Sourcefire Announces 2009 Third Quarter Results
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- Sourcefire Announces 2009 Third Quarter Results
Largest Revenue and Earnings Quarter in Company History
-- Q3 Revenue: $27.4 million, an increase of 35% year-over-year
-- Q3 GAAP Net Income: $2.7 million, or $0.09 per diluted share
-- Q3 Adjusted Net Income: $4.6 million, or $0.16 per diluted share
COLUMBIA, Md.--(BUSINESS WIRE)-- Sourcefire, Inc. (Nasdaq: FIRE), a leader in intelligent Cybersecurity solutions, today announced financial results for its fiscal third quarter ended September 30, 2009.
"Sourcefire's strong performance this quarter was balanced across our business," said John Burris, CEO of Sourcefire. "We continued to grow top line revenue, while also expanding our operating margin. I'm particularly pleased that we achieved quarterly and year-to-date profitability on both an adjusted and a GAAP basis for the first time in the Company's history."
Financial Summary
-- Total Revenues -Revenues for 3Q09 were $27.4 million compared to $20.3
million in 3Q08, an increase of 35%. Revenues for the nine months ended
September 30, 2009 were $68.2 million compared to $50.0 million for the
same period last year, an increase of 37%.
-- GAAP Net Income - Net income was $2.7 million for 3Q09, or $0.09 per
diluted share, on the basis of generally accepted accounting principles
(GAAP), compared with GAAP net loss of $1.7 million, or a loss of $0.07
per diluted share, in 3Q08. Net income for the nine months ended
September 30, 2009 was $2.2 million, or $0.08 per diluted share,
compared with GAAP net loss of $8.3 million, or a loss of $0.33 per
diluted share, for the same period last year.
-- Adjusted Net Income - Adjusted net income for 3Q09, which excludes
stock-based compensation expense, was $4.6 million, or $0.16 per diluted
share in 3Q09. This compares to adjusted net loss in 3Q08, which
excludes stock-based compensation expense as well as costs associated
with the transition to our new chief executive officer, of $0.2 million,
or a loss of $0.01 per diluted share. Adjusted net income for the nine
months ended September 30, 2009, which excludes stock-based compensation
expense, was $6.6 million, or $0.24 per diluted share. This compares
with adjusted net loss for the same period last year, which excludes
stock-based compensation expense as well as CEO transition costs, of
$4.2 million, or a loss of $0.17 per diluted share.
-- Balance Sheet- As of September 30, 2009 the Company's cash, cash
equivalents and investments totaled $112.4 million.
Recent Company Highlights
Global Expansion & Channel Development
-- Achieved 80% of 3Q09 revenues through partners, compared with 71% in the
year-ago period.
-- Increased 3Q09 international revenues to $6.1 million, up 57% over the
year-ago level.
-- Increased 3Q09 U.S. commercial revenues to $13.3 million, up 50% over
the year-ago level.
-- Increased 3Q09 U.S. federal sector revenues to $8.0 million up 6% over
the year-ago level, and ended the quarter with a significant federal
order backlog.
-- Launched Virtual 3D Partner Program for Virtualization and Cloud
Computing Companies designed to provide hardware, software and services
companies with virtual security solutions to address their customer's
critical requirements.
Innovation & Recognition
-- Named to InfoWorld's Open Source Hall of Fame for Snort. The list
recognizes "the greatest open source software projects of all time" that
have established dominant market positions and proven essential in
"propelling the open source movement into the spotlight."
-- Led the industry in same-day patch coverage with the Sourcefire VRT
(Vulnerability Research Team).
-- Integrated the Sourcefire 3D(R) System with QualysGuard(R). This
integration provides customers with the ability to import QualysGuard
scan data into the Sourcefire RNA(R) (Real-time Network Awareness) host
database, combining real-time network discovery information with active
vulnerability scan data. With Sourcefire and Qualys working in tandem,
the number of actionable network threats detected by the Sourcefire
intrusion prevention system (IPS) can be vastly reduced, leading to
increased security and lower total cost of ownership (TCO).
-- Hosted its first-ever Virtual Customer Summit drawing more than 700
attendees. The online summit included sessions by Sourcefire and Snort
experts and customers who discussed leading techniques for identifying
and protecting against the latest Cybersecurity threats.
