Kintera Reports First Quarter 2008 Financial Results

  
    
  
  
    
      Kintera,® Inc. (NASDAQ:KNTA), a leading 
      provider of software as a service (SaaS) to the nonprofit and government 
      sectors, today reported financial results for its first quarter ended 
      March 31, 2008.
    
    
      Revenue for the first quarter 2008 was $8.9 million, compared to $10.7 
      million for the same period last year.
    
    
      On a GAAP basis, net loss for the quarter was $4.3 million, or $0.11 per 
      diluted share, which is an improvement of 48 percent or $0.10 per 
      diluted share, compared with a net loss of $8.3 million, or $0.21 per 
      diluted share, for the same period last year.
    
    
      Earnings before interest, taxes, depreciation, amortization, stock-based 
      compensation expense and restructuring charges (adjusted EBITDA) was a 
      loss of $2.5 million, or $0.06 per share, in the first quarter of 2008, 
      compared to a loss of $3.8 million, or $0.09 per share, in the first 
      quarter of 2007. This is an improvement of approximately 33 percent or 
      $0.03 per share year-over-year.
    
    
      “We believe our unified software as a service 
      platform, which includes events, marketing, and donor management, will 
      help fuel our growth, expand our existing relationships, and attract new 
      organizations to Kintera,” said Richard N. 
      LaBarbera, Kintera CEO. “We are excited about 
      its potential and the value it brings to help nonprofit organizations 
      better achieve their mission.”
    
    
      Operating expenses for the first quarter 2008 totaled $9.2 million. This 
      is a decrease of 37 percent year over year, from $15 million in the 
      first quarter 2007.
    
    
      Cash, cash equivalents and marketable securities at March 31, 2008 were 
      $5.7 million. Deferred revenues were $15.7 million at March 31, 2008 
      compared with $15.5 million at Dec. 31, 2007.
    
    
      The company also announced a restructuring plan which includes a 14 
      percent reduction in resources targeting an excess of one million per 
      quarter of savings by the third quarter. Our expected charge is $450,000.
    
    
      Earnings Call
    
    
      Kintera will host a conference call on Wednesday, May 7, 2008 at 1:45 
      p.m. PDT to discuss the company's financial results. The conference call 
      can be accessed by dialing toll-free 866.356.4123 (617.597.5393 for 
      international calls), using conference code 72167212. A replay of the 
      call will be available via the Internet at www.kintera.com/webcasts.
    
    
      KNTA-F
    
    
      About Kintera, Inc.
    
    
      Kintera®, Inc. (NASDAQ:KNTA) provides an 
      integrated, on-demand open platform to help organizations quickly and 
      easily reach more people, raise more money, and run more efficiently. 
      The Kintera platform consists of a variety of products including Events, 
      Advocacy, E-mail, Web Site Content Management, Donor Management, 
      Constituent Relationship Management and Accounting. In addition, Kintera’s 
      open technology, Kintera Connect™, enables 
      clients and partners to integrate directly with Kintera technology, 
      resulting in the availability of best of breed solutions through the 
      Kintera Connect partner program.
    
    
      For more information about Kintera software and services, visit www.kintera.com.
    
    
      Kintera, Kintera Sphere, Kintera Connect, Social CRM and The Giving 
      Experience, are either registered trademarks or trademarks of Kintera, 
      Inc. in the U.S. and/or other countries. Other company and product names 
      may be trademarks of their respective owners.
    
    
      Forward-Looking Statements
    
    
      This press release contains, in addition to historical information, 
      forward-looking statements. Such statements are based on 
      management’s current estimates and 
      expectations and are subject to a number of uncertainties and risks that 
      could cause actual results to differ materially from those described in 
      the forward-looking statements. Kintera is providing this 
      information as of May 7, 2008, and expressly disclaims any duty to 
      update information contained in this press release. Forward-looking 
      statements in this press release include, without limitation, express 
      and implied statements regarding Kintera's anticipated operating 
      results, including anticipated expense reductions, and the growth in the 
      market for Kintera's services.
    
