WebSideStory Reports Strong First Quarter 2007 Results

Non-GAAP Revenue and EPS Exceed Consensus Expectations



SAN DIEGO, May 9  /PRNewswire-FirstCall/ -- Visual Sciences, Inc. (formerly known as WebSideStory, Inc.) (NASDAQ:WSSI), today announced non-GAAP earnings of $0.16 per share and record non-GAAP revenue of $20.7 million for the first quarter ended March 31, 2007.  Financial and operating highlights include:

  *  Revenue:  Total non-GAAP revenue for the first quarter was
     $20.7 million, an increase of 42% year-over-year on an as-reported
     basis and 35% on an organic basis.  On a GAAP basis, total revenue was
     $20.6 million.  A reconciliation of GAAP to non-GAAP revenue is
     provided below.

  *  Non-GAAP Earnings per Share:  Non-GAAP net income increased 46% to
     $3.3 million for the first quarter, compared to $2.3 million for the
     same period last year.  Non-GAAP earnings per fully diluted share was
     $0.16 for the first quarter of 2007 compared to $0.12 for the same
     period in 2006.

  *  GAAP Earnings per Share:  On a GAAP basis, the company incurred a loss
     of $0.4 million for the first quarter, compared to a loss of
     $1.7 million for the same period last year.  Net loss per fully diluted
     share was $(0.02) for the first quarter compared to $(0.09) for the
     same period in 2006.

  *  New Customers:  The company added 77 new customers in the first quarter
     including CitiSearch, CBC (Canadian Broadcasting Company), Men's
     Wearhouse, AMD (Advanced Micro Devices) and Amnesty International, and
     signed 275 new sales bookings with new and existing customers.
     Notably, the company significantly expanded its relationship with a
     large telecom carrier and a large electronics retailer for
     multi-channel customer analytics.

  *  Name Change:  The company changed its name to Visual Sciences, Inc. and
     its common stock will trade under the Nasdaq Global Market symbol
     "VSCN" as of the opening of trading on Thursday, May 10, 2007. (Refer
     to separate press release issued today.)

  *  Major Product Releases:  Two major product milestones were achieved
     today as the company simultaneously released new major versions of HBX
     Analytics (version 4.0) and the Visual Sciences Technology Platform
     (version 5.0).  (Refer to two separate press releases issued today.)

  *  Best Product Award:  Visual Sciences Search, the company's
     analytics-driven site search engine, earned the 2007 Codie Award for
     Best Enterprise Search Engine for the second straight year.



"We achieved record revenue in the first quarter -- a testament to the strong demand for our products -- and we exceeded our goals for bottom line performance, demonstrating continued financial discipline," said Jim MacIntyre, CEO of Visual Sciences.   Mr. MacIntyre continued, "Our decision to use only the Visual Sciences brand going forward is symbolic.  It illustrates our single-minded focus on delivering the best real-time analytics applications for enterprises who want to understand complex data and use it to optimize their businesses and our commitment to focus marketing expenditures and efforts around one corporate brand."

Financial Guidance for the Second Quarter and Full Year 2007

Visual Sciences is providing the following outlook for the second quarter of 2007 and is updating its guidance for full year 2007.  The company increased its revenue guidance range for 2007, and maintained EPS guidance at current levels.  The company intends to invest incremental earnings into sales and marketing to spur higher growth in 2008.

                                       Q2 2007             Full Year 2007
                                   Low        High         Low        High
  Revenue Guidance (in millions)
    Estimated non-GAAP revenue
     range                        $21.3       $21.9       $90.2       $92.2
    Deferred revenue related to
     merger                          --          --        (0.2)       (0.2)
       Estimated GAAP revenue
        range                     $21.3       $21.9       $90.0       $92.0

  Earnings per share guidance
    Estimated non-GAAP EPS range  $0.15       $0.16       $0.69       $0.74
    Estimated amortization of
     intangibles                  (0.06)      (0.06)      (0.24)      (0.24)
    Estimated stock-based
     compensation                 (0.10)      (0.08)      (0.40)      (0.30)
    Deferred revenue related to
     merger                          --          --       (0.01)      (0.01)
    Estimated non-cash tax benefit
     (expense)                       --          --       (0.01)      (0.04)
    Estimated non-cash interest
     expense                         --          --       (0.01)      (0.01)
       Estimated GAAP EPS
        range                    $(0.01)      $0.02       $0.02       $0.14
  Estimated shares used in per
   share calculations        21,300,000  21,300,000  21,800,000  21,800,000



  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.  We believe 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 net income targets.  Investors should not consider non-GAAP financial measures in isolation from, or as a substitute for, financial information presented in compliance with GAAP.