Fourth Quarter and Full Year 2009 Outlook
Based on information as of October 29, 2009, Sourcefire expects revenue for 4Q09 in the range of $31.5 million to $33.0 million, net income per share in the range of $0.11 to $0.14 and, on an adjusted basis, net income per share in the range of $0.17 to $0.20. Sourcefire's expectation of adjusted net income per share excludes stock-based compensation expense for the fourth quarter in the expected range of $1.6 million to $1.8 million. For fiscal year 2009 Sourcefire expects revenue in the range of $99.7 million to $101.2 million, net income per share in the range of $0.19 to $0.22 and adjusted net income per share in the range of $0.41 to $0.44. Sourcefire's expectation of full year 2009 adjusted net income per share excludes stock-based compensation expense in the expected range of $6.0 million to $6.2 million.
Non-GAAP Measures
In evaluating the operating performance of its business, Sourcefire's management excludes certain charges and credits that are required by GAAP. These non-GAAP results provide useful information to both management and investors by excluding (i) stock-based compensation, which does not involve the expenditure of cash, and (ii) items that Sourcefire believes may not be indicative of the Company's operating performance, because either they are unusual and Sourcefire does not expect them to recur in the ordinary course of its business or they are unrelated to the ongoing operation of the business in the ordinary course. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release.
Conference Call and Webcast
On Thursday, October 29, 2009 at 8:30 a.m. Eastern Time, Sourcefire will host a conference call to review these results. A listen-only web cast of the session will be available at http://investor.sourcefire.com. Those wishing to participate in the live session should use the following numbers to dial in:
Calling from the United States or Canada: 800-510-9834 Calling from other countries: 617-614-3669 Pass code: 68961121
An online replay will be available at http://investor.sourcefire.com following the completion of the live call and will remain available for at least 90 days.
About Sourcefire
Sourcefire, Inc. (Nasdaq: FIRE) is a world leader in intelligent Cybersecurity solutions. Sourcefire is transforming the way Global 2000 organizations and government agencies manage and minimize network security risks. Sourcefire's IPS and Real-time Adaptive Security solution equips customers with an efficient and effective layered security defense - protecting network assets before, during and after an attack. Through the years, Sourcefire has been consistently recognized for its innovation and industry leadership by customers, media and industry analysts alike - with more than 50 awards and accolades. Today, the names Sourcefire and founder Martin Roesch have grown synonymous with innovation and network security intelligence. For more information about Sourcefire, please visit http://www.sourcefire.com.
SOURCEFIRE(R), SNORT(R), the Sourcefire logo, the Snort and Pig logo, SECURITY FOR THE REAL WORLD(TM), SOURCEFIRE DEFENSE CENTER(R), SOURCEFIRE 3D(R), RNA(R), RUA(TM), DAEMONLOGGER(TM), CLAMAV(R), SOURCEFIRE SOLUTIONS NETWORK(TM), and certain other trademarks and logos are trademarks or registered trademarks of Sourcefire, Inc. in the United States and other countries. Other company, product and service names may be trademarks or service marks of others.
Cautionary Language Concerning Forward-Looking Statements
The statements contained in this release that are not historical facts are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. These statements include expectations regarding financial results for the fourth quarter and full year of 2009 and the Company's future profitability on an adjusted basis. Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown risks and uncertainties, and actual results, performance, and/or achievements of Sourcefire, Inc. may differ materially from the future results, performance, and/or achievements expressed or implied by these forward-looking statements as a result of a number of factors. These factors include, without limitation, the fact that the outlook for the fourth quarter and full year of 2009 could change, and also include, without limitation, those risks and uncertainties described from time to time in the reports filed by Sourcefire, Inc. with the U.S. Securities and Exchange Commission. Sourcefire, Inc. undertakes no obligation to update any forward-looking statements.