    
      These forward-looking statements involve risks and uncertainties, 
      which could cause actual results to differ materially from those 
      expressed or implied here. Readers are referred to the documents 
      filed by Kintera with the Securities and Exchange Commission, 
      specifically the most recent reports which identify important risk 
      factors that could cause actual results to differ from those contained 
      in the forward-looking statements, including but not limited to: our 
      limited operating history; our history of losses; our dependence on 
      increased acceptance by nonprofit organizations of online fundraising; 
      lengthy sales cycles for major customers; our need to manage growth; 
      risks associated with accounting for and processing large amounts of 
      donations; the rapidly changing technologies and market demands; and 
      other risks identified in our filings with the Securities and Exchange 
      Commission. Given these uncertainties, you should not place undue 
      reliance on these forward-looking statements. The information contained 
      in this press release is a statement of Kintera's present intention, 
      belief or expectation and is based upon, among other things, the 
      existing industry conditions, market conditions and prices, the economy 
      in general and Kintera's assumptions.
    
    
      Kintera may change its intention, belief or expectation, at any time 
      and without notice, based upon any changes in such factors, in Kintera's 
      assumptions or otherwise. Kintera undertakes no obligation to 
      review or confirm analysts' expectations or estimates or to release 
      publicly any revisions to any forward-looking statements to reflect 
      events or circumstances after the date hereof or to reflect the 
      occurrence of unanticipated events.
    
    
      Note Regarding Use of Non-GAAP Financial Measures
    
    
      Certain of the information set forth herein, including adjusted 
      EBITDA, adjusted EBITDA per share, and operating expenses and net losses 
      excluding restructuring charges, are considered non-GAAP financial 
      measures. Kintera believes this information is useful to 
      investors because it provides a basis for measuring the Company’s 
      available capital resources, the operating performance of the Company’s 
      business and the Company’s cash flow, 
      excluding non-cash and non-recurring items that would normally be 
      included in the most directly comparable measures calculated and 
      presented in accordance with generally accepted accounting principles. 
      The Company’s management uses these 
      non-GAAP financial measures along with the most directly comparable GAAP 
      financial measures in evaluating the Company’s 
      operating performance and capital resources and cash flow. Non-GAAP 
      financial measures should not be considered in isolation from, or as a 
      substitute for, financial information presented in compliance with GAAP, 
      and non-financial measures as reported by the Company may not be 
      comparable to similarly titled amounts reported by other companies.
    
    
      
        
          
            Kintera, Inc.
          
          
            Consolidated Statements of Operations Data
          
          
            (in thousands, except per share data)
          
          
            (unaudited)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          For the three months ended
        
      
      
        
        
        
          March 31,
        
      
      
        
        
        
        
        
          2008
        
        
           
        
        
          2007
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net revenue
        
        
        
        
          $
        
        
          8,911
        
        
        
        
        
        
          $
        
        
          10,721
        
        
        
      
      
        
          Cost of revenue
        
        
        
        
           
        
        
          3,993
        
        
           
        
        
           
        
        
           
        
        
          4,136
        
        
           
        
      
      
        
          Gross profit
        
        
        
        
        
        
          4,918
        
        
        
        
        
        
        
        
          6,585
        
        
        
      
      
        
          
            Gross margin
          
        
        
        
        
        
        
          55
        
        
          %
        
        
        
        
        
        
          61
        
        
          %
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Sales and marketing
        
        
        
        
        
        
          4,018
        
        
        
        
        
        
        
        
          5,620
        
        
        
      
      
        
          Product development and support
        
        
        
        
        
        
          1,621
        
        
        
        
        
        
        
        
          1,732
        
        
        
      
      
        
          General and administrative
        
        
        
        
        
        
          3,006
        
        
        
        
        
        
        
        
          4,486
        
        
        
      
      
        
          Amortization of purchased intangibles
        
        
        
        
        
        
          522
        
        
        
        
        
        
        
        
          733
        
        
        
      
      
        
          Restructuring charges
        
        
        
        
           
        
        
          -
        
        
           
        
        
           
        
        
           
        
        
          2,445
        
        
           
        
      
      
        
          Total operating expenses
        
        
        
        
           
        
        
          9,167
        
        
           
        
        
           
        
        
           
        
        
          15,016
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Operating loss
        
        
        
        
        
        
          (4,249
        
        
          )
        
        
        
        
        
        
          (8,431
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Interest income (expense) and other, net
        
        
        
        
           
        
        
          6
        
        
           
        
        
           
        
        
           
        
        
          286
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Loss before income taxes
        
        
        
        
        
        
          (4,243
        
        
          )
        
        
        
        
        
        
          (8,145
        
        
          )
        
