Netezza Announces Second Quarter Fiscal 2008 Financial Results



    Revenue Increases 60% Over the Prior Year's Second Fiscal Quarter and 80%
Over the Prior Fiscal Year's First Half

    FRAMINGHAM, MASS., August 23 /CNW/ - Netezza Corporation (NYSE Arca: NZ)
today announced its financial results for the second fiscal quarter ended July
31, 2007.

    Highlights:

    --  Revenue for the second quarter of fiscal 2008 increased 60% to $28.4
million compared with $17.8 million for the same period one year ago. Revenue
for the first half of fiscal 2008 increased 80% to $53.7 million compared with
$29.8 million for the same period one year ago.

    --  Gross profit for the second quarter of fiscal 2008 increased to $17.0
million compared with $10.6 million for the same period one year ago. Gross
profit for the first half of fiscal 2008 increased to $32.3 million compared
with $17.7 million for the same period one year ago.

    --  Stock-based compensation expenses were $0.9 million in the second
quarter of fiscal 2008 compared with $0.1 million for the same period one year
ago. Stock-based compensation expenses were $1.8 million for the first half of
fiscal 2008 compared with $0.2 million for the same period one year ago.

    --  Operating loss for the second quarter of fiscal 2008 was $0.5 million
compared with an operating loss of $2.2 million for the same period one year
ago. Operating loss for the first half of fiscal 2008 was $2.1 million
compared with an operating loss of $6.5 million for the same period one year
ago.

    --  Net loss for the second quarter of fiscal 2008 was $1.0 million
compared with a net loss of $1.9 million for the same period one year ago. Net
loss for the first half of fiscal 2008 was $2.9 million compared with a net
loss of $6.0 million for the same period one year ago.

    --  Net loss per share for the second quarter of fiscal 2008 was $0.19
compared with a net loss per share of $0.46 for the same period one year ago.
Net loss per share for the first half of fiscal 2008 was $0.55 compared with a
net loss per share of $1.24 for the same period one year ago.

    --  Netezza closed its initial public offering on July 24, 2007, raising
proceeds of $113.2 million net of expenses.

    Jit Saxena, Netezza's chairman and chief executive officer, stated, "We
are very pleased with our results for the quarter ended July 31, 2007. We
continued to see good demand for our products both from new customers as well
as from our existing customers and across different vertical markets. Our
continued investments in product development and in our distribution channels
continue to expand our opportunities and position us very well for the
future."

    Financial Guidance:

    "Based on the current momentum in the marketplace, our expected revenue
for our full fiscal 2008 is in the range of $114 - $116 million and we expect
to continue to see improvement at the operating income level," said Patrick
Scannell, senior vice president and chief financial officer of Netezza.

    Second Quarter Conference Call:

    Netezza will host a conference call and webcast at 4:30 PM Eastern Time
(1:30 PM Pacific Time) on August 23, 2007 to discuss its second fiscal quarter
results and business outlook.

    The conference call can be accessed by dialing +1-866-510-0710 for
participants in the United States and by dialing +1-617-597-5378 for
participants outside the United States. The passcode for the conference call
is 97931534. A telephonic replay of the conference call will also be available
two hours after the call and will run for two weeks. The replay can be
accessed by dialing +1-888-286-8010 for participants in the United States and
by dialing +1-617-801-6888 for participants outside the United States. The
passcode for the replay is 92918343.

    The webcast will be accessible from the "Investor Relations" section of
Netezza's website (http://www.netezza.com). The webcast will be archived on
Netezza's website for a period of one year.

    About Netezza Corporation:

    Netezza is a leading provider of data warehouse appliances. The Netezza
Performance Server data warehouse appliance integrates database, server and
storage platforms in a purpose-built system to perform detailed queries and
analyses on large volumes of stored data. Recognizing the limitations of
traditional data warehouse solutions, Netezza designed its NPS family of data
warehouse appliances specifically for analysis of terabytes of data 10 to 100
times faster than traditional solutions, with a lower total cost of ownership
and greater ease of use. Netezza is headquartered in Framingham, MA and has
offices in Washington, DC, the United Kingdom, Australia, Japan, Korea and
Canada. For more information about Netezza, please visit www.netezza.com.

    For Netezza Investors:

    The statements set forth above include forward-looking statements within
the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.
These forward-looking statements relate to Netezza's future financial
performance and Netezza's business prospects. These statements involve risk
and uncertainties, including: market demand for our products; our limited
operating history and history of losses; quarterly fluctuation of our
business; our ability to attract and retain key personnel; competition in the
data warehouse market; our dependence on certain key customers; our ability to
protect our patents and intellectual property; our ability to defend against
third party infringement claims, other litigation and contingent liabilities;
and risks relating to operating internationally. For a further list and
description of risks and uncertainties that could cause actual results to
differ materially from those contained in the forward looking statements in
this release, we refer you to the "Risk Factors" section of Netezza's
prospectus dated July 18, 2007, which is on file with the SEC and is available
on Netezza's investor relations website at http://www.netezza.com and on the
SEC website at http://www.sec.gov. In addition, the forward-looking statements
included in this press release represent our views as of August 23, 2007. We
anticipate that subsequent events and developments will cause our views to
change. However, while we may elect to update these forward-looking statements
at some point in the future, we specifically disclaim any obligation to do so.
These forward-looking statements should not be relied upon as representing our
views as of any date subsequent to August 23, 2007.

