BakBone Software Reports First Quarter Fiscal 2011 Financial Results


    
    Operating Income from Continuing Operations of $1.0 Million

    Positive Cash Flow from Continuing Operations of $1.3 Million

    Conference Call Today at 2:00 pm PT






    
</pre>
<p><span class="xn-location">SAN DIEGO</span>, <span class="xn-chron">Aug. 5</span> /CNW/ -- BakBone Software® (OTC Bulletin Board:   BKBO), a leading provider of storage and data protection software, today announced its financial results for the first quarter of fiscal 2011, ended <span class="xn-chron">June 30, 2010</span>.</p>
<p/>
<p> </p>
<p> </p>
<p>First Quarter Fiscal 2011 Financial Highlights</p>
<p> </p>
<pre>
    
    -- Revenues from Continuing Operations         $14.0 million
    -- Operating Income from Continuing Operations  $1.0 million
    -- Total Bookings                              $11.5 million


    
</pre>
<p>"Our first quarter bookings reflect strong demand from Asia, especially <span class="xn-location">Japan</span>, offset by reduced bookings in <span class="xn-location">Europe</span> and <span class="xn-location">North America</span> as compared to the prior year," said <span class="xn-person">Steve Martin</span>, senior vice president, chief financial officer and interim CEO, BakBone. "<span class="xn-location">Japan</span> was especially strong for BakBone. During the recent quarter, we received a commitment for approximately <span class="xn-money">$2 million</span> from a large financial services company in <span class="xn-location">Japan</span>. Approximately 25% of the order is included in our bookings for the first fiscal quarter with the remaining amounts expected over future quarters including the next fiscal year.</p>
<p/>
<p>"We continue to move aggressively toward an enhanced channel-centric sales model in our North American operations, similar to the one we use for our successful sales efforts in <span class="xn-location">Japan</span>," continued <span class="xn-person">Mr. Martin</span>. "We are working closely with our resellers and distributors to drive additional sales of our NetVault® storage offerings in the marketplace.</p>
<p/>
<p>"NetVault: FASTRecover(TM) and NetVault: SmartDisk(TM) have been well-received, and we continue to enhance these offerings with additional features to ensure that our products are on the leading-edge. For the remainder of fiscal 2011, we will be focused on strengthening our channel-centric sales model and on expanding our presence in the growing markets of the Asia-Pacific region, while maintaining good control of operating expenses. We remain committed to increasing revenues and improving profitability," <span class="xn-person">Mr. Martin</span> concluded.</p>
<pre>
    

    Fiscal First Quarter Financial Results
    
</pre>
<p>The first quarter income statements reflect the continuing operations of BakBone's core storage business following the closure of the ColdSpark message management business in May of 2010.</p>
<p/>
<p>Fiscal first quarter 2011 revenues were <span class="xn-money">$14.0 million</span>, <span class="xn-money">$2.6 million</span> below the <span class="xn-money">$16.6 million</span> in revenues in the first quarter of fiscal 2010. Fiscal first quarter 2011 bookings were <span class="xn-money">$11.5 million</span>, <span class="xn-money">$2.1 million</span> below the <span class="xn-money">$13.6 million</span> in bookings in the first quarter of fiscal 2010. Included in the bookings in the prior fiscal year's first quarter was a <span class="xn-money">$1.5 million</span> contribution from the sale of non-core intellectual property rights to an OEM customer. Excluding this item, bookings in the recent quarter decreased 4% from the comparable quarter last year.</p>
<p/>
<p>Operating income from continuing operations totaled <span class="xn-money">$1.0 million</span> compared with <span class="xn-money">$1.7 million</span> in the first quarter of fiscal 2010. Excluding the non-recurring contribution from the sale of non-core IP in the first quarter of 2010, operating income from continuing operations in the recent first quarter increased by <span class="xn-money">$0.8 million</span>. Operating expenses from continuing operations decreased by <span class="xn-money">$2.0 million</span> as a result of lower accounting and professional fees as well as strategic cost reductions across most operating functions. The Company reported a net loss of <span class="xn-money">$3,000</span>, or <span class="xn-money">$0.00</span> per share, compared with net income of <span class="xn-money">$691,000</span>, or <span class="xn-money">$0.01</span> per share, in the first quarter of the prior fiscal year.</p>
<p/>
<p>Total cash at <span class="xn-chron">June 30, 2010</span> was <span class="xn-money">$4.9 million</span>, and is net of the payment in <span class="xn-chron">June 2010</span> of approximately <span class="xn-money">$0.5 million</span> in cash consideration to ColdSpark investors under the terms of the purchase agreement. Total common shares issued and outstanding at <span class="xn-chron">June 30, 2010</span> were 80.5 million.</p>
<pre>
    

