MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- SumTotal® Systems (Nasdaq:SUMT), the market leader and a global provider of talent development solutions, today announced its financial results for the second quarter ended June 30, 2008.
On a Generally Accepted Accounting Principles (GAAP) basis, total revenue for the second quarter 2008 increased to $31.9 million from $30.2 million in the second quarter 2007. GAAP net loss was $1.0 million, or $0.03 per share on a basic and diluted basis, compared to a net loss of $1.5 million, or $0.05 per share in the second quarter 2007.
Non-GAAP revenue for the second quarter 2008 increased to $32.0 million from $30.5 million in the second quarter 2007. Non-GAAP net income was $1.8 million, or $0.06 per share on a diluted basis, compared to non-GAAP net income of $1.9 million, or $0.06 per share on a diluted basis, a year ago.
Cash flows from operating activities were $4.1 million for the quarter and $7.7 million for the first six-months of 2008.
Non-GAAP results exclude the impact of certain one-time charges primarily related to restructuring activities, if any, and non-cash accounting adjustments and charges primarily related to acquisition accounting, stock-based compensation, and any related income tax effects. A reconciliation to the GAAP results is provided in the attached statements.
"We delivered on our commitment and beat our forecast for the second quarter,” said Don Fowler, SumTotal’s chief executive officer. “In the quarter, we increased recurring revenue to 54% of total revenue, grew our twelve-month trailing subscriptions bookings 38% compared with the same period last year, and we doubled our performance management business. And we delivered SumTotal Version 8, the only unified Talent Development Suite on the market. These are great results.”
For the third quarter 2008, SumTotal estimates its GAAP revenue will be between $28.9 million and $30.9 million. GAAP net loss is estimated to be between ($2.7) million and ($1.7) million, or between ($0.08) and ($0.05) per share on both a basic and diluted basis.
On a non-GAAP basis, revenue is estimated to be between $29.0 million and $31.0 million. Non-GAAP net income is estimated to be between $0.3 million, or $0.01 per share on a diluted basis, and $1.3 million, or $0.04 per share on a diluted basis. The reconciling items between GAAP loss and non-GAAP income are estimated to be a $0.1 million adjustment to revenue, $1.4 million for amortization of intangibles, and $1.5 million for stock-based compensation.
SumTotal will host an investor conference call and webcast on July 29, 2008, at 5:00 p.m. ET/ 2:00 p.m. PT. SumTotal plans to make a live audio webcast available to investors and the public at http://investor.sumtotalsystems.com.
In addition to the webcast, SumTotal plans to make available a telephone replay of the call on July 29, 2008, beginning at approximately 7:00 p.m. PT through the close of business on August 5, 2008. Interested parties can access the replay by dialing 800-642-1687 within the US or 706-645-9291 outside the US and entering the access code 55261701.
SumTotal Systems, Inc. (NASDAQ:SUMT) is the market leader and a global provider of talent development solutions. SumTotal deploys mission-critical solutions designed to align goals, develop skills, assess performance, plan for succession and set compensation. SumTotal's solutions aim to accelerate performance and profits for more than 1,500 companies and governments of all sizes, including six of the world's 10 biggest pharmaceutical makers, six of the 10 largest automotive companies in the world, four of the five branches of the U.S. Armed Forces, three of the world's top five airlines, five of the six largest U.S. commercial banks and two of the world's top five specialty retailers. Mountain View, Calif.-based SumTotal has offices across Asia, Australia, Europe and North America. For more information about SumTotal's products and services, visit www.sumtotalsystems.com.
SumTotal and the SumTotal logo are registered trademarks or trademarks of SumTotal Systems, Inc. and/or its affiliates in the United States and/or other countries. Other names may be trademarks of their respective owners.
Information in this press release and the accompanying conference call contain forward-looking statements and management’s estimation regarding future performance of the company, including without limitation, financial estimates for the third quarter ending September 30, 2008 and beyond. These statements represent the company’s current expectations or beliefs concerning its future results, and include statements, among others, regarding its financial forecasts; the company’s competitive position and business model, including its market share and its ability to grow its performance management and international business, and its subscriptions and support business. These statements are not historical facts or guarantees of future performance or events; are based on current expectations, estimates, beliefs, assumptions, goals and objectives; and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed or implied by these statements. Readers of this press release and listeners to the accompanying conference call are cautioned not to place undue reliance on any forward-looking statement or statements. Additional factors that could cause actual results to differ include, but are not limited to (i) worsening of the general economic climate and the company’s inability to timely respond to such changes; (ii) decreases in information technology spending which may cause delays or cancellations of purchases of the company’s products and services; (iii) market acceptance of the company’s products and services, including SumTotal 8.0, and the ability to successfully manage and increase growth internationally and in the performance and learning management markets; (iv) delays or complications in upgrading customers to the SumTotal platform, including SumTotal 8.0, causing a decrease in customer satisfaction; (v) inability of the company’s executive team to execute on its plans, causing the company to miss its financial forecasts or not grow the company’s business at or above the forecasts; (vi) underestimating the cost reductions or other adjustments necessary to timely respond to changes in the economic climate in general and specifically to the company’s business in order to maintain profitability, or making cuts that aversely impact the company’s ability to execute; (vii) inability to recruit or retain key personnel, including management; (viii) increased competition, especially in the performance management and international markets, causing the loss of deals, material reductions in prices or acceptance of terms the company otherwise would not accept; (ix) inaccurately estimating the speed, ability or cost of the company transitioning its product offerings to on-demand subscriptions and a recurring revenue model; (x) customer dissatisfaction with the company’s products or services, causing product returns, refusal to pay for products or services delivered or customers to cancel or not renew their services at higher than expected rates; (xi) the lengthening of the company’s sales cycle and increased difficulties in negotiating sales contracts on terms favorable to the company and the uncertain timing of such sales; (xii) other market conditions that include risks and uncertainties such as risks associated with financial, economic, political, terrorist activity and other uncertainties associated with operating a global business; and (xiii) other events and other important factors disclosed previously and from time to time in the company’s filings with the Securities and Exchange Commission, including the company’s annual report on Form 10-K for the year ended December 31, 2007, its quarterly report on Form 10-Q for the quarter ended March 31, 2008 and its Form 8-Ks. The company assumes no obligation to update the information in this press release or in the accompanying conference call.