8-K
 

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
October 30, 2007
(Date of report; date of earliest event reported)
Commission file number: 1-33026
COMMVAULT SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
     
Delaware   22-3447504
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)
2 Crescent Place
Oceanport, New Jersey
07757

(Address of principal executive offices)
(Zip Code)
(732) 870-4000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
     
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 


 

Item 2.02 Results of Operations and Financial Condition
     On October 30, 2007, CommVault Systems, Inc. issued a press release announcing its results for its second quarter ended September 30, 2007. A copy of the press release is attached hereto as Exhibit 99.1.
     This information is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into filings under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
                 
    (d)   Exhibits:  
 
 
          99.1    
Press Release dated October 30, 2007

2


 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  COMMVAULT SYSTEMS, INC.
 
 
Dated: October 30, 2007  /s/ Louis F. Miceli    
  Louis F. Miceli   
  Vice President, Chief Financial Officer   
 

3

EX-99.1
 

Exhibit 99.1
(COMMVAULT LOGO)
Investor Relations:
Michael Picariello
CommVault
732-728-5380
ir@commvault.com
CommVault Announces Second Quarter Fiscal 2008 Financial Results
Second Quarter Fiscal 2008 Highlights Include:
    Revenues of $47.4 million
 
    Non-GAAP EBIT of $7.0 million and Non-GAAP EBIT Margins of 14.8%
 
    GAAP EBIT of $4.7 million and GAAP EBIT Margins of 9.8%
 
    Non-GAAP Diluted Earnings Per Share of $0.12
 
    GAAP Diluted Earnings Per Share of $0.08
OCEANPORT, N.J. – October 30, 2007 – CommVault® [NASDAQ: CVLT] today announced its financial results for the second fiscal quarter ended September 30, 2007.
N. Robert Hammer, CommVault’s chairman, president and CEO stated, “CommVault had a very solid second quarter which was highlighted by record revenues and increased earnings. We continue to make significant progress in expanding our market positions in both our core backup and emerging products. The recent launch of CommVault Simpana 7.0 has improved the competitive differentiation of our current product lines which will enable us to continue to build our business around information management products and services.”
Total revenues in the second quarter of fiscal 2008 were a record $47.4 million, an increase of 29% over the second quarter of fiscal 2007 and 8% over the prior quarter. Software revenue in the second quarter of fiscal 2008 was $26.6 million, up 31% year-over-year and 10% sequentially. Services revenue in the second quarter of fiscal 2008 was $20.9 million, up 27% year-over-year and 5% sequentially.
Non-GAAP income from operations (EBIT) increased 32% to $7.0 million in the second quarter of fiscal 2008 compared to $5.3 million in the second quarter of the prior year. EBIT determined in accordance with U.S. GAAP was $4.7 million for the second quarter, a 21% increase from $3.8 million in the same period of the prior year.

 


 

For the second quarter of fiscal 2008, non-GAAP net income increased 27% to $5.7 million, or $0.12 per diluted share, from $4.5 million or $0.12 per diluted share in the same period of the prior year. CommVault reported GAAP net income for the quarter of $3.4 million, a decrease of $1.0 million compared to the same period of the prior year. GAAP net income for the quarter ended September 30, 2007 includes an effective tax rate of 38% compared to an effective tax rate of 1% in the same period of the prior year.
Operating cash flow totaled $4.5 million for the second quarter of fiscal 2008. Total cash and cash equivalents as of September 30, 2007 were $79.2 million.
A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Use of Non-GAAP Financial Measures.”
Fiscal 2008 Guidance
For the fiscal year ending March 31, 2008, CommVault currently expects:
    Total revenues in the range of $194 million to $196 million.
 
    Non-GAAP gross margins of 86.0% to 86.3%.
 
    Non-GAAP operating income margins of 17.2% to 17.7%.
 
