CommVault Announces Third Quarter Fiscal 2013 Financial Results

       CommVault Announces Third Quarter Fiscal 2013 Financial Results

Record Revenue of $128.1 million, up 24% Year-Over-Year

GAAP EBIT of $20.2 million; GAAP EPS of $0.25

Record Non-GAAP EBIT of $29.8 million; Record Non-GAAP EPS of $0.39

PR Newswire

OCEANPORT, N.J., Jan. 30, 2013

OCEANPORT, N.J., Jan. 30, 2013 /PRNewswire/ --

(Logo:http://photos.prnewswire.com/prnh/20110329/MM73841LOGO )

Third Quarter Fiscal 2013 Highlights Include:
                               Third Quarter
GAAP Results:
Revenues                       $128.1 million
Income from Operations (EBIT)  $20.2 million
EBIT Margin                    15.8%
Diluted Earnings Per Share     $0.25
Non-GAAP Results:
Income from Operations (EBIT)  $29.8 million
EBIT Margin                    23.3%
Diluted Earnings Per Share     $0.39

CommVault (NASDAQ: CVLT) announced today its financial results for the third
quarter ended December 31, 2012.

N. Robert Hammer, CommVault's chairman, president and CEO stated, "We achieved
excellent third quarter financial performance which was highlighted by record
results in quarterly revenues of $128.1 million, non-GAAP operating income of
$29.8 million and non-GAAP EPS of $0.39. Our year-over-year software revenue
growth of 28% was driven by an all-time high volume of enterprise deals
(transactions greater than $100,000) and outstanding execution from all of our
major geographic operations. During the third quarter, we continued to make
significant investments to position the company for long term growth while
still delivering record non-GAAP operating profits. We are in an excellent
position to continue to accelerate our pace of innovation in our addressable
markets to provide unique value to our customers, while continuing to deliver
above market financial results on a consistent basis."

Total revenues for the third quarter of fiscal 2013 were $128.1 million, an
increase of 24% over the third quarter of fiscal 2012 and an increase of 8%
over the prior quarter. Software revenue in the third quarter of fiscal 2013
was $65.9 million, an increase of 28% year-over-year and an increase of 11%
sequentially. Services revenue in the third quarter of fiscal 2013 was $62.2
million, an increase of 19% year-over-year and 6% sequentially.

Income from operations (EBIT) was $20.2 million for the third quarter, a 64%
increase from $12.3 million in the same period of the prior year. On a
sequential basis, income from operations (EBIT) decreased 10% in the third
quarter of fiscal 2013. Non-GAAP income from operations (EBIT) increased 52%
to $29.8 million in the third quarter of fiscal 2013 compared to $19.6 million
in the third quarter of the prior year. On a sequential basis, Non-GAAP
income from operations (EBIT) increased 3% in the third quarter of fiscal
2013.

For the third quarter of fiscal 2013, CommVault reported net income of $12.2
million, an increase of $5.0 million compared to the same period of the prior
year. Non-GAAP net income for the quarter increased 50% to $19.0 million, or
$0.39 per diluted share, from $12.7 million, or $0.27 per diluted share, in
the same period of the prior year.

Operating cash flow totaled $27.5 million for the third quarter of fiscal 2013
compared to $27.7 million in the third quarter of fiscal 2012. Total cash and
short-term investments were $397.2 million as of December 31, 2012 compared to
$300.2 million as of March 31, 2012. There were no share repurchases during
the third quarter of fiscal 2013, which still leaves $102.8 million remaining
in the existing repurchase plan available through March 31, 2014.

A reconciliation of GAAP to non-GAAP results has been provided in Financial
Statement Table IV included in this press release. An explanation of these
measures is also included below under the heading "Use of Non-GAAP Financial
Measures."

Recent Business Highlights:

  oOn January 16, 2013, CommVault announced that its Simpana® 9 data and
    information management software has received the Certificate of
    Networthiness (CoN) from the U.S. Army Network Enterprise Technology
    Command.
  oOn November 15, 2012, CommVault announced its CommVault® Simpana® 9
    software will ship with the new Dell PowerVault DL2300 appliance to
    deliver new levels of integrated, scalable and simplified data protection
    to safeguard information for medium-to-large, distributed organizations.
  oOn October 29, 2012, CommVault introduced Simpana® IntelliSnap™ Recovery
    Manager, the industry's first standalone software product for automating
    snapshot management and application-aware recovery across multiple storage
    arrays and physical or virtual servers.

