Reports 34th Consecutive Quarter of Revenue Growth; Achieves Positive Operating Cash Flow for Second Quarter in a Row
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Salary.com, Inc. (NASDAQ: SLRY), a leading provider of on-demand talent management, payroll, and compensation solutions, recently announced financial results for its second quarter of fiscal 2010, which ended September 30, 2009.
Revenue in the second quarter of 2010 was $11.6 million, an increase of 10% over the second quarter of fiscal 2009. Bookings were $12.2 million, an increase of 9% over the second quarter of fiscal 2009. Non-GAAP operating cash flow, which excludes cash payments for severance, was positive with a cash inflow of $0.5 million in the second quarter of 2010. GAAP operating cash flow was an inflow of $0.4 million in the second quarter of 2010.
Kent Plunkett, founder and chief executive officer, stated, “We are pleased to have completed our 34th consecutive quarter of revenue growth and achieved positive operating cash flow from operations for the second quarter in a row. Our broad strategy of offering an array of integrated, best-in-breed human capital management tools and data again contributed to larger overall transaction sizes in the second quarter, with 14 transactions over $100,000 in the quarter and six of those larger than $250,000. We believe Salary.com’s strong execution is reflected in continued bookings and cash flow growth as we continue to gain momentum as a human capital management leader.”
Second Quarter 2010 Financial Summary
– Second quarter revenue was $11.6 million, an increase of 10% over the second quarter of fiscal 2009.
– On a GAAP basis, for the second quarter of fiscal 2010, Salary.com reported a net loss of $4.7 million, or ($0.29) per diluted share, compared to a net loss of $6.3 million, or ($0.39) per diluted share, in the second quarter of fiscal 2009.
– On a non-GAAP basis, excluding stock-based compensation, amortization of intangibles and restructuring expenses, Salary.com reported a net loss of $1.9 million, or ($0.12) per diluted share, for the second quarter of fiscal 2010, compared to a net loss of $3.0 million, or ($0.18) per diluted share, in the second quarter of fiscal 2009.
– Cash and cash equivalents as of September 30, 2009 were $16.1 million, compared to $17.0 million as of June 30, 2009.
– Current deferred revenue was $27.3 million as of September 30, 2009, compared to $27.4 million as of June 30, 2009. Total deferred revenue grew to $29.9 million as of September 30, 2009, from $29.3 million as of June 30, 2009.
– Excluding non-recurring cash payments for severance, non-GAAP cash flow from operations was a net inflow of $0.5 million in the second quarter of fiscal 2010. Including the non-recurring payments for severance, GAAP cash flow from operations was a net inflow of $0.4 million, a $1.4 million improvement compared to the same period a year ago.
Additional Second Quarter Business Highlights
– During the second quarter, Salary.com added approximately 100 customers, and ended the quarter with approximately 3,600 enterprise customers.
– New customer additions in the second quarter of fiscal 2010 included: Boston Medical Center, Caraco Pharmaceutical Laboratories, Ltd., Casio America, Inc., The Cooper Health System, Emergint Technologies Inc., and Washington Mills Management, Inc.
– During the second quarter, Salary.com held user conferences in Boston, Chicago, New York, San Francisco, and Singapore, with over 500 customers attending. The user groups offered four separate tracks for different human resources disciplines and featured industry experts from Gartner, IDC, and Bersin & Associates as speakers.
– At the HR Technology Conference in October, Salary.com won the Talent Management Shootout in a vote by hundreds of human resources professionals. TalentManager won the contest against three competitors after a demonstration of its easy-to-learn and easy-to-use features and the seamless integration of TalentManager’s data-driven content with Salary.com’s performance, competency, goal management, compensation planning, succession planning, career planning, and employee development software and data solutions. Bersin and Associates published the reasons they believe Salary.com won the Shootout in a blog post.
– During the second quarter, Salary.com repurchased approximately 179,000 shares at an average purchase price of $3.01 per share. To date, the Company has repurchased approximately 1.3 million shares at an average price of $2.03 per share.
Bryce Chicoyne, Salary.com’s chief financial officer said, “Our effective execution in the second quarter resulted in an increase in bookings, revenue, and operating cash flow on both a year-over-year and sequential basis, and I am proud of that accomplishment. We remain committed to long-term revenue growth and cash flow generation and are managing the company with that in mind. Larger deal trends and a continued strong customer retention rate are fueling our optimism for long-term growth.”
Business Outlook
For the third quarter of fiscal 2010, Salary.com expects total revenue in the range of $11.4 million to $11.9 million. Non-GAAP net loss is expected to be in the range of $1.7 million to $2.2 million. Non-GAAP net loss excludes non-cash stock-based compensation expenses in the range of $1.7 million to $2.0 million, amortization of intangibles in the range of $1.2 million to $1.3 million, and restructuring charges of approximately $100,000. GAAP net loss for the third quarter of fiscal 2010 is expected to be in the range of $4.7 million to $5.8 million. Weighted average diluted shares for the quarter are estimated to be approximately 16.2 million shares.
For the full year fiscal 2010, we expect revenue to be in the range of $46.5 million to $50.5 million. Non-GAAP net loss is expected to be in the range of $4.8 million to $8.8 million. Non-GAAP net loss excludes non-cash impact of stock-based compensation in the range of $8.0million to $10.0 million, amortization of intangibles in the range of $4.8 million to $5.1 million, and restructuring charges of approximately $200,000. On a GAAP basis, net loss for fiscal 2010 is expected to be in the range of $19.3 million to $23.3 million. Non-GAAP cash flow from operations, which excludes $500,000 in severance, is expected to be in the range of $1.2 million to $2.2 million in fiscal 2010. Weighted average diluted shares for the year are estimated to be approximately 16.3 million shares.
For more information on Salary.com, please visit www.salary.com
Matt Lafata, HRchitect
