44 43
Current portion of deferred revenue 73,575 76,995
Total current liabilities 95,296 97,872
Long-term debt, less current portion 57 68
Deferred revenue, net of current portion 38,079 37,665
Stockholders' equity:
Common stock 34 33
Additional paid-in capital 97,107 95,377
Accumulated other comprehensive loss (536) (292)
Accumulated deficit (60,333) (56,937)
Total stockholders' equity 36,272 38,181
Total Liabilities Stockholders' Equity $169,704 $173,786
RightNow Technologies, Inc.
Consolidated Operating Statements
(In thousands, except per share amounts) (Unaudited)
Three Months Ended
March 31,
2008 2007
Revenue:
Software, hosting and support
Recurring * $24,412 $19,225
Perpetual 144 594
Professional services 8,342 5,883
Total revenue 32,898 25,702
Cost of revenue:
Software, hosting and support 5,035 4,394
Professional services 7,285 5,171
Total cost of revenue 12,320 9,565
Gross profit 20,578 16,137
Operating expenses:
Sales and marketing 16,818 15,727
Research and development 4,486 4,296
General and administrative 3,516 2,860
Total operating expenses 24,820 22,883
Loss from operations (4,242) (6,746)
Interest and other income, net 938 828
Loss before income taxes (3,304) (5,918)
Provision for income taxes (92) (84)
Net loss $(3,396) $(6,002)
Net loss per share:
Basic $(0.10) $(0.18)
Diluted $(0.10) $(0.18)
Shares used in the computation:
Basic 33,532 32,858
Diluted 33,532 32,858
Supplemental information of stock-based
compensation expense included in:
Cost of software, hosting and support $77 $58
Cost of professional services 153 125
Sales and marketing 538 658
Research and development 235 226
General and administrative 263 235
Total stock-based compensation $1,266 $1,302
* Recurring revenue includes software, hosting and support revenue from
term license and subscription agreements, and post contract support
services.
RightNow Technologies, Inc.
Consolidated Statements of Cash Flow
(In thousands) (Unaudited)
Three Months Ended
March 31,
2008 2007
Operating activities:
Net loss $(3,396) $(6,002)
Non-cash adjustments:
Depreciation and amortization 1,954 1,675
Stock-based compensation 1,266 1,302
Provision (recoveries) for losses
on accounts receivable 89 (69)
Changes in operating accounts:
Receivables 7,447 15,427
Prepaid expenses (448) (584)
Deferred commissions (404) (887)
Accounts payable 1,758 (1,133)
Commissions and bonuses payable (1,523) (1,171)
Other accrued liabilities 534 2,881
Deferred revenue (3,434) (6,056)
Other (173) (23)
Cash provided by operating activities 3,670 5,360
Investing activities:
Net change in investments (1,970) 1,549
Acquisition of property and equipment (1,509) (1,987)
Other (15) (29)
Cash (used in) investing activities (3,494) (467)
Financing activities:
Proceeds from issuance of common stock 414 643
Excess benefit of stock options exercised 53 49
Payments on long-term debt (11) (7)
Cash provided by financing activities 456 685
Effect of foreign exchange rates on cash
and cash equivalents 278 113
Increase in cash and cash equivalents 910 5,691
Cash and cash equivalents at beginning
of period 43,681 39,208
Cash and cash equivalents at end of
period $44,591 $44,899
RightNow Technologies, Inc.
