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Responsys Announces Fourth Quarter and Fiscal 2012 Results(GlobeNewswire Via Acquire Media NewsEdge) Total fourth quarter revenue increases 20% to $44.7 million compared to a year ago Delivers non-GAAP EPS of $0.07 in the fourth quarter of 2012 Announces 2013 annual revenue guidance of $188-$192 million Announces first quarter 2013 revenue guidance of $43-45 million SAN BRUNO, Calif., Feb. 20, 2013 (GLOBE NEWSWIRE) -- Responsys, Inc. (Nasdaq:MKTG), a leading provider of email and cross-channel marketing solutions, today announced financial results for the quarter ended December 31, 2012. For the fourth quarter of 2012, total revenue increased 19.9% to $44.7 million, up from $37.2 million in the fourth quarter of 2011. Subscription revenue for the fourth quarter of 2012 was $30.3 million, up 13.2% as compared to $26.7 million in the fourth quarter of 2011. Professional services revenue was $14.4 million, up 37.2% as compared to $10.5 million in the fourth quarter of 2011. GAAP net income for the fourth quarters of 2012 and 2011 were both $2.0 million. Similarly, net income per share attributable to common stockholders in the fourth quarters of 2012 and 2011 were both $0.04 per share on a diluted basis. "Our strong fourth quarter financial results reflect our success in helping brands transform the way they interact and build relationships with their customers across the digital channels," said Dan Springer, Chairman and Chief Executive Officer of Responsys. "As digital marketers shift away from mass marketing to creating individualized experiences for each customer, we're poised to lead the market with the industry's only interaction management platform that puts the customer first, not the campaign." For the year ended December 31, 2012, total revenue increased 20.7% to $162.8 million, up from $134.9 million for the year ended December 31, 2011. Subscription revenue for the year 2012 was $113.4 million, up 20.0% as compared to $94.5 million in 2011. Professional services revenue for the year was $49.5 million, up 22.3% as compared to $40.4 million in 2011. GAAP net income for 2012 was $7.6 million. This compares to GAAP net income of $8.0 million for 2011. Net income per share attributable to common stockholders in 2012 was $0.14 per share on a diluted basis, as compared to $0.12 in 2011. Both periods included a $2.2 million gain from acquisitions. In addition to using GAAP results in evaluating Responsys' business, management believes it is useful to also measure results using non-GAAP net income, which is net income excluding stock-based compensation expense, amortization of acquired intangible assets, gain on acquisitions, and related income tax effects, as applicable. Non-GAAP net income for the fourth quarter of 2012 was $3.7 million, or $0.07 per diluted share as compared to $3.3 million, or $0.06 per share on a non-GAAP diluted basis1, for the fourth quarter of 2011. Non-GAAP net income for the year ended December 31, 2012 was $11.6 million, or $0.22 per diluted share as compared to $11.0 million, or $0.21 per share on a non-GAAP diluted basis1, for the year ended December 31, 2011. A reconciliation of the comparable GAAP to non-GAAP financial measures used in this release is included in the attached tables. Business Outlook Based on information available as of February 20, 2013, Responsys is issuing guidance for the first quarter of 2013 and fiscal 2013 as follows: Fiscal 2013 revenue is expected to be in the range of $188-192 million. Non-GAAP net income is expected to be approximately $0.16 to $0.18 per diluted share. Non-GAAP net income for the full year excludes an estimated $1.8 million in amortization of acquired intangibles and an estimated $12.5 million in stock-based compensation expense. Non-GAAP net income per diluted share is based on weighted average diluted shares outstanding of 54 million. For the first quarter of 2013, the Company expects revenue to be in the range of $43-$45 million. Non-GAAP net income is expected to be approximately $0.05 per diluted share. Non-GAAP net income for the quarter excludes an estimated $0.7 million in amortization of acquired intangibles and an estimated $2.9 million in stock-based compensation expense. Non-GAAP net income per diluted share is based on estimated weighted average diluted shares outstanding of 53.6 million. Non-GAAP net income for the first quarter and fiscal year 2013 assumes an effective non-GAAP tax rate of 33% and 