    Non-GAAP diluted EPS in the range of $0.57 per share to $0.59 per share using an effective tax rate of approximately 28% and a weighted average diluted share count of approximately 45.6 million to 46.3 million.
 
    An actual cash tax rate in the mid to high single digits range based on current assumptions.
The Non-GAAP diluted EPS guidance excludes approximately $0.13 per share to $0.15 per share of noncash stock-based compensation charges, net of non-GAAP income tax benefits of approximately $0.05 per share, and any additional FICA expense that will be incurred by CommVault when employees exercise in the money stock options.

 


 

Use of Non-GAAP Financial Measures
CommVault has provided in this press release selected financial information that has not been prepared in accordance with GAAP. CommVault uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, when used as a supplement to GAAP measures, in evaluating CommVault’s ongoing operational performance. CommVault believes that the use of these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing its financial results with other companies in CommVault’s industry, many of which present similar non-GAAP financial measures to the investment community.
The non-GAAP financial results discussed above excludes noncash stock-based compensation charges, additional FICA expense incurred by CommVault when employees exercise in the money stock options and accretion of preferred stock dividends. In addition, the non-GAAP financial results apply an effective tax rate of 28% in fiscal 2008 and 25% starting in the second quarter of fiscal 2007 which resulted in an estimated effective tax rate of approximately 20% for fiscal 2007.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures, which are provided in Table IV included in this press release.
Conference Call Information
CommVault will host a conference call today, October 30, 2007, at 5:00 p.m. EDT to discuss its financial results. To access this call, dial 800-561-2731 (domestic) or 617-614-3528 (international). Additionally, a live web cast of the conference call will be hosted under “Webcasts and Presentations” located under the “Investor Relations” section on CommVault’s Web site www.commvault.com.
An archived web cast of this conference call will also be available on the “Investor Relations” section of CommVault’s Web site, www.commvault.com.

 


 

About CommVault
A singular vision — a belief in a better way to address current and future data management needs - guides CommVault in the development of Singular Information Management® solutions for high-performance data protection, universal availability and simplified management of data on complex storage networks. CommVault’s exclusive single-platform architecture gives companies unprecedented control over data growth, costs and risk. CommVault’s Simpana™ software suite of products was designed to work together seamlessly from the ground up, sharing a single code and common function set, to deliver superlative Data Protection, Archive, Replication, Search and Resource Management capabilities. More companies every day join those who have discovered the unparalleled efficiency, performance, reliability, and control only CommVault can offer. Information about CommVault is available at www.commvault.com. CommVault’s corporate headquarters is located in Oceanport, New Jersey in the United States. (cvlt-f)
Safe Harbor Statement
This press release contains forward-looking statements, including statements regarding financial projections, which are subject to risks and uncertainties, such as competitive factors, difficulties and delays inherent in the development, manufacturing, marketing and sale of software products and related services, general economic conditions and others. Statements regarding CommVault’s beliefs, plans, expectations or intentions regarding the future are forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from anticipated results. CommVault does not undertake to update its forward-looking statements.
©1999 — 2007 CommVault Systems, Inc. All rights reserved. CommVault, CommVault and logo, the “CV” logo, CommVault Systems, Solving Forward, Simpana, SIM, Singular Information Management, CommVault Galaxy, Unified Data Management, QiNetix, Quick Recovery, QR, GridStor, Vault Tracker, Quick Snap, QSnap, Recovery Director, CommServe, and CommCell, are trademarks or registered trademarks of CommVault Systems, Inc. All other third-party brands, products, service names, trademarks, or registered service marks are the property of and used to identify the products or services of their respective owners. All specifications are subject to change without notice.

