Websidestory (NASDAQ:WSSI)
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SAN DIEGO, Nov. 6 /PRNewswire-FirstCall/ -- WebSideStory, Inc. (NASDAQ:WSSI), a leading provider of digital marketing and analytics solutions, today announced the results of operations for the third quarter ended September 30, 2006. Financial and operating highlights for the quarter include:
* Non-GAAP earnings per share of $0.16, compared to previously issued
guidance of $0.13 to $0.14 per share. Non-GAAP earnings per share
excludes stock-based compensation expenses, amortization of intangibles
and other non-cash items described below. GAAP loss per share of $0.09
with a reconciliation provided in the table below.
* Non-GAAP revenue of $18.9 million, which compares favorably to
previously issued guidance of $17.9 million to $18.5 million. Non-GAAP
revenue includes $1.5 million in deferred revenue related to the
company's merger with Visual Sciences.
* GAAP revenue of $17.4 million.
* Strong year-over-year organic revenue growth from all product lines,
yielding 34% growth company-wide, highlighted by 65% growth in the
Visual Sciences Division.
* The company's 12th consecutive quarter of positive cash generation,
adding $2.4 million in cash to the balance sheet, raising cash and
short-term investments at quarter end to $19.4 million.
* 85 new bookings for various modules of the WebSideStory and Visual
Sciences suites, expanding the enterprise customer base to 1,450
worldwide.
* KMWorld Magazine named WebSideStory Search 4.0 one of its Trend-Setting
Products of the Year. WebSideStory Search 4.0 introduced a number of
industry first capabilities into the market, including Active Ranking --
a patent-pending capability that enables marketers to automatically
drive site search results based on the full spectrum of web site
behavioral data.
* WebSideStory was named one of the 50 fastest growing software companies
in the U.S by Baseline Magazine.
* The announcement of new, industry leading Web 2.0 solutions, including
Active Browsing, a patent-pending capability that enables any site to
use Ajax to optimize site search results.
"WebSideStory is performing very well across the board. HBX Analytics, Search and Publish continue to grow at healthy rates, and Visual Sciences exceeded our internal projections," said Jim MacIntyre, who will take over as WebSideStory's CEO on November 20, 2006. "WebSideStory continues to differentiate from point solution providers, offering an integrated suite of online marketing optimization solutions. Our recent ActiveInsights user forum was a defining event for the industry, where customers using two or more of our solutions, such as WebSideStory Search and HBX Analytics, stood on stage and validated the power of our integrated offerings with powerful return-on- investment success stories. I am proud and excited to be taking over for Jeff Lunsford as WebSideStory's new CEO. I look forward to working with our new chairman, Bill Harris, and the whole WebSideStory team as we continue our record of growth and innovation."
"The strength in earnings was a direct result of the strength in revenue, combined with our operating team doing a good job keeping costs in line across the board," said Claire Long, Chief Financial Officer for WebSideStory. "We enjoyed robust margin expansion, up to a 17 percent net margin from 12 percent last quarter, and continued driving the company toward our goals for 2007. We ended the quarter with approximately $19.4 million in cash and investments, which does not include an additional $400,000 committed to a letter of credit for Visual Sciences new offices. We currently expect to have between $23 and $25 million of cash-on-hand by the end of March 2007."
"I am proud to have helped build such a differentiated market leader as WebSideStory -- one that continues to innovate and produce stellar results like the Q3 results we announced today," said Jeff Lunsford, WebSideStory's outgoing CEO. "We have built a world-class management team that will continue to grow this business and design innovative solutions for our global customer base."
