Guidance
Software, Inc. (NASDAQ: GUID) today reported financial results for
the fourth quarter and full year ended December 31, 2014.
Fourth quarter 2014 financial highlights, calculated in accordance with
generally accepted accounting principles (GAAP) include:
-
Revenue of $28.2 million, compared to $28.0 million in the fourth
quarter of 2013
-
Product revenue of $9.2 million, compared to $9.3 million in the
fourth quarter of 2013
-
Services and maintenance revenue of $17.5 million, up from $16.6
million in the fourth quarter of 2013
-
Net loss of $3.1 million, or ($0.11) per share, compared to net loss
of $3.4 million, or ($0.13) per share, in the fourth quarter of 2013
On a non-GAAP basis, which excludes share-based compensation,
amortization of intangibles and realignment expenses, the Company
reported a pre-tax net income of $0.9 million, or $0.03 per share, in
the fourth quarter of 2014, compared to a non-GAAP pre-tax net loss of
$1.9 million, or ($0.07) per share, in the fourth quarter of 2013.
“With changes to our executive management team, we started to address
the headwinds and execution issues facing our company and are working
diligently to enhance our mission and strategy to compete more
effectively in today’s evolving marketplace,” said Barry Plaga, Interim
Chief Executive Officer and current Chief Financial Officer. “We are
building on our leadership positions in both computer forensics and
eDiscovery as well as capturing business in the broader cybersecurity
market. In fact, we have become the clear leader in next-generation
endpoint security. During the fourth quarter, Gartner named Guidance
Software the 2013 market share leader for Endpoint Detection and
Response (EDR). We are also focused on improving sales execution and
marketing efficiency globally and are actively adding new senior members
to our team with a goal to drive double-digit product revenue growth and
bottom-line profitability.”
Mr. Plaga continued, “Importantly, we have built a strong foundation on
which to generate success in 2015 and beyond. In 2014, our customer base
expanded with 961 new customers of our enterprise products and
cybersecurity revenues grew 30%. Given the current state of the industry
and the failure of traditional anti-malware defenses to prevent data
breaches, Guidance Software is in a strong position to provide the
market with market-leading cybersecurity products for continuous
detection and response to advanced threats.”
Fourth Quarter 2014 Highlights and Noteworthy Events
-
In the fourth quarter, the Company added 133 new EnCase® Enterprise
customers and 104 customers of EnCase® eDiscovery, EnCase®
Cybersecurity and EnCase® Analytics. For the full year, the Company
added 568 EnCase® Enterprise customers and 393 customers of EnCase®
eDiscovery, EnCase® Cybersecurity and EnCase® Analytics.
-
Gartner named Guidance Software the 2013 market share leader for
Endpoint Detection and Response (EDR) tools in its recent Competitive
Landscape Report. The research examines critical EDR customer buying
behaviors, solution use cases and technologies that product managers
and marketing professionals must consider.
-
Jay Ackerman was named Chief Revenue Officer by Guidance Software.
Ackerman provides leadership across sales, technical support, and
professional services assisting the Company in accelerating the
adoption of Guidance’s market-leading security solutions.
-
Guidance Software was selected to join the Box Trust ecosystem of
partners. Guidance’s eDiscovery software enables Box enterprise
customers to securely search, collect and preserve electronically
stored information (ESI), while responding to litigation, arbitration,
and internal or regulatory investigations.
-
EnCase now integrates seamlessly with Dropbox for Business allowing
Dropbox customers to easily address their eDiscovery requirements.
2015 Financial Outlook:
The Company's guidance for the year ending December 31, 2015 is as
follows:
-
Revenue is expected to be in the range of $108 million to $112 million.
-
Non-GAAP pre-tax earnings are expected to be
approximately ($0.15) – ($0.08) per share.
Conference Call Information:
The Company will host a conference call today at 2:00 p.m. Pacific time,
5:00 p.m. Eastern time to discuss its quarterly results. Participants
should call (877) 303-9850 (North America) or (408) 427-3732
(International) and should dial in at least five minutes prior to the
conference call.
A webcast and replay of the call may also be found online through
Guidance Software's Investor Relations website at http://investors.guidancesoftware.com/events.cfm.