 


 

Table I
CommVault Systems, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Revenues:
                               
Software
  $ 26,556     $ 20,260     $ 50,636     $ 39,048  
Services
    20,850       16,378       40,759       31,112  
 
                       
Total revenues
    47,406       36,638       91,395       70,160  
 
                               
Cost of revenues:
                               
Software
    542       391       1,003       663  
Services
    5,636       4,844       11,460       9,357  
 
                       
Total cost of revenues
    6,178       5,235       12,463       10,020  
 
                       
Gross margin
    41,228       31,403       78,932       60,140  
 
                               
Operating expenses:
                               
Sales and marketing
    23,088       16,272       44,315       31,579  
Research and development
    6,667       6,100       13,126       11,518  
General and administrative
    6,098       4,611       11,256       9,264  
Depreciation and amortization
    723       582       1,422       1,079  
 
                       
Income from operations
    4,652       3,838       8,813       6,700  
 
                               
Interest expense
          (17 )     (114 )     (17 )
Interest income
    886       676       1,703       1,200  
 
                       
Income before income taxes
    5,538       4,497       10,402       7,883  
 
                               
Income tax expense
    (2,100 )     (66 )     (3,985 )     (111 )
 
                       
 
                               
Net income
    3,438       4,431       6,417       7,772  
 
                               
Less: accretion of preferred stock dividends
          (1,407 )           (2,818 )
Less: accretion of fair value of preferred stock upon conversion
          (102,745 )           (102,745 )
 
                       
Net income (loss) attributable to common stockholders
  $ 3,438     $ (99,721 )   $ 6,417     $ (97,791 )
 
                       
 
                               
Net income (loss) attributable to common stockholders per share:
                               
Basic
  $ 0.08     $ (4.90 )   $ 0.15     $ (4.96 )
 
                       
Diluted
  $ 0.08     $ (4.90 )   $ 0.14     $ (4.96 )
 
                       
 
                               
Weighted average shares used in computing per share amounts:
                               
Basic
    43,103       20,353       42,726       19,696  
 
                       
 
                               
Diluted
    45,677       20,353       45,321       19,696  
 
                       

 


 

Table II
CommVault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
                 
    September 30,     March 31,  
    2007     2007  
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 79,183     $ 65,001  
Trade accounts receivable, net
    30,820       22,044  
Prepaid expenses and other current assets
    4,538       3,657  
Deferred tax assets
    9,618       9,616  
 
           
Total current assets
    124,159       100,318  
 
               
Property and equipment, net
    5,077       4,624  
Deferred tax assets, net
    41,773       42,543  
Other assets
    1,008       554  
 
           
Total assets
  $ 172,017     $ 148,039  
 
           
 
               
Liabilities and stockholders’ equity
               
Current liabilities:
               
Accounts payable
  $ 2,168     $ 1,500  
Accrued liabilities
    21,505       20,215  
Term loan
          7,500  
Deferred revenue
    42,655       36,214  
 
           
Total current liabilities
    66,328       65,429  
 
               
Deferred revenue, less current portion
    5,420       4,284  
Other liabilities
    92       4  
 
               
Total stockholders’ equity
    100,177       78,322  
 
           
 
  $ 172,017     $ 148,039  
 
           

 


 

Table III
CommVault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                 
    Six Months Ended  
    September 30,  
    2007     2006  
Cash flows from operating activities
               
Net income
  $ 6,417     $ 7,772  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    1,500       1,213  
Noncash stock-based compensation
    4,026       2,881  
Excess tax benefits from stock-based compensation
    (2,486 )      
Deferred income taxes
    356        
 
               
Changes in operating assets and liabilities:
               
Accounts receivable
    (8,268 )     295  
Prepaid expenses and other current assets
    (490 )     (224 )
Other assets
    (231 )     (200 )
Accounts payable
    641       (230 )
Accrued liabilities
    2,269       1,317  
Deferred revenue and other liabilities
    6,578       954  
 
           
Net cash provided by operating activities
    10,312       13,778  
 
               
Cash flows from investing activities
               
Purchase of property and equipment
    (1,869 )     (2,247 )
 
           
Net cash used in investing activities
    (1,869 )     (2,247 )
 
