SonicWALL Reports First Quarter 2010 Financial Results

PRESS RELEASE

SAN JOSE, Calif., April 23 /PRNewswire-FirstCall/ -- SonicWALL, Inc. (Nasdaq: SNWL), today reported performance in the quarter ended March 31, 2010, with revenue of $55.3 million, representing 17% growth year-over-year. The Company shipped 50,000 revenue units in the quarter. Cash flow from operations was $11.1 million, and the Company ended the first quarter with $127.3 million in deferred revenue.

Net income for the first quarter of 2010 calculated in accordance with U.S. generally-accepted accounting principles (GAAP) was $4.4 million, or $0.08 per diluted share. In comparison, GAAP net income for the first quarter of 2009 was $1.7 million, or $0.03 per diluted share.

Non-GAAP net income for the first quarter of 2010 was $6.7 million or $0.12 per diluted share. In comparison, non-GAAP net income for the first quarter of 2009 was $3.9 million, or $0.07 per diluted share. Non-GAAP net income excludes amortization of purchased intangible assets and share-based compensation expense primarily associated with the expensing of stock options. An explanation of our use of non-GAAP measures is included in the section in this press release entitled "Use of Non-GAAP Financial Measures."

Non-GAAP gross margin in the first quarter was 74.4%, compared to 74.0% in the first quarter of 2009. Non-GAAP operating margin was 18.4%, compared to 11.6% in the first quarter of 2009.

"SonicWALL had a strong start to 2010," said Matt Medeiros, CEO. "We believe that our technology leadership will enable us to continue to build momentum in the mid-enterprise and SMB markets throughout the year."

Guidance for Q2 2010

SonicWALL expects second quarter 2010 revenue to be in the range of $55.0-$57.0 million. The Company expects non-GAAP gross margin to be in the range of 72%-73% of revenue. SonicWALL expects earnings per share in the second quarter of 2010 to be in the range of $0.10-$0.11 per diluted share on a non-GAAP basis. On a GAAP basis, inclusive of a total of approximately $4.0 million, before taxes, in combined amortization of purchased intangibles assets, and share-based compensation expense, the Company expects earnings per share to be in the range of $0.08 to $0.09. Share-based compensation expense associated with the expensing of stock options is estimated to be approximately $2 million for the second quarter of 2010.

This is the only statement SonicWALL will be giving during the quarter with respect to guidance, unless a decision is made to provide an update.

Conference Call

A conference call to discuss first quarter 2010 results will take place today, April 23, 2010, at 5:30 a.m. PT (8:30 a.m. ET). SonicWALL President and CEO Matt Medeiros and SonicWALL CFO Rob Selvi will host the call. A web cast of the live call can be accessed at http://www.sonicwall.com/us/company/2518.html. A replay of the call will be available beginning at approximately 12:00 p.m. PT (3:00 p.m. ET) today at the Company's website or by telephone until 5:00 p.m. PT on April 27 at 888-203-1112 (toll-free) or 719-457-0820 (International), passcode