Use of Non-GAAP Financial Measures

CommVault has provided in this press release the following non-GAAP financial
measures: non-GAAP income from operations, non-GAAP income from operations
margin, non-GAAP net income and non-GAAP diluted earnings per share. This
selected financial information has not been prepared in accordance with GAAP.
CommVault uses these non-GAAP financial measures internally to understand,
manage and evaluate its business and make operating decisions. In addition,
CommVault believes these non-GAAP operating measures are useful to investors,
when used as a supplement to GAAP financial 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. 

These non-GAAP financial measures should be considered as a supplement to, and
not as a substitute for or superior to, 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.

Non-GAAP income from operations and non-GAAP income from operations margin.
These non-GAAP financial measures exclude noncash stock-based compensation
charges and additional FICA and related payroll tax expense incurred by
CommVault when employees exercise in the money stock options or vest in
restricted stock awards. CommVault believes that these non-GAAP financial
measures are useful metrics for management and investors because they compare
CommVault's core operating results over multiple periods. When evaluating the
performance of CommVault's operating results and developing short and long
term plans, CommVault does not consider such expenses. Although noncash
stock-based compensation and the additional FICA and related payroll tax
expenses are necessary to attract and retain employees, CommVault places its
primary emphasis on stockholder dilution as compared to the accounting charges
related to such equity compensation plans. In addition, because of the
varying available valuation methodologies, subjective assumptions such as
volatility outside CommVault's control and the variety of awards that
companies can issue, CommVault believes that providing non-GAAP financial
measures that exclude noncash stock-based compensation expense and the
additional FICA and related payroll tax expenses incurred on stock option
exercises and vesting of restricted stock awards allow investors to make
meaningful comparisons between CommVault's operating results and those of
other companies.

There are a number of limitations related to the use of non-GAAP income from
operations and non-GAAP income from operations margin. The most significant
limitation is that these non-GAAP financial measures exclude certain operating
costs, primarily related to noncash stock-based compensation, which is of a
recurring nature. Noncash stock-based compensation has been, and will
continue to be for the foreseeable future, a significant recurring expense in
CommVault's operating results. In addition, noncash stock-based compensation
is an important part of CommVault's employees' compensation and can have a
significant impact on their performance. Lastly, the components CommVault
excludes in its non-GAAP financial measures may differ from the components
that its peer companies exclude when they report their non-GAAP financial
measures.

CommVault's management generally compensates for limitations described above
related to the use of non-GAAP financial measures by providing investors with
a reconciliation of the non-GAAP financial measure to the most directly
comparable GAAP financial measure. Further, CommVault management uses non-GAAP
financial measures only in addition to, and in conjunction with, results
presented in accordance with GAAP.

Non-GAAP net income and non-GAAP diluted EPS. Non-GAAP net income excludes
noncash stock-based compensation and the additional FICA and related payroll
tax expenses incurred by CommVault when employees exercise in the money stock
options or vest in restricted stock awards, which are discussed above, as well
as applies a non-GAAP effective tax rate of 37% in fiscal 2013 and 36% in
fiscal 2012.

CommVault anticipates that in any given quarter its non-GAAP tax rate may be
either higher or lower than the GAAP tax rate as evidenced by historical
fluctuations. The GAAP tax rate for the nine months ended December 31, 2012
was 39% and the GAAP tax rate for the nine months ended December 31, 2011 was
38%. On an annual basis, the GAAP tax rate over the past six fiscal years was
36% for fiscal 2012, 42% for fiscal 2011, 43% for fiscal 2010, 44% for fiscal
2009, 23% for fiscal 2008 and (241%) for fiscal 2007. In addition,
CommVault's cash tax rate has been significantly lower than its GAAP tax rate
for the past three fiscal years. The cash tax rate over the past three fiscal
years is estimated to be approximately 14% for fiscal 2012, approximately 11%
for fiscal 2011, and approximately 10% for fiscal 2010. Also, the cash tax
rate for fiscal 2013 is estimated to be in the range of 14% - 18%. CommVault
expects that its cash tax rate will remain lower than its GAAP tax rate for
the remainder of fiscal 2013 and into fiscal 2014. CommVault defines its cash
tax rate as the total amount of cash income taxes payable for the fiscal year
divided by consolidated GAAP pre-tax income.

