New book by Larry Connors Click here Improve your trading - See how
NaviSite, Inc. (NASDAQ: NAVI), a leading provider of cloud enabled enterprise-hosting and application-management services, today reported financial results for the fourth quarter and full fiscal year 2009 that ended on July 31, 2009. -- Total revenue for the quarter ended in July 31, 2009, was $36.9 million, representing a year-over-year decrease of 9%. Total revenue for the full fiscal year 2009 was $152.7 million, representing a 1% decrease over revenue of $154.9 million in fiscal year 2008. The expected decrease in total revenue for the quarter and fiscal year was due to the planned decline in NaviSite's professional-services revenue during these periods. -- Recurring hosting revenue was $34.5 million for the fourth quarter, compared to $34.4 million in the fourth quarter of fiscal year 2008. The fourth quarter of fiscal year 2008 included $0.9 million of hosting revenue from NaviSite's former Los Angeles data center, whose lease NaviSite did not renew at the end of the third quarter of fiscal year 2009. Excluding the Los Angeles hosting revenue in the fourth quarter of fiscal year 2008, recurring hosting revenue increased 3%. Recurring hosting revenue was $140.5 million for the year, representing a growth of 7% over the $131.3 million recorded in fiscal year 2008. -- Gross margin improved to 35% for the fourth quarter, representing a four-percentage-point increase from the 31% recorded in the fourth quarter of the previous year and a two-percentage-point increase from the 33% recorded in the prior quarter. Gross margin for fiscal year 2009 was 33%, representing a three-percentage-point increase from the 30% recorded in fiscal year 2008. -- Loss from operations for the fourth quarter was $3.5 million. Income from operations for the full fiscal year was $0.2 million. Operating income was impacted negatively for both periods from the $5.7 million charge from the arbitration settlement entered into during the quarter. Excluding the settlement, income from operations for the fourth quarter would have been $2.2 million, or an increase of 62% over the fourth quarter of fiscal year 2008, and $5.9 million for the fiscal year, representing a 39% year-over-year increase. -- EBITDA, excluding impairment costs, stock-based compensation, severance and other non-operational charges ("EBITDA, as adjusted") for the fourth quarter was $8.8 million, representing a year-over-year increase of 4%. EBITDA, as adjusted for the full fiscal year 2009 was $35.1 million, representing an increase of 10% over the EBITDA, as adjusted of $32.0 million in fiscal year 2008. Significant non operational charges that were excluded from EBITDA, as adjusted, include the $5.7 million arbitration settlement charge in the fourth quarter of fiscal year 2009, and the $1.6 million gain on settlement in the fourth quarter of fiscal year 2008. -- Net loss attributable to common shareholders, including the settlement charge and gain, for the fourth quarter was $8.6 million, or $(0.24) per share, compared to a loss of $1.2 million, or $(0.04) per share, in the fourth quarter of fiscal year 2008. Net loss attributable to common shareholders, including the settlement charge and gain, for the full fiscal year 2009 was $18.5 million, or $(0.52) per share, compared to a loss of $11.3 million or ($0.33) per share for the fiscal year 2008. Net loss attributable to common shareholders excluding the arbitration settlement charge would have been $2.8 million or $(0.08) per share for the fourth quarter of fiscal year 2009 and $12.7 million or $(0.36) per share for fiscal year 2009. -- Cash generated from operating activities for the fourth quarter of fiscal year 2009 was $4.1 million, representing an increase of 4% from the $3.9 million recorded in the fourth quarter of fiscal year 2008. Cash generated from operating activities for the full fiscal year 2009 was $21.6 million, representing an increase of 261% from the $6.0 million recorded in fiscal year 2008. "Despite the expected top line revenue decline, recurring hosting revenue continued to show growth during fiscal year 2009 -- improving overall gross margin and operating cash flow. In addition, the reduction and repositioning of our professional services business during the fiscal year was the first step in NaviSite's strategy to focus on enterprise hosting, application management and cloud computing," said Arthur Becker, Chief Executive Officer of NaviSite. Quarterly Business