Salary.com Announces Second Quarter 2010 Financial Results
Reports 34th Consecutive Quarter of Revenue Growth; Achieves Positive Operating Cash Flow for Second Quarter in a Row
Needham, MA, Nov 05, 2009 -- Salary.com, Inc. (NASDAQ: SLRY), a leading provider of on-demand talent management, payroll, and compensation solutions, today announced financial results for its second quarter of fiscal 2010, which ended September 30, 2009.
Revenue in the second quarter of 2010 was $11.6 million, an increase of 10% over the second quarter of fiscal 2009. Bookings were $12.2 million, an increase of 9% over the second quarter of fiscal 2009. Non-GAAP operating cash flow, which excludes cash payments for severance, was positive with a cash inflow of $0.5 million in the second quarter of 2010. GAAP operating cash flow was an inflow of $0.4 million in the second quarter of 2010.
Kent Plunkett, founder and chief executive officer, stated, "We are pleased to have completed our 34th consecutive quarter of revenue growth and achieved positive operating cash flow from operations for the second quarter in a row. Our broad strategy of offering an array of integrated, best-in-breed human capital management tools and data again contributed to larger overall transaction sizes in the second quarter, with 14 transactions over $100,000 in the quarter and six of those larger than $250,000. We believe Salary.com's strong execution is reflected in continued bookings and cash flow growth as we continue to gain momentum as a human capital management leader."
Second Quarter 2010 Financial Summary
-- Second quarter revenue was $11.6 million, an increase of 10% over the
second quarter of fiscal 2009.
-- On a GAAP basis, for the second quarter of fiscal 2010, Salary.com
reported a net loss of $4.7 million, or ($0.29) per diluted share, compared
to a net loss of $6.3 million, or ($0.39) per diluted share, in the second
quarter of fiscal 2009.
-- On a non-GAAP basis, excluding stock-based compensation, amortization
of intangibles and restructuring expenses, Salary.com reported a net loss
of $1.9 million, or ($0.12) per diluted share, for the second quarter of
fiscal 2010, compared to a net loss of $3.0 million, or ($0.18) per diluted
share, in the second quarter of fiscal 2009.
-- Cash and cash equivalents as of September 30, 2009 were $16.1 million,
compared to $17.0 million as of June 30, 2009.
-- Current deferred revenue was $27.3 million as of September 30, 2009,
compared to $27.4 million as of June 30, 2009. Total deferred revenue grew
to $29.9 million as of September 30, 2009, from $29.3 million as of June
-- Excluding non-recurring cash payments for severance, non-GAAP cash
flow from operations was a net inflow of $0.5 million in the second quarter
of fiscal 2010. Including the non-recurring payments for severance, GAAP
cash flow from operations was a net inflow of $0.4 million, a $1.4 million
improvement compared to the same period a year ago.
Additional Second Quarter Business Highlights
-- During the second quarter, Salary.com added approximately 100
customers, and ended the quarter with approximately 3,600 enterprise
-- New customer additions in the second quarter of fiscal 2010 included:
Boston Medical Center, Caraco Pharmaceutical Laboratories, Ltd., Casio
America, Inc., The Cooper Health System, Emergint Technologies Inc., and
Washington Mills Management, Inc.
-- During the second quarter, Salary.com held user conferences in Boston,
Chicago, New York, San Francisco, and Singapore, with over 500 customers
attending. The user groups offered four separate tracks for different
human resources disciplines and featured industry experts from Gartner,
IDC, and Bersin & Associates as speakers.
-- At the HR Technology(R) Conference in October, Salary.com won the
Talent Management Shootout in a vote by hundreds of human resources
professionals. TalentManager won the contest against three competitors
after a demonstration of its easy-to-learn and easy-to-use features and the
seamless integration of TalentManager's data-driven content with
Salary.com's performance, competency, goal management, compensation
planning, succession planning, career planning, and employee development
software and data solutions. Bersin and Associates published the reasons
they believe Salary.com won the Shootout in a blog post available at
-- During the second quarter, Salary.com repurchased approximately
179,000 shares at an average purchase price of $3.01 per share. To date,
the Company has repurchased approximately 1.3 million shares at an average
price of $2.03 per share.
Bryce Chicoyne, Salary.com's chief financial officer said, "Our effective execution in the second quarter resulted in an increase in bookings, revenue, and operating cash flow on both a year-over-year and sequential basis, and I am proud of that accomplishment. We remain committed to long-term revenue growth and cash flow generation and are managing the company with that in mind. Larger deal trends and a continued strong customer retention rate are fueling our optimism for long-term growth."
For the third quarter of fiscal 2010, Salary.com expects total revenue in the range of $11.4 million to $11.9 million. Non-GAAP net loss is expected to be in the range of $1.7 million to $2.2 million. Non-GAAP net loss excludes non-cash stock-based compensation expenses in the range of $1.7 million to $2.0 million, amortization of intangibles in the range of $1.2 million to $1.3 million, and restructuring charges of approximately $100,000. GAAP net loss for the third quarter of fiscal 2010 is expected to be in the range of $4.7 million to $5.8 million. Weighted average diluted shares for the quarter are estimated to be approximately 16.2 million shares.
