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SumTotal® Systems (Nasdaq: SUMT), the market leader and a global provider of talent development solutions, today announced its financial results for the second quarter ended June 30, 2008.
Second Quarter 2008 Results
On a Generally Accepted Accounting Principles (GAAP) basis, total revenue for the second quarter 2008 increased to $31.9 million from $30.2 million in the second quarter 2007. GAAP net loss was $1.0 million, or $0.03 per share on a basic and diluted basis, compared to a net loss of $1.5 million, or $0.05 per share in the second quarter 2007.
Non-GAAP revenue for the second quarter 2008 increased to $32.0 million from $30.5 million in the second quarter 2007. Non-GAAP net income was $1.8 million, or $0.06 per share on a diluted basis, compared to non-GAAP net income of $1.9 million, or $0.06 per share on a diluted basis, a year ago.
Cash flows from operating activities were $4.1 million for the quarter and $7.7 million for the first six-months of 2008.
Non-GAAP results exclude the impact of certain one-time charges primarily related to restructuring activities, if any, and non-cash accounting adjustments and charges primarily related to acquisition accounting, stock-based compensation, and any related income tax effects. A reconciliation to the GAAP results is provided in the attached statements.
"We delivered on our commitment and beat our forecast for the second quarter,” said Don Fowler, SumTotal’s chief executive officer. “In the quarter, we increased recurring revenue to 54% of total revenue, grew our twelve-month trailing subscriptions bookings 38% compared with the same period last year, and we doubled our performance management business. And we delivered SumTotal Version 8, the only unified Talent Development Suite on the market. These are great results.”
Business Highlights
Expanded our subscriptions business with new and existing customers such as Teradyne, Colonial Bank, StarTek, and the world’s largest dedicated security technology company;
Increased our leadership position within the large enterprise segment, signing deals with new customers including a large credit card company, and expanding our relationship with existing customers including Wachovia and a large oil exploration company;
Doubled our performance management bookings year-over-year, adding new customers such as the County of Los Angeles, Horizon Bay Senior Communities and a leading humanitarian organization;
Continued growth in international markets, including new customers such as a leading European independent provider of IT infrastructure services, Scottish Media Group, and Mizuho Corporate Bank;
Launched SumTotal Version 8 Talent Development Suite; customers who committed to the industry’s only unified Talent Development Suite include Arrow Electronics and Parsons Corporation among others;
Positioned in the Leaders Quadrant by Gartner, Inc. in the 2008 'Magic Quadrant for Corporate Learning Systems.’
Third Quarter Guidance
For the third quarter 2008, SumTotal estimates its GAAP revenue will be between $28.9 million and $30.9 million. GAAP net loss is estimated to be between ($2.7) million and ($1.7) million, or between ($0.08) and ($0.05) per share on both a basic and diluted basis.
On a non-GAAP basis, revenue is estimated to be between $29.0 million and $31.0 million. Non-GAAP net income is estimated to be between $0.3 million, or $0.01 per share on a diluted basis, and $1.3 million, or $0.04 per share on a diluted basis. The reconciling items between GAAP loss and non-GAAP income are estimated to be a $0.1 million adjustment to revenue, $1.4 million for amortization of intangibles, and $1.5 million for stock-based compensation.
Conference Call
SumTotal will host an investor conference call and webcast on July 29, 2008, at 5:00 p.m. ET/ 2:00 pm. PT. SumTotal plans to make a live audio webcast available to investors and the public at SumTotal website.
In addition to the webcast, SumTotal plans to make available a telephone replay of the call on July 29, 2008, beginning at approximately 7:00 pm. PT through the close of business on August 5, 2008. Interested parties can access the replay by dialing 800-642-1687 within the US or 706-645-9291 outside the US and entering the access code 55261701.
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