The company's guidance for the fourth quarter 2006 and full year 2006 and 2007 is as follows:
Q4 2006 Full Year 2006
Revenue Guidance (millions) Low High Low High
Estimated non-GAAP
revenue range $19.2 $19.7 $69.6 $70.1
Deferred revenue related
to Visual Sciences merger (1.0) (1.0) (5.1) (5.1)
Estimated GAAP revenue
range $18.2 $18.7 $64.5 $65.0
Earnings per share guidance
Estimated non-GAAP EPS
range $0.15 $0.16 $0.53 $0.54
Estimated amortization
of intangibles (0.08) (0.08) (0.29) (0.29)
Estimated stock-based
compensation (0.17) (0.15) (0.58) (0.56)
Deferred revenue
related to Visual
Sciences merger (0.05) (0.05) (0.26) (0.26)
Estimated non-cash tax
benefit (expense) 0.05 0.04 0.24 0.23
Estimated non-cash
interest expense (0.01) (0.01) (0.05) (0.05)
Effect of using non-
GAAP dilutive shares (0.01) (0.01) (0.02) (0.02)
Estimated GAAP EPS
range $(0.12) $(0.10) $(0.43) $(0.41)
Estimated shares used
in per share
calculations 20,500,000 20,500,000 20,000,000 20,000,000
Full Year 2007
Revenue Guidance (millions) Low High
Estimated non-GAAP revenue range $89.5 $91.5
Deferred revenue related to
Visual Sciences merger (0.2) (0.2)
Estimated GAAP revenue range $89.3 $91.3
Earnings per share guidance
Estimated non-GAAP EPS range $0.69 $0.74
Estimated amortization of
intangibles (0.24) (0.24)
Estimated stock-based
compensation (0.48) (0.38)
Deferred revenue related to
Visual Sciences merger (0.01) (0.01)
Estimated non-cash tax benefit
(expense) 0.02 (0.04)
Estimated non-cash interest
expense (0.01) (0.01)
Effect of using non-GAAP dilutive
shares (0.01) --
Estimated GAAP EPS range $(0.04) $0.06
Estimated shares used in per
share calculations 22,125,000 22,125,000
Note on the Use of Non-GAAP Financial Measures
Some of the financial measures in this press release, including some of our financial guidance, are non-GAAP financial measures within the meaning of SEC Regulation G. WebSideStory believes that this presentation is useful to investors because it more accurately describes the operating performance of the company on a period-to-period basis, excluding specific costs and expenses that we believe are not indicative of our core operating results. Company management uses these non-GAAP measures as important indicators of the company's past performance and to plan and forecast performance in future periods. In addition, bonus payments to our officers and employees under our corporate bonus plan are based on the achievement of specified non-GAAP revenue and non-GAAP EPS targets. Investors should not consider non-GAAP financial measures in isolation from, or in substitution for, financial information presented in compliance with GAAP.
Quarterly Conference Call and Webcast Information
As previously announced, management will host a quarterly conference call and simultaneous webcast to discuss WebSideStory's third quarter results at 1:30 p.m. PST on Nov. 6. To participate in the call, investors should dial 866.700.7441 (domestic) or 617.213.8839 (international) 10 minutes prior to the scheduled call. The passcode is 26500360. Additionally, a live audio- only webcast of the call may be accessed via the Internet at http://www.websidestory.com/ir.
Forward-Looking Statements
Statements in this press release that are not a description of historical facts are forward-looking statements. You should not regard any forward- looking statement as a representation by WebSideStory that any of its plans will be achieved. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in WebSideStory's business, including, without limitation: WebSideStory's reliance on its web analytics services for the majority of its revenue; blocking or erasing of cookies or limitations on our ability to use cookies; WebSideStory's limited experience with digital marketing applications beyond web analytics; the risks associated with integrating the operations and products of Avivo Corporation and Visual Sciences, LLC with those of WebSideStory; privacy concerns and laws or other domestic or foreign regulations that may subject WebSideStory to litigation or limit our ability to collect and use Internet user information; WebSideStory's ability to defend itself against claims of patent infringement alleged by NetRatings, Inc.; WebSideStory's ongoing ability to protect its own intellectual property rights and to avoid violating the intellectual property rights of third parties; the highly competitive markets in which we operate that could make it difficult for WebSideStory to acquire and retain customers; the risk that WebSideStory's customers fail to renew their agreements; the risks associated with the company's indebtedness; the risk that WebSideStory's services may become obsolete in a market with rapidly changing technology and industry standards; and other risks described in WebSideStory's Securities and Exchange Commission filings, including WebSideStory's annual report on Form 10-K for the year ended December 31, 2005 and quarterly reports on Form 10-Q. Do not place undue reliance on these forward-looking statements which speak only as of the date of this news release. All forward-looking statements are qualified in their entirety by this cautionary statement, and WebSideStory undertakes no obligation to revise or update this news release to reflect events or circumstances after the date of this news release.