Registered users may access this content over the Internet, and there is
no cost to register. If you have not already registered, please do so at
least 15 minutes prior to the start of the conference call.
An audio-only replay of the call will be available by calling (855)
859-2056, passcode 64883863, available from 8:00 pm Eastern time,
February 12, 2015, through midnight Eastern Time, February 18, 2015.
About Guidance Software:
Guidance Software is recognized worldwide as the industry leader in
endpoint investigation solutions for security incident response and
forensic analysis. Its EnCase® Enterprise platform, deployed on an
estimated 25 million endpoints, is used by more than 70 percent of the
Fortune 100, more than 45 percent of the Fortune 500, and numerous
government agencies to conduct digital investigations of servers,
laptops, desktops and mobile devices. Built on the EnCase Enterprise
platform are market-leading cybersecurity, IT help desk, and electronic
discovery solutions, EnCase® Cybersecurity, EnCase® Analytics, EnCase®
Remote Recovery + and EnCase® eDiscovery. They empower organizations to
conduct speedy and thorough security incident response, reveal
previously hidden advanced persistent threats or malicious insider
activity, recover lost files, perform sensitive data discovery for
compliance purposes, and respond to litigation discovery requests. For
more information about Guidance Software, visit www.encase.com.
EnCase®, EnScript®, FastBloc®, EnCE®, EnCEP®, Guidance Software™,
LinkedReview™, EnPoint™ and Tableau™ are registered trademarks or
trademarks owned by Guidance Software in the United States and other
jurisdictions and may not be used without prior written permission. All
other trademarks and copyrights referenced in this press release are the
property of their respective owners.
Notes to Unaudited Condensed Consolidated Statements of Operations:
Guidance Software reports its financial results in accordance with
generally accepted accounting principles, or GAAP. To supplement this
information, we present from time to time total non-GAAP revenue, gross
profit, operating expenses, operating income (loss) and net income
(loss), as well as non-GAAP net income (loss) per share. Total non-GAAP
revenue consists of GAAP revenue as reported and adds back
acquisition-related deferred revenue adjustments booked for GAAP
purposes. Non-GAAP gross profit consists of GAAP gross profit as
reported and adds back the acquisition-related deferred revenue
adjustment, one-time realignment expenses and stock-based compensation
expense booked for GAAP purposes. Non-GAAP operating income (loss)
consists of GAAP operating income (loss) as reported and adds back the
acquisition-related deferred revenue adjustments booked for GAAP
purposes and excludes, one-time realignment expenses and gain on sale of
intangible assets, amortization of intangibles, share-based compensation
expense. Non-GAAP net income (loss) consists of GAAP operating income
(loss) as reported and adds back the acquisition-related deferred
revenue adjustment booked for GAAP purposes and excludes one-time
realignment expenses, amortization of intangibles, share-based
compensation expense, gain on sale of the domain name and the income tax
provision.
We use these non-GAAP financial measures for internal managerial
purposes, when publicly providing our business outlook, and to
facilitate period-to-period comparisons. We describe limitations
specific to each non-GAAP financial measure below. Management generally
compensates for limitations in the use of non-GAAP financial measures by
relying on comparable GAAP financial measures and providing investors
with a reconciliation of the non-GAAP financial measures only in
addition to and in conjunction with results presented in accordance with
GAAP. We believe that these non-GAAP financial measures reflect an
additional way of viewing aspects of our operations that, when viewed
with our GAAP results, provide a more complete understanding of factors
and trends affecting our business. These non-GAAP measures should be
considered as a supplement to, and not as a substitute for, or superior
to, net income (loss) and net income (loss) per share calculated in
accordance with GAAP.
Accordingly, management and the Board of Directors do not consider these
excluded items for purposes of evaluating the performance of the
business; and they exclude such costs when evaluating the performance of
the Company, its business units and its management teams and when making
decisions to allocate resources among the Company's business units.
Acquisition-related Deferred Revenue. Acquisition-related
deferred revenue adjustment reflects the fair value adjustment to
deferred revenues acquired in business combinations. The fair value of
deferred revenue represents an amount equivalent to the estimated cost
plus an appropriate profit margin, to perform services related to the
acquiree's software and product support, which assumes a legal
obligation to do so, based on the deferred revenue balances as of the
acquisition date. Guidance Software adds back this deferred revenue for
its non-GAAP financial measures because it believes the inclusion of
this amount directly correlates to the underlying performance of
Guidance Software operations and facilitates comparisons of pre-merger
results of legacy Guidance Software and CaseCentral to that of the
Company's post-merger results.