    Conference Call Information
    
</pre>
<p>The Company has scheduled a conference call for today, <span class="xn-chron">August 5, 2010</span>, at <span class="xn-chron">2:00 p.m. PT</span> to discuss the results for the quarter ended <span class="xn-chron">June 30, 2010</span>. The call will be hosted by <span class="xn-person">Steve Martin</span>, Interim CEO and Chief Financial Officer of BakBone.</p>
<p/>
<p>To access the conference call, please dial 800-854-3238 (Passcode: 90772190). This call will also be webcast and can be accessed at <a href="http://www.bakbone.com">www.bakbone.com</a> by clicking on "Company Info" and then "Investor Relations."  An audio replay of the call will be available for seven days following the call at 800-642-1687 for U.S. callers or 706-645-9291 for those calling outside the U.S. (Passcode: 90772190). The archived webcast will also be available at the same website location.</p>
<pre>
    

    Note Regarding Use of Non-GAAP Financial Measures
    
</pre>
<p>Certain of the information set forth herein, including non-GAAP measures for operating income from continuing operations excluding a non-recurring revenue item, may be considered non-GAAP financial measures. BakBone believes the presentation of these non-GAAP financial measures is useful to investors because it provides a basis for understanding of BakBone's historical financial and operating performance, capital resources and cash flow, excluding non-recurring items. BakBone's management uses these non-GAAP financial measures along with the most directly comparable GAAP financial measures in evaluating the Company's operating performance and capital resources and cash flow. The presentation of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial information presented in compliance with GAAP, and non-GAAP financial measures as reported by BakBone may be different from non-GAAP financial measures used by other companies.</p>
<pre>
    

    About BakBone Software
    
</pre>
<p>BakBone makes data protection a simple, straightforward process with an award-winning product suite. From real-time data protection to deduplication, disk-based and tape backup and application protection, BakBone's solutions manage resources across all platforms, providing improved operational efficiency, reduced system downtime, improved data and application availability and enhanced security to support the business growth of enterprise environments. For more information about BakBone, visit <a href="http://www.bakbone.com">www.bakbone.com</a> or email <a href="mailto:info@bakbone.com">info@bakbone.com</a>.</p>
<pre>
    


    Safe Harbor
    
</pre>
<p>This press release contains express and/or implied forward-looking statements including, without limitation, statements regarding anticipated financial results and market developments that involve risks, uncertainties, assumptions and other factors, which, if they do not materialize or prove correct, could cause BakBone's results to differ materially from historical results, or those expressed or implied by such forward-looking statements. The potential risks and uncertainties may include, but are not limited to: risks that the costs of exiting the ColdSpark business will be higher than anticipated; risks that the ongoing weak economic and market conditions, particularly in <span class="xn-location">North America</span>, could continue to lead to reduced spending on information technology products; competition in our target markets; potential capital needs; management of future growth and expansion; the development, implementation and execution of the Company's strategic vision; risk of third-party claims of infringement; protection of proprietary information; customer acceptance of the Company's existing and newly introduced products and fee structures; the success of the Company's brand development efforts; risks associated with strategic alliances; reliance on distribution channels; product concentration; need to develop new and enhanced products; potential product defects; our ability to hire and retain qualified employees and key management personnel; and risks associated with changes in domestic and international market conditions and the entry into and development of international markets for the Company's products. Our forward-looking statements should be considered in the context of these and other risk factors disclosed in our most recent report filed with the Securities and Exchange Commission, which may be found at <a href="http://www.sec.gov">www.sec.gov</a>, as well as those risk factors disclosed in our current report filed with the relevant Canadian securities regulators, which is available on SEDAR at <a href="http://www.sedar.com">www.sedar.com</a>. All future written and oral forward-looking statements made by us or on our behalf are also subject to these factors. BakBone assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made, other than as required under applicable securities laws.</p>
<p/>
<p>BakBone®, BakBone Software®, NetVault®, Application Plugin Module(TM), BakBone logo®, Integrated Data Protection(TM), NetVault: SmartDisk(TM), Asempra®, and FASTRecover(TM) are all trademarks or registered trademarks of BakBone Software, Inc., in the <span class="xn-location">United States</span> and/or in other countries. All other brands, products or service names are or may be trademarks, registered trademarks or service marks of, and used to identify, products or services of their respective owners.</p>
<pre>
    