Highlights -- Booked approximately $0.8 million of new monthly recurring hosting revenue ("MRR") in the fourth quarter of fiscal year 2009, an increase from the $0.5 million booked in the third quarter of fiscal year 2009, and booked approximately $2.5 million of new MRR in fiscal year 2009. -- Signed $21.0 million of total hosting contract value with an average contract term of 27 months during the fourth quarter for recurring applications services and enterprise-hosting business, compared to bookings of $11.3 million in hosting contract value in the previous quarter, and $63.9 million in fiscal year 2009. -- Signed professional-services contracts with a total value of $1.1 million during the fourth quarter of fiscal year 2009, compared to bookings of $0.9 million of professional-services contract value in the previous quarter. -- Customer churn, defined as the loss of a customer or a reduction in a customer's monthly recurring revenue from our active customer pool, was 1.7% per month during the quarter, compared to 1.0% in the prior quarter and 1.2% a year ago. Reported churn for the fourth quarter of fiscal year 2009 excludes the impact of the Company's decision not to renew its' Los Angeles datacenter lease. Conference Call Scheduled for October 15, 2009 NaviSite, Inc., Chief Executive Officer Arthur Becker and Chief Financial Officer Jim Pluntze will host a conference call on Thursday, October 15, 2009, at 5:00 p.m. Eastern Time to discuss the Company's results for its fourth quarter and 2009 fiscal year financial results. NaviSite's conference call can be accessed by dialing 800.901.5218 (International: +1.617.786.4511) and entering passcode 99866058. Alternatively, participants can listen to a live webcast of the call available through NaviSite's website at http://navisite.com/investors/events. A replay of the call will be accessible following the conference call by dialing 888.286.8010 (International: +1.617.801.6888) and using passcode 97261837. EBITDA EBITDA is not a recognized measure for financial-statement presentation under United States generally accepted accounting principles (U.S. GAAP). The Company believes that the non-GAAP measure of EBITDA, as adjusted provides investors with a useful supplemental measure of the Company's actual and expected operating and financial performance by excluding the impact of interest, taxes, depreciation and amortization. The Company also excludes impairment costs, stock-based compensation, severance, and other non-recurring charges from its non-GAAP measure, as such items may be considered to be of a non-operational nature. EBITDA does not have any standardized definition and therefore may not be comparable to similar measures presented by other reporting companies. Management uses EBITDA, as adjusted to assist in evaluating the Company's actual and expected operating and financial performance. These non-GAAP results should not be evaluated in isolation from, or as a substitute for, the Company's financial results prepared in accordance with U.S. GAAP. A table reconciling the Company's net loss, as reported, to EBITDA, as adjusted is included in the condensed consolidated financial statements in this release. The Company believes that using EBITDA, as adjusted as a performance measure, together with net loss, will help investors better understand the Company's underlying financial performance. About NaviSite NaviSite is a leading provider of cloud enabled enterprise-hosting and application-management services offering a comprehensive suite of customized IT-as-a-Service solutions. We enable companies to reduce the cost and complexity of IT and focus on their core business. Our innovative, flexible and scalable enterprise class solutions complement IT departments, allowing companies to lower costs, increase service levels, and free IT resources to concentrate on true business priorities. Over 1,400 customers depend on NaviSite for customized solutions delivered through its global footprint, comprising 16 state-of-the-art data centers supported by approximately 650 professionals. For more information, please visit www.navisite.com. This release contains forward-looking statements, which address a variety of subjects including NaviSite's expected future operating and financial results, including profitability, revenue growth and EBITDA, success and performance of NaviSite's product and service offerings and NaviSite's strategic business plans for growing its customer base and increasing sales. All