Realignment Expenses. Realignment expenses represent one-time
severance and related employment costs associated with a reduction in
headcount. Guidance Software excludes realignment expenses from non-GAAP
operating income and non-GAAP net income because it believes (i) the
amount of such expenses in any specific period may not directly
correlate to the underlying performance of Guidance Software business
operations and (ii) such expenses are uncommon and not expected to recur
in future periods.
Amortization of Intangibles. Amortization of intangibles is a
non-cash expense arising from the acquisition of intangible assets in
connection with acquisitions. Guidance Software excludes
acquisition-related amortization expense from non-GAAP operating income
and non-GAAP net income because it believes (i) the amount of such
expenses in any specific period may not directly correlate to the
underlying performance of Guidance Software business operations and (ii)
such expenses can vary significantly between periods as a result of new
acquisitions and full amortization of previously acquired intangible
assets. Investors should note that the use of these intangible assets
contributed to revenue in the periods presented and will contribute to
future revenue generation and the related amortization expense will
recur in future periods.
Share-based Compensation Expense. Share-based compensation
expense is a non-cash expense arising from the grant of stock awards to
employees. Guidance Software excludes share-based compensation expense
from non-GAAP operating income and non-GAAP net income because it
believes (i) the amount of such expenses in any specific period may not
directly correlate to the underlying performance of Guidance Software
business operations and (ii) such expenses can vary significantly
between periods as a result of the timing of grants of new share-based
awards, including grants in connection with acquisitions. Investors
should note that share-based compensation is a key incentive offered to
employees whose efforts contributed to the operating results in the
periods presented and are expected to contribute to operating results in
future periods and such expense will recur in future periods.
Adjustment to Fair Value of Contingent Consideration Payable. Adjustment
to fair value of contingent consideration payable reflects any
adjustment to the fair value of the contingent consideration from the
final purchase price allocation established as of February 21, 2012,
which was the date the Company acquired CaseCentral. Guidance Software
excludes adjustments to the fair value of contingent consideration from
non-GAAP operating income and non-GAAP net income because it believes
(i) the amount of such adjustments in any specific period may not
directly correlate to the underlying performance of Guidance Software
business operations and (ii) such adjustments can vary significantly
between periods as a result of an increase or decrease in the
probability of the achievement of various earn-out scenarios used to
determine the fair value of the contingent consideration.
State Sales Tax Charges. The reduction in certain state sales tax
charges is a reduction of a previous one-time charge for expenses
accrued for sales taxes that may be due to a taxing authority. Guidance
Software excludes the sales tax charge and adjustments to it from
non-GAAP operating income and non-GAAP net income because it believes
the amount of the expense in the specific period it occurred is a
one-time charge and does not directly correlate to the underlying
performance of Guidance Software's business operations.
Gain on Sale of Domain Name. Gain on sale of domain name is a
non-cash gain arising from the sale of a domain name in exchange for
certain third party software licenses. Guidance Software excludes the
gain on sale of domain name from non-GAAP operating income and non-GAAP
net income because it believes (i) the amount of such income in any
specific period may not directly correlate to the underlying performance
of Guidance Software business operations and (ii) such income occurs
infrequently and can vary significantly between periods.
Forward Looking Statements:
This news release contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that forward-looking
statements in this release involve risks and uncertainties that could
cause actual results to differ materially from current expectations.
There can be no assurance that demand for Guidance Software's products
will continue at current or greater levels, or that the Company will
continue to grow revenues, or be profitable. There are also risks that
Guidance Software's pursuit of providing network security and
e-discovery technology might not be successful, or that if successful,
it will not materially enhance Guidance Software's financial
performance; that the Company could fail to retain key employees; that
changes in customer requirements and other general economic and
political uncertainties could impact Guidance Software's relationship
with its customers; and that delays in product development, competitive
pressures or technical difficulties could impact timely delivery of
next-generation products; and other risks and uncertainties that are
described from time to time in Guidance Software's periodic reports and
registration statements filed with the Securities and Exchange
Commission. The Company specifically disclaims any responsibility for
updating these forward-looking statements.