Reconciliation of Non-GAAP Measurements
(Amounts in thousands, except per share amounts) (Unaudited)
Diluted Earnings Per Share Reconciliation
Three Months Ended
March 31,
2008 2007
Net loss as reported $(3,396) $(6,002)
Add stock-based compensation ("SBC") 1,266 1,302
Net loss before SBC $(2,130) $(4,700)
Net loss per share, as reported $(0.10) $(0.18)
Net loss per share, before SBC $(0.06) $(0.14)
Shares outstanding, as reported 33,532 32,858
Shares outstanding, excluding the
effect of SBC 33,532 32,858
Forward-Looking Guidance Reconciliation
GAAP Guidance Non-GAAP Guidance
Quarter ending From To Adjustment From To
June 30, 2008
Net loss $(3,500) $(4,200) $ 1,900 [a] $(1,600) $(2,300)
EPS $(0.10) $(0.12) $(0.05) $(0.07)
Shares 33,800 33,800 33,800 33,800
Year ending
December 31, 2008
Net loss $(8,400) $(10,800) $ 6,600 [a] $(1,800) $(4,200)
EPS $(0.25) $(0.32) $(0.05) $(0.12)
Shares 34,000 34,000 34,000 34,000
[a] Estimated stock-based compensation expense to be recorded for the
periods indicated in accordance with Statement of Financial
Accounting Standards No. 123R, Share-Based Payments, ("SFAS 123R")
which is effective for periods beginning January 1, 2006.
About Non-GAAP Financial Measures
Non-GAAP net loss and diluted net loss per share are supplemental measures
of our performance that are not required by, or presented in accordance with
GAAP. These non-GAAP financial measures are not intended to be used in
isolation and should not be considered a substitute for net loss and net loss
per share or any other performance measure determined in accordance with GAAP.
We present non-GAAP net loss and net loss per share because we consider each
to be an important supplemental measure of our performance.
Management uses these non-GAAP financial measures to make operational
decisions, evaluate the Company's performance, prepare forecasts and determine
compensation. Further, management believes that both management and investors
benefit from referring to these non-GAAP financial measures in assessing the
Company's performance when planning, forecasting and analyzing future periods.
Our stock-based compensation expenses are expected to vary depending on the
number of new grants issued, changes in our stock price, stock market
volatility, expected option lives and risk-free rates of return, all of which
are difficult to estimate. In calculating non-GAAP net loss and net loss per
share, management excludes stock-based compensation expenses to facilitate its
review of the comparability of the Company's operating performance on a
period-to-period basis because such expenses are not, in management's view,
related to the Company's ongoing operating performance. Management uses this
view of its operating performance for purposes of comparison with its business
plan and individual operating budgets and resource allocation.
Management further believes that these non-GAAP financial measures are
useful to investors in providing greater transparency to the information used
by management in its operational decision making. We believe that the use of
non-GAAP net loss and net loss per share also facilitate a comparison of
RightNow's underlying operating performance with that of other companies in
our industry, which use similar non-GAAP financial measures to supplement
their GAAP results.
Calculating non-GAAP net loss and net loss per share have limitations as
an analytical tool, and readers should not consider these measures in
isolation or as substitutes for GAAP net loss and GAAP net loss per share. In
the future, we expect to incur additional stock-based compensation expenses
and the exclusion of these expenses in the presentation of our non-GAAP
financial measures should not be construed as an inference that these costs
are unusual, infrequent or non-recurring. Investors and potential investors
are cautioned that there are material limitations associated with the use of
non-GAAP financial measures as an analytical tool, which include:
* Other companies inside and outside of our industry may calculate
non-GAAP net loss and net loss per share differently than we do,
limiting their usefulness as a comparative tool; and
* The Company's income tax expense or benefit will be ultimately based
on its GAAP taxable income and actual tax rates in effect, which may
differ significantly from the effective tax rate used in our non-GAAP
financial measures.
In addition, the adjustments to our GAAP financial measures reflect the
exclusion of stock-based compensation expenses that are recurring and will be
reflected in the Company's financial results for the foreseeable future. The
Company compensates for these limitations by providing specific information
regarding the GAAP amount excluded from the non-GAAP financial measures. The
Company further compensates for the limitations of our use of non-GAAP
financial measures by presenting comparable GAAP measures more prominently.
The Company evaluates the non-GAAP financial measures together with the most
directly comparable GAAP financial measures.
Investors and potential investors are encouraged to review the
reconciliation of non-GAAP financial measures contained within this press
release with our GAAP net loss and net loss per share. For more information,
see the consolidated operating statements and reconciliation of non-GAAP
measurements contained in this press release.
SOURCE RightNow Technologies, Inc.
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