MOUNTAIN VIEW, Calif.--Aug. 1, 2006--SumTotal(R) Systems, Inc.
(NASDAQ:SUMT), the largest provider of talent, learning and business
performance technologies and services, announced its financial results
for the second quarter ended June 30, 2006. Second-Quarter 2006 Results On a Generally Accepted Accounting Principles ("GAAP") basis,
total revenue for the second quarter of 2006 was $25.1 million, an
increase of 58% from the $15.9 million reported in the second quarter
of 2005. License revenue was $7.6 million in the second quarter of
2006, an increase of 49% from $5.1 million in the same quarter one
year ago. Net loss, on a GAAP basis, for the second quarter of 2006
was $2.3 million, or $0.09 per share on both a basic and diluted
basis, compared to a net loss of $3.4 million, or $0.16 per share in
the same quarter one year ago.
Deferred revenue on a GAAP basis at the end of the second quarter
increased 43% year over year to end the quarter at $28.1 million,
compared to $19.7 million for the same quarter of the previous year.
On a non-GAAP basis, in the second quarter of 2006 revenue
increased by 66% to $26.5 million from revenue of $16.0 million as
reported for the second quarter of 2005. License revenue was $8.3
million on a non-GAAP basis, an increase of 60% from $5.2 million in
the same quarter one year ago. Non-GAAP net income for the second
quarter was $2.3 million, or $0.09 per share on both a basic and
diluted basis, compared to a non-GAAP net loss of $2.4 million, or
$0.11 per share on both a basic and diluted basis for the second
quarter a year ago.
Non-GAAP results exclude the impact of certain non-cash accounting
adjustments and one-time charges primarily related to acquisition
accounting. A reconciliation to the GAAP results is provided in the
attached statements.
"Our second quarter growth and profitability demonstrates the
strength of our business model and our continued ability to execute,"
said Donald Fowler, SumTotal's chief executive officer. "We
experienced solid sales activity across our targeted market segments
with particularly strong contributions from the retail, financial
services and manufacturing segments. We continued to grow our
recurring revenue base to a new high of over 47% of total revenues in
the second quarter. We are pleased with the progress we have made to
date and the acceptance of our talent management platform, and remain
enthusiastic about our ability to achieve our long-term growth
objectives."
Recent Highlights
During the second quarter, SumTotal Systems:
-- Added North American customer wins, including solutions for
talent management, with new customers such as: Alticor Inc.,
California Chamber of Commerce, Grant Thornton,
ExecellerateHRO, Shaw Industries, Inc., The Timken Company,
BlueLinx Corporation and The Weather Channel.
-- SumTotal Enterprise Suite Version 7 upgrades and
installed base growth with more than 200 customers who have
purchased or upgraded to SumTotal 7. Current quarter upgrades
include Eaton Corporation, Eastman Kodak Company and Toys "R"
Us, Inc. -- Expanded its international presence in new and existing
markets:
-- Entered the China market with learning and talent
management for Liaoning Mobile, a wholly owned subsidiary
of China Mobile Limited. China Mobile Limited is the
leading mobile services provider in mainland China.
Liaoning Mobile purchased licenses from SumTotal and its
partner HP Education. -- Entered into a contract with leading global consulting and
IT services company Satyam Computer Services Ltd. and
partner C&S, making SumTotal 7 the backbone for the Satyam
Learning Center, which supports all of their global
locations. -- Expanded its Indian operation, opening a state-of-the-art
office in Hyderabad, India. This new, high-tech R&D
facility boasts a cutting-edge technology infrastructure.
-- Strengthened its product leadership by becoming the first
learning and talent management company to join the Google
Enterprise Professional program, integrating the Google Search
Appliance within SumTotal 7 to increase access to formal and
informal knowledge and learning.
-- Filed a Form S-3 shelf registration statement with the
Securities and Exchange Commission for an aggregate maximum of
$75 million. Guidance
For the third quarter of 2006, SumTotal Systems estimates its GAAP
revenue will be between $25.5 million and $27.5 million. On a non-GAAP
basis, revenue is estimated to be between $26.0 million and $28.0
million. GAAP net loss is estimated between $1.9 million, or $0.08 per
share, and $0.9 million, or $0.04 per share. On a non-GAAP basis, net
income is estimated to be between $2.0 million, or $0.08 per share,
and $3.0 million, or $0.12 per share. The reconciling items between
GAAP and non-GAAP income (loss) are estimated to be a $0.5 million
adjustment to revenue, $2.2 million for amortization of intangibles
and $1.2 million for stock-based compensation. Conference Call
SumTotal will host an investor conference call and webcast on
Tuesday, August 1, 2006, at 2:00 p.m. (Pacific Time) / 5:00 p.m.
(Eastern Time) to discuss the financial results for the second quarter
ended June 30, 2006. A live audio webcast is available to investors
and the public at: www.sumtotalsystems.com/company/investors.
In addition to the webcast, a telephone replay will be available
on Tuesday, August 1, 2006, beginning at approximately 5:00 p.m.
(Pacific Time) through the close of business (Pacific Time) on
Tuesday, August 8, 2006. Investors and other interested parties can
access the replay by dialing the U.S. toll-free number: 800-405-2236,
access code: 11065300. The international dial-in number is 1
303-590-3000, access code: 11065300.
About SumTotal Systems, Inc.
SumTotal Systems, Inc. (NASDAQ:SUMT) is the largest provider of
talent, learning and business performance technologies and services.
SumTotal deploys mission-critical solutions that align talent and
knowledge with organizational processes and business goals to generate
significant bottom-line results. With more than 17 million users
worldwide, SumTotal has helped accelerate performance and profits for
more than 1,500 of the world's best-known companies and government
agencies including Accenture, Aetna, Cendant, DaimlerChrysler, Delta
Air Lines, Harley-Davidson, Microsoft, Novartis, PNC Bank, U.S. Army,
U.S. Air Force, U.S. Navy, U.S. Coast Guard, U.S. Bancorp, United
Airlines, Vodafone, Wachovia and Wyeth. SumTotal has offices
throughout the United States, and in London, Paris, Frankfurt,
Singapore, Sydney, Tokyo, Hong Kong and Hyderabad. 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. or its affiliates in the United
States and/or other countries. Other names may be trademarks of their
respective owners.