Conference Call Details

As previously announced, Visual Sciences will host a conference call today at 2:00 pm PDT to discuss the company's first quarter financial results.  To access this call, dial 800-901-5218 (domestic) or 617-786-4511 (international) using passcode 71581684.  A live audio-only webcast of this conference call will be available on the "Investor Relations" page of the company's Web site (http://www.websidestory.com/) and a replay will be archived on the Web site as well.

About Visual Sciences

Founded in 1996, Visual Sciences, Inc. (formerly known as WebSideStory, Inc.) (NASDAQ:WSSI) is a leading provider of real-time analytics applications.  The company's analytics applications, based on its patent pending on-demand service and software platform, enable fast and detailed analytics on large volumes of streaming and stored data.  More than 1,570 enterprises worldwide rely on the answers delivered by these applications to provide them with actionable intelligence to optimize their business operations.  The company provides real-time analytics applications for web sites, contact centers, retail points-of-sale, messaging systems and the intelligence community.  Visual Sciences flexible technology platform, Visual Sciences Technology Platform 5(TM), allows the company to rapidly introduce tailored solutions to meet its clients' needs.  Visual Sciences is headquartered in San Diego, California, and has East Coast offices in Herndon, Virginia and a European headquarters in Amsterdam, The Netherlands.  For more information, contact Visual Sciences. Voice: 858.546.0040. Fax: [phone]. Address: 10182 Telesis Court, 6th Floor, San Diego, CA 92121. Web site: http://www.visualsciences.com/.  Visual Sciences is a registered trademark of Visual Sciences, Inc.

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 Visual Sciences 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 Visual Sciences' business, including, without limitation: Visual Sciences' reliance on its web analytics services for the majority of its revenue; blocking or erasing of cookies or limitations on the company's ability to use cookies; Visual Sciences' limited experience with customer intelligence applications beyond web analytics; the risks associated with integrating the operations and products of acquired companies with those of Visual Sciences; privacy concerns and laws or other domestic or foreign regulations that may subject Visual Sciences to litigation or limit the company's ability to collect and use Internet user information; Visual Sciences' ability to defend itself against claims of patent infringement alleged by NetRatings, Inc.; Visual Sciences' 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 the company operates that could make it difficult for Visual Sciences to acquire and retain customers; the risk that Visual Sciences' customers fail to renew their agreements; the risks associated with the company's indebtedness, including the risk of non- compliance with the covenants in the company's credit facility; the risk that Visual Sciences' services may become obsolete in a market with rapidly changing technology and industry standards; the risks associated with renaming the company and undertaking related branding activities; and other risks described in Visual Sciences' Securities and Exchange Commission filings, including the company's annual report on Form 10-K for the year ended December 31, 2006 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 Visual Sciences undertakes no obligation to revise or update this news release to reflect events or circumstances after the date of this news release.

                          VISUAL SCIENCES, INC.
                  (FORMERLY KNOWN AS WEBSIDESTORY, INC.)
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                               (UNAUDITED)
                    (in thousands, except share data)

                                                   March 31,   December 31,
                                                    2007           2006
  Assets
  Current assets
    Cash and cash equivalents                       $9,081        $19,713
    Investments                                      3,123          5,606
    Accounts receivable, net                        16,955         15,654
    Deferred tax assets                                719            708
    Prepaid expenses and other current assets        3,852          3,943
        Total current assets                        33,730         45,624

  Property and equipment, net                        6,511          6,562
  Goodwill                                          57,098         49,380
  Intangible assets, net                            18,384         19,732
  Deferred tax assets                               14,881         14,956
  Other assets                                       1,166          1,314
                                                  $131,770       $137,568

  Liabilities and Stockholders' Equity
  Current liabilities
    Accounts payable                                $1,751           $987
    Accrued liabilities                              7,840          9,327
    Deferred revenue                                20,425         20,924
    Capital lease short-term                            30             38
    Revolving credit facility                        5,000             --
    Current maturities of notes payable                 --         19,708
        Total current liabilities                   35,046         50,984