35%, respectively. Conference Call Information for Today, Wednesday, February 20, 2013 Responsys will host a conference call to discuss the results at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time today. The conference call will be hosted by Dan Springer, Chief Executive Officer, and Chris Paul, Chief Financial Officer. To access the call from the U.S., please dial (877) 303-9139 or (760) 536-5195 from outside the U.S. A live webcast of the call will also be available at http://investors.responsys.com/events.cfm under the Events and Presentations menu. An audio replay will be available until February 23, 2013 by calling (855) 859-2056, or (404) 537-3406 from outside the U.S., using conference ID 93575333. The replay will also be available on our website at http://investors.responsys.com. About Responsys Responsys is a leading provider of email and cross-channel marketing solutions that enable companies to engage in relationship marketing across the interactive channels customers are embracing today -- email, mobile, social, the web and display. With Responsys solutions, marketers can create, execute, and automate highly dynamic campaigns and lifecycle marketing programs that are designed to grow revenue, increase marketing efficiency, and strengthen customer loyalty. Responsys' New School Marketing vision, flexible on-demand application suite, and customer success-focused services aim to deliver high ROI, increased levels of automation and fast time-to-value. Founded in 1998, Responsys is headquartered in San Bruno, California and has offices throughout the world. Responsys serves world-class brands such as: Southwest Airlines, LinkedIn, LEGO, Orbitz, United Airlines, Dollar Thrifty, Newegg, Qantas, Avis Europe, Deutsche Lufthansa, UnitedHealthcare and American Family Mutual Insurance Company. For more information about Responsys, visit responsys.com. Non-GAAP Financial Measures This press release contains non-GAAP financial measures including non-GAAP net income, and non-GAAP net income per share on a diluted basis1. Non-GAAP net income and non-GAAP net income per share on a diluted basis1, exclude the amortization of acquired intangible assets, stock-based compensation expense, gain on the acquisitions, and related tax effects. The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company's management uses these non-GAAP measures to compare the Company's performance to that of prior periods and uses these measures in financial reports prepared for management and the Company's board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company's financial measures with other software-as-a-service companies, many of which present similar non-GAAP financial measures to investors. The Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant elements that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management in determining these non-GAAP financial measures. In order to compensate for these limitations, management of the Company presents its non-GAAP financial measures in connection with its GAAP results. The Company urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which is included in this press release, and not to rely on any single financial measure to evaluate the Company's business. Forward Looking Statements The financial projections under Business Outlook, and other forward-looking statements included in this release, reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties include: our ability to acquire and retain customers; whether customers purchase additional functionality and increase their usage; pricing pressures and competitive factors; the uncertain impact of overall global economic conditions, including on customers, prospective customers and partners, renewal rates and length of sales cycles; the fact that the market for cross-channel marketing solutions, particularly in emerging channels, is at an early stage of development and may not develop as rapidly as we anticipate; outages, which can affect customer satisfaction or result in reduced revenues; security breaches; our ability to develop, and market acceptance of, new products and services; the impact of any discovered product defects; our ability to manage our growth, both domestically and internationally; our ability to successfully expand our sales force and its effectiveness; our ability to maintain profitability; the level of hiring and equity award activity, which will affect the level of stock-based compensation expense; and other risks detailed from time to time in our SEC reports including, but not limited to, our most recent annual report on Form 10-K and most recent quarterly report on Form 10-Q. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 1 Non-GAAP net income per share attributable to common stockholders was derived by dividing by the corresponding non-GAAP basic and non-GAAP diluted weighted-average shares outstanding. Non-GAAP weighted-average shares outstanding for the twelve months ended December 31, 2011 was computed to give effect to the conversion of the Series A, Series B, Series C, Series D, and Series E convertible preferred stock using the as-if converted method into common shares as though the conversion had occurred as of the beginning of the period. Responsys, Inc. Consolidated Balance Sheets (in thousands) As of December 31, 20122011Assets Current assets: Cash and cash equivalents $ 106,656 $ 73,456 Short-term investments – 21,300 Accounts receivable, net 28,065 20,706 Deferred taxes – current 5,997 5,393 Prepaid expenses and other current assets 2,803 3,599 Total current assets 143,521 124,454 Property and equipment – net 18,426 14,663 Goodwill 17,335 14,048 Intangible assets – net 2,925 3,386 Deferred taxes – noncurrent 4,100 5,748 Other assets 2,458 938 Total assets $ 188,765 $ 163,237 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 3,363 $ 1,739 Accrued compensation 8,014 6,916 Other accrued liabilities 4,432 2,914 Capital lease obligations – current 896 879 Deferred revenue – current 8,072 7,387 Total current liabilities 24,777 19,835 Capital lease obligations – noncurrent 228 1,154 Deferred taxes – noncurrent 482 691 Deferred revenue – noncurrent 407 323 Other long-term liabilities 4,461 977 Total liabilities 30,355 22,980 Commitments and contingencies Stockholders' equity: Common stock 5 5 Additional paid-in capital 165,423 155,428 Accumulated deficit (7,212) (14,794) Accumulated other comprehensive income (loss) 194 (382) Total stockholders' equity 158,410 140,257 Total liabilities and stockholders' equity $ 188,765 $ 163,237 Responsys, Inc. Consolidated Statements of Income (in thousands, except per share data) Three Months Ended December 31,Year Ended December 31, 2012201120122011 Revenue: Subscription $ 30,250 $ 26,734 $ 113,363 $ 94,501 Professional services 14,423 10,510 49,461 40,438 Total revenue 44,673 37,244 162,824 134,939 Cost of revenue: Subscription 8,971 7,633 32,672 27,918 Professional services 11,043 9,901 42,727 36,747 Total cost of revenue 20,014 17,534 75,399 64,665 Gross profit 24,659 19,710 87,425 70,274 Operating expenses: Research and development 3,504 3,557 15,224 13,544 Sales and marketing 12,823 9,637 45,544 33,300 General and administrative 4,826 3,181 17,679 11,463 Gain on acquisition – – (2,233) (2,220) Total operating expenses 21,153 16,375 76,214 56,087 Operating income 3,506 3,335 11,211 14,187 Other income (expense), net (126) (70) (285) (268) Income before income taxes 3,380 3,265 10,926 13,919 Provision for income taxes (1,378) (1,269) (3,380) (5,824) Equity in net income (loss) of unconsolidated affiliates – (34) 36 (124) Net income $ 2,002 $ 1,962 $ 7,582 $ 7,971 Net income attributable to common stockholders: Basic $ 2,002 $ 1,962 $ 7,582 $ 5,019 Diluted $ 2,002 $ 1,962 $ 7,582 $ 5,190 Net income per share attributable to common stockholders: Basic $ 0.04 $ 0.04 $ 0.16 $ 0.14 Diluted $ 0.04 $ 0.04 $ 0.14 $ 0.12 Shares used in computation of net income per share attributable to common stockholders: Basic 48,829 47,452 48,355 35,278 Diluted 53,170 53,424 53,087 41,734 Responsys, Inc. Non-GAAP Financial Measures (in thousands, except per share data) Three Months Ended December 31,Year Ended December 31, 2012201120122011Gross profit: GAAP gross profit Subscription $ 21,279 $ 19,101 $ 80,691 $ 66,583 Professional services 3,380 609 6,734 3,691 Total GAAP gross profit 24,659 19,710 87,425 70,274 Add back: Stock-based compensation: Subscription 185 121 662 381 Professional services 286 219 982 623 Total non-GAAP gross profit $ 25,130 $ 20,050 $ 89,069 $ 71,278 Operating income: GAAP operating income $ 3,506 $ 3,335 $ 11,211 $ 14,187 Add back: Amortization of intangible assets 787 569 2,693 2,325 Stock-based compensation 1,759 1,292 6,428 3,713 Deduct: Gain on acquisition -- -- (2,233) (2,220) Total non-GAAP operating income $ 6,052 $ 5,196 $ 18,099 $ 18,005 Income before income taxes: GAAP income before income taxes $ 3,380 $ 3,265 $ 10,926 $ 13,919 Add back: Amortization of intangible assets 787 569 2,693 2,325 Stock-based