    
                             Netezza Corporation
                     Consolidated Statement of Operations
                   (in thousands, except per share amounts)
                                 (unaudited)


                                         For the three     For the six
                                          months ended      months ended
                                           July 31,          July 31,
                                       ----------------- -----------------
                                         2007     2006     2007     2006
                                       -------- -------- -------- --------

    Revenue
         Product                       $22,933  $14,389  $43,510  $23,278
         Services                        5,467    3,395   10,232    6,504
                                       -------- -------- -------- --------
         Total revenue                  28,400   17,784   53,742   29,782

    Cost of revenue
         Product                         9,481    6,046   17,876    9,611
         Services                        1,956    1,109    3,604    2,434
                                       -------- -------- -------- --------
         Total cost of revenue          11,437    7,155   21,480   12,045
                                       -------- -------- -------- --------

    Gross Profit                        16,963   10,629   32,262   17,737

    Operating Expenses
    Sales and marketing                  9,962    7,217   19,631   13,590
    Research and development             5,572    4,321   11,056    8,547
    General and administrative           1,905    1,247    3,660    2,099
                                       -------- -------- -------- --------
         Total operating expenses       17,439   12,785   34,347   24,236

                                       -------- -------- -------- --------
    Operating loss                        (476)  (2,156)  (2,085)  (6,499)

    Interest income                        195       99      217      219
    Interest expense                       502      196      715      288
    Other income, net                       51      360      220      545
                                       -------- -------- -------- --------

    Loss before income taxes           $  (732) $(1,893) $(2,363) $(6,023)

    Provision for income taxes             291        -      565        -

                                       -------- -------- -------- --------

    Net loss                           $(1,023) $(1,893) $(2,928) $(6,023)

    Accretion to preferred stock         1,370    1,483    2,853    2,966
                                       -------- -------- -------- --------

    Net loss attributable to common
     stockholders                      $(2,393) $(3,376) $(5,781) $(8,989)
                                       -------- -------- -------- --------


    Net loss per common share:
    Basic                              $ (0.19) $ (0.46) $ (0.55) $ (1.24)
    Diluted                            $ (0.19) $ (0.46) $ (0.55) $ (1.24)

    Shares used in per common share
     calculations:
    Basic                               12,374    7,272   10,444    7,230
    Diluted                             12,374    7,272   10,444    7,230

    Stock-based compensation included
     in above figures:
    Cost of product revenue            $    23  $     3  $    45  $     6
    Cost of services revenue                27        3       53        4
    Sales and marketing                    257       57      506       69
    Research and development               177       32      325       52
    General and administrative             452       52      886       86
                                       -------- -------- -------- --------
    Total                              $   936  $   147  $ 1,815  $   217
                                       -------- -------- -------- --------
    

    

                             Netezza Corporation
                     Condensed Consolidated Balance Sheet
                                (in thousands)


                                                    July 31,   January 31,
                                                      2007         2007
                                                   ----------- -----------
                                                   (unaudited)
    Assets

    Current assets
     Cash and cash equivalents                      $  116,558  $   5,018
     Accounts receivable                                18,855     31,834
     Inventory                                          33,176     26,239
     Other current assets                                3,984      1,370
                                                   ----------- -----------
      Total current assets                             172,573     64,461

     Property and equipment, net                         5,588      4,228
     Restricted cash                                       379        379
     Other long-term assets                                153        131
                                                   ----------- -----------

      Total assets                                  $  178,693  $  69,199
                                                   ----------- -----------



    Liabilities, convertible redeemable preferred
     stock and stockholders' equity (deficit)

    Current liabilities
     Accounts payable                               $    3,212  $  12,683
     Accrued expenses                                    8,890      8,678
     Current portion of note payable to bank                 -      2,436
     Refundable exercise price for restricted
      stock                                                  -         24
     Deferred revenue                                   24,150     14,741
                                                   ----------- -----------
      Total current liabilities                         36,252     38,562
    Long-term deferred revenue                          13,290      9,765
    Note payable to bank, net of current portion             -      4,099
    Preferred stock warrant liability                        -        765
                                                   ----------- -----------

      Total liabilities                                 49,542     53,191

      Total convertible redeemable preferred
       stock                                                 -     97,131

      Total stockholders' equity (deficit)             129,151    (81,123)
                                                   ----------- -----------

      Total liabilities, convertible redeemable
       preferred stock and stockholders' equity
       (deficit)                                    $  178,693  $  69,199
                                                   ----------- -----------
    




For further information:

For further information: Netezza Corporation Investor Contact: Patrick
J. Scannell, Jr., +1-508-665-4623 Senior Vice President & Chief Financial
Officer ir@netezza.com or Media Contact: Virginia Lux, +1-508-665-5794
Director of Marketing Communications vlux@netezza.com

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NETEZZA CORPORATION

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