COLUMBIA, MD--(Marketwired - Jul 29, 2013) - Sourcefire, Inc. (
Financial Summary
- Total Revenue - Revenue for the second quarter of 2013 was $65.1 million compared to $50.6 million in the second quarter of 2012, an increase of 29%.
- GAAP Net Income - Net income was $2.2 million for the second quarter of 2013, or $0.07 per diluted share, on the basis of generally accepted accounting principles (GAAP), compared with GAAP net income of $1.1 million, or $0.04 per diluted share, in the second quarter of 2012.
- Adjusted Net Income - Adjusted net income for the second quarter of 2013, which excludes stock-based compensation expense and amortization of acquired intangible assets and includes an assumed tax rate of 35%, was $6.6 million, or $0.20 per diluted share. This compares to adjusted net income of $4.9 million, or $0.16 per diluted share, for the second quarter of 2012, which excludes stock-based compensation expense, amortization of acquired intangible assets and other acquisition-related expenses, and includes an assumed tax rate of 35%.
- Cash and Cash Flow - As of June 30, 2013, the Company's cash, cash equivalents and investments totaled $237.4 million. For the second quarter of 2013, net cash provided by operating activities was $5.9 million and the Company generated free cash flow of $2.5 million.
Recent Company Highlights
Revenue
- Increased U.S. commercial revenue to $32.1 million, up 16% over 2Q12.
- Increased international revenue to $19.9 million, up 35% over 2Q12.
- Increased U.S. federal sector revenue to $13.1 million, up 57% over 2Q12.
Innovation & Recognition
- Introduced innovative malware trajectory capabilities across the Advanced Malware Protection portfolio, giving customers detailed visibility into malware attack activity and enabling them to detect, remediate and control malware outbreaks. With these additions, Sourcefire Advanced Malware Protection solutions are the only offerings that add a continuous capability to its malware blocking, going beyond point-in-time detection to confirm an infection, trace its path, analyze its behavior, remediate its targets and report on its impact regardless of when a file is determined to be malware.
- Announced enhancements to the FirePOWER™ security platform, including the 7000 and 8000 series appliances, as well as updates to the Next-Generation Intrusion Prevention Systems (NGIPS) and Next-Generation Firewall (NGFW) solutions. With these new features, Sourcefire offers customers increased flexibility and scalability to help ensure leading protection for any environment.
- Based on its recent analysis of the intrusion prevention systems (IPS) market, Frost & Sullivan recognized Sourcefire with the 2013 Global Frost & Sullivan Award for Product Leadership. Sourcefire's dedication to understanding, detecting, and blocking the most advanced enterprise network threats has enabled its Next-Generation IPS (NGIPS) solution to stand out from the competition. In addition, Sourcefire was recognized for providing exceptional customer value in terms of deployment flexibility, adaptability, and performance.
Non-GAAP Measures
To supplement its consolidated financial statements presented in accordance with GAAP, Sourcefire considers certain financial measures that are not prepared in accordance with GAAP, including non-GAAP adjusted net income, adjusted net income per share, adjusted income from operations, adjusted income from operations as a percentage of revenue and free cash flow.
Sourcefire uses these non-GAAP financial measures, in addition to GAAP financial measures, to evaluate its operating and financial performance and to compare such performance to that of prior periods and to the performance of its competitors. The Company also uses these non-GAAP financial measures in making operational and financial decisions and in establishing operational goals. Sourcefire believes that providing these non-GAAP financial measures to investors, as a supplement to GAAP financial measures, helps investors to evaluate the Company's operating and financial performance and trends in its business, consistent with how management evaluates such performance and trends. The Company also believes these non-GAAP financial measures may be useful to investors in comparing its performance to the performance of other companies, although Sourcefire's non-GAAP financial measures are specific to it and the non-GAAP financial measures of other companies may not be calculated in the same manner.