      
      
        
          Provision for income taxes
        
        
        
        
           
        
        
          52
        
        
           
        
        
           
        
        
           
        
        
          118
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net loss
        
        
        
        
          $
        
        
          (4,295
        
        
          )
        
        
           
        
        
          $
        
        
          (8,263
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic and diluted net loss per share
        
        
        
        
          $
        
        
          (0.11
        
        
          )
        
        
           
        
        
          $
        
        
          (0.21
        
        
          )
        
      
      
        
          Weighted average shares - basic and diluted
        
        
        
        
           
        
        
          40,248
        
        
           
        
        
           
        
        
           
        
        
          39,839
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          
            Kintera, Inc.
          
          
            Reconciliation of GAAP Net Loss to EBITDA
          
          
            (in thousands, except per share data)
          
          
            (unaudited)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          For the three months ended
        
      
      
        
        
        
        
        
          March 31,
        
      
      
        
        
        
        
        
          2008
        
        
           
        
        
          2007
        
      
      
        
          Net loss
        
        
        
        
          $
        
        
          (4,295
        
        
          )
        
        
        
        
          $
        
        
          (8,263
        
        
          )
        
      
      
        
          Interest income
        
        
        
        
        
        
          (6
        
        
          )
        
        
        
        
        
        
          (286
        
        
          )
        
      
      
        
          Depreciation and amortization
        
        
        
        
        
        
          1,265
        
        
        
        
        
        
        
        
          1,370
        
        
        
      
      
        
          Income taxes
        
        
        
        
        
        
          52
        
        
        
        
        
        
        
        
          118
        
        
        
      
      
        
          Stock-based compensation
        
        
        
        
        
        
          505
        
        
        
        
        
        
        
        
          838
        
        
        
      
      
        
          Restructuring charges
        
        
        
        
        
        
          -
        
        
        
        
        
        
        
        
          2,445
        
        
        
      
      
        
        
        
        
        
           
        
        
           
        
        
           
        
      
      
        
          Adjusted EBITDA
        
        
        
        
          $
        
        
          (2,479
        
        
          )
        
        
           
        
        
          $
        
        
          (3,778
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Basic and Diluted Adjusted EBITDA per share
        
        
        
        
          $
        
        
          (0.06
        
        
          )
        
        
           
        
        
          $
        
        
          (0.09
        
        
          )
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average shares - basic and diluted
        
        
        
        
           
        
        
          40,248
        
        
           
        
        
           
        
        
           
        
        
          39,839
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          
            Kintera, Inc.
          
        
      
      
        
          Condensed Consolidated Statements of Cash Flows
        
      
      
        
          (in thousands)
        
      
      
        
          (unaudited)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          For the three months ended
        
      
      
        
        
        
        
        
          March 31,
        
      
      
        
        
        
        
        
          2008
        
        
           
        
        
          2007
        
      
      
        
          Cash provided by (used in) operating activities
        
        
        
        
          $
        
        
          (2,769
        
        
          )
        
        
        
        
          $
        
        
          (3,721
        
        
          )
        
      
      
        
          Cash provided by (used in) investing activities
        
        
        
        
        
        
          558
        
        
        
        
        
        
        
        
          (2,171
        
        
          )
        
      
      
        
          Cash provided by (used in) financing activities
        
        
        
        
           
        
        
          (265
        
        
          )
        
        
           
        
        
           
        
        
          (100
        
        
          )
        
      
      
        
          Net increase (decrease) in cash
        
        
        
        
        
        
          (2,476
        
        
          )
        
        
        
        
        
        
          (5,992
        
        
          )
        
      
      
        
          Cash and cash equivalents, beginning of period
        
        
        
        
           
        
        
          6,556
        
        
           
        
        
           
        
        
           
        
        
          11,548
        
        
           
        
      
      
        
          Cash and cash equivalents, end of period
        
        
        
        
          $
        
        
          4,080
        
        
           
        
        
           
        
        
          $
        
        
          5,556
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
    
    
      
        
          Kintera, Inc.
        