statements other than statements of historical fact -- including, without limitation, those with respect to NaviSite's goals, plans and strategies set forth herein -- are forward-looking statements. The following important factors and uncertainties, among general economic conditions and changes in economic conditions and others, could cause actual results to differ materially from those described in these forward-looking statements. NaviSite's success -- including its ability to improve its gross profit, to improve its cash flows, to expand its operations and revenue and to reach and sustain profitability -- depends on its ability to execute on its business strategy and the continued and increased demand for, and market acceptance of, its products and services. The financial forecasts of the Company may not be achieved, including those as to expected EBITDA and revenue. NaviSite may be unable to raise the necessary funds to meet its payment obligations to its lending group under its senior secured credit facility and other creditors. NaviSite may not be able to expand its operations in accordance with its business strategy. NaviSite may experience difficulties integrating technologies, operations and personnel in accordance with its business strategy. NaviSite's products, technologies and resources may not successfully operate with the technology, resources and applications of third parties. NaviSite derives a significant portion of its revenue from a small number of customers and the loss of any of those customers could significantly damage NaviSite's financial condition and results of operations. Competition has increased, and technological changes made, in the markets in which NaviSite's competes. For a detailed discussion of cautionary statements that may affect NaviSite's future results of operations and financial results, please refer to NaviSite's filings with the Securities and Exchange Commission, including NaviSite's most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Forward-looking statements represent management's current expectations and are inherently uncertain. We do not undertake any obligation to update forward-looking statements made by us. All logos, company and product names may be trademarks or registered trademarks of their respective owners. NaviSite Financial Tables
Condensed Consolidated Statements of Operations
For the Three Months Ended For the Fiscal Year Ended
July 31, 2009 July 31, 2008 July 31, 2009 July 31, 2008
Unaudited
(In thousands, except per share amounts)
Revenue $ 36,800 $ 40,288 $ 152,326 $ 154,507
Revenue, related parties 64 152 346 372
Total revenue 36,864 40,440 152,672 154,879
Cost of revenue, excluding stock compensation, restructuring, 18,171 22,049 78,072 85,561
depreciation and amortization
Depreciation and amortization 5,472 5,346 22,948 20,360
Stock compensation 292 375 1,268 1,794
Restructuring charge - - 209 -
Cost of revenue 23,935 27,770 102,497 107,715
Gross profit 12,929 12,670 50,175 47,164
Operating expenses:
Selling and marketing, excluding stock compensation and restructuring 4,816 5,012 19,723 19,370
General and administrative, excluding settlement, stock 5,402 5,467 21,820 20,678
compensation, restructuring and transaction fees
Loss on settlement 5,736 - 5,736 -
Stock compensation 374 768 1,855 2,576
Restructuring charge - - 180 -
Transaction fees 145 71 662 265
Total operating expenses 16,473 11,318 49,976 42,889
Income (loss) from operations (3,544 ) 1,352 199 4,275
Other income (expense):
Interest income 7 50 43 264
Interest expense (3,753 ) (3,188 ) (14,164 ) (12,033 )
Loss on debt extinguishment - - - (1,651 )
Other income (expense), net 10 1,748 705 2,295
Loss from continuing operations before income taxes (7,280 ) (38 ) (13,217 ) (6,850 )
Income taxes (397 ) (420 ) (1,894 ) (1,834 )
Net loss (7,677 ) (458 ) (15,111 ) (8,684 )
Accretion of preferred stock dividends (874 ) (779 ) (3,350 ) (2,656 )
Net loss attributable to common stockholders $ (8,551 ) $ (1,237 ) $ (18,461 ) $ (11,340 )
Basic and diluted net loss per common share:
Net loss attributable to common stockholders $ (0.24 ) $ (0.04 ) $ (0.52 ) $ (0.33 )
Basic and diluted weighted average number of common shares 35,714 35,130 35,528 34,731
outstanding
NaviSite Financial Tables
Net Loss to EBITDA, as adjusted Reconciliation
For the Three Months Ended
July 31, 2009 July 31, 2008
Unaudited
(In thousands)
Net loss, as reported $ (7,677 ) $ (458 )
Depreciation 3,947 3,835
Interest income/expense, net 3,746 3,138
