NETEZZA
ANNOUNCES SECOND QUARTER FISCAL 2009 FINANCIAL RESULTS |
Revenues increased 65% over the prior year Second quarter GAAP diluted EPS was $0.05 Marlborough, Mass. — August 28, 2008 — Netezza Corporation (NYSE Arca: NZ), the global leader in data warehouse and analytic appliances, today reported its financial results for the second fiscal quarter ended July 31, 2008. Jit Saxena, Netezza's Chairman and Chief Executive Officer, stated, "We are extremely pleased with our results for our second quarter. Both new and existing customers across many diverse industries are leveraging the Netezza appliance to move their businesses forward. We continue to strengthen our position as an industry leader in providing performance, value, flexibility and scalability to world class international organizations." Total revenue for the second quarter of fiscal 2009 (fiscal year ending January 31, 2009) increased 65% to $47.0 million compared with $28.4 million for the same period one year ago. GAAP net income attributable to common stockholders for the second quarter of fiscal 2009 was $3.1 million compared with a GAAP net loss attributable to common stockholders of $2.5 million for the same period one year ago. Non-GAAP net income attributable to common stockholders for the second quarter of fiscal 2009 was $5.2 million compared with a non-GAAP net loss attributable to common stockholders of $0.2 million for the same period one year ago. GAAP diluted net income per share for the second quarter of fiscal 2009 was $0.05 compared with a GAAP diluted net loss per share of $0.20 for the same period one year ago. Non-GAAP diluted net income per share for the second quarter of fiscal 2009 was $0.08 compared with a non-GAAP diluted net loss per share of $0.01 for the same period one year ago. Non-GAAP net income (loss) attributable to common stockholders, non-GAAP diluted net income per share and non-GAAP operating income exclude non-cash stock-based compensation, amortization of acquired intangible assets and, where applicable, accretion of preferred stock dividends. A reconciliation of GAAP to non-GAAP results has been provided in the financial statements included in this press release. An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures." Financial Guidance: "Based upon continued strength in our overall business and the near term visibility, we are raising our revenue guidance from $172 million to the $182 million level for fiscal year 2009," said Patrick Scannell, Senior Vice President and Chief Financial Officer of Netezza. "We have realized significant leverage in our operating model and are ahead of our own expectations this quarter. We will continue to make aggressive investments in our business and expect to keep non-GAAP operating income as a percentage of revenue at the current level for the near term. Our long term model for operating income levels remains unchanged." Use of Non-GAAP Financial Measures: To supplement Netezza's unaudited condensed consolidated financial statements presented in accordance with GAAP, Netezza is presenting certain non-GAAP measures of financial performance. Netezza believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding Netezza's performance by excluding certain non-cash items that may not be indicative of Netezza's core business or future outlook. The presentation of these non-GAAP measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Netezza's results of operations as determined in accordance with GAAP. The non-GAAP financial measures presented by Netezza exclude non-cash stock-based compensation, amortization of acquired intangible assets and, where applicable, accretion of preferred stock dividends. Because of the varying valuation methodologies and assumptions that companies use under FAS123(R) and that companies use to value and amortize acquired intangible assets, Netezza's management believes that excluding non-cash stock-based compensation and amortization of acquired intangible assets allows investors to analyze Netezza's recurring business over multiple periods and provide more meaningful comparisons with other companies. Upon the closing of Netezza's initial public offering, accretion of preferred dividends was no longer applicable due to the conversion of preferred stock to common stock, and is therefore excluded to aid in comparing current and future operating results with those of past periods. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures provided in the financial statements included in this press release. Second Quarter Conference Call: Netezza will host a conference call and webcast at 8:30 AM Eastern Time (5:30 AM Pacific Time) on August 28, 2008 to discuss its second quarter fiscal year 2009 results and business outlook. The conference call can be accessed by dialing +1 800 561-2601 for participants in the United States and by dialing +1 617 614-3518 for participants outside the United States. The passcode for the conference call is 34827681. A telephonic replay of the conference call will also be available two hours after the call and will run for two weeks. The replay can be accessed by dialing +1 888 286-8010 for participants in the United States and by dialing +1 617 801-6888 for participants outside the United States. The passcode for the replay is 11406939. The webcast will be accessible from the "Investor Relations" section of Netezza's website (http://www.netezza.com). The webcast will be archived on Netezza's website for a period of one year. About Netezza Corporation: Netezza is the global leader in data warehouse appliances that dramatically simplify high-performance analytics for business users across the extended enterprise, delivering significant competitive and operational advantage in today's information-intensive marketplaces. The Netezza Performance Server(R) (NPS(R)) family of streaming analytic(TM) appliances brings appliance simplicity to a broad range of complex data warehouse and analytic challenges. Customers who have realized the benefits of Netezza appliances include Ahold, Amazon.com, CNET Networks, Debenhams, Department of Veterans Affairs, Epsilon, Nationwide, Neiman Marcus, Orange UK, Premier, Inc., Ross Stores, Ryder System, Inc., The Carphone Warehouse and Virgin Media. Based in Marlborough, Mass., Netezza has offices in Washington, DC, the United Kingdom and Asia Pacific. For more information about Netezza, please visit www.netezza.com. Netezza Performance Server, NPS and streaming analytic are trademarks of Netezza Corporation. Other names may be trademarks of their respective owners. For Netezza Investors: The statements set forth above include forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended. These forward-looking statements relate to Netezza's
future financial performance and Netezza's business prospects. These
statements involve risk and uncertainties, including: market demand
for our products; our limited operating history and history of losses;
quarterly fluctuation of our business; our ability to attract and
retain key personnel; competition in the data warehouse market; our
dependence on certain key customers; our ability to protect our patents
and intellectual property; our ability to defend against third party
infringement claims, other litigation and contingent liabilities;
and risks relating to operating internationally. For a further list
and description of risks and uncertainties that could cause actual
results to differ materially from those contained in the forward-looking
statements in this release, we refer you to the "Risk Factors"
section of Netezza's Annual Report on Form 10-K for the year ended
January 31, 2008, and most recent Quarterly Report on Form 10-Q, each
of which is on file with the SEC and available in the investor relations
section of Netezza's website at http://www.netezza.com
and on the SEC website at http://www.sec.gov. In addition, the forward-looking
statements included in this press release represent our views as of
August 28, 2008. We anticipate that subsequent events and developments
will cause our views to change. However, while we may elect to update
these forward-looking statements at some point in the future, we specifically
disclaim any obligation to do so. These forward-looking statements
should not be relied upon as representing our views as of any date
subsequent to August 28, 2008.
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Netezza Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
July 31, January 31,
2008 2008
----------- -----------
Assets
Current assets
Cash and cash equivalents $ 99,051 $ 46,184
Short term marketable securities 1,999 37,149
