MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- SumTotal® Systems (Nasdaq:SUMT), a global provider of learning, performance, and talent management solutions, announced its financial results for the first quarter ended March 31, 2008.
On a Generally Accepted Accounting Principles (GAAP) basis, total revenue for the first quarter 2008 was $36.0 million, an increase of 24% from $29.1 million in the first quarter 2007. GAAP net income was $1.5 million, or $0.05 per share on a diluted basis, compared to a net loss of $1.8 million, or $0.07 per share on a diluted basis, in the first quarter 2007.
Non-GAAP revenue for the first quarter 2008 increased by 22% to $36.1 million from $29.5 million in the first quarter 2007. Non-GAAP net income was $4.6 million, or $0.14 per share on a diluted basis, compared to non-GAAP net income of $1.9 million, or $0.07 per share on a diluted basis, a year ago.
Deferred revenue on a GAAP basis at the end of the first quarter 2008 increased to $33.1 million from $30.9 million for the same quarter of the previous year.
Cash flows from operating activities for the quarter was $3.6 million compared to $2.5 million for the same period last year.
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.
"Fueled by the growth in our on-demand business and the recognition of over $5 million of revenue from one large deal, the first quarter was the best in our history and we posted record revenues and record profit,” said Don Fowler, SumTotal’s chief executive officer. “Although I am pleased with the strong start to the year, I remain cautious about the remainder of the year due to the broader economic climate. But with the momentum in our on-demand business, I believe we are well-positioned for the long-term.”
For the second quarter 2008, SumTotal Systems estimates its GAAP revenue will be between $29.9 million and $31.9 million. GAAP net loss is estimated to be between ($2.5) million and ($1.5) 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 $30.0 million and $32.0 million. Non-GAAP net income is estimated to be between $0.5 million, or $0.02 per share on a diluted basis, and $1.5 million, or $0.05 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, $0.1 million for restructuring charges, and $1.4 million for stock-based compensation.
SumTotal will host an investor conference call and webcast on April 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 April 29, 2008, beginning at approximately 7:00 p.m. PT through the close of business on May 6, 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 42024006.
SumTotal Systems, Inc. (NASDAQ:SUMT) is a global provider of learning, performance, and talent management 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, ResultsonDemand, and ToolBook 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 second quarter ending June 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) ability to successfully manage and increase growth internationally and in the performance and learning management markets; (iv) delays in upgrading to the SumTotal platform, or complications in upgrading customers causing a decrease in customer satisfaction; (v) inability of the company’s executive team, including its recent hires in operations and marketing, 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 and its Form 8-Ks. The company assumes no obligation to update the information in this press release or in the accompanying conference call.