Adjusted Net Income, Adjusted Net Income per Share, Adjusted Income from Operations and Adjusted Income from Operations as a Percentage of Revenue: In evaluating the operating performance of its business, Sourcefire excludes certain charges and credits that are required by GAAP. These non-GAAP measures exclude (i) stock-based compensation, which does not involve the expenditure of cash, (ii) amortization of acquisition-related intangible assets, which does not involve the expenditure of cash, and (iii) other acquisition-related expenses, which are unrelated to the ongoing operation of the Company's business in the ordinary course. For 2013, we expect non-GAAP results to be adjusted to reflect the effect of an assumed tax rate of 35%. This adjustment is intended to normalize the tax rate and provide a tax rate that approximates the Company's expected long-term GAAP tax rate.
Free Cash Flow: Sourcefire defines free cash flow as net cash provided by operating activities minus capital expenditures. The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the purchase of property and equipment, can be used for strategic opportunities, including investing in the business, making strategic acquisitions and strengthening the balance sheet.
These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release.
About Sourcefire
Sourcefire, Inc. (
Sourcefire, the Sourcefire logo, Snort, the Snort and Pig logo, Agile Security and the Agile Security logo, 'Before, During, and After,' ClamAV, FireAMP, FirePOWER, FireSIGHT and certain other trademarks and logos are trademarks or registered trademarks of Sourcefire, Inc. in the United States and other countries. Other company, product and service names may be trademarks or service marks of others.
Cautionary Language Concerning Forward-Looking Statements
The statements contained in this release that are not historical facts are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties. These statements include expectations regarding financial results for the second quarter of 2013 and expectations of future growth.
Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown risks and uncertainties, and actual results, performance, and/or achievements of Sourcefire, Inc. may differ materially from the future results, performance, and/or achievements expressed or implied by these forward-looking statements as a result of a number of factors. These factors include, without limitation, those risks and uncertainties described from time to time in the reports filed by Sourcefire, Inc. with the U.S. Securities and Exchange Commission. Sourcefire, Inc. undertakes no obligation to update any forward-looking statements.
| Sourcefire, Inc. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenue: | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Products | $ | 38,088 | $ | 29,794 | $ | 68,880 | $ | 55,487 | ||||||||
| Technical support and professional services | 26,964 | 20,804 | 52,336 | 41,413 | ||||||||||||
| Total revenue | 65,052 | 50,598 | 121,216 | 96,900 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Products | 10,891 | 8,682 | 20,917 | 17,171 | ||||||||||||
| Technical support and professional services | 3,578 | 2,837 | 6,776 | 5,270 | ||||||||||||
| Total cost of revenue | 14,469 | 11,519 | 27,693 | 22,441 | ||||||||||||
| Gross profit | 50,583 | 39,079 | 93,523 | 74,459 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 12,255 | 10,661 | 23,450 | 20,089 | ||||||||||||
| Sales and marketing | 25,792 | 19,764 | 50,902 | 38,968 | ||||||||||||
| General and administrative | 8,138 | 5,911 | 14,542 | 11,355 | ||||||||||||
| Depreciation and amortization | 1,660 | 1,133 | 3,263 | 2,317 | ||||||||||||
| Total operating expenses | 47,845 | 37,469 | 92,157 | 72,729 | ||||||||||||
| Income from operations | 2,738 | 1,610 | 1,366 | 1,730 | ||||||||||||
| Other income (expense), net | (149 | ) | 11 | (190 | ) | 8 | ||||||||||