About WebSideStory, Inc.
Founded in 1996, WebSideStory, Inc. (NASDAQ:WSSI) is a leading provider of digital marketing and analytics solutions that improve online marketing, sales and business operations. Its WebSideStory division consists of web analytics, site search, web content management, and keyword bid management. WebSideStory also provides customer analytics solutions through its wholly owned subsidiary, Visual Sciences, LLC, a leading provider of streaming data analysis and visualization software. WebSideStory is headquartered in San Diego, California, and has European headquarters in Amsterdam, The Netherlands. For more information, contact WebSideStory. Voice: 858.546.0040. Fax: 858.546.0480. Address: 10182 Telesis Court, 6th Floor, San Diego, CA 92121. Web site: http://www.websidestory.com/. WebSideStory is a registered trademark of WebSideStory. Visual Sciences is a registered trademark of Visual Sciences, LLC. Other trademarks belong to their respective owners.
WEBSIDESTORY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (in thousands, except share data)
September 30, December 31,
2006 2005
Assets
Current assets
Cash and cash equivalents $10,050 $19,968
Investments 9,320 11,712
Accounts receivable, net 14,468 7,842
Deferred tax assets 2,726 507
Prepaid expenses and other current assets 3,858 2,304
Total current assets 40,422 42,333
Property and equipment, net 6,260 2,532
Investments -- 3,276
Goodwill 49,759 21,286
Intangible assets, net 21,277 6,901
Deferred tax assets 11,737 9,166
Other assets 1,508 2,249
$130,963 $87,743
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $1,808 $877
Accrued liabilities 7,584 3,880
Deferred revenue 17,649 12,801
Capital lease short-term 50 83
Current maturities of notes payable 19,432 --
Total current liabilities 46,523 17,641
Capital lease long-term 56 90
Other liabilities 604 196
Total liabilities 47,183 17,927
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.001 par value;
10,000,000 shares authorized and no
shares issued and outstanding at
September 30, 2006 and December 31, 2005 -- --
Common stock, $0.001 par value; 75,000,000
shares authorized, 18,879,509 and
18,401,180 shares issued and outstanding
at September 30, 2006 and December 31,
2005, respectively 19 18
Additional paid-in capital 133,937 114,934
Unearned stock-based compensation (46) (630)
Accumulated other comprehensive income 326 103
Accumulated deficit (50,456) (44,609)
Total stockholders' equity 83,780 69,816
$130,963 $87,743
WEBSIDESTORY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) (in thousands, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues
Subscription, hosting
and support $13,877 $10,341 $38,700 $26,043
License 1,332 -- 2,027 --
Professional services 1,681 368 3,575 607
Advertising 557 628 1,834 1,056
Total revenues 17,447 11,337 46,136 27,706
Cost of revenues*
Cost of revenue 4,287 1,979 11,445 4,619
Amortization of intangible
assets 715 67 1,931 126
Total cost of revenues 5,002 2,046 13,376 4,745
Gross profit 12,445 9,291 32,760 22,961
Operating expenses*
Sales and marketing 6,852 3,934 19,738 10,485
Technology development 3,384 1,342 9,403 3,351
General and administrative 4,014 1,886 9,997 4,669
Amortization of intangible
assets 830 515 2,372 717
Total operating
expenses 15,080 7,677 41,510 19,222
(Loss) income from
operations (2,635) 1,614 (8,750) 3,739
Interest expense (505) (8) (1,274) (26)
Interest income 161 241 454 633
Other expense 2 -- 2 (51)
(Loss) income before
provision for income
taxes (2,977) 1,847 (9,568) 4,295
(Benefit from) provision
for income taxes (1,304) 88 (3,708) 205
(Loss) income before
cumulative effect of
change in accounting
principle (1,673) 1,759 (5,860) 4,090
Cumulative effect of
change in accounting