compensation 1,759 1,292 6,428 3,713 Deduct: Gain on acquisition – – (2,233) (2,220) Total non-GAAP income before taxes $ 5,926 $ 5,126 $ 17,814 $ 17,737 Provision for income taxes: GAAP provision for income taxes $ (1,378) $ (1,269) $ (3,380) $ (5,824) Tax effect from: Amortization of intangible assets (238) (178) (822) (723) Stock-based compensation (561) (387) (2,016) (939) Fair value adjustment for call and put options related to Eservices -- -- -- -- Gain on acquisition -- -- -- 888 Total non-GAAP provision for income taxes $ (2,177) $ (1,834) $ (6,218) $ (6,598) Net income: GAAP net income $ 2,002 $ 1,962 $ 7,582 $ 7,971 Add back: Amortization of intangible assets 787 569 2,693 2,325 Stock-based compensation 1,759 1,292 6,428 3,713 Deduct: Fair value adjustment for call and put options related to Eservices Gain on acquisition – – (2,233) (2,220) Income tax effect of non-GAAP items (799) (565) (2,838) (774) Total non-GAAP net income $ 3,749 $ 3,258 $ 11,632 $ 11,015 Non-GAAP net income per share1: Basic $ 0.08 $ 0.07 $ 0.24 $ 0.25 Diluted $ 0.07 $ 0.06 $ 0.22 $ 0.21 Shares used in computing non-GAAP net income per share: Basic shares: Weighted-average shares used in computing basic net income per common share 48,829 47,452 48,355 35,278 Less: weighted-average preferred shares outstanding due to conversion upon IPO – – – (20,574) Conversion of preferred shares – – – 30,159 Weighted-average shares used in calculating non-GAAP basic net income per share 48,829 47,452 48,355 44,863 Diluted shares: Weighted-average shares used in computing diluted net income per common share 53,170 53,424 53,087 41,734 Less: weighted-average preferred shares outstanding due to conversion upon IPO – – – (20,574) Conversion of preferred shares – – – 30,159 Weighted-average shares used in calculating non-GAAP diluted net income per share 53,170 53,424 53,087 51,319 Responsys, Inc. Stock-Based Compensation Expense (in thousands) Three Months Ended December 31,Year Ended December 31, 201220112012 2011 Cost of revenue $ 471 $ 340 $ 1,644 $ 1,004 Research and development 198 208 914 610 Sales and marketing 508 317 1,785 861 General and administrative 582 427 2,085 1,238 Total $ 1,759 $ 1,292 $ 6,428 $ 3,713 Responsys, Inc. Consolidated Cash Flow (in thousands) Year Ended December 31, 20122011 Cash flows from operating activities: Net income $ 7,582 $ 7,971 Adjustments to reconcile net income to net cash provided by operating activities: -- Benefit (provision) for bad debts 148 (79) Depreciation and amortization 10,884 9,669 Stock-based compensation 6,428 3,713 Gain on acquisition (2,233) (2,220) Net change in call and put options -- -- Deferred taxes 365 4,375 Excess tax benefits from stock-based compensation (1,880) (1,387) Equity in net (income) loss of unconsolidated affiliates (36) 124 Other 190 88 Changes in operating assets and liabilities - net of business acquired: -- Accounts receivable (7,236) (491) Prepaid expenses and other current assets 835 (307) Other assets 224 (668) Accounts payable 1,520 (116) Accrued compensation 917 2,874 Other accrued liabilities 3,245 1,069 Deferred revenue 684 (1,699) Other long-term liabilities 1,978 84 Net cash provided by operating activities 23,615 23,000 Cash flows from investing activities: Purchases of property and equipment (10,457) (7,535) Addition of capitalized software development costs (1,366) (439) Business acquisition, net of cash received (614) (6,101) Purchase of short-term investments (4,007) (24,131) Redemption of short-term investments 25,177 2,750 Purchase of equity interest (1,772) -- Investment in unconsolidated affiliate -- (381) Net cash provided by (used in) investing activities 6,961 (35,837) Cash flows from financing activities: Proceeds from issuance of common stock 1,513 1,189 Proceeds from initial public offering -- 72,182 Proceeds from early-exercised stock options 3 153 Repurchase of common stock -- -- Payments of offering costs -- (1,674) Principal payments on capital lease obligations (879) (752) Excess tax benefits from stock-based compensation 1,880 1,387 Net cash provided by financing activities 2,517 72,485 Effect of foreign exchange rate changes on cash and cash equivalents 107 (76) Net increase in cash and cash equivalents 33,200 59,572 Cash and cash equivalents at beginning of period 73,456 13,884 Cash and cash equivalents at end of period $ 106,656 $ 73,456 CONTACT: Carla Cooper (Investor Relations) Responsys, Inc. (650) 452-1484 [email protected] Source: Responsys, Inc. 2013 GlobeNewswire, Inc. |