CommVault believes that the use of a non-GAAP tax rate is a useful measure as
it allows management and investors to compare its operating results on a more
consistent basis over the multiple periods presented in its earnings release
without the impact of significant variations in the tax rate as more fully
described above. It is also more reflective of the increase in the cash tax
rate as it approaches the GAAP tax rate over the next one to two fiscal
years. Non-GAAP EPS is derived from non-GAAP net income divided by the
weighted average shares outstanding on a fully diluted basis.

CommVault considers non-GAAP net income and non-GAAP diluted EPS useful
metrics for CommVault management and its investors for the same basic reasons
that CommVault uses non-GAAP income from operations and non-GAAP income from
operations margin. In addition, the same limitations as well as management
actions to compensate for such limitations described above also apply to
CommVault's use of non-GAAP net income and non-GAAP EPS.

Conference Call Information

CommVault will host a conference call today, January 30, 2013, at 8:30 a.m.
Eastern Time (5:30 a.m. Pacific Time)to discuss its financial results. To
access this call, dial 888-895-5479 (domestic) or 847-619-6250
(international). Investors can also access the webcast by visiting
www.commvault.com. The live webcast and replay will be hosted under "Investor
Events" located under the "Investor Relations" section of the website. An
archived webcast of this conference call will also be available following the
call.

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.

Safe Harbor Statement

This press release may contain 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.

©1999-2013 CommVault Systems, Inc. All rights reserved. CommVault, CommVault
and logo, the "CV" logo, CommVault Systems, Solving Forward, SIM, Singular
Information Management, Simpana, Simpana OnePass, CommVault Galaxy, Unified
Data Management, QiNetix, Quick Recovery, QR, CommNet, GridStor, Vault
Tracker, InnerVault, Quick Snap, QSnap, Recovery Director, CommServe,
CommCell, IntelliSnap, ROMS, and CommValue 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 Income
(In thousands, except per share data)
(Unaudited)
                                    Three Months Ended    Nine Months Ended

                                    December 31,          December 31,
                                    2012       2011       2012       2011
Revenues:
Software                            $ 65,909   $ 51,421   $ 179,363  $ 143,047
Services                              62,238     52,219     178,213    149,578
Total revenues                        128,147    103,640    357,576    292,625
Cost of revenues:
Software                              776        795        2,098      2,051
Services                              15,687     12,815     44,998     36,676
Total cost of revenues                16,463     13,610     47,096     38,727
Gross margin                          111,684    90,030     310,480    253,898
Operating expenses:
Sales and marketing                   64,547     56,142     176,634    157,124
Research and development              12,367     10,087     34,749     28,949
General and administrative            13,317     10,361     36,568     29,167
Depreciation and amortization         1,226      1,120      3,533      3,244
Income from operations                20,227     12,320     58,996     35,414
Interest expense                      —          (4)        —          (57)
Interest income                       299        190        796        513
Income before income taxes            20,526     12,506     59,792     35,870
Income tax expense                    8,326      5,346      23,568     13,772
Net income                          $ 12,200   $ 7,160    $ 36,224   $ 22,098
Net income per common share:
Basic                               $ 0.27     $ 0.16     $ 0.80     $ 0.50
Diluted                             $ 0.25     $ 0.15     $ 0.75     $ 0.47
Weighted average common shares
outstanding:
Basic                                 45,738     43,834     45,203     43,981
Diluted                               48,564     46,791     47,999     47,003



Table II
CommVault Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
                                           December 31,  March 31,
                                           2012          2012
Assets
Current assets:
Cash and cash equivalents                  $   395,298   $ 297,088
Short-term investments                         1,948       3,146
Trade accounts receivable, net                 71,415      67,793
Prepaid expenses and other current assets      15,260      12,606
Deferred tax assets, net                       13,921      14,717
Total current assets                           497,842     395,350
Deferred tax assets, net                       22,546      23,861
Property and equipment, net                    11,151      9,137
Other assets                                   6,875       4,340
Total assets                               $   538,414   $ 432,688
Liabilities and stockholders' equity
Current liabilities:
Accounts payable                           $   2,692     $ 1,847
Accrued liabilities                            46,537      45,888
Deferred revenue                               134,884     125,314
Total current liabilities                      184,113     173,049
Deferred revenue, less current portion         26,737      22,059
Other liabilities                              7,899       7,596
Total stockholders' equity                     319,665     229,984
Total liabilities and stockholders' equity $   538,414   $ 432,688