    
</pre>
<p> </p>
<pre>
    
                    BAKBONE SOFTWARE INCORPORATED
                Condensed Consolidated Balance Sheets
                           (in thousands)
    
</pre>
<p> </p>
<pre>
    
                                                   Fiscal Period Ended
                                                   -------------------
                                                   June 30,     March 31,
                                                      2010         2010
                                                  ---------    ----------
                        ASSETS                    (unaudited)
    Current assets:
             Cash and cash equivalents                 $4,883       $4,903
             Restricted cash                               51           51
             Accounts receivable, net                   8,619       10,582
             Prepaid expenses and other assets          1,406          739
                                                        -----          ---
    
</pre>
<p> </p>
<pre>
    
                        Total current assets           14,959       16,275
    Property and equipment, net                         1,719        2,020
    Intangible assets, net                              1,642        1,814
    Goodwill                                            7,615        7,615
    Other assets                                          440          946
                                                          ---          ---
    
</pre>
<p> </p>
<pre>
    
                        Total assets                  $26,375      $28,670
                                                      =======      =======
    
</pre>
<p> </p>
<pre>
    
             LIABILITIES AND SHAREHOLDERS'
                        DEFICIT
    Current liabilities:
              Accounts payable and accrued
               liabilities                             $8,547       $7,942
              Current portion of acquisition
               consideration payable                    2,369          809
              Current portion of deferred
               revenue                                 44,641       44,337
                                                       ------       ------
    
</pre>
<p> </p>
<pre>
    
                        Total current liabilities      55,557       53,088
    Deferred revenue, excluding
     current portion                                   43,432       44,840
    Acquisition consideration payable,
     excluding current portion                          4,101        6,037
    Other liabilities                                     599          697
                                                          ---          ---
    
</pre>
<p> </p>
<pre>
    
                        Total liabilities             103,689      104,662
                                                      -------      -------
    
</pre>
<p> </p>
<pre>
    
    Shareholders' deficit                             (77,314)     (75,992)
                                                      -------      -------
    
</pre>
<p> </p>
<pre>
    
    Total liabilities and
     shareholders' deficit                            $26,375      $28,670
                                                      =======      =======





    
</pre>
<p> </p>
<pre>
    
                   BAKBONE SOFTWARE INCORPORATED
        Condensed Consolidated Statements of Operations (1)
               (in thousands, except per share data)
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                                                    Three months
                                                   ended June 30,
                                                   --------------
                                                    2010      2009
                                                    (unaudited)
                                                    -----------
    
</pre>
<p> </p>
<pre>
    
    Revenues:
      License and service                        $13,983   $15,100
      Other                                            -     1,500
                                                     ---     -----
      Total revenues                              13,983    16,600
    Cost of revenues                               1,426     1,345
                                                   -----     -----
      Gross profit                                12,557    15,255
                                                  ------    ------
    Operating expenses:
      Sales and marketing                          5,860     6,536
      Research and development                     2,343     2,828
      General and administrative                   3,330     4,215
                                                   -----     -----
      Total operating expenses                    11,533    13,579
                                                  ------    ------
      Operating income from continuing
       operations                                  1,024     1,676
    Other non-operating expense                     (212)     (383)
                                                    ----      ----
      Income before income taxes and
       discontinued operations                       812     1,293
    Provision for income taxes                         9        25
                                                     ---       ---
      Income from continuing operations              803     1,268
      Loss from discontinued operations, net         806       577
                                                     ---       ---
      Net (loss) income                              $(3)     $691
                                                     ===      ====
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Basic net (loss) income per common share:
      Income from continuing operations            $0.01     $0.02
                                                   =====     =====
      Loss from discontinued operations           $(0.01)   $(0.01)
                                                  ======    ======
      Net (loss) income                           $(0.00)    $0.01
                                                  ======     =====
    