| Income before income taxes | 2,589 | 1,621 | 1,176 | 1,738 | ||||||||||||
| Provision (benefit) for income taxes | 372 | 508 | (1,015 | ) | 558 | |||||||||||
| Net income | $ | 2,217 | $ | 1,113 | $ | 2,191 | $ | 1,180 | ||||||||
| Net income per share - basic | $ | 0.07 | $ | 0.04 | $ | 0.07 | $ | 0.04 | ||||||||
| Net income per share - diluted | $ | 0.07 | $ | 0.04 | $ | 0.07 | $ | 0.04 | ||||||||
| Weighted average shares outstanding used in computing per share amounts: | ||||||||||||||||
| Basic | 31,314,224 | 29,714,500 | 30,983,817 | 29,470,671 | ||||||||||||
| Diluted | 32,129,720 | 30,961,421 | 31,892,619 | 30,669,716 | ||||||||||||
| Stock-based compensation expense for the three and six months ended June 30, 2013 and 2012 is included in the Consolidated Statements of Operations as follows (in thousands): | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Cost of revenue (product) | $ | 152 | $ | 93 | $ | 309 | $ | 171 | ||||||||
| Cost of revenue (services) | 305 | 211 | 564 | 377 | ||||||||||||
| Stock-based comp expense included in cost of revenue | 457 | 304 | 873 | 548 | ||||||||||||
| Research and development | 1,758 | 1,184 | 3,328 | 2,156 | ||||||||||||
| Sales and marketing | 3,176 | 2,137 | 6,144 | 3,883 | ||||||||||||
| General and administrative | 1,803 | 1,244 | 3,156 | 2,389 | ||||||||||||
| Stock-based comp expense included in operating expenses | 6,737 | 4,565 | 12,628 | 8,428 | ||||||||||||
| Total stock-based compensation expense | $ | 7,194 | $ | 4,869 | $ | 13,501 | $ | 8,976 | ||||||||
| Sourcefire, Inc. | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||
| (in thousands) | |||||||||
| June 30, | December 31, | ||||||||
| 2013 | 2012 | ||||||||
| Assets | (unaudited) | (unaudited) | |||||||
| Cash and cash equivalents | $ | 128,720 | $ | 96,178 | |||||
| Investments | 108,729 | 107,777 | |||||||
| Accounts receivable, net | 71,092 | 77,426 | |||||||
| Inventory | 7,107 | 6,880 | |||||||
| Deferred tax assets | 24,027 | 13,023 | |||||||
| Prepaid expenses and other current assets | 10,438 | 9,043 | |||||||
| Property and equipment, net | 16,666 | 15,438 | |||||||
| Goodwill | 15,000 | 15,000 | |||||||
| Intangible assets, net | 3,773 | 4,456 | |||||||
| Other long-term assets | 18,570 | 19,453 | |||||||
| Total assets | $ | 404,122 | $ | 364,674 | |||||
| Liabilities | |||||||||
| Accounts payable and accrued expenses | $ | 28,872 | $ | 27,783 | |||||
| Deferred revenue | 94,073 | 90,241 | |||||||
| Other liabilities | 2,252 | 1,524 | |||||||
| Total liabilities | 125,197 | 119,548 | |||||||
| Stockholders' Equity | |||||||||
| Common stock | 31 | 30 | |||||||
| Additional paid-in capital | 287,775 | 255,610 | |||||||
| Accumulated deficit | (8,331 | ) | (10,522 | ) | |||||
| Accumulated other comprehensive income (loss) | (550 | ) | 8 | ||||||
| Total stockholders' equity | 278,925 | 245,126 | |||||||
| Total liabilities and stockholders' equity | $ | 404,122 | $ | 364,674 | |||||
| Sourcefire, Inc. | ||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
| (in thousands) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Net income | $ | 2,217 | $ | 1,113 | $ | 2,191 | $ | 1,180 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | 3,643 | 1,521 | 19,548 | 21,131 | ||||||||||||
| Net cash provided by operating activities | 5,860 | 2,634 | 21,739 | 22,311 | ||||||||||||
| Net cash used in investing activities | (4,768 | ) | (7,573 | ) | (7,862 | ) | (13,109 | ) | ||||||||
| Net cash provided by financing activities | 2,853 | 5,087 | 18,665 | 8,928 | ||||||||||||
| Net increase in cash and cash equivalents | 3,945 | 148 | 32,542 | 18,130 | ||||||||||||
| Cash and cash equivalents at beginning of period | 124,775 | 77,389 | 96,178 | 59,407 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 128,720 | $ | 77,537 | $ | 128,720 | $ | 77,537 | ||||||||