Guidance Software, Inc.
|
Unaudited Condensed Consolidated Statements of Operations
|
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product revenue
|
|
|
$
|
9,205
|
|
|
|
|
$
|
9,250
|
|
|
|
|
$
|
34,412
|
|
|
|
|
$
|
34,203
|
|
Subscription revenue
|
|
|
|
1,507
|
|
|
|
|
|
2,143
|
|
|
|
|
|
7,406
|
|
|
|
|
|
10,345
|
|
Services and maintenance revenue
|
|
|
|
17,536
|
|
|
|
|
|
16,567
|
|
|
|
|
|
66,838
|
|
|
|
|
|
65,976
|
|
Total revenues
|
|
|
|
28,248
|
|
|
|
|
|
27,960
|
|
|
|
|
|
108,656
|
|
|
|
|
|
110,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue
|
|
|
|
2,292
|
|
|
|
|
|
1,785
|
|
|
|
|
|
8,427
|
|
|
|
|
|
7,450
|
|
Cost of subscription revenue
|
|
|
|
994
|
|
|
|
|
|
1,025
|
|
|
|
|
|
4,574
|
|
|
|
|
|
4,314
|
|
Cost of services and maintenance revenue
|
|
|
|
5,811
|
|
|
|
|
|
5,795
|
|
|
|
|
|
23,005
|
|
|
|
|
|
25,756
|
|
Total cost of revenues
|
|
|
|
9,097
|
|
|
|
|
|
8,605
|
|
|
|
|
|
36,006
|
|
|
|
|
|
37,520
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
19,151
|
|
|
|
|
|
19,355
|
|
|
|
|
|
72,650
|
|
|
|
|
|
73,004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
|
9,316
|
|
|
|
|
|
11,127
|
|
|
|
|
|
39,011
|
|
|
|
|
|
41,486
|
|
Research and development
|
|
|
|
5,083
|
|
|
|
|
|
6,306
|
|
|
|
|
|
22,998
|
|
|
|
|
|
27,744
|
|
General and administrative
|
|
|
|
5,996
|
|
|
|
|
|
3,248
|
|
|
|
|
|
18,350
|
|
|
|
|
|
17,403
|
|
Depreciation and amortization
|
|
|
|
1,774
|
|
|
|
|
|
2,005
|
|
|
|
|
|
7,426
|
|
|
|
|
|
7,678
|
|
Total operating expenses
|
|
|
|
22,169
|
|
|
|
|
|
22,686
|
|
|
|
|
|
87,785
|
|
|
|
|
|
94,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
(3,018
|
)
|
|
|
|
|
(3,331
|
)
|
|
|
|
|
(15,135
|
)
|
|
|
|
|
(21,307
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and other, net
|
|
|
|
7
|
|
|
|
|
|
6
|
|
|
|
|
|
670
|
|
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
|
(3,011
|
)
|
|
|
|
|
(3,325
|
)
|
|
|
|
|
(14,465
|
)
|
|
|
|
|
(21,283
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
53
|
|
|
|
|
|
34
|
|
|
|
|
|
264
|
|
|
|
|
|
217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
$
|
(3,064
|
)
|
|
|
|
$
|
(3,359
|
)
|
|
|
|
$
|
(14,729
|
)
|
|
|
|
$
|
(21,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic
|
|
|
$
|
(0.11
|
)
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
(0.55
|
)
|
|
|
|
$
|
(0.83
|
)
|
Net loss per share - diluted
|
|
|
$
|
(0.11
|
)
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
(0.55
|
)
|
|
|
|
$
|
(0.83
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculation - basic
|
|
|
|
27,199
|
|
|
|
|
|
26,017
|
|
|
|
|
|
26,758
|
|
|
|
|
|
25,757
|
|
Shares used in per share calculation - diluted
|
|
|
|
27,199
|
|
|
|
|
|
26,017
|
|
|
|
|
|
26,758
|
|
|
|
|
|
25,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss) before income taxes excluding
acquisition-related deferred revenue adjustment, realignment
expense, share-based compensation, amortization of intangibles,
certain state sales tax charges, and a gain on sale of domain name.