For the full year fiscal 2010, we expect revenue to be in the range of $46.5 million to $50.5 million. Non-GAAP net loss is expected to be in the range of $4.8 million to $8.8 million. Non-GAAP net loss excludes non-cash impact of stock-based compensation in the range of $8.0million to $10.0 million, amortization of intangibles in the range of $4.8 million to $5.1 million, and restructuring charges of approximately $200,000. On a GAAP basis, net loss for fiscal 2010 is expected to be in the range of $19.3 million to $23.3 million. Non-GAAP cash flow from operations, which excludes $500,000 in severance, is expected to be in the range of $1.2 million to $2.2 million in fiscal 2010. Weighted average diluted shares for the year are estimated to be approximately 16.3 million shares.
What: Salary.com second quarter financial results and business
overview conference call and webcast
When: Thursday, November 5, 2009
Time: 5:00 PM ET
Live Call: (877) 879-6201, domestic
(719) 325-4891, international
Replay: (888) 203-1112, conference ID 9646334, domestic
(719) 457-0820, conference ID 9646334, international
Webcast: http://investor.salary.com/events.cfm (live and replay)
NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures in the text of this press release and accompanying non-GAAP supplemental information represent financial measures used by Salary.com's management to evaluate the operating performance of the Company and to conduct its business operations. Non-GAAP financial measures discussed in the press release relate to the Company's net income and operating expenses and exclude amortization of intangible assets, stock-based compensation, and restructuring charges. This press release also discusses operating cash flows excluding non-recurring severance costs as well.
By excluding these items and by providing information on the Company's bookings in addition to its GAAP revenues, Salary.com can evaluate its operations and can compare its results on a more consistent basis to the results of other companies in the industry. Management uses the non-GAAP financial measures for planning purposes, including the preparation of operating budgets and to determine appropriate levels of operating and capital investments. Management also believes that the non-GAAP financial measures provide additional insight for analysts and investors in evaluating the Company's financial and operational performance and in assisting investors in comparing the Company's financial performance to those of other companies in the Company's industry, many of which present similar non-GAAP financial measures to investors.
However, these non-GAAP financial measures are not intended to be an alternative to financial measures prepared in accordance with GAAP and should not be considered in isolation from our GAAP results of operations. Pursuant to the requirements of the SEC rules under Regulation G, a detailed reconciliation between the Company's GAAP and non-GAAP financial results is provided in this press release and investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in the Company's SEC filings.
About Salary.com, Inc.
Salary.com(TM) is a leading provider of on-demand talent management, payroll, and compensation solutions helping businesses and individuals manage pay and performance. Salary.com's highly configurable software applications, proprietary data and consulting services help HR and compensation professionals automate, streamline and optimize critical talent management processes including: payroll, benefits, HR administration, market pricing, compensation planning, performance management, competency management, learning and development, and succession planning.
Built with compensation and competency data at the core, Salary.com solutions provide businesses of all sizes with the most productive and cost-effective way to manage and inspire their most important asset -- their people. For more information, visit www.salary.com.
Safe Harbor Statement
This release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These are statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "may," "will," "expects," "projects," "anticipates," "estimates," "believes," "intends," "plans," "should," "seeks," and similar expressions. This press release contains forward-looking statements relating to, among other things, Salary.com's expectations and assumptions concerning future performance and growth, including expectations of financial performance in the third quarter of 2010 and the full fiscal year 2010.
Forward-looking statements involve known and unknown risks and uncertainties that may cause actual future results to differ materially from those projected or contemplated in the forward-looking statements. The risks and uncertainties referred to above include, but are not limited to, the impact of a global economic recession and uncertainty in the information technology spending environment, risks associated with possible fluctuations in our operating results and rate of growth, integration and performance of acquired businesses, our history of operating losses, the possibility that we will not achieve GAAP profitability or our expectations for Non-GAAP net loss, our ability maintain and expand our customer base and product and service offerings, interruptions or delays in our service or our Web hosting, our business model, our ability to continue to obtain compensation data, breach of our security measures, the emerging market in which we operate, our ability to hire, retain and motivate our employees and manage our growth, our ability to generate additional revenues from our investments in sales and marketing, competition, our ability to continue to release and gain customer acceptance of new and improved versions of our service, successful customer deployment and utilization of our services, our ability to effectively protect our intellectual property and not infringe on the intellectual property of others, fluctuations in the number of shares outstanding and general economic factors, as well as those risks and uncertainties described in Salary.com's filings with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended March 31, 2009 and Form 10-Q for the quarter ended June 30, 2009. Salary.com expressly disclaims any obligation to update any forward-looking statements. The information and opinions contained in the third-party website links referred to in this press release do not reflect the views of Salary.com. Salary.com has not verified, prepared, or adopted any such information or opinions.
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