| Sourcefire, Inc. | |||||||||||||||||
| Reconciliation of Non-GAAP Measures to GAAP | |||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Reconciliation of adjusted income from operations: | |||||||||||||||||
| GAAP income from operations | $ | 2,738 | $ | 1,610 | $ | 1,366 | $ | 1,730 | |||||||||
| Amortization of acquisition-related intangible assets | 342 | 342 | 684 | 684 | |||||||||||||
| Other acquisition-related expenses* | - | 769 | - | 1,436 | |||||||||||||
| Stock-based compensation expense | 7,194 | 4,869 | 13,501 | 8,976 | |||||||||||||
| Adjusted income from operations | $ | 10,274 | $ | 7,590 | $ | 15,551 | $ | 12,826 | |||||||||
| Adjusted income from operations as % of total revenue | 15.8 | % | 15.0 | % | 12.8 | % | 13.2 | % | |||||||||
| Reconciliation of adjusted net income: | |||||||||||||||||
| GAAP net income | $ | 2,217 | $ | 1,113 | $ | 2,191 | $ | 1,180 | |||||||||
| Stock-based compensation expense | 7,194 | 4,869 | 13,501 | 8,976 | |||||||||||||
| Amortization of acquisition-related intangible assets | 342 | 342 | 684 | 684 | |||||||||||||
| Other acquisition-related expenses* | - | 769 | - | 1,436 | |||||||||||||
| Tax credit for research and experimentation | (601 | ) | - | (2,064 | ) | - | |||||||||||
| Income tax adjustment** | (2,571 | ) | (2,152 | ) | (4,327 | ) | (3,934 | ) | |||||||||
| Adjusted net income | $ | 6,581 | $ | 4,941 | $ | 9,985 | $ | 8,342 | |||||||||
| Adjusted net income per share - basic | $ | 0.21 | $ | 0.17 | $ | 0.32 | $ | 0.28 | |||||||||
| Adjusted net income per share - diluted | $ | 0.20 | $ | 0.16 | $ | 0.31 | $ | 0.27 | |||||||||
| Weighted average number of shares - basic | 31,314,224 | 29,714,500 | 30,983,817 | 29,470,671 | |||||||||||||
| Weighted average number of shares - diluted | 32,129,720 | 30,961,421 | 31,892,619 | 30,669,716 | |||||||||||||
| * Includes the accrual of retention obligations related to the hiring of former Immunet employees. | |||||||||||||||||
| ** Income tax adjustment is used to adjust the GAAP provision for income taxes to a Non-GAAP provision for income taxes utilizing an estimated tax rate of 35%. | |||||||||||||||||
| Reconciliation of net cash provided by operating activities to free cash flow: | |||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Net cash provided by operating activities | $ | 5,860 | $ | 2,634 | $ | 21,739 | $ | 22,311 | |||||||||
| Purchase of property and equipment | (3,371 | ) | (1,534 | ) | (4,606 | ) | (4,076 | ) | |||||||||
| Free cash flow | $ | 2,489 | $ | 1,100 | $ | 17,133 | $ | 18,235 | |||||||||
| Sourcefire, Inc. | |||||||||||||
| Supplemental Operating Data | |||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Number of deals in excess of $500,000 | 28 | 13 | 41 | 25 | |||||||||
| Number of deals in excess of $100,000 | 120 | 83 | 206 | 162 | |||||||||
| Number of new customers | 126 | 98 | 225 | 182 | |||||||||
| Percentage of channel-influenced deals | 39 | % | 43 | % | 45 | % | 47 | % | |||||
| Percentage of install base on FirePOWER | 38 | % | 15 | % | |||||||||
| Total channel partners | 814 | 691 | |||||||||||
| Number of full-time employees at end of period | 674 | 519 | |||||||||||
| Revenue Composition by Geography: | |||||||||||||
| United States | 69 | % | 71 | % | 67 | % | 69 | % | |||||
| International | 31 | % | 29 | % | 33 | % | 31 | % | |||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||
| Revenue Composition by Business Distribution: | |||||||||||||
| Existing customer product revenue | 42 | % | 41 | % | 41 | % | 38 | % | |||||
| New customer product revenue | 16 | % | 18 | % | 16 | % | 20 | % | |||||
| Services revenue | 42 | % | 41 | % | 43 | % | 42 | % | |||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | |||||
Media Contact: Jennifer Leggio Sourcefire 650-260-4025 jleggio@sourcefire.com Investor Contact: Staci Mortenson ICR 203-682-8273 Staci.Mortenson@icrinc.com