|
|
|
$
|
863
|
|
|
|
|
$
|
(1,925
|
)
|
|
|
|
$
|
(2,571
|
)
|
|
|
|
$
|
(12,077
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss) per share before income taxes excluding
acquisition-related deferred revenue adjustment,realignment expense,
share-based compensation, amortization of intangibles, certain state
sales tax charges, and gain on sale of domain name.
|
|
|
|
|
|
Basic
|
|
|
$
|
0.03
|
|
|
|
|
$
|
(0.07
|
)
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
$
|
(0.47
|
)
|
Diluted
|
|
|
$
|
0.03
|
|
|
|
|
$
|
(0.07
|
)
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Software, Inc.
|
Calculation of Pre-Tax Non-GAAP Income
|
(unaudited)
|
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
Calculation of pre-tax non-GAAP income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
|
|
$
|
(3,064
|
)
|
|
|
|
$
|
(3,359
|
)
|
|
|
|
$
|
(14,729
|
)
|
|
|
|
$
|
(21,500
|
)
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
|
53
|
|
|
|
|
|
34
|
|
|
|
|
|
264
|
|
|
|
|
|
217
|
|
Acquisition-related deferred revenue adjustment
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
253
|
|
Amortization of intangibles
|
|
|
|
520
|
|
|
|
|
|
559
|
|
|
|
|
|
2,187
|
|
|
|
|
|
2,458
|
|
Realignment expense
|
|
|
|
2,066
|
|
|
|
|
|
-
|
|
|
|
|
|
3,643
|
|
|
|
|
|
-
|
|
Reduction of contingent consideration payable
|
|
|
|
-
|
|
|
|
|
|
(600
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(600
|
)
|
Reduction of certain state sales tax charges
|
|
|
|
-
|
|
|
|
|
|
(531
|
)
|
|
|
|
|
-
|
|
|
|
|
|
(531
|
)
|
Gain on sale of domain name
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(630
|
)
|
|
|
|
|
-
|
|
Share-based compensation expense (including related payroll taxes
paid by the Company)
|
|
|
|
1,288
|
|
|
|
|
|
1,972
|
|
|
|
|
|
6,694
|
|
|
|
|
|
7,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss) before income taxes excluding
acquisition-related deferred revenue adjustment, realignment
expense, share-based compensation, amortization of
intangibles, certain state sales tax charges, and a gain on
sale of domain name.
|
|
|
$
|
863
|
|
|
|
|
$
|
(1,925
|
)
|
|
|
|
$
|
(2,571
|
)
|
|
|
|
$
|
(12,077
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss) per share before income taxes
excluding acquisition-related deferred revenue adjustment,realignment
expense, share-based compensation, amortization of
intangibles, certain state sales tax charges, and gain on
sale of domain name.
|
|
|
|
Basic
|
|
|
$
|
0.03
|
|
|
|
|
$
|
(0.07
|
)
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
$
|
(0.47
|
)
|
Diluted
|
|
|
$
|
0.03
|
|
|
|
|
$
|
(0.07
|
)
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
27,199
|
|
|
|
|
|
26,017
|
|
|
|
|
|
26,758
|
|
|
|
|
|
25,757
|
|
Diluted
|
|
|
|
27,335
|
|
|
|
|
|
26,017
|
|
|
|
|
|
26,758
|
|
|
|
|
|
25,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Detail of Share-based Compensation Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue
|
|
|
$
|
30
|
|
|
|
|
$
|
37
|
|
|
|
|
$
|
131
|
|
|
|
|
$
|
137
|
|
Cost of subscription revenue
|
|
|
|
28
|
|
|
|
|
|
48
|
|
|
|
|
|
128