Accounts receivable 17,263 19,999
Inventory 28,194 31,611
Restricted cash 379 379
Other current assets 4,404 4,038
----------- -----------
Total current assets 151,290 139,360
Property and equipment, net 6,513 5,467
Goodwill 3,304 -
Intangible assets, net 3,301 -
Long term marketable securities 51,321 53,775
Restricted cash 639 -
Other long term assets 906 150
----------- -----------
Total assets $ 217,274 $ 198,752
=========== ===========
Liabilities and stockholders' equity
Current liabilities
Accounts payable $ 3,759 $ 5,533
Accrued expenses 5,891 5,494
Accrued compensation and benefits 4,039 5,244
Deferred revenue 44,904 30,588
----------- -----------
Total current liabilities 58,593 46,859
Long term deferred revenue 14,499 15,418
----------- -----------
Total liabilities 73,092 62,277
Stockholders' equity 144,182 136,475
----------- -----------
Total liabilities and stockholders' equity $ 217,274 $ 198,752
=========== ===========
Netezza Corporation
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
For the three For the six
months ended months ended
July 31, July 31,
----------------- -----------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenue
Product $35,134 $22,933 $66,460 $43,510
Services 11,901 5,467 20,151 10,232
-------- -------- -------- --------
Total revenue 47,035 28,400 86,611 53,742
Cost of revenue
Product 14,005 9,481 26,599 17,876
Services 2,888 1,956 4,992 3,604
-------- -------- -------- --------
Total cost of revenue 16,893 11,437 31,591 21,480
-------- -------- -------- --------
Gross Profit 30,142 16,963 55,020 32,262
Operating Expenses
Sales and marketing 15,292 9,962 28,622 19,631
Research and development 8,014 5,572 15,262 11,056
General and administrative 3,669 1,978 6,782 3,733
-------- -------- -------- --------
Total operating expenses 26,975 17,512 50,666 34,420
-------- -------- -------- --------
Operating income (loss) 3,167 (549) 4,354 (2,158)
Interest income 1,036 195 2,779 217
Interest expense - 502 - 715
Other income (expense), net (86) 51 (219) 220
-------- -------- -------- --------
Income (loss) before income taxes
and accretion to preferred stock $ 4,117 $ (805) $ 6,914 $(2,436)
Income tax provision 976 291 1,641 565
-------- -------- -------- --------
Net income (loss) $ 3,141 $(1,096) $ 5,273 $(3,001)
Accretion to preferred stock - 1,370 - 2,853
-------- -------- -------- --------
Net income (loss) attributable to
common stockholders $ 3,141 $(2,466) $ 5,273 $(5,854)
======== ======== ======== ========
Net income (loss) per common
share:
Basic $ 0.05 $ (0.20) $ 0.09 $ (0.56)
Diluted $ 0.05 $ (0.20) $ 0.08 $ (0.56)
Shares used in per common share
calculations:
Basic 58,692 12,374 58,322 10,444
Diluted 66,541 12,374 66,908 10,444
Netezza Corporation
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except per share amounts and percentages)
(unaudited)
For the three For the six
months ended months ended % change
for the
July 31, July 31, three
---------------- ---------------- months
ended
July 31,
2008 as
compared
with the
three
months
ended
July 31,
2008 2007 2008 2007 2007
------- -------- ------- -------- ---------
Non-GAAP financial
measures and
reconciliation:
GAAP cost of product
revenue $14,005 $ 9,481 $26,599 $17,876
Non-cash stock-based
compensation (1) 43 23 86 45
Amortization of
acquired intangible
assets (2) 4 - 4 -
------- -------- ------- --------
Non-GAAP cost of product
revenue $13,958 $ 9,458 $26,509 $17,831
======= ======== ======= ========
GAAP cost of service
revenue $ 2,888 $ 1,956 $ 4,992 $ 3,604
Non-cash stock-based
compensation (1) 66 27 111 53
Amortization of
acquired intangible
assets (2) 79 - 79 -
------- -------- ------- --------
Non-GAAP cost of service
revenue $ 2,743 $ 1,929 $ 4,802 $ 3,551
======= ======== ======= ========
GAAP gross profit $30,142 $16,963 $55,020 $32,262
Non-cash stock-based
compensation (1) 109 50 197 98
Amortization of
acquired intangible
assets (2) 83 - 83 -
------- -------- ------- --------
Non-GAAP gross profit $30,334 $17,013 $55,300 $32,360
======= ======== ======= ========
GAAP sales and marketing
expenses $15,292 $ 9,962 $28,622 $19,631 54%
Non-cash stock-based
compensation (1) 601 257 1,172 506
Amortization of
acquired intangible
assets (2) 9 - 9 -
------- -------- ------- --------
Non-GAAP sales and