Income taxes 397 420
Amortization 1,696 1,829
EBITDA 2,109 8,764
Stock based compensation 666 1,143
Severance 145 101
Transaction fees, integration costs and settlement charge (gain) 5,863 (1,557 )
EBITDA, as adjusted (excludes impairment costs, stock based $ 8,783 $ 8,451
compensation, severance, loss on debt extinguishment and
transaction fees, integration costs and settlement charge (gain)
For the Fiscal Year Ended
July 31, 2009 July 31, 2008
Unaudited
(In thousands)
Net loss, as reported $ (15,111 ) $ (8,684 )
Depreciation 16,439 13,329
Interest income/expense, net 14,121 11,769
Income taxes 1,894 1,834
Amortization 7,197 7,893
EBITDA 24,540 26,141
Stock based compensation 3,123 4,370
Severance 933 506
Loss on debt extinguishment - 1,651
Transaction fees, integration costs and settlement charge (gain) 6,525 (662 )
EBITDA, as adjusted (excludes impairment costs, stock based $ 35,121 $ 32,006
compensation, severance, loss on debt extinguishment and transaction
fees, integration costs and settlement charge (gain))
NaviSite Financial Tables
Condensed Consolidated Balance Sheets
July 31, 2009 July 31, 2008
ASSETS Unaudited
(In thousands)
Current assets:
Cash and cash equivalents $ 10,534 $ 3,261
Accounts receivable, less allowance for doubtful accounts of $1,820
and $897 at July 31, 2009 and July 31, 2008, respectively 16,417 18,927
Unbilled accounts receivable 1,361 1,711
Prepaid expenses and other current assets 6,337 11,370
Total current assets 34,649 35,269
Non-current assets 129,031 140,444
Total assets $ 163,680 $ 175,713
LIABILITIES, PREFERRED STOCK AND
STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable, current portion $ 10,603 $ 6,100
Capital lease obligations, current portion 3,040 3,166
Accounts payable 5,375 7,033
Accrued expenses, deferred revenue, deferred
other income and customer deposits 16,605 16,921
Total current liabilities 35,623 33,220
Total non-current liabilities 132,280 133,736
Total liabilities 167,903 166,956
Preferred stock 30,879 27,529
Total stockholders' equity (deficit) (35,102 ) (18,772 )
Total liabilities, preferred stock and stockholders' equity (deficit) $ 163,680 $ 175,713
NaviSite Financial Tables
Condensed Consolidated Statements of Cash Flow
For the Three Months Ended
July 31, 2009 July 31, 2008
Unaudited
(In thousands)
Net cash provided by operating activities $ 4,099 $ 3,930
Net cash provided by (used for) investing activities (1,140 ) 1,771
Net cash provided by (used for) financing activities 4,537 (7,378 )
Effect of exchange rate changes on cash 149 -
Net increase (decrease) in cash 7,645 (1,677 )
Cash and cash equivalents, beginning of period 2,889 4,938
Cash and cash equivalents, end of period $ 10,534 $ 3,261
For the Fiscal Year Ended
July 31, 2009 July 31, 2008
Unaudited
(In thousands)
Net cash provided by operating activities $ 21,575 $ 5,977
Net cash used for investing activities (10,571 ) (29,812 )
Net cash provided by (used for) financing activities (3,571 ) 15,395
Effect of exchange rate changes on cash (160 ) -
Net increase (decrease) in cash 7,273 (8,440 )
Cash and cash equivalents, beginning of period 3,261 11,701
Cash and cash equivalents, end of period $ 10,534 $ 3,261
SOURCE: NaviSite, Inc. NaviSite, Inc. Jim Pluntze, 978-946-8615 sbyers@navisite.com For full details for NAVI click here.
Email Print Archives Feedback Email Article Link
Close X
Related News [NAVI]
UPCOMING EVENTS
Learn new strategies, how to trade in this market, and the stocks you should be focusing on each day. Join us for our free 20 minute tele-seminars during the week.
Thursday December 3 12:30 PM
* Attendance is strictly limited and are filled on a first-come, first-served basis.
The TradingMarkets Directory
Stocks
Options
Forex
E-mini/Futures
How to Trade
Tools
PowerRatings
Blogs
Premium Subscription Services
RELATED SITES
Please call 1-213-955-5858 ext. 1
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. The Connors Group, Inc. © Copyright 2009 The Connors Group, Inc. All analyst commentary provided on TradingMarkets.com is provided for educational purposes only. The analysts and employees or affiliates of TradingMarkets.com may hold positions in the stocks or industries discussed here. This information is NOT a recommendation or solicitation to buy or sell any securities. Your use of this and all information contained on TradingMarkets.com is governed by the Terms and Conditions of Use. Please click the link to view those terms. Follow this link to read our Editorial Policy. © 2009 The Connors Group, Inc.
|