      
      
        
          Condensed Consolidated Balance Sheet Data
        
      
      
        
          (in thousands)
        
      
      
        
          (unaudited)
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          March 31,
        
        
        
        
          December 31,
        
        
        
        
          September 30,
        
        
        
        
          June 30,
        
        
        
        
          March 31,
        
      
      
        
        
        
        
        
          2008
        
        
           
        
        
          2007
        
        
           
        
        
          2007
        
        
           
        
        
          2007
        
        
           
        
        
          2007
        
      
      
        
          Cash, cash equivalents and marketable securities
        
        
        
        
          $
        
        
          5,660
        
        
        
        
          $
        
        
          9,404
        
        
        
        
          $
        
        
          11,751
        
        
        
        
          $
        
        
          12,036
        
        
        
        
          $
        
        
          14,772
        
      
      
        
          Restricted cash
        
        
        
        
        
        
          7,718
        
        
        
        
        
        
          12,429
        
        
        
        
        
        
          11,776
        
        
        
        
        
        
          4,813
        
        
        
        
        
        
          6,271
        
      
      
        
          Accounts receivable, net
        
        
        
        
        
        
          4,608
        
        
        
        
        
        
          4,174
        
        
        
        
        
        
          5,025
        
        
        
        
        
        
          5,889
        
        
        
        
        
        
          5,916
        
      
      
        
          Other current assets
        
        
        
        
           
        
        
          2,284
        
        
           
        
        
           
        
        
          2,147
        
        
           
        
        
           
        
        
          1,960
        
        
           
        
        
           
        
        
          1,668
        
        
           
        
        
           
        
        
          1,526
        
      
      
        
          Total current assets
        
        
        
        
        
        
          20,270
        
        
        
        
        
        
          28,154
        
        
        
        
        
        
          30,512
        
        
        
        
        
        
          24,406
        
        
        
        
        
        
          28,485
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Property and equipment, net
        
        
        
        
        
        
          5,854
        
        
        
        
        
        
          5,859
        
        
        
        
        
        
          3,396
        
        
        
        
        
        
          3,215
        
        
        
        
        
        
          3,228
        
      
      
        
          Goodwill, intangibles and other
        
        
        
        
           
        
        
          15,456
        
        
           
        
        
           
        
        
          15,985
        
        
           
        
        
           
        
        
          16,564
        
        
           
        
        
           
        
        
          17,143
        
        
           
        
        
           
        
        
          17,723
        
      
      
        
          Total assets
        
        
        
        
          $
        
        
          41,580
        
        
           
        
        
          $
        
        
          49,998
        
        
           
        
        
          $
        
        
          50,472
        
        
           
        
        
          $
        
        
          44,764
        
        
           
        
        
          $
        
        
          49,436
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Donations payable
        
        
        
        
          $
        
        
          7,718
        
        
        
        
          $
        
        
          12,429
        
        
        
        
          $
        
        
          11,776
        
        
        
        
          $
        
        
          4,813
        
        
        
        
          $
        
        
          6,271
        
      
      
        
          Deferred revenue
        
        
        
        
        
        
          15,721
        
        
        
        
        
        
          15,513
        
        
        
        
        
        
          15,637
        
        
        
        
        
        
          16,892
        
        
        
        
        
        
          18,001
        
      
      
        
          Accounts payable and other current liabilities
        
        
        
        
           
        
        
          5,052
        
        
           
        
        
           
        
        
          5,235
        
        
           
        
        
           
        
        
          6,043
        
        
           
        
        
           
        
        
          5,592
        
        
           
        
        
           
        
        
          6,332
        
      
      
        
          Total current liabilities
        
        
        
        
        
        
          28,491
        
        
        
        
        
        
          33,177
        
        
        
        
        
        
          33,456
        
        
        
        
        
        
          27,297
        
        
        
        
        
        
          30,604
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Other liabilities
        
        
        
        
        
        
          3,283
        
        
        
        
        
        
          3,230
        
        
        
        
        
        
          1,101
        
        
        
        
        
        
          810
        
        
        
        
        
        
          654
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Stockholders' equity
        
        
        
        
           
        
        
          9,806
        
        
           
        
        
           
        
        
          13,591
        
        
           
        
        
           
        
        
          15,915
        
        
           
        
        
           
        
        
          16,657
        
        
           
        
        
           
        
        
          18,178
        
      
      
        
          Total liabilities and stockholders' equity
        
        
        
        
          $
        
        
          41,580
        
        
           
        
        
          $
        
        
          49,998
        
        
           
        
        
          $
        
        
          50,472
        
        
           
        
        
          $
        
        
          44,764
        
        
           
        
        
          $
        
        
          49,436