</pre>
<p> </p>
<pre>
    
    Diluted net (loss) income per common
     share:
      Income from continuing operations            $0.01     $0.01
                                                   =====     =====
      Loss from discontinued operations           $(0.01)   $(0.00)
                                                  ======    ======
      Net (loss) income                           $(0.00)    $0.01
                                                  ======     =====
    
</pre>
<p> </p>
<pre>
    
    Weighted-average common shares
     outstanding:
      Basic                                       86,328    76,747
                                                  ======    ======
      Diluted                                     86,328    94,819
                                                  ======    ======
    
</pre>
<p> </p>
<pre>
    
    (1) In May 2010, the Company decided to close its ColdSpark Message
    Management division.
     As a result, the results of operations related to the division have
     been classified as discontinued
     operations in the consolidated financial statements for all periods
     presented.  Thus, certain
    account balances from the prior period comparative financial
    statements have been reclassified
    to conform to the discontinued operations presentation.





    
</pre>
<p> </p>
<pre>
    
      BAKBONE SOFTWARE INCORPORATED
      Condensed Consolidated Statements of Cash Flows (1)
      (in thousands)
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                                                      Three months ended
                                                           June 30,
                                                      ------------------
                                                       2010          2009
                                                         (unaudited)
                                                         -----------
      Cash flows from operating activities:
      Net (loss) income                                 $(3)         $691
      Adjustments to reconcile net (loss)
       income to net cash provided by
       operating activities  from continuing
       operations:
        Loss from discontinued operations               806           577
        Depreciation and amortization                   465           447
        Non-cash interest expense                       185           125
        Stock-based compensation                        134            12
        Operating expenses funded by financing
         arrangement                                     55           103
        Bad debts expense                                26             -
        Loss on disposal of capital assets                6             6
        Other changes in assets and liabilities        (402)       (1,777)
                                                       ----        ------
          Net cash provided by operating
           activities                                 1,272           184
                                                      -----           ---
    
</pre>
<p> </p>
<pre>
    
      Cash flows from investing activities:
        Cash paid for acquisitions, net of cash
         received                                      (476)       (1,014)
        Capital expenditures                            (89)          (67)
                                                        ---           ---
          Net cash used in investing activities        (565)       (1,081)
                                                       ----        ------
    
</pre>
<p> </p>
<pre>
    
      Cash flows from financing activities:
        Payments on capital lease obligations            (8)          (74)
        Payments on long-term debt obligations          (69)         (224)
                                                        ---          ----
          Net cash used in financing activities         (77)         (298)
                                                        ---          ----
    
</pre>
<p> </p>
<pre>
    
      Cash flows from discontinued operations:
        Net cash used in operating activities of
         discontinued operations                       (752)         (274)
        Net cash used in financing activities of
         discontinued operations                        (21)           (2)
                                                        ---           ---
                                                       (773)         (276)
                                                       ----          ----
    
</pre>
<p> </p>
<pre>
    
      Effect of exchange rates on cash and
       cash equivalents                                 123           500
                                                        ---           ---
    
</pre>
<p> </p>
<pre>
    
        Net decrease in cash and cash
         equivalents                                    (20)         (971)
        Cash and cash equivalents, beginning of
         period                                       4,903         8,398
        Cash and cash equivalents, end of period     $4,883        $7,427
                                                     ======        ======
    
</pre>
<p> </p>
<pre>
    
      (1) In May 2010, the Company decided to close its ColdSpark Message
      Management division.  As a result,
      the cash flow activity related to the division have been classified
      as discontinued operations in the consolidated
      financial statements for all periods presented.  Thus, certain cash
      flow activity from the prior period comparative
      financial statements has been reclassified to conform to the
      discontinued operations presentation.





