First Quarter 2011:
Revenue: $30.8 million, an increase of 19% year-over-year
GAAP Net Income: $0.5 million, or $0.02 per diluted share
Adjusted Net Income: $1.2 million, or $0.04 per diluted share
Sourcefire, Inc. (Nasdaq: FIRE), the creator of Snort' and a leader in intelligent cybersecurity solutions, today announced financial results for its fiscal first quarter ended March 31, 2011.
"I'm very pleased by the solid start to the year, with total revenue increasing 19 percent despite the softness in our Federal business which continues to be impacted by ongoing budgetary constraints," said John Burris, CEO of Sourcefire. "Channel partners drove a higher proportion of our sales, which underscores the investments we have been making as well as the channels' confidence in our industry-leading technologies and our upcoming next generation products."
Total Revenues - Revenues for the first quarter of 2011 were $30.8 million compared to $25.8 million in the first quarter of 2010, an increase of 19%.
GAAP Net Income - Net income was $0.5 million for the first quarter of 2011, or $0.02 per diluted share, on the basis of generally accepted accounting principles (GAAP), compared with GAAP net income of $0.8 million, or $0.03 per diluted share, in the first quarter of 2010. GAAP net income for the first quarter of 2011 includes a one-time $2.0 million research and experimentation tax credit.
Adjusted Net Income - Adjusted net income for the first quarter of 2011, which excludes stock-based compensation expense, amortization of acquired intangible assets and acquisition-related expenses, and includes an assumed tax rate of 35%, was $1.2 million, or $0.04 per diluted share. This compares to adjusted net income in the first quarter of 2010, which excludes stock-based compensation expense and includes an assumed tax rate of 35%, of $2.0 million, or $0.07 per diluted share.
Cash and Cash Flow - Cash, cash equivalents and investments were $152.8 million as of March 31, 2011. For the first quarter of 2011 net cash provided by operating activities was $7.3 million. Free cash flow, which Sourcefire defines as net cash provided by operating activities less capital expenditures, was $6.0 million for the first quarter of 2011.
First Quarter Company Highlights
Global Expansion & Channel Development
Increased channel-influenced sales worldwide to 50%, up from 33% in 1Q10.
Increased U.S. commercial revenues to $16.2 million, up 33% over 1Q10.
Increased international revenues to $8.4 million, up 11% over 1Q10.
Increased U.S. federal sector revenues to $6.1 million, up 1% over 1Q10.
Innovation & Recognition
Named to Forbes' List of 25 Fastest-Growing Tech Companies, surpassing all other security vendors.
Sourcefire Intrusion Prevention System (IPS) outperformed all competitors in tuned detection for second consecutive year according to NSS Labs. Protected against 98 percent of all attacks and established a new industry record in NSS Labs' independent tests.
ImmunetTM, the company's advanced cloud-based anti-malware solution, surpassed 1.3 million users. Immunet hit this milestone due to its revolutionary community-based detection model that simplifies the sharing of protection with one's most trusted contacts. Immunet's cloud-based approach enables users to better protect against zero-day attacks with real-time protection driven by intelligence from its user community.
Enabled application control within virtual environments. Announced integration between SourcefireR and VMware vShieldTM App and vShield Edge. The integrations enable the Sourcefire Intrusion Prevention System (IPS) to configure VMware vShield App or vShield Edge to dynamically restrict any policy-violating activity within a customer's virtual environment. The Sourcefire IPSTM integrated with VMware vShield products provides users with application detection, application control and real-time adaptive security.
Second Quarter 2011 Outlook
Based on information as of May 4, 2011, Sourcefire expects revenue for the second quarter of 2011 in the range of $33.5 million to $35.5 million, net loss per share in the range of ($0.05) to ($0.02) and, on an adjusted basis, net income per diluted share in the range of $0.03 to $0.06. Sourcefire's expectation of adjusted net income per share excludes stock-based compensation expense of $3.3 million to $3.5 million and amortization of acquired intangible assets and acquisition-related expenses of approximately $1.0 million and includes an assumed 35% tax rate.
Adjusted Net Income, Adjusted Net Income per Share, Adjusted Income from Operations and Adjusted Income from Operations as a Percentage of Revenue: In evaluating the operating performance of our business, Sourcefire excludes certain charges and credits that are required by GAAP. Sourcefire believes these non-GAAP results provide useful information to both management and investors by excluding (i) stock-based compensation, which does not involve the expenditure of cash, (ii) amortization of acquisition-related intangible assets, which does not involve the expenditure of cash, and (iii) other acquisition-related expenses, which are unrelated to the ongoing operation of our business in the ordinary course. For all of 2011 Sourcefire expects that non-GAAP results will continue to be adjusted to reflect the effect of an assumed tax rate of 35%. Sourcefire believes this adjustment provides useful information to both management and investors.
Free Cash Flow: Sourcefire defines free cash flow as net cash provided by operating activities minus capital expenditures. The Company considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that, after the purchase of property and equipment, can be used for strategic opportunities, including investing in the business, making strategic acquisitions and strengthening the balance sheet.
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 Wednesday, May 4, 2011 at 5:00 p.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: 800-591-6945
Calling from other countries: 617-614-4911
Pass code: 71512655
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.
Sourcefire, Inc. (Nasdaq:FIRE), is a world leader in intelligent cybersecurity solutions. Sourcefire is transforming the way Global 2000 organizations and government agencies manage and minimize network security risks. Sourcefire's IPS, Real-time Network Awareness and Real-time Adaptive Security solutions equip 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 50 awards and accolades. Today, the name Sourcefire has grown synonymous with innovation and network security intelligence. For more information about Sourcefire, please visit http://www.sourcefire.com.
Sourcefire, the Sourcefire logo, Snort, the Snort and Pig logo, ClamAV, Immunet and certain other trademarks and logos are trademarks or registered trademarks of Sourcefire, Inc. in the United States and other countries. Other company, product and service names may be trademarks or service marks of others.