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Sourcefire Announces 2009 Second Quarter Results

Revenue increases 38 percent year-over-year
Columbia, MD -- July 30, 2009 -- Sourcefire, Inc. (Nasdaq: FIRE), a leader in Cybersecurity, today announced financial results for its fiscal second quarter ended June 30, 2009.

John Burris, Sourcefire's CEO, commented: "When I joined Sourcefire a year ago, we said we would grow revenue, control expenses, leverage our channel relationships, and achieve full year profitability on an adjusted basis. I am very excited by the progress that Sourcefire has made and confident in our ability to continue to execute against these objectives."

Financial Summary

  • Total Revenues - Revenues for 2Q09 were $22.2 million compared to $16.0 million in 2Q08, an increase of 38%. Revenues for the six months ended June 30, 2009 were $40.8 million compared to $29.7 million for the same period last year, an increase of 37%.

  • Gross Profit - Gross profit for 2Q09 increased 39% to $17.1 million, or 77% of revenues, compared to $12.3 million, or 77% of revenues, in 2Q08. Gross profit for the six months ended June 30, 2009 increased 37% to $31.5 million, or 77% of revenues, compared to $23.0 million, or 77% of revenues, for the same period last year.

  • GAAP Earnings " Net income was $0.6 million for 2Q09, or $0.02 per diluted share, on the basis of generally accepted accounting principles (GAAP), compared with GAAP net loss of $3.1 million, or a loss of $0.12 per diluted share, in 2Q08. Net loss for the six months ended June 30, 2009 was $0.5 million, or a loss of $0.02 per diluted share, compared with net loss of $6.6 million, or a loss of $0.27 per diluted share, for the same period last year.

  • Adjusted Net Income/Loss - Adjusted net income for 2Q09, which excludes stock-based compensation expense, was $2.0 million, or $0.07 per diluted share in 2Q09. This compares to adjusted net loss in 2Q08, which excludes stock-based compensation expense as well as costs associated with the transition to our new chief executive officer, of $1.9 million, or a loss of $0.07 per diluted share. Adjusted net income for the six months ended June 30, 2009, which excludes stock-based compensation expense, was $2.1 million, or $0.08 per diluted share. This compares with adjusted net loss for the same period last year, which excludes stock-based compensation expense as well as CEO transition costs, of $4.1 million, or a loss of $0.16 per diluted share.

  • Balance Sheet - As of June 30, 2009 the Company's cash, cash equivalents and investments totaled $108.3 million.

    Recent Company Highlights Global Expansion & Channel Development

  • Grew international revenues to $10.6 million (26% of total revenues) in the first six months of 2009, up 23% over the year-ago level of $8.6 million (29% of total revenues). v Increased U.S. federal sector revenues to $9.5 million (23% of total revenues) in the first six months of 2009, up 202% over the year-ago level of $3.1 million (11% of total revenues) driven by emphasis on Cybersecurity initiatives.
  • Signed an agreement with SRA International, Inc. to resell the Sourcefire 3D' System to federal government customers. The Sourcefire 3D System will now be available to federal customers as a component of SRA's comprehensive Cybersecurity offering " SRA One Vault " and as part of its leading managed security service.
  • Appointed a Managing Director of the Sourcefire Asia Pacific operations.
  • Named a security industry veteran the Vice President of World Wide Channel Sales.

    Innovation & Recognition

  • Announced the Sourcefire 3D System 4.9, with the new Sourcefire Virtual 3D Sensor and Sourcefire Virtual Defense Center. These new virtual appliances will enable users to deploy Sourcefire's leading security solutions within their virtual environments, increasing protection for both physical and virtual assets. Available during the second half of 2009, the Sourcefire 3D System 4.9 also features the industry's first Policy Layering capabilities that deliver increased customization for large or multi-organizational networks, including cloud or virtual implementations.
  • Recognized with a Reader Trust Award at the 2009 SC Awards. Snort was named Best Intrusion Detection/Prevention Solution.
  • Named one of Network World's "2009 Best of Tests" winners, the Sourcefire 3D System was the sole winner in the security category. The Sourcefire 3D System was recognized for its ability to make network protection easier and more effective.
  • Led the industry in same-day patch coverage with the Sourcefire VRT (Vulnerability Research Team).
  • Engineered the new 3D6500 Sensor, offering up to 4Gbps of throughput in a 2U form factor appliance while providing the ability to interface with 10G fiber networks. As is the case with all Sourcefire 3D Sensors, the 3D6500 features integrated copper and fiber bypass (fail-open) technology—a critical requirement for inline IPS deployments—foregoing the need to acquire costly external bypass devices.
  • Celebrated 10-year anniversary of Snort, the world's most popular Intrusion Detection and Prevention System (IDS/IPS). Snort recently hit major milestones reaching 3.7 million downloads and more than 244,000 registered users.
  • Awarded two scholarships recognizing the use of Snort as an educational tool. Sourcefire announced the winners of its fifth annual Snort Scholarship Program, two $5,000 Cybersecurity scholarships to deserving university students using Snort to provide real-world experience in network security.

    Third Quarter 2009 Outlook Based on information as of July 30, 2009, Sourcefire expects revenue for 3Q09 in the range of $24.8 million to $26.3 million, net income per share in the range of $0.03 to $0.06 and, on an adjusted basis, net income per share in the range of $0.08 to $0.11. Sourcefire's expectation of adjusted net income per share excludes stock-based compensation expense in the expected range of $1.4 million to $1.7 million.

    Non-GAAP Measures In evaluating the operating performance of its business, Sourcefire's management excludes certain charges and credits that are required by GAAP. These non-GAAP results provide useful information to both management and investors by excluding items that Sourcefire believes may not be indicative of the Company's operating performance. These items share one or more of the following characteristics: they are unusual and Sourcefire does not expect them to recur in the ordinary course of its business; they do not involve the expenditure of cash; or they are unrelated to the ongoing operation of the business in the ordinary course. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release.

    Conference Call and Webcast On Thursday, July 30, 2009 at 9:00 a.m. Eastern Time, Sourcefire will host a conference call to review these results. A listen-only web cast of the session will be available at http://investor.sourcefire.com. Those wishing to participate in the live session should use the following numbers to dial in:

    Calling from the United States or Canada: 800-706-7741 Calling from other countries: 617-614-3471 Pass code: 88240816

    An online replay will be available at http://investor.sourcefire.com following the completion of the live call and will remain available for at least 90 days.

    About Sourcefire Sourcefire, Inc. (Nasdaq:FIRE) is a world leader in Cybersecurity solutions. Sourcefire is transforming the way Global 2000 organizations and government agencies manage and minimize network security risks. Sourcefire's IPS and Real-time Adaptive Security solution equips customers with an efficient and effective layered security defense " protecting network assets before, during and after an attack. Through the years, Sourcefire has been consistently recognized for its innovation and industry leadership by customers, media and industry analysts alike " with more than 40 awards and accolades. Today, the names Sourcefire and founder Martin Roesch have grown synonymous with innovation and network security intelligence. For more information about Sourcefire, please visit http://www.sourcefire.com.