marketing expenses $14,682 $ 9,705 $27,441 $19,125 51%
======= ======== ======= ========
GAAP research and
development expenses $ 8,014 $ 5,572 $15,262 $11,056 44%
Non-cash stock-based
compensation (1) 559 177 1,000 325
Amortization of
acquired intangible
assets (2) 45 - 45 -
------- -------- ------- --------
Non-GAAP research and
development expenses $ 7,410 $ 5,395 $14,217 $10,731 37%
======= ======== ======= ========
GAAP general and
administrative expenses $ 3,669 $ 1,978 $ 6,782 $ 3,733 85%
Non-cash stock-based
compensation (1) 673 452 1,233 886
Amortization of
acquired intangible
assets (2) 12 - 12 -
------- -------- ------- --------
Non-GAAP general and
administrative expenses $ 2,984 $ 1,526 $ 5,537 $ 2,847 96%
======= ======== ======= ========
GAAP operating expenses $26,975 $17,512 $50,666 $34,420 54%
Non-cash stock-based
compensation (1) 1,833 886 3,405 1,717
Amortization of
acquired intangible
assets (2) 66 - 66 -
------- -------- ------- --------
Non-GAAP operating
expenses $25,076 $16,626 $47,195 $32,703 51%
======= ======== ======= ========
GAAP operating income
(loss) $ 3,167 $ (549) $ 4,354 $(2,158)
Non-cash stock-based
compensation (1) 1,942 936 3,602 1,815
Amortization of
acquired intangible
assets (2) 149 - 149 -
------- -------- ------- --------
Non-GAAP operating income
(loss) $ 5,258 $ 387 $ 8,105 $ (343)
======= ======== ======= ========
GAAP net income (loss)
attributable to common
stockholders $ 3,141 $(2,466) $ 5,273 $(5,854)
Non-cash stock-based
compensation (1) 1,942 936 3,602 1,815
Amortization of
acquired intangible
assets (2) 149 - 149 -
Accretion to preferred
stock (3) - 1,370 - 2,853
------- -------- ------- --------
Non-GAAP net income
(loss) attributable to
common stockholders $ 5,232 $ (160) $ 9,024 $(1,186)
======= ======== ======= ========
GAAP net income (loss)
per common share - basic $ 0.05 $ (0.20) $ 0.09 $ (0.56)
Non-cash stock-based
compensation (1) 0.04 0.08 0.06 0.17
Amortization of
acquired intangible
assets (2) 0.00 - 0.00 -
Accretion to preferred
stock (3) - 0.11 - 0.28
------- -------- ------- --------
Non-GAAP net income
(loss) per common share
- basic $ 0.09 $ (0.01) $ 0.15 $ (0.11)
======= ======== ======= ========
GAAP net income (loss)
per common share -
diluted $ 0.05 $ (0.20) $ 0.08 $ (0.56)
Non-cash stock-based
compensation (1) 0.03 0.08 0.05 0.17
Amortization of
acquired intangible
assets (2) 0.00 - 0.00 -
Accretion to preferred
stock (3) - 0.11 - 0.28
------- -------- ------- --------
Non-GAAP net income
(loss) per common share
- diluted $ 0.08 $ (0.01) $ 0.13 $ (0.11)
======= ======== ======= ========
Shares used in per common
share calculations:
Basic 58,692 12,374 58,322 10,444
Diluted 66,541 12,374 66,908 10,444
Footnotes - Adjustments
(1) Represents non-cash compensation charges associated with stock
options granted and accounted for in accordance with the fair market
provisions of Statement of Financial Accounting Standards No. 123(R)
as follows:
For the three For the six
months ended months ended
July 31, July 31,
---------------- ----------------
2008 2007 2008 2007
------- -------- ------- --------
Cost of product revenue $ 43 $ 23 $ 86 $ 45
Cost of services revenue 66 27 111 53
Sales and marketing 601 257 1,172 506
Research and development 559 177 1,000 325
General and
administrative 673 452 1,233 886
------- -------- ------- --------
Total non-cash stock-
based compensation
expense $ 1,942 $ 936 $ 3,602 $ 1,815
======= ======== ======= ========
(2) Represents amortization of acquired intangible assets in
conjunction with Netezza's acquisition of NuTech Solutions, Inc. on
May 9, 2008 as follows:
For the three For the six
months ended months ended
July 31, July 31,
---------------- ----------------
2008 2007 2008 2007
------- -------- ------- --------
Cost of product revenue $ 4 $ - $ 4 $ -
Cost of services revenue 79 - 79 -
Sales and marketing 9 - 9 -
Research and development 45 - 45 -
General and
administrative 12 - 12 -
------- -------- ------- --------
Total amortization
expense $ 149 $ - $ 149 $ -
======= ======== ======= ========
(3) Represents accretion of preferred stock dividends on Netezza's
Series A through D convertible redeemable preferred stock prior to
its conversion to common stock on July 24, 2007.
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CONTACT: Netezza Corporation |