|
|
|
|
|
|
189
|
|
Cost of service and maintenance revenue
|
|
|
|
365
|
|
|
|
|
|
245
|
|
|
|
|
|
1,419
|
|
|
|
|
|
1,284
|
|
Selling and marketing
|
|
|
|
12
|
|
|
|
|
|
582
|
|
|
|
|
|
1,308
|
|
|
|
|
|
2,100
|
|
Research and development
|
|
|
|
407
|
|
|
|
|
|
565
|
|
|
|
|
|
1,783
|
|
|
|
|
|
2,044
|
|
General and administrative
|
|
|
|
446
|
|
|
|
|
|
495
|
|
|
|
|
|
1,925
|
|
|
|
|
|
1,872
|
|
Total share-based compensation expense
|
|
|
$
|
1,288
|
|
|
|
|
$
|
1,972
|
|
|
|
|
$
|
6,694
|
|
|
|
|
$
|
7,626
|
|
Detail of Acquisition-related Deferred
Revenue Adjustment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription revenue
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
193
|
|
Services and maintenance revenue
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
60
|
|
Total acquisition-related deferred revenue adjustment
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
253
|
|
Detail of Realignment Expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service and maintenance revenue
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
186
|
|
|
|
|
$
|
-
|
|
Selling and marketing
|
|
|
|
550
|
|
|
|
|
|
-
|
|
|
|
|
|
1,018
|
|
|
|
|
|
-
|
|
Research and development
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
790
|
|
|
|
|
|
-
|
|
General and administrative
|
|
|
|
1,516
|
|
|
|
|
|
-
|
|
|
|
|
|
1,649
|
|
|
|
|
|
-
|
|
Total realignment expense
|
|
|
$
|
2,066
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
3,643
|
|
|
|
|
$
|
-
|
|
Detail of Reduction of Contingent
Consideration Payable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
$
|
-
|
|
|
|
|
$
|
(600
|
)
|
|
|
|
$
|
-
|
|
|
|
|
$
|
(600
|
)
|
Detail of Reduction of Certain State Sales
Tax Charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
$
|
-
|
|
|
|
|
$
|
(531
|
)
|
|
|
|
$
|
-
|
|
|
|
|
$
|
(531
|
)
|
Detail of Gain on Sale of Domain Name
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and other, net
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
(630
|
)
|
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Software, Inc
|
Reconciliation of GAAP to Non-GAAP Financial Measures
|
(Unaudited and in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues, as reported
|
|
|
|
|
|
|
$
|
28,248
|
|
|
|
|
|
|
$
|
27,960
|
|
|
|
|
|
|
$
|
108,656
|
|
|
|
|
|
|
$
|
110,524
|
|
Acquisition-related deferred revenue adjustment
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
253
|
|
Total non-GAAP revenues
|
|
|
|
|
|
|
$
|
28,248
|
|
|
|
|
|
|
$
|
27,960
|
|
|
|
|
|
|
$
|
108,656
|
|
|
|
|
|
|
$
|
110,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit, as reported
|
|
|
|
|
|
|
$
|
19,151
|
|
|
|
|
|
|
$
|
19,355
|
|
|
|
|
|
|
$
|
72,650
|
|
|
|
|
|
|
$
|
73,004
|
|
Acquisition-related deferred revenue adjustment
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
253
|
|
Realignment expense
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
186
|
|
|
|
|
|
|
|
-
|
|
Share-based compensation
|
|
|
|
|
|
|
|
423
|
|
|
|
|
|
|
|
330
|
|
|
|
|
|
|
|
1,678
|
|
|
|
|
|
|
|
1,610
|
|
Gross profit adjustment
|
|
|
|
|
|
|
|
423
|
|
|
|
|
|
|
|
330
|
|
|
|
|
|
|
|
1,864
|
|
|
|
|
|
|
|
1,863
|
|
Total non-GAAP gross profit
|
|
|
|
|
|
|
$
|
19,574
|
|
|
|
|
|
|
$
|
19,685
|
|
|
|
|
|
|
$
|
74,514
|
|
|
|
|
|
|
$
|
74,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses, as reported
|
|
|
|
|
|
|
$
|
22,169
|
|
|
|
|
|
|
$
|
22,686
|
|
|
|
|
|
|
$
|
87,785
|
|
|
|
|
|
|
$
|
94,311
|
|
Amortization of intangibles
|
|
|
|
|
|
|
|
(520
|
)
|
|
|
|
|
|
|
(559
|
)
|
|
|
|
|
|
|
(2,187
|
)
|
|
|
|
|
|
|
(2,458
|
)
|
Reduction of contingent consideration payable
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
600
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
600
|
|
Reduction of certain state sales tax charges
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
531
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
531
|
|
Realignment expense
|
|
|
|
|
|
|
|
(2,066
|
)
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(3,457
|
)
|
|
|
|
|
|
|
-
|
|
Share-based compensation
|
|
|
|
|
|
|
|
(865
|
)
|
|
|
|
|
|
|
(1,642
|
)
|
|
|
|
|
|
|
(5,016
|
)
|
|
|
|
|
|
|
(6,016
|
)
|
Operating expense adjustment
|
|
|
|
|
|
|
|
(3,451
|
)
|
|
|
|
|
|
|
(1,070
|
)
|
|
|
|
|
|
|
(10,660
|
)
|
|
|
|
|
|
|
(7,343
|
)
|
Total non-GAAP operating expenses
|
|
|
|
|
|
|
$
|
18,718
|
|
|
|
|
|
|
$
|
21,616
|
|
|
|
|
|
|
$
|
77,125
|
|
|
|
|
|
|
$
|
86,968
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss as reported
|
|
|
|
|
|
|
$
|
(3,018
|
)
|
|
|
|
|
|
$
|
(3,331
|
)
|
|
|
|
|
|
$
|
(15,135
|
)
|
|
|
|
|
|
$
|
(21,307
|
)
|
Gross profit adjustment
|
|
|
|
|
|
|
|
423
|
|
|
|
|
|
|
|
330
|
|
|
|
|
|
|
|
1,864
|
|
|
|
|
|
|
|
1,863
|
|
Operating expense adjustment
|
|
|
|
|
|
|
|
3,451
|
|
|
|
|
|
|
|
1,070
|
|
|
|
|
|
|
|
10,660
|
|
|
|
|
|
|
|
7,343
|
|
Total non-GAAP operating income (loss)
|
|
|
|
|
|
|
$
|
856
|
|
|
|
|
|
|
$
|
(1,931
|
)
|
|
|
|
|
|
$
|
(2,611
|
)
|
|
|
|
|
|
$
|
(12,101
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss as reported
|
|
|
|
|
|
|
$
|
(3,064
|
)
|
|
|
|
|
|
$
|
(3,359
|
)
|
|
|
|
|
|
$
|
(14,729
|
)
|
|
|
|
|
|
$
|
(21,500
|
)
|
Gross profit adjustment
|
|
|
|
|
|
|
|
423
|
|
|
|
|
|
|
|
330
|
|
|
|
|
|
|
|
1,864
|
|
|
|
|
|
|
|
1,863
|
|
Operating expense adjustment
|
|
|
|
|
|
|
|
3,451
|
|
|
|
|
|
|
|
1,070
|
|
|
|
|
|
|
|
10,660
|
|
|
|
|
|
|
|
7,343
|
|
Income tax provision
|
|
|
|
|
|
|
|
53
|
|
|
|
|
|
|
|
34
|
|
|
|
|
|
|
|
264
|
|
|
|
|
|
|
|
217
|
|
Gain on sale of domain name
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
(630
|
)
|
|
|
|
|
|
|
-
|
|
Total non-GAAP net income (loss)
|
|
|
|
|
|
|
$
|
863
|
|
|
|
|
|
|
$
|
(1,925
|
)
|
|
|
|
|
|
$
|
(2,571
|
)
|
|
|
|
|
|
$
|
(12,077
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share-diluted, as reported
|
|
|
|
|
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
$
|
(0.55
|
)
|
|
|
|
|
|
$
|
(0.83
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) per share-diluted
|
|
|
|
|
|
|
$
|
0.03
|
|
|
|
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
$
|
(0.47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guidance Software, Inc.