               
Cash flows from financing activities
               
Proceeds from the exercise of stock options
    5,928       190  
Net proceeds from follow-on public offering of common stock
    4,315        
Excess tax benefits from stock-based compensation
    2,486        
Repayments on term loan
    (7,500 )     (5,000 )
Proceeds from term loan
          15,000  
Payments to Series A through E preferred stockholders upon conversion to common stock
          (101,833 )
Net proceeds from initial public offering and concurrent private placement
          82,494  
 
           
Net cash provided by (used in) financing activities
    5,229       (9,149 )
 
               
Effects of exchange rate — changes in cash
    510       (257 )
 
           
 
               
Net increase in cash and cash equivalents
    14,182       2,125  
Cash and cash equivalents at beginning of period
    65,001       48,039  
 
           
 
               
Cash and cash equivalents at end of period
  $ 79,183     $ 50,164  
 
           

 


 

Table IV
CommVault Systems, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
                                 
    Three Months Ended     Six Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Non-GAAP financial measures and reconciliation:
                               
GAAP income from operations
  $ 4,652     $ 3,838     $ 8,813     $ 6,700  
Noncash stock-based compensation (1)
    2,213       1,484       4,026       2,881  
FICA expense on stock option exercises (2)
    145             392        
 
                       
Non-GAAP income from operations
  $ 7,010     $ 5,322     $ 13,231     $ 9,581  
 
                       
 
                               
GAAP net income (loss) attributable to common stockholders
  $ 3,438     $ (99,721 )   $ 6,417     $ (97,791 )
Noncash stock-based compensation (1)
    2,213       1,484       4,026       2,881  
FICA expense on stock option exercises (2)
    145             392        
Accretion of preferred stock dividends (3)
          1,407             2,818  
Accretion of fair value of preferred stock upon conversion (4)
          102,745             102,745  
Non-GAAP provision for income taxes adjustment (5)
    (111 )     (1,429 )     (165 )     (1,429 )
 
                       
Non-GAAP net income attributable to common stockholders
  $ 5,685     $ 4,486     $ 10,670     $ 9,224  
 
                       
 
                               
GAAP diluted weighted average shares outstanding
    45,677       20,353       45,321       19,696  
Conversion of Series A through E preferred stock
          6,057             6,195  
Conversion of Series AA, BB and CC preferred stock
          9,266             9,476  
Dilutive effect of stock options and warrants
          3,267             3,326  
 
                       
Non-GAAP diluted weighted average shares outstanding
    45,677       38,943       45,321       38,693  
 
                       
 
                               
Non-GAAP diluted net income per share
  $ 0.12     $ 0.12     $ 0.24     $ 0.24  
 
                       

 


 

Footnotes — Adjustments
 
(1)   Represents noncash stock-based compensation charges associated with stock options granted as follows:
                                 
    Three Months Ended     Six Months Ended  
    September 30,     September 30,  
    2007     2006     2007     2006  
Cost of services revenue
  $ 42     $ 25     $ 75     $ 51  
Sales and marketing
    1,059       660       1,917       1,277  
Research and development
    323       195       580       382  
General and administrative
    789       604       1,454       1,171  
 
                       
Total noncash stock-based compensation expense
  $ 2,213     $ 1,484     $ 4,026     $ 2,881  
 
                       
 
(2)   Represents additional FICA expenses incurred by CommVault when employees exercise in the money stock options.
 
(3)   Represents accretion of preferred stock dividends due on CommVault’s Series A through E cumulative redeemable convertible preferred stock prior to its conversion to common stock on September 27, 2006.
 
(4)   Represents accretion of fair value of Series A through E cumulative redeemable convertible preferred stock upon conversion to common stock on September 27, 2006.
 
(5)   The provision for income taxes is adjusted to reflect CommVault’s estimated non-GAAP effective tax rate of approximately 28% in fiscal 2008 and 25% starting in the second quarter of fiscal 2007 which resulted in an estimated effective tax rate of approximately 20% for fiscal 2007.