    
</pre>
<p> </p>
<pre>
    
                   BAKBONE SOFTWARE INCORPORATED
        Reconciliation of Bookings to U.S. GAAP Revenue (1)
                           (in thousands)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                             Three months ended June
                                                       30,
                                            ------------------------
                                              2010              2009
                                              ----              ----
                                                   (unaudited)
    Revenues sourced from current period
     bookings:
      Total bookings for the period        $11,473           $13,478
      Bookings deferred into subsequent
       periods                            (10,753)           (10,686)
                                           -------           -------
    
</pre>
<p> </p>
<pre>
    
      Revenues from current period
       bookings                                720             2,792
    
</pre>
<p> </p>
<pre>
    
    Revenues sourced from prior period
     bookings:                              13,263            13,808
                                            ------            ------
    
</pre>
<p> </p>
<pre>
    
      Total revenues recognized in the
       period                              $13,983           $16,600
                                           =======           =======
    
</pre>
<p> </p>
<pre>
    
    (1)  We define bookings as the gross dollars invoiced through the
    sale of software licenses,
    maintenance contracts and professional services. We utilize bookings
    information as an
    operations measure, but it is not intended to replace U.S. GAAP
    accounting. Under the ratable
    revenue recognition method, license bookings are recognized as
    revenue over the appropriate
    period (generally three to five years). In general, variations in
    revenues period-over-period are
    affected by the amortization of current and prior period license
    bookings. Accordingly, we believe
    that trends in current and historical bookings are key factors in
    analyzing our operating results.





    
</pre>
<p> </p>
<pre>
    
                        BAKBONE SOFTWARE INCORPORATED
      Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1)
                                (in thousands)
                                 (unaudited)
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
                                                       Three months ended
                                                       ------------------
                                                         June 30, 2009
                                                  GAAP       Adj    Non-GAAP
                                                  ----       ---    --------
    
</pre>
<p> </p>
<pre>
    
    Revenues:
      License and service                        $15,100        $-    $15,100
      Other                                        1,500    (1,500)         -
                                                   -----    ------        ---
      Total revenues                              16,600    (1,500)    15,100
    Cost of revenues                               1,345         -      1,345
                                                   -----       ---      -----
      Gross profit                                15,255    (1,500)    13,755
                                                  ------    ------     ------
    Operating expenses:
      Sales and marketing                          6,536         -      6,536
      Research and development                     2,828         -      2,828
      General and administrative                   4,215         -      4,215
                                                   -----       ---      -----
      Total operating expenses                    13,579         -     13,579
                                                  ------       ---     ------
      Operating income from continuing
       operations                                  1,676    (1,500)       176
    Other non-operating expense                     (383)        -       (383)
                                                    ----       ---       ----
      Income (loss) before income taxes and
       discontinued operations                     1,293    (1,500)      (207)
    Provision for income taxes                        25         -         25
                                                     ---       ---        ---
      Income (loss) from continuing operations     1,268    (1,500)      (232)
      Loss from discontinued operations, net         577         -        577
                                                     ---       ---        ---
      Net income (loss)                             $691   $(1,500)     $(809)
                                                    ====   =======      =====
    
</pre>
<p> </p>
<pre>
    
    (1) This presentation includes non-GAAP measures.  Our non-GAAP
    measures are not meant to be considered in
    isolation or as a substitute for comparable GAAP measures, and should
    be read only in conjunction with our
    consolidated financial measures prepared in accordance with GAAP.
    The following is an explanation of these
     non-GAAP measures.
    
</pre>
<p> </p>
<pre>
    
    Non-recurring revenue item:  We recorded $1.5 million in non-
    recurring revenue related to the sale of non-critical
    intellectual property assets.
    -----------------------------




    
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
    
    Investor Contact:         Corporate Contact:     Media Contact:
    Doug Sherk /Jenifer
     Kirtland                 Steve Martin           Amber Winans
    415-896-6820              858-795-7525           858-795-7584
    jkirtland@evcgroup.com    IR@bakbone.com         amber.winans@bakbone.com


    (Logo:  http://photos.prnewswire.com/prnh/20031120/SDBAKLOGO)
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20031120/SDBAKLOGO)





    

For further information: For further information: Investors, Doug Sherk or Jenifer Kirtland, jkirtland@evcgroup.com, both at +1-415-896-6820, for BakBone Software; or Corporate, Steve Martin, +1-858-795-7525, IR@bakbone.com, or Media, Amber Winans, +1-858-795-7584, amber.winans@bakbone.com, both of BakBone Software Web Site: http://www.bakbone.com

Organization Profile

BAKBONE SOFTWARE

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890