Sourcefire, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share data)
Three Months Ended September Nine Months Ended September 30,
30,
2009 2008 2009 2008
Revenue: (unaudited) (unaudited) (unaudited) (unaudited)
Products $ 16,650 $ 12,661 $ 38,798 $ 28,189
Technical
support and 10,773 7,628 29,396 21,769
professional
services
Total revenue 27,423 20,289 68,194 49,958
Cost of
revenue:
Products 4,281 3,585 10,730 8,061
Technical
support and 1,786 1,345 4,561 3,583
professional
services
Total cost of 6,067 4,930 15,291 11,644
revenue
Gross profit 21,356 15,359 52,903 38,314
Operating
expenses:
Research and 4,227 3,267 10,943 9,525
development
Sales and 9,164 8,655 25,462 23,834
marketing
General and 4,604 4,984 12,439 13,929
administrative
Depreciation
and 815 775 2,466 1,852
amortization
Total
operating 18,810 17,681 51,310 49,140
expenses
Income (loss)
from 2,546 (2,322 ) 1,593 (10,826 )
operations
Other income, 145 642 758 2,627
net
Income (loss)
before income 2,691 (1,680 ) 2,351 (8,199 )
taxes
Income tax
(benefit) (6 ) 39 138 140
expense
Net income $ 2,697 $ (1,719 ) $ 2,213 $ (8,339 )
(loss)
Net income
(loss) per $ 0.10 $ (0.07 ) $ 0.08 $ (0.33 )
share - basic
Net income
(loss) per $ 0.09 $ (0.07 ) $ 0.08 $ (0.33 )
share -
diluted
Weighted average shares outstanding used in computing per share amounts:
Basic 26,662,046 25,698,879 26,284,576 25,208,404
Diluted 28,487,916 25,698,879 27,686,847 25,208,404
Stock-based compensation expense for the three and nine months ended September
30, 2009 and 2008 is included in the Consolidated Statements of Operations as
follows (in thousands):
Three Months Ended September Nine Months Ended September 30,
30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
Cost of
revenue $ 29 $ 11 $ 54 $ 27
(product)
Cost of
revenue 60 34 114 66
(services)
Stock-based
compensation
expense 89 45 168 93
included in
cost of
revenue
Research and 286 202 702 543
development
Sales and 535 375 1,315 1,017
marketing
General and 959 945 2,241 1,717
administrative
Stock-based
compensation
included in 1,780 1,522 4,258 3,277
operating
expenses
Total
stock-based $ 1,869 $ 1,567 $ 4,426 $ 3,370
compensation
expense
Sourcefire, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2009 2008
Assets (unaudited)
Cash and cash equivalents $ 44,433 $ 39,768
Investments 68,015 61,800
Accounts receivable, net 25,872 27,864
Inventory 5,615 4,521
Prepaid expenses and other current assets 3,329 2,115
Property and equipment, net 7,530 8,341
Intangible assets, net 370 465
Other long-term assets 773 1,431
Total assets $ 155,937 $ 146,305
Liabilities
Accounts payable and accrued expenses $ 9,207 $ 12,292
Deferred revenue 27,346 24,108
Other liabilities 582 864
Total liabilities 37,135 37,264
Stockholders' Equity
Common stock 26 25
Additional paid-in capital 167,044 159,306
Accumulated deficit (48,381 ) (50,594 )
Accumulated other comprehensive income 113 304
Total stockholders' equity 118,802 109,041
Total liabilities and stockholders' equity $ 155,937 $ 146,305
Sourcefire, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended September 30,
2009 2008
(unaudited) (unaudited)
Net income (loss) $ 2,213 $ (8,339 )
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating 7,330 705
activities
Net cash provided by (used in) operating 9,543 (7,634 )
activities
Net cash (used in) provided by investing (8,159 ) 2,190
activities
Net cash provided by financing activities 3,281 972
Net increase (decrease) in cash and cash 4,665 (4,472 )
equivalents
Cash and cash equivalents at beginning of 39,768 33,071
period
Cash and cash equivalents at end of period $ 44,433 $ 28,599
Sourcefire, Inc.
Reconciliation of Non-GAAP Measures to GAAP
(in thousands, except share and per share data)
Three Months Ended September Nine Months Ended September 30,
30,
2009 2008 2009 2008
Reconciliation
to adjusted (unaudited) (unaudited) (unaudited) (unaudited)
net income
(loss):
Net income $ 2,697 $ (1,719 ) $ 2,213 $ (8,339 )
(loss)
Stock-based
compensation 1,869 1,118 4,426 2,921
expense
Stock-based
compensation
expense - 449 - 449
related to CEO
transition
CEO transition - - - 742
costs
Adjusted net $ 4,566 $ (152 ) $ 6,639 $ (4,227 )
income (loss)
Adjusted net
income (loss) $ 0.17 $ (0.01 ) $ 0.25 $ (0.17 )
per share -
basic
Adjusted net
income (loss) $ 0.16 $ (0.01 ) $ 0.24 $ (0.17 )
per share -
diluted
Weighted
average number 26,662,046 25,698,879 26,284,576 25,208,404
of shares -
basic
Weighted
average number 28,487,916 25,698,879 27,686,847 25,208,404
of shares -
diluted
Source: Sourcefire, Inc.
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