principle (net of tax) -- -- 13 --
Net (loss) income $(1,673) $1,759 $(5,847) $4,090
Basic net (loss) income
per share:
(Loss) income before
cumulative effect of
change in accounting
principle $(0.09) $0.10 $(0.32) $0.24
Cumulative effect of
change in accounting
principle -- -- -- --
Basic net (loss) income
per share $(0.09) $0.10 $(0.32) $0.24
Diluted net (loss) income
per share:
(Loss) income before
cumulative effect of
change in accounting
principle $(0.09) $0.09 $(0.32) $0.22
Cumulative effect of
change in accounting
principle -- -- -- --
Diluted net (loss) income
per share $(0.09) $0.09 $(0.32) $0.22
Shares used in per share
calculations:
Basic 18,737,879 18,093,867 18,540,356 16,890,651
Diluted 18,737,879 19,756,635 18,540,356 18,398,107
(*) Stock-based compensation:
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Cost of revenues $601 $24 $1,576 $45
Sales and marketing 1,000 53 2,760 141
Technology development 676 48 1,919 221
General and administrative 666 94 1,818 331
WebSideStory, Inc. (unaudited)
(in thousands, except share and per share data)
Reconciliation of GAAP net
(loss) income Three months ended Nine months ended
attributable to common September September September September
stockholders 30, 30, 30, 30,
to Non-GAAP net income 2006 2005 2006 2005
Net (loss) income $(1,673) $1,759 $(5,847) $4,090
Amortization of
intangibles 1,545 582 4,303 843
Stock-based compensation 2,943 219 8,073 738
Deferred revenue related
to Visual Sciences
merger * 1,456 -- 4,144 --
Non-cash tax (benefit) (1,336) -- (3,883) --
Non-cash interest expense 265 -- 692 --
Cumulative effect of
change in accounting
principle -- -- (13) --
Non-GAAP net income $3,200 $2,560 $7,469 $5,671
Reconciliation of GAAP
(loss) income per share to
Non-GAAP income per share
GAAP (loss) income per
share attributable to
common stockholders
Basic $(0.09) $0.10 $(0.32) $0.24
Diluted $(0.09) $0.09 $(0.32) $0.22
Amortization of
intangibles 0.08 0.03 0.22 0.05
Stock-based compensation 0.15 0.01 0.41 0.04
Deferred revenue related
to Visual Sciences
merger * 0.07 -- 0.21 --
Non-cash tax (benefit) (0.07) -- (0.20) --
Non-cash interest expense 0.01 -- 0.03 --
Effect of using non-GAAP
dilutive shares 0.01 -- 0.03 --
Cumulative effect of change
in accounting principle -- -- -- --
Non-GAAP net income per
share attributable to
common stockholders:
Diluted $0.16 $0.13 $0.38 $0.31
GAAP weighted-average
number of shares used
in per share amounts:
Basic 18,737,879 18,093,867 18,540,356 16,890,651
Diluted 18,737,879 19,756,635 18,540,356 18,398,107
Non-GAAP weighted-
average number of
shares used in per
share amounts:
Basic 18,737,879 18,093,867 18,540,356 16,890,651
Diluted 19,936,045 19,756,635 19,827,840 18,398,107
WebSideStory, Inc. (unaudited) (in thousands)
Three months ended Nine months ended
Reconciliation of September September September September
GAAP revenue 30, 30, 30, 30,
to Non-GAAP revenue 2006 2005 2006 2005
GAAP revenue $17,447 $11,337 $46,136 $27,706
Deferred revenue related
to Visual Sciences
merger * 1,456 -- 4,144 --
Non-GAAP revenue $18,903 $11,337 $50,280 $27,706
* In accordance with Statement of Financial Accounting Standards
No. 141, "Business Combinations", the deferred revenue obligation on
the ending balance sheet of Visual Sciences was reduced to fair value
when recorded on the beginning balance sheet within WebSideStory.
This fair value adjustment resulted in a write-down of $5.4 million of
deferred revenue which would otherwise have been recognized as revenue
by Visual Sciences on a stand-alone basis in periods subsequent to the
merger date.
DATASOURCE: WebSideStory, Inc.
CONTACT: Erik Bratt, ext. 365, , or Claire
Long, CFO, ext. 387, both of WebSideStory, Inc., +1-858-546-0040
Web site: http://www.websidestory.com/