  Capital lease long-term                               44             50
  Other liabilities                                  1,515            781
        Total liabilities                           36,605         51,815

  Commitments and contingencies
  Stockholders' equity
    Preferred stock, $0.001 par value;
     10,000,000 shares authorized and no
     shares issued and outstanding at
     March 31, 2007 and December 31, 2006               --             --
    Common stock, $0.001 par value;
     75,000,000 shares authorized, 20,152,179
     and 19,238,781 shares issued and
     outstanding at March 31, 2007 and
     December 31, 2006, respectively                    20             19
    Additional paid-in capital                     148,024        137,862
    Unearned stock-based compensation                   (2)           (22)
    Accumulated other comprehensive income             292            219
    Accumulated deficit                            (53,169)       (52,325)
        Total stockholders' equity                  95,165         85,753
                                                  $131,770       $137,568



                          VISUAL SCIENCES, INC.
                  (FORMERLY KNOWN AS WEBSIDESTORY, INC.)
             CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                               (UNAUDITED)
             (in thousands, except share and per share data)


                                                      Three Months Ended
                                                           March 31,
                                                     2007           2006

  Revenues
    Subscription, hosting and support              $16,392        $11,768
    License                                          1,841            251
    Professional services                            1,777            759
    Advertising                                        542            665
        Total revenues                              20,552         13,443

  Cost of revenues*
    Cost of revenue                                  4,941          3,136
    Amortization of intangible assets                  715            502
        Total cost of revenues                       5,656          3,638

  Gross profit                                      14,896          9,805

  Operating expenses*
    Sales and marketing                              6,996          5,938
    Technology development                           3,484          2,672
    General and administrative                       4,223          2,693
    Amortization of intangible assets                  634            713
        Total operating expenses                    15,337         12,016

  Loss from operations                                (441)        (2,211)

    Interest expense                                  (492)          (307)
    Interest income                                    218            157
    Other expense                                       (3)            --
        Total other expense                           (277)          (150)

  Loss before income taxes                            (718)        (2,361)

  Benefit from income taxes                           (292)          (606)

  Loss before cumulative effect of change in
   accounting principle                               (426)        (1,755)

  Cumulative effect of change in accounting
   principle (net of tax)                               --             13

  Net loss                                           $(426)       $(1,742)

  Basic net loss per share:
    Loss before cumulative effect of change in
     accounting principle                           $(0.02)        $(0.09)
    Cumulative effect of change in accounting
     principle                                          --             --
  Basic net loss per share                          $(0.02)        $(0.09)
  Diluted net loss per share:
    Loss before cumulative effect of change in
     accounting principle                           $(0.02)        $(0.09)
    Cumulative effect of change in accounting
     principle                                          --             --
  Diluted net loss per share                        $(0.02)        $(0.09)

  Shares used in per share calculations:
    Basic                                       19,431,312     18,405,000
    Diluted                                     19,431,312     18,405,000



                          VISUAL SCIENCES, INC.
                  (FORMERLY KNOWN AS WEBSIDESTORY, INC.)
       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - Continued
                               (UNAUDITED)
             (in thousands, except share and per share data)

                                                     Three Months Ended
                                                          March 31,
                                                      2007          2006

  (*) Stock-based compensation:

  Cost of revenues                                    $510           $411
  Sales and marketing                                  730            786
  Technology development                               460            550
  General and administrative                           618            488



                          VISUAL SCIENCES, INC.
                  (FORMERLY KNOWN AS WEBSIDESTORY, INC.)
             CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (UNAUDITED)
                              (in thousands)

                                                     Three Months Ended
                                                          March 31,
                                                     2007           2006
  Cash flows from operating activities
    Net loss                                         $(426)       $(1,742)
    Adjustments to reconcile net loss to net cash
     provided by operating activities:
      Depreciation and amortization                  2,335          1,756
      Debt discount amortization                       292            171
      Bad debt provision                               127             --
      Stock-based compensation                       2,318          2,235
      Loss on sale of securities                        --             35
      Windfall tax benefits from stock options
       exercised                                      (363)          (176)
      Deferred income taxes                           (292)          (606)
      Cumulative effect of change in accounting
       principle                                        --            (13)
      Changes in operating assets and liabilities,
       net of effect of acquisition:
          Accounts receivable                       (1,395)          (712)
          Prepaid expenses and other assets           (184)          (228)
          Accounts payable and accrued liabilities  (1,090)        (1,165)
          Deferred revenue                            (540)         1,664
          Other liabilities                            314              1
              Net cash provided by operating
               activities                            1,096          1,220