|
Unaudited Condensed Consolidated Balance Sheets
|
(in thousands)
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2014
|
|
|
|
2013
|
|
ASSETS
|
|
|
|
Current assets:
|
|
|
|
Cash and cash equivalents
|
$
|
18,355
|
|
|
$
|
19,919
|
|
Restricted cash
|
|
153
|
|
|
|
-
|
|
Trade receivables, net
|
|
20,255
|
|
|
|
19,027
|
|
Inventory
|
|
2,684
|
|
|
|
1,928
|
|
Prepaid expenses and other current assets
|
|
5,054
|
|
|
|
4,148
|
|
Total current assets
|
|
46,501
|
|
|
|
45,022
|
|
|
|
|
|
Long-term assets:
|
|
|
|
Property and equipment, net
|
|
14,558
|
|
|
|
18,464
|
|
Intangible assets, net
|
|
7,766
|
|
|
|
9,953
|
|
Goodwill
|
|
14,632
|
|
|
|
14,632
|
|
Other assets
|
|
2,370
|
|
|
|
1,160
|
|
Total long-term assets
|
|
39,326
|
|
|
|
44,209
|
|
|
|
|
|
Total assets
|
$
|
85,827
|
|
|
$
|
89,231
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
Current liabilities:
|
|
|
|
Accounts payable
|
$
|
5,919
|
|
|
$
|
5,517
|
|
Accrued liabilities
|
|
8,407
|
|
|
|
10,148
|
|
Capital lease obligations
|
|
67
|
|
|
|
182
|
|
Deferred revenues
|
|
39,128
|
|
|
|
37,316
|
|
Total current liabilities
|
|
53,521
|
|
|
|
53,163
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
Deferred rent
|
|
7,661
|
|
|
|
7,058
|
|
Other long-term liabilities
|
|
645
|
|
|
|
158
|
|
Deferred revenues
|
|
6,232
|
|
|
|
4,347
|
|
Deferred tax liabilities
|
|
584
|
|
|
|
465
|
|
Total long-term liabilities
|
|
15,122
|
|
|
|
12,028
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
Common stock
|
|
25
|
|
|
|
25
|
|
Additional paid-in capital
|
|
110,265
|
|
|
|
102,392
|
|
Treasury stock
|
|
(11,479
|
)
|
|
|
(11,479
|
)
|
Accumulated deficit
|
|
(81,627
|
)
|
|
|
(66,898
|
)
|
Total stockholders' equity
|
|
17,184
|
|
|
|
24,040
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$
|
85,827
|
|
|
$
|
89,231
|
|
|
|
|
|
|
|
|
|
Guidance Software, Inc
|
Unaudited Cash Flow Summary
|
(in thousands)
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
|
|
|
2014
|
|
2013
|
Operating Activities:
|
|
|
|
|
|
|
Net loss
|
|
|
|
$ (14,729)
|
|
$ (21,500)
|
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
|
|
|
|
|
Depreciation & amortization
|
|
|
|
7,426
|
|
7,678
|
Provision for doubtful accounts
|
|
|
|
-
|
|
600
|
Share-based compensation
|
|
|
|
6,694
|
|
7,626
|
Contingent consideration payable
|
|
|
|
-
|
|
(600)
|
Gain on sale of domain name
|
|
|
|
(630)
|
|
-
|
Deferred taxes
|
|
|
|
87
|
|
78
|
Loss on disposal of assets
|
|
|
|
249
|
|
184
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Restricted cash
|
|
|
|
(153)
|
|
-
|
Trade receivables
|
|
|
|
(1,228)
|
|
3,931
|
Inventory
|
|
|
|
(756)
|
|
80
|
Prepaid expenses and other assets
|
|
|
|
(1,453)
|
|
1,798
|
Accounts payable
|
|
|
|
1,296
|
|
2,104
|
Accrued liabilities
|
|
|
|
(1,138)
|
|
2,663
|
Deferred revenues
|
|
|
|
3,697
|
|
(1,789)
|
Net cash (used in) provided by operating activities
|
|
|
|
(638)
|
|
2,853
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
(1,911)
|
|
(13,231)
|
Net cash used in investing activities
|
|
|
|
(1,911)
|
|
(13,231)
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
|
Proceeds from the exercise of stock options
|
|
|
|
1,179
|
|
1,729
|
Common stock repurchased or withheld
|
|
|
|
-
|
|
(2,835)
|
Principal payments on capital lease and other obligations
|
|
|
|
(194)
|
|
(1,203)
|
Net cash provided by (used in) financing activities
|
|
|
|
985
|
|
(2,309)
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
(1,564)
|
|
(12,687)
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of period
|
|
|
|
19,919
|
|
32,606
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
|
|
$ 18,355
|
|
$ 19,919
|
Copyright Business Wire 2015