Table III
CommVault Systems, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                                                        Nine Months Ended

                                                        December 31,
                                                        2012        2011
Cash flows from operating activities
Net income                                              $ 36,224    $ 22,098
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                             3,605       3,349
Noncash stock-based compensation                          21,061      15,044
Excess tax benefits from stock-based compensation         (18,114)    (7,026)
Deferred income taxes                                     2,113       (365)
Changes in operating assets and liabilities:
Trade accounts receivable                                 (3,435)     7,720
Prepaid expenses and other current assets                 (2,648)     (1,811)
Other assets                                              (1,593)     (3,195)
Accounts payable                                          835         1,197
Accrued liabilities                                       17,511      11,423
Deferred revenue                                          13,950      20,227
Other liabilities                                         293         1,222
Net cash provided by operating activities                 69,802      69,883
Cash flows from investing activities
Purchase of short-term investments                        (1,948)     (3,146)
Proceeds from maturity of short-term investments          3,146       1,150
Purchase of property and equipment                        (5,606)     (4,417)
Net cash used in investing activities                     (4,408)     (6,413)
Cash flows from financing activities
Repurchase of common stock                                —           (45,639)
Proceeds from the exercise of stock options               14,077      14,014
Excess tax benefits from stock-based compensation         18,114      7,026
Net cash provided by (used in) financing activities       32,191      (24,599)
Effects of exchange rate — changes in cash                625         (2,035)
Net increase in cash and cash equivalents                 98,210      36,836
Cash and cash equivalents at beginning of period          297,088     217,170
Cash and cash equivalents at end of period              $ 395,298   $ 254,006





Table IV
CommVault Systems, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share data)
(Unaudited)
                                    
                                                          Nine Months Ended
                                    Three Months Ended
                                                          December 31,
                                    December 31,
                                    2012       2011       2012       2011
Non-GAAP financial measures and
reconciliation:
GAAP income from operations         $ 20,227   $ 12,320   $ 58,996   $ 35,414
Noncash stock-based compensation      8,984      6,229      21,061     15,044
(1)
FICA and related payroll tax
expense on
stock option exercises and vesting
on
restricted stock awards (2)           623        1,096      1,245      2,098
Non-GAAP income from operations     $ 29,834   $ 19,645   $ 81,302   $ 52,556
GAAP net income                     $ 12,200   $ 7,160    $ 36,224   $ 22,098
Noncash stock-based compensation      8,984      6,229      21,061     15,044
(1)
FICA and related payroll tax
expense on
stock option exercises and vesting
on
restricted stock awards (2)           623        1,096      1,245      2,098
Non-GAAP provision for income taxes
adjustment (3)                        (2,823)    (1,793)    (6,808)    (5,312)
Non-GAAP net income                 $ 18,984   $ 12,692   $ 51,722   $ 33,928
Diluted weighted average shares       48,564     46,791     47,999     47,003
outstanding
Non-GAAP diluted net income per     $ 0.39     $ 0.27     $ 1.08     $ 0.72
share





Footnotes - Adjustments
(1) Represents noncash stock-based compensation charges associated with stock
options and restricted stock units granted as follows:
                       Three Months Ended              Nine Months Ended

                       December 31,                   December 31,
                       2012             2011           2012         2011
Cost of services       $    280         $   134        $  659       $  335
revenue
Sales and marketing         4,169           2,867         9,591        7,126
Research and                852             644           2,114        1,561
development
General and                 3,683           2,584         8,697        6,022
administrative
Stock-based            $    8,984       $   6,229      $  21,061    $  15,044
compensation expense
(2) Represents additional FICA and related payroll tax expenses incurred by
CommVault when employees exercise in the money stock options or vest in
restricted stock awards.
(3) The provision for income taxes is adjusted to reflect CommVault's
estimated non-GAAP effective tax rate of approximately 37% in fiscal 2013 and
36% in fiscal 2012.



SOURCE CommVault

Website: http://www.commvault.com
Contact: Investor Relations, Michael Picariello, CommVault, +1-732-728-5380,
ir@commvault.com
 
Press spacebar to pause and continue. Press esc to stop.