  Cash flows from investing activities
    Purchase of investments                             --         (3,677)
    Sales of investments                             1,003          7,077
    Maturities of investments                        1,502          2,548
    Purchase of property and equipment                (789)          (954)
    Acquisition, net of cash acquired                   --        (20,186)
        Net cash provided by (used in) investing
         activities                                  1,716        (15,192)

  Cash flows from financing activities
    Exercise of stock options                        1,183            445
    Windfall tax benefits from stock options
     exercised                                         363            176
    Payments on capital lease                          (13)           (21)
    Proceeds from revolving credit facility          5,000             --
    Payments on notes payable                      (20,000)            --
    Net cash (used in) provided by financing
     activities                                    (13,467)           600

  Effect of exchange rate changes on cash               23             23
  Net decrease in cash and cash equivalents        (10,632)       (13,349)
  Cash and cash equivalents at beginning of period  19,713         19,968

  Cash and cash equivalents at end of period        $9,081         $6,619

  Supplementary disclosure of non-cash investing
   and financing activities:

    Business combination with Visual Sciences
     Technologies, LLC
    Cash paid for business combination,
     net of cash acquired                              $--        $20,186
    Fair value of debt issued in business combination   --         18,740
    Fair value of warrants issued in business
     combination                                        --          5,391
    Fair value of common stock issued in business
     combination                                     7,362             --
    Liabilities assumed in business combination        356          3,472
        Total fair value of assets acquired in
          business combination                      $7,718        $47,789


  VISUAL SCIENCES, INC. (UNAUDITED) (in thousands, except share and per
   share data)

                                                      Three Months Ended
                                                           March 31,
                                                      2007          2006
  Reconciliation of GAAP net loss to non-GAAP
   net income
    Net loss                                         $(426)       $(1,742)

    Amortization of intangibles                      1,349          1,215

    Stock-based compensation                         2,318          2,235

    Deferred revenue related to merger*                173          1,105

    Non-cash tax benefit                              (360)          (675)

    Non-cash interest expense                          292            171

    Cumulative effect of change in accounting
     principle                                          --            (13)

        Non-GAAP net income                         $3,346         $2,296

  Reconciliation of GAAP net loss per common share
   to non-GAAP income per common share

    GAAP net loss per common share:
        Basic                                       $(0.02)        $(0.09)
        Diluted                                     $(0.02)        $(0.09)

    Amortization of intangibles                       0.07           0.06

    Stock-based compensation                          0.11           0.11

    Deferred revenue related to merger*               0.01           0.06

    Non-cash tax benefit                             (0.02)         (0.03)

    Non-cash interest expense                         0.01           0.01

    Cumulative effect of change in accounting
     principle                                          --             --

    Non-GAAP net income per common share:
        Diluted                                      $0.16          $0.12

  GAAP weighted-average shares used in
   per share calculations:
        Basic                                   19,431,312     18,405,000
        Diluted                                 19,431,312     18,405,000

  Non-GAAP weighted-average shares used
   in per share calculations:
        Basic                                   19,431,312     18,405,000
        Diluted                                 20,632,422     19,774,782



             VISUAL SCIENCES, INC. (UNAUDITED) (in thousands)

                                                     Three Months Ended
                                                          March 31,
                                                     2007          2006

  Reconciliation of GAAP revenue to Non-GAAP
   revenue

    GAAP revenue                                   $20,552        $13,443

    Deferred revenue related to merger*                173          1,105

    Non-GAAP revenue                               $20,725        $14,548


  *  In accordance with Statement of Financial Accounting Standards No. 141
     "Business Combinations," the deferred revenue obligation on the ending
     balance sheet of Visual Sciences Technologies, LLC (formerly known as
     Visual Sciences, LLC) ("VS") was reduced to fair value when recorded on
     the company's beginning balance sheet.  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 VS on a stand-alone
     basis in periods subsequent to the merger date.


DATASOURCE: WebSideStory, Inc.



CONTACT:  Karen Haus-Moran, , or Carolyn

Bass, , both of Market Street Partners,

[phone], for Visual Sciences, Inc.



Web site:  http://www.visualsciences.com/ 

Web